Cal. Code Regs. Tit. 10, § 2644.4 - Projected Losses
(a)
"Projected losses" means the insurer's historic losses per exposure, adjusted
by catastrophe adjustment, as prescribed in section
2644.5, by loss development, as
prescribed in section
2644.6, and by loss trend, as
prescribed in section
2644.7.
(b) Projected losses shall be calculated by
applying the loss trend factor separately to data from each accident-year in
the recorded period. However, for claims-made policies projected losses shall
be calculated on a report-year basis.
(c) For policies providing multi-year
coverage, such as mechanical breakdown, projected losses may be calculated on a
policy-year basis.
(d) For
professional liability and errors and omissions coverage, the insurer shall, in
lieu of the computation of projected losses specified in sections
2644.5 through
2644.7, tender an alternative
computation of projected losses, which the Commissioner shall approve if the
Commissioner finds the projection to have been made in the most sound actuarial
manner. Nothing in this section precludes the Commissioner from requiring the
additional filing of projected losses computed in the manner specified in
sections 2644.5 through
2644.7.
(e) For the earthquake line of business and
for the fire following earthquake exposure in other lines, projected losses and
defense and cost containment expenses may be based on complex catastrophe
models using geological and structural engineering science and insurance claim
expertise. The use of such models shall conform to the standards of practice as
set forth by the Actuarial Standards Board and the applicant shall have the
burden of proving, by a preponderance of the evidence, that the model is based
upon the best available scientific information for assessing earthquake
frequency, severity, damage and loss, and that the projected losses derived
from the model meet all applicable statutory standards.
Notes
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 Repealed by operation of Government Code section 11346.1(g) (Register 92, No. 15).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 A Certificate of Compliance must be transmittted to OAL 6-15-92 or emergency language will be repealed by operation of law on the following day.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 Repealed by operation of Government Code section 11346.1(g) and new section filed 3-15-95; operative 3-15-95.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. Change without regulatory effect amending subsection (d) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.
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.
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. Change without regulatory effect amending subsection (d) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.