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 166-2 - Discussion Of General Rules
Section 166-2.7 - Discussion of allocation of excess profits

(a) At the October 1982 hearing, several speakers commented that some companies might be unfairly required to participate in a refund of excess profits. The proposed regulation required that insurers with combined ratios (of underwriting losses and expenses to premiums) of up to 115 percent might have to issue refunds or credits. Although the department believes that it is not necessary to earn an underwriting profit in order to have an excess profit, there is some merit in the contention that too high a refund point might result in some insurers realizing less than a reasonable profit after excess profits are distributed. The refund point will be modified to an overall return on net worth of 21 percent, so that the distribution will be made from earnings above the excess point.

(b) Several speakers at the hearing expressed concern over the procedural difficulty and expense of issuing excess profit refunds or credits. This department wholeheartedly favors an efficient procedure for carrying out the statutory mandate. However, it is irrelevant to argue that inconvenience or expense are appropriate reasons for ignoring high insurer profits.