Haw. Code R. § 16-7-23 - Servicing carrier allowances
(a) Servicing
carrier shall be reimbursed for plan business on the following basis:
(1) Ten percent of written premium for
operating costs, which shall include loss prevention and inspection services,
but exclude claim expense, agents' commissions, and taxes;
(2) Actual dollars of commission paid to the
authorized agent;
(3) Actual amount
of premium taxes paid;
(4)
Allocated loss adjustment expenses shall be charged against the plan as part of
the incurred loss; and
(5)
Unallocated loss adjustment expenses shall be charged at an amount equal to ten
per cent of the sum of the reported losses incurred plus the allocated loss
adjustment expense.
(b)
The board of directors shall reimburse a servicing carrier in whole or in part
for all reasonable and necessary expenses directly or under contractual
arrangements with others, incurred in qualifying for, or ceasing to be a
servicing carrier. The expense must be explained and supported in detail as may
be required by the board of directors.
(c) The board shall direct the reimbursement
of servicing carrier for normal operating expenses incurred in connection with
plan business. The operating expenses shall include any losses or expenses paid
or incurred directly or under contractual arrangements with others, not
otherwise reimbursed under subsection (a), or which are in excess of the
allowances provided thereunder, but shall not include any loss or expense
incurred as a result of fraud or dishonesty on the part of a servicing
carrier's personnel (including, but not limited to, independent adjusters and
agents).
(d) Losses or expenses
reimbursable under subsections (b) and (c) for which sufficient funds are not
otherwise available, shall be obtained by the board of directors through an
assessment against the members of the plan or through an assessment of the
policyholders.
(e) Joint
underwriting plan business written by servicing carrier shall not be included
in determining a servicing carrier's share of market for membership assessment
or other purposes.
(f) Losses and
expenses shall be payable solely out of the funds provided by the joint
underwriting plan.
(g) The amounts
allowed under subsection (a) shall be subject to periodic review by the board
of directors.
Notes
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