New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter V - Rates And Rating Organizations
Subchapter F - Treatment Of Excess Profits In Motor Vehicle Insurance
Part 166 - Treatment Of Excess Profits In Motor Vehicle Insurance
Subpart 166-1 - General Rules
Section 166-1.3 - Profitability data averaged
Current through Register Vol. 46, No. 39, September 25, 2024
(a) Profitability data shall be averaged over a six-year period.
(b) In measuring profitability from all sources of income, including capital gains, investment income and underwriting income, it is desirable to use a base of several years in order to minimize volatility in the results. The business cycle in insurance is believed to be approximately six years in length. While little can be deduced from the volatile results of a single year, an excess profit over a six-year period would be good evidence that the forces of competition have been insufficient to exercise a natural control over the prices and profits of insurers.
(c) See section 166-2.3 of this Part for discussion of this section.
