HAR §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. [Eff 6/22/81] (Auth: HRS §435C-2) (Imp: HRS §435C-3) 13 DEPARTMENT OF REGULATORY AGENCIES Chapter 7, Hawaii Medical Malpractice Underwriting Plan Rules of Practice and Procedure, on the Summary Page dated May 28, 1981 was adopted on May 28, 1981 following a public hearing held on May 28, 1981, after public notice was given in the Honolulu Star-Bulletin on May 8, 1981. These rules shall take effect ten days after filing with the Office of the Lieutenant Governor. /s/ Mary G.F. Bitterman MARY G.F. BITTERMAN Director of Regulatory Agencies APPROVED AS TO FORM: /s/ Ruth I. Tsujimura Deputy Attorney General /s/ George R. Ariyoshi GEORGE R. ARIYOSHI Governor State of Hawaii Date: June 10, 1981 June 12, 1981 Filed