Sec. 105.2. Claim adjustment services

(a) Direct.

Include the following expenses when in connection with the investigation and adjustment of policy claims:

Independent adjusters: fees and expenses of independent adjusters or settling agents.

Legal: fees and expenses of lawyers for legal services in the defense, trial or appeal of suits, or for other legal services.

Bonds: premium costs of bonds.

Appeal costs and expenses: appeal bond premiums; charges for printing records; charges for printing briefs; court fees incidental to appeals.

General court costs and fees: entry fees and other court costs, and

other fees not includible in losses.

Note:

Interest and costs assessed as part of or subsequent to judgment are includible in losses.

Medical testimony: fees and expenses of medical witnesses for

attendance or testimony at trials or hearings.

(Medical includes physicians, surgeons,

chiropractors, chiropodists, dentists, osteopaths,

veterinarians, and hospital representatives.)

Expert witnesses: fees and expenses of expert witnesses for

attendance or testimony at trials or hearings.

Lay witnesses: fees and expenses of lay witnesses for attendance or

testimony at trials or hearings.

Service of process: constables' sheriffs' and other fees and

expenses for service of process, including subpