§ 2645.4. Losses and Allocated Loss Adjustment Expenses.
10 CA ADC § 2645.4Barclays Official California Code of Regulations
10 CCR § 2645.4
§ 2645.4. Losses and Allocated Loss Adjustment Expenses.
In lieu of projected losses and loss adjustment expenses, actual loss and loss adjustment expense data for calendar year 1989 shall be used.
(b) Loss development and trending. Actual incurred losses shall be used, subject to validation by the Commissioner to ensure that there has not been inappropriate reserves-strengthening. Because incurred losses for calendar year 1989 are now known, no loss development is necessary or appropriate and loss and loss adjustment expense trend would have so insubstantial an effect on rates that no adjustment shall be made.
(d) If the insurer satisfies none of the three tests in subdivision (c) of this section, unless the Commissioner finds, based on evidence proffered by the insurer and any other party, that some other number better reflects appropriate reserve levels, the insurer's reserves shall be adjusted, on a line-by-line, company-specific basis, to the same multiple of earned premium as the 1985 through 1988 reserves had to 1985 through 1988 earned premium. The adjustment, stated as a formula, is as follows:
[ | 1985-1988 reserves | ] | ||
1989 reserves = 1989 earned premium | [ | ] | ||
[ | 1985-1988 earned premium | ] |
Credits
Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code. Reference: Sections 1861.01 and 1861.05, Insurance Code; Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.
History
1. New section filed 8-13-91 as an emergency; operative 8-13-91 (Register 92, No. 3). A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.
2. New subsections (c) and (d) filed 10-8-91 as an emergency; operative 10-8-91 (Register 92, No. 13). A Certificate of Compliance must be transmitted to OAL 2-5-92 or emergency language will be repealed by operation of law on the following day.
3. Editorial correction of operative date in History 2. (Register 92, No. 19).
4. New section filed 2-20-92 as an emergency; operative 2-20-92 (Register 92, No. 19). A Certificate of Compliance must be transmitted to OAL 6-19-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 2-20-92 order transmitted to OAL 6-19-92 and filed 7-28-92 (Register 92, No. 31).
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 10, § 2645.4, 10 CA ADC § 2645.4
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