Example:
Expenses which are allocated to lines of business as an overhead on salaries shall be calculated in relation only to the salaries included in the same expense group.
Expenses included in the expense group, loss adjustment expenses | Bases of allocation to lines of business |
Claim adjustment services: | |
Direct | Actual |
Reinsurance assumed | Actual |
Reinsurance ceded | Actual |
Commission and brokerage-direct | See commission and allowances (section 107.3[c][2] of this Title) |
Allowances to managers and agents | See commission and allowances (section 107.3[c][2] of this Title) |
Salaries | See special instructions relating to the allocation of salaries and other expenses (Part 109 of this Title) |
Employee relations and welfare | Overhead on salaries |
Pensions | Overhead on salaries |
Directors' fees | Overhead on salaries |
Travel and travel items | Special studies |
Rent and rent items | Overhead on salaries |
Equipment | Overhead on salaries |
Printing and stationery | Overhead on salaries |
Postage, telephone and telegraph, exchange and express | Overhead on salaries |
Legal and auditing | Special studies |
Income from special services | Special studies |
Miscellaneous | Special studies |
Expenses included in the expense group, acquisition, field supervision and collection expenses | Bases of allocation to lines of business |
Commission and brokerage: | |
Direct | Actual, but subject to instructions under commission and allowances (section 107.3[c][2] of this Title) |
Reinsurance assumed | Actual |
Reinsurance ceded | Actual |
Contingent-net | Special studies |
Policy and membership | Actual |
Allowances to managers and agents | Special studies, but subject to instructions under commission and allowances (section 107.3[c][2] of this Title) |
Advertising | Premiums |
Salaries | See special instructions relating to the allocation of salaries and other expenses (Part 109 of this Title) |
Employee relations and welfare | Overhead on salaries |
Pensions | Overhead on salaries |
Directors' fees | Overhead on salaries |
Travel and travel items | Special studies |
Rent and rent items | Overhead on salaries |
Equipment | Overhead on salaries |
Printing and stationery | Overhead on salaries |
Postage, telephone and telegraph, exchange and express | Overhead on salaries |
Legal and auditing | Special studies |
Income from special services | Special studies |
Miscellaneous | Special studies |
Expenses included in the expense group, general expenses | Bases of allocation to lines of business |
Commission and brokerage-direct | See commission and allowances (section 107.3[c][2] of this Title) |
Allowances to managers and agents | See commission and allowances (section 107.3[c][2] of this Title) |
Boards, bureaus an associations | Special studies |
Surveys and underwriting reports | Special studies |
Audit of assurance records | Special studies |
Salaries | See special instructions relating to the allocation of salaries and other expenses (Part 109 of this Title) |
Employee relations and welfare | Overhead on salaries |
Pensions | Overhead on salaries |
Directors' fees | Overhead on salaries |
Travel and travel items | Special studies |
Rent and rent items | Overhead on salaries |
Equipment | Overhead on salaries |
Printing and stationery | Overhead on salaries |
Postage, telephone and telegraph, exchange and express | Overhead on salaries |
Legal and auditing | Special studies |
Income from special services | Special studies |
Miscellaneous | Special studies |
Expenses included in the expense group, taxes | Bases of allocation to lines of business |
Taxes, licenses and fees: | |
State and local insurance taxes | Special studies |
Insurance Dept. licenses and fees | Special studies |
Payroll taxes | Overhead on salaries |
All other (excluding federal income and real estate) | Special studies |
For these expense classifications permitting the basis "overhead on salaries or premiums," any other basis of allocation may be adopted which yields more accurate results. The bases "overhead on salaries and premiums" shall not be used if clearly inappropriate.
In making any allocations to lines of business, companies shall observe the general instructions regarding allocation bases (see section 109.3, infra.)
N.Y. Comp. Codes R. & Regs. Tit. 11 § 108.3