N.Y. Comp. Codes R. & Regs. tit. 11, § 165.2
(1) Abbreviations used in this Part include:
(2) Unless otherwise noted, references are to the annual statement blank.
(b) Net worth (or surplus to policyholders) computation.
Net worth (or surplus to policyholders) shall be computed as follows:
Net worth as reported on the annual statement
(P. 3, L. 27) $_____
Add: Prepaid expenses (equity in the
unearned premium reserves) for all lines
[IEE6 + 11 + 1/212 (IEE 7 + 10)1/2IEE 1] ×
(P.7, Pt.2B, L.2 + 4 + 5) $_____
Non-admitted assets
(P.11, Total of amounts in Exh. 2,
C.2 older than line 23) _____
Schedule P excess
(P.3, L.16, current year) _____
Unauthorized Reinsurance
(P.3, L.15, current year) _____
Total Additions _____
Sub-total $
Less: Tax on unrealized capital gains (or plus tax savings on unrealized capital losses) (Sch. D Summary, L.67, C.3-C.4) × 30% _____
Net worth $_____
(c) Investable funds.
Investable funds shall be computed as follows:
Add: Unpaid losses (P.9, Pt.3A, C5) $ _____ Unpaid loss adjustment expense (P.9, Pt.3A, C.6) _____ Unearned premium reserve
(P.6, Pt.2, C.3) _____ $_____
Less: Uncollected premiums and bills receivable taken for premiums (P.2, L.8 + L.10 allocated * _____ Prepaid expenses
[IEE 6 + 11 + 1/212 (IEE 7 + 10)1/2IEE 1] (P.7, Pt2B, C.2 + 4 + 5)
_____ _____
Investable Funds $_____
_____
(d) Allocation of investment gains, unrealized capital gains or losses, net worth and assets.
(1) The allocation of investment gains, unrealized capital gains or losses, net worth and assets to a line of insurance shall be in the proportion that the investable funds for the line bears to the investable funds for all lines, which ratio shall then be multiplied:
- in the case of investment gain, by the total investment gain and other income (P.4, L.9A + L.17),
- in the case of unrealized capital gains or losses, by the total unrealized capital gains or losses (P.4, L.23),
- in the case of net worth, as calculated above under " net worth (or surplus to policyholders) computation," by the average net worth
[Preceding Yr. + Current Yr./2] and,
- in the case of assets, by the average total assets (P.2, L.22 + P.11), Total of amounts in Exh. 2, C.2 Other than L.23
[Preceding Yr. + Current Yr./2]
(2) The State portion shall be determined by applying to the total the ratio that the State's direct earned premiums for the line bears to the countrywide direct earned premiums for the line.
(e) Industry-wide pre-tax earnings on investment.
(1) In computing profitability on the basis of certain industry-wide experience, the following five-year experience shall be used in section 165.3 of this Part for the percentage of pre-tax investment gains and pre-tax unrealized capital gains or losses to premiums earned and this data shall be entered on lines 9(d) and 10(d) of the profit computation: TABLE I *
TABLE I
| Line of insurance | Investment gains (pretax) | Unrealized capital gains or losses (pretax) |
|---|---|---|
| As percent of premiums earned | ||
| Fire | 7.0% | −1.7% |
| Allied lines | 5.7 | −1.4 |
| Homeowners multiple peril | 5.7 | −1.4 |
| Commercial multiple peril | 7.5 | −1.8 |
| Inland marine | 5.3 | −1.3 |
| Workmen's compensation | 12.0 | −2.9 |
| Liability other than auto (B.I.) | 19.0 | −4.6 |
| Liability other than auto (P.D.) | 12.5 | −3.0 |
| Auto no-fault and liability (B.I.) | 11.8* | −2.6* |
| Auto liability (P.D.) | 4.5 | −1.1 |
| Auto collision | 2.2 | −0.5 |
| Auto fire, theft and comprehensive | 2.5 | −0.6 |
| Aircraft (all perils) | 6.7 | −1.6 |
| Fidelity | 14.9 | −3.5 |
| Surety | 7.8 | −1.9 |
| Glass | 3.0 | −0.6 |
| Burglary and theft | 5.5 | −1.2 |
| Boiler and machinery | 9.1 | −2.1 |
| Credit | 3.4 | −1.0 |
*
The calculation of the premiums earned-to-asset ratio on auto no-fault and liability insurance was based on pre-no-fault experience. As no-fault experience becomes available, it is anticipated that this ratio will need to be changed significantly to properly reflect the experience.
(f) Industry-wide premiums-to-surplus ratios.
(1) In computing profitability on the basis of certain industry-wide experience, the following five-year premiums-to-surplus ratio experience shall be used in section 165.3 of this Part at line 15(b) of the profit computation:
TABLE II
TABLE II
| Line of insurance | Premiums earned- to-surplus ratio |
|---|---|
| Fire | 1.8 |
| Allied lines | 2.2 |
| Homeowners multiple peril | 2.2 |
| Commercial multiple peril | 1.6 |
| Inland marine | 2.3 |
| Workmen's compensation | 1.0 |
| Liability other than auto (B.I.) | .6 |
| Liability other than auto (P.D.) | 1.0 |
| Auto no-fault and liability (B.I.) | 1.0* |
| Auto liability (P.D.) | 2.7 |
| Auto collision | 5.5 |
| Auto fire, theft and comprehensive | 4.9 |
| Aircraft (all perils) | 1.8 |
| Fidelity | .8 |
| Surety | 1.6 |
| Glass | 4.5 |
| Burglary and theft | 2.3 |
| Boiler and machinery | 1.4 |
| Credit | 3.7 |
(g) Industry-wide premiums-to-asset ratios.
(1) In computing profitability on the basis of certain industry-wide experience, the following five-year premiums-to-asset ratio experience shall be used in section 165.3 of this Part at line 16(b) of the profit computation: TABLE III **
TABLE III
| Line of insurance | Premiums earned to asset ratio |
|---|---|
| Fire | 0.6 |
| Allied lines | 0.7 |
| Homeowners multiple peril | 0.8 |
| Commercial multiple peril | 0.6 |
| Inland marine | 0.8 |
| Workmen's compensation | 0.4 |
| Liability other than auto (B.I.) | 0.2 |
| Liability other than auto (P.D.) | 0.3 |
| Auto no-fault and liability (B.I.) | 0.4** |
| Auto liability (P.D.) | 1.0 |
| Auto collision | 1.9 |
| Auto fire, theft and comprehensive | 1.7 |
| Aircraft (all perils) | 0.6 |
| Fidelity | 0.3 |
| Surety | 0.5 |
| Glass | 1.5 |
| Burglary and theft | 0.8 |
| Boiler and machinery | 0.5 |
| Credit | 1.3 |
**
The calculation of the premiums earned-to-asset ratio on auto non-fault and liability insurance was based no pre-no- fault experience. As no-fault experience becomes available, it is anticipated that this ratio will need to be changed significantly to properly reflect the experience.
(a) Abbreviations.