Regulation of Experience Refunds Paid Pursuant to Experience Refund Agreements

Regulation of Experience Refunds Paid Pursuant to Experience Refund Agreements Experience Refunds may be paid, allocated or accrued by an insurer pursuant to a written experience refund agreement and may be paid only with respect to earned premiums produced by or attributable to the creditor or licensed agent designated to receive such experience refund; provided however, that: A. All such experience refund agreements shall be on a form approved in writing by the Commissioner and shall be filed with the Commissioner prior to use. A sample form recommended by the Commissioner is attached hereto as Exhibit “A”. B. All such experience refunds shall be calculated using only statutory accounting methods. C. All such experience refund calculations shall be made in accordance with the requirements of the form which is attached hereto as Exhibit “B”, said form having been prescribed by the Commissioner and which provides for, inter alia, the deduction of claims incurred, premium taxes incurred, compensation paid, and expenses incurred during the preceding calendar year. D. All such experience refunds shall be paid annually within thirty (30) days following the filing of the insurer’s annual statement with the Department of Insurance. No experience refund may be paid if the insurer is insolvent or has capital or surplus less than the legal minimum or if the payment of the experience refund would render the insurer insolvent or result in the insurer’s capital or surplus being less than the legal minimum.