New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter C - Fire, Marine, Casualty And Surety Insurers
Part 105 - Operating Expense Classification For Annual Statement Purposes
Section 105.3 - Commissions and brokerage
Current through Register Vol. 46, No. 12, March 20, 2024
(a) Direct.
Include:
All payments, reimbursements and allowances, on direct writings, computed as a percentage of premiums for production, management or other services to:
managers
supervising general agents
general agents
regional and district agents
local agents
office agents
brokers
solicitors
other producers and agents
Commissions and brokerage to employees when the activities for which the commissions are paid are not a part of their duties as employees.
Exclude:
Compensation to employees except as noted above (see salaries).
Allowances, reimbursements and payments not computed as a percentage of premiums (see allowances to managers and agents).
Expenses involved in transactions between insurance companies (see joint expenses; commission and brokerage-reinsurance assumed and ceded; expenses for account of another; and income from special services).
Contingent commissions (see commission and brokerage-contingent).
Fees of investment counsel (see legal and auditing).
Expenses includible in boards, bureaus and associations.
Taxes on premiums (see taxes, licenses and fees).
Commission received for special services such as loss adjustment and inspection not related to policies issued by the company (see income from special services).
(b) Reinsurance assumed.
Where commission and allowances under reinsurance assumed take the form of accurate proportions of actual expenses incurred, as in some quota share and pooling agreement, entries shall be made to the actual expenses.
(c) Reinsurance ceded.
Where commission and allowances under reinsurance ceded take the form of accurate proportions of actual expenses incurred, as in some quota and pooling agreements, entries shall be made to the actual expenses.
(d) Examples relating to the treatment of commission on reinsurance assumed and reinsurance ceded.
| Paid on written business | |
| Commission and brokerage-direct ....... | $100,000 |
| Salaries and related items ....... | 30,000 |
| Rent items rent items ....... | 7,000 |
| Printing and stationery ....... | 7,000 |
| Postage, etc. ....... | 5,000 |
| Surveys and underwriting reports ....... | 8,000 |
| Total ....... | $157,000 |
Note:
These are not intended to show the complete list of expenses involved but are given only for illustrative purposes.
| Paid on written business | |
| Commission and brokerage-reinsurance ceded ....... | $10,000 |
| Salaries and related items ....... | 3,000 |
| Rent and rent items ....... | 700 |
| Printing and stationery ....... | 700 |
| Postage, etc. ....... | 500 |
| Surveys and underwriting reports ....... | 800 |
| Total ....... | $15,700 |
| Paid on written business | |
| Commission and brokerage-reinsurance assumed ....... | $10,000 |
| Salaries and related items ....... | 3,000 |
| Rent and rent items ....... | 700 |
| Printing and stationery ....... | 700 |
| Postage, etc. ....... | 500 |
| Surveys and underwriting reports ....... | 800 |
| Total ....... | $15,700 |
(e) Contingent-direct.
Include:
Contingent or profit commission paid.
Contingent or profit commission received.
Contingent commission to employees when the activities for which the contingent commission is paid are not a part of their duties as employees.
(f) Contingent reinsurance assumed.
(g) Continent reinsurance ceded.
(h) Policy and membership fees.
Include:
Policy and membership fees retained by, or paid to, agents.
Policy and membership fees to employees when the activities for which the policy and membership fees are paid are not a part of their duties as employees.
