Chapter Ins 6

Ins 6.30 Note Storage, safekeeping and warehouse space, rent of — 13

Ins 6.30 Note Subpoenas relating to claim adjustment — 1-a

Ins 6.30 Note Subscriptions to accounting, legal, actuarial and similar societies — 12

Ins 6.30 Note Subscriptions to social or civic clubs or affairs — 12

Ins 6.30 Note Supper money — 9-b

Ins 6.30 Note Surety bonds covering employees — 10

Ins 6.30 Note Survey reports relating to claim adjustment — 1-a

Ins 6.30 Note Surveys and underwriting reports, operating expense classification — 6

Ins 6.30 Note Syndicates, underwriting — 5

Ins 6.30 Note Tabulating services — 21

Ins 6.30 Note Tax allowances, reinsurance — 2-b and 2-c

Ins 6.30 Note Tax expert services — 17

Ins 6.30 Note Taxes, interest, etc., paid in lieu of rent for leased premises — 13

Ins 6.30 Note Taxes, licenses and fees, operating expense classification — 18

Ins 6.30 Note Taxes, real estate — 20

Ins 6.30 Note Telephone and telegraph — 16

Ins 6.30 Note Telephone and telegraph expenses of employees while traveling — 12

Ins 6.30 Note Teletype — 16

Ins 6.30 Note Time clock service charges — 13

Ins 6.30 Note Towels — 13

Ins 6.30 Note Training of employees — 9-b

Ins 6.30 Note Training pay of employees — 8

Ins 6.30 Note Transcripts of testimony relating to claim adjustment — 1-a

Ins 6.30 Note Transfer agents' fees — 17

Ins 6.30 Note Transfer of employees — 12

Ins 6.30 Note Transfer taxes — 18-d

Ins 6.30 Note Transportation of guests — 12

Ins 6.30 Note Transportation of employees — 12

Ins 6.30 Note Travel and Travel Items, operating expense classification — 12

Ins 6.30 Note Traveling expenses of employees — 12

Ins 6.30 Note Trustees' fees — 17

Ins 6.30 Note Underwriters' boards — 5

Ins 6.30 Note Underwriting reports — 6

Ins 6.30 Note Underwriting syndicates — 5

Ins 6.30 Note Unemployment insurance taxes — 18-c

Ins 6.30 Note Visiting nurse service — 9-b

Ins 6.30 Note Wages paid in connection with owned real estate — 19

Ins 6.30 Note Warehouse, storage and safekeeping space, rent of — 13

Ins 6.30 Note Waste baskets — 15

Ins 6.30 Note Water, light, heat and power in leased premises — 13

Ins 6.30 Note Watchperson expenses relating to claim adjustment — 1-a

Ins 6.30 Note Weather reports relating to claim adjustment — 1-a

Ins 6.30 Note Welfare of employees — 9-b

Ins 6.30 Note Witnesses relating to claim adjustment — 1-a

Ins 6.30 Note Worker's compensation insurance — 9-a

Ins 6.30(2) (2) Part II.

Ins 6.30(2)(a) (a) Instructions relating to the allocation of joint expenses to companies.

Ins 6.30(2)(a)1. 1. Joint Expenses a. Joint Expenses, as described in s. Ins 6.30 (1) (b) 22. a., shall be allocated to companies as follows: - See PDF for table

Ins 6.30(2)(a)1.b. b. Definitions

The term Premiums used as basis of allocation means the allocation of expenses shall follow the percentages of applicable premiums.

The term Special Studies used as a basis of allocation means that expenses shall be analyzed and bases of allocation applied as dictated by that analysis.

The term Overhead on Salaries used as a basis of allocation means that the allocation of expenses shall follow the percentages of the applicable salaries allocation.

Ins 6.30(2)(a)1.c. c. Other Bases Permitted or Prescribed

For those operating 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.

Ins 6.30(2)(a)1.d. d. Other Instructions Applicable

In making any allocations of Joint Expenses, companies shall observe the General Instructions Regarding Allocation Bases (see s. Ins 6.30 (5) (a) 2.).

Ins 6.30(2)(a)1.e. e. Records Required

The methods followed in allocating Joint Expenses shall be described, kept and supported as set forth under Detail of Allocation Bases (See s. Ins 6.30 (5) (a) 3-c).

The effects of the application, to each operating expense classification, of all bases of allocation shall be shown on records kept in clear and legible form. Such records shall be readily available for examination.

