N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 166-1.3

Current through Register Vol. 46, No. 53, December 31, 2024

Section 166-1.3 - Profitability data averaged

(a) Profitability data shall be averaged over a six-year period.

(b) In measuring profitability from all sources of income, including capital gains, investment income and underwriting income, it is desirable to use a base of several years in order to minimize volatility in the results. The business cycle in insurance is believed to be approximately six years in length. While little can be deduced from the volatile results of a single year, an excess profit over a six-year period would be good evidence that the forces of competition have been insufficient to exercise a natural control over the prices and profits of insurers.

(c) See section 166-2.3 of this Part for discussion of this section.

N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 166-1.3