California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 4.8 - Review of Rates
Article 5 - Determination of Rates for Rollback Period
Section 2645.5 - Fixed Expenses
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Executive compensation in excess of the insurer's maximum permissible executive compensation shall be deducted from fixed expenses. For purposes of this computation, the following shall apply:
max comp = 1077(101.4600 + 0.4060 logX)
max comp = 1077(101.4140 + 0.3490 logX)
max comp = 1077(101.2310 + 0.3820 logX)
max comp = 1077(101.2470 + 0.3580 logX)
max comp = 1077(101.2460 + 0.3420 logX)
where X is the greater of (i) the insurer's total 1989 countrywide direct earned premium for lines of business subject to Proposition 103 divided by 1,000,000 or (ii) 70.
(b) For rollback calculations, fixed expenses for each line shall be set at the lower of the quantity specified in section 2644.12, subdivision (a), or actual recorded expenses for calendar year 1989. For rollback calculations the term "maximum profit factor" in section 2644.12 means "profit factor" as defined in section 2645.6.
(c) For rollback calculations, the following table shall be used to determine the efficiency standard:
|
Line |
Captive Writer |
Direct Writer |
Independ Agency |
|
Fire |
41.50% |
28.83% |
41.88% |
|
Allied Lines |
36.65% |
29.54% |
33.20% |
|
Farmowners Multiple Peril |
36.16% |
36.16% |
36.16% |
|
Homeowners Multiple Peril |
32.77% |
24.28% |
40.86% |
|
Commercial Multiple Peril |
34.02% |
30.13% |
39.59% |
|
Inland Marine |
32.91% |
33.99% |
33.10% |
|
Financial Guaranty |
15.01% |
15.01% |
15.01% |
|
Medical Malpractice |
18.36% |
18.36% |
18.36% |
|
Earthquake |
41.13% |
17.35% |
30.94% |
|
Other Liability |
35.01% |
14.92% |
28.63% |
|
Pvt Pass Auto Liability |
27.01% |
19.01% |
33.16% |
|
Comml Auto Liab |
33.86% |
19.78% |
31.63% |
|
Pvt Pass Auto Phys Damage |
27.13% |
19.87% |
34.49% |
|
Comml Auto Phys Damage |
31.81% |
17.04% |
35.97% |
|
Aircraft |
24.07% |
29.22% |
24.27% |
|
Fidelity |
26.84% |
26.84% |
26.84% |
|
Surety |
42.56% |
51.77% |
53.76% |
|
Glass |
39.97% |
39.97% |
39.97% |
|
Burglary & Theft |
27.48% |
27.48% |
27.48% |
|
Boiler & Machinery |
27.86% |
31.76% |
52.54% |
|
Credit |
44.69% |
44.69% |
44.69% |
1. New section
filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate
of Compliance must be transmitted to OAL 12-11-91 or emergency language will be
repealed by operation of law on the following day.
2. New subsections (a)
and (c) filed 10-8-91 as an emergency; operative 10-8-91 (Register 92, No. 13). A
Certificate of Compliance must be transmitted to OAL 2-5-92 or emergency language
will be repealed by operation of law on the following day.
3. Editorial
correction of file and operative dates in HISTORY 2. (Register 92, No.
19).
4. New section filed 2-20-92 as an emergency; operative 2-20-92
(Register 92, No. 19). A Certificate of Compliance must be transmitted to OAL
6-19-92 or emergency language will be repealed by operation of law on the following
day.
5. Certificate of Compliance as to 2-20-92 order transmitted to OAL
6-19-92 and filed 7-28-92 (Register 92, No. 31).
Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code. Reference: Sections 1861.01 and 1861.05, Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.
