Cal. Code Regs. tit. 10 § 2644.3

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Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2644.3 - Minimum Permitted Earned Premium

The minimum permitted earned premium is calculated as follows:

(a) the quotient of

(1) the sum of

(A)

(i) projected losses, as defined in section 2644.4,

(ii) plus projected defense and cost containment expenses, as defined in section 2644.8,

(B) multiplied by 1 minus the fixed investment income factor as defined in section 2644.19(a),

(2) minus projected ancillary income, as defined in section 2644.13,

(b) divided by the minimum denominator, as defined in section 2644.3(c).

Stated as formula:

		(losses + DCCE) x (1- fixed invest inc factor) - ancil income
	Min Permitted EP=	___________________________
		min denom

(c) The minimum denominator means:

(1) 1.0,

(2) minus the efficiency standard, as defined in section 2644.12,

(3) minus the minimum profit factor, as defined in section 2644.15,

(4) plus the variable investment income factor, as defined in section 2644.19(b).

Stated as a formula:

Min denom =1- eff std - profit factor + var invest inc factor

Cal. Code Regs. Tit. 10, § 2644.3

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 A Certificate of Compliance must be transmitted to OAL 12-11-91 or emergency language will be repealed by operation of law on the following day.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. Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).
3. New section refiled 2-14-92 as an emergency; operative 2-14-92 (Register 92, No. 15). A Certificate of Compliance must be transmittted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.
4. Repealed by operation of Government Code section 11346.1(g) and new section filed 3-15-95; operative 3-15-95. Submitted to OAL for printing only pursuant to Government Code section 11343(a)(1) (Register 95, No. 11).
5. Amendment filed 1-3-2007; operative 4-3-2007. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2007, No. 1).
6. Amendment filed 5-16-2008; operative 5-16-2008. Submitted to OAL for printing only pursuant to Government Code section 11340.9(g) (Register 2008, No. 20).

Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference: Sections 1861.01 and 1861.05, Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.