Ins 6.30(2)(a)1.f. f. Interim Allocations of Joint Expenses

It is permissible to apportion expenses between companies during the year on the basis of methods and procedures other than those prescribed herein, provided allocations of corrected amounts, calculated in accordance with these instructions, are made in time for entry in the Annual Statement.

Ins 6.30(3) (3) Part III.

Ins 6.30(3)(a) (a) Instructions relating to the composition of, and allocation to, expense groups.

Ins 6.30(3)(a)1. 1. List of Expense Groups

Expenses reported in the operating expense classifications shall be allocated to the following expense groups:

Investment Expenses.

Loss Adjustment Expenses.

Acquisition, Field Supervision and Collection Expenses.

Taxes.

General Expenses.

Ins 6.30(3)(a)2. 2. Composition of the Expense Groups.

The composition of each expense group shall be as follows:

Ins 6.30(3)(a)2.a. a. Investment Expenses.

Investment Expenses shall comprise all expenses incurred wholly or partially in connection with the investing of funds and the obtaining of investment income, including related expenses incurred in the following activities: initiating or handling orders and recommendations; doing research; pricing; appraising and valuing; paying and receiving; entering and keeping general and detail records; safe keeping; collecting, recording, calculating and accruing investment income; general clerical, secretarial, office maintenance, supervisory and executive duties; handling personnel, supplies, mail, etc.; and all other activities reasonably attributable to the investing of funds and the obtaining of investment income.

Ins 6.30(3)(a)2.b. b. Loss Adjustment Expenses.

Loss Adjustment Expenses shall comprise all expenses incurred wholly or partially in connection with the adjustment and recording of policy claims, including the totals of the operating expense classification, Claim Adjustment Services: the types of expenses included in Claim Adjustment Services, when the activities resulting in such types of expenses are performed by employees; and including related expenses incurred in the following activities: estimating amounts of claims; paying and receiving; entering and keeping general and detail records; general clerical, secretarial, office maintenance, supervisory and executive duties; handling personnel, supplies, mail, etc.; and all other activities reasonably attributable to the adjustment and recording of policy claims in connection with claims reported, paid, and outstanding, and reinsurance thereon.

Ins 6.30(3)(a)2.c. c. Acquisition, Field Supervision and Collection Expenses

Acquisition, Field Supervision and Collection Expenses shall comprise all expenses incurred wholly or partially in the following activities:

Soliciting and procuring business and developing the sales field.

Writing policy contracts, and checking and directly supervising the work of policy writers.

Receiving and paying of premiums and commissions; entering into or setting up records of premiums and commissions receivable and payable for collection purposes; balancing and maintaining such records; corresponding with and visiting insureds and producers for the purpose of collecting premiums or adjusting differences; checking current accounts from producers; auditing of records of delinquent agents; and services of collection agencies. Do not include activities offices within the company.

Compiling and distributing expiration lists, notices of premiums due, lists of premiums or premium balances receivable and payable, contingent and other commission statements, production statements for acquisition and field supervision purposes, and similar data.

Maintaining good will of insureds and producers; activities of field personnel; contact work relating to acquisition, field supervision and collection; making contracts and agreements with producers; and activities in connection with agency appointments and replacements. Do not include: inspections of risks when carried on by personnel employed by the insurance company, engaged full time in physical inspection of risks and activities directly related thereto; audits for the purpose of premium determination; and activities in connection with the adjustment of policy claims.

Rendering service to agents and other producers, such as providing office space, personnel, telephone, etc., and obtaining agents' licenses.

Do not include fees paid for agents' licenses.

Advertising and publicity of every nature related to acquisition, field supervision and collection. In addition to applicable salaries, etc., include the entire amount shown in the operating expense classification, Advertising.

Miscellaneous activities of agents, brokers and producers other than employees, when performed by them: inspections; quoting premiums; signing policies; examining and mailing policies, applications and daily reports; compiling figures for current accounts; correspondence and sundry bookkeeping and clerical work.

Other activities reasonably attributable to those operations listed above, such as: keeping general and detail records; paying and receiving; general clerical, secretarial, office maintenance, supervisory and executive work; and handling personnel, supplies, mail, etc.

Commission and Allowances: When the whole or a part of any amount in the operating expense classifications Commission and Brokerage-Direct, and Allowances to Managers and Agents is paid specifically for services other than those set forth under Acquisition, Field Supervision and Collection Expenses, and when such services are not duplicated or otherwise compensated by the company, the amount thereof shall be allocated to expense groups other than Acquisition, Field Supervision and Collection, and such allocations shall be justified by detailed statements and data calculated and prepared in accordance with the methods described in these instructions showing amounts of expenditures properly allocated to expense groups and lines of business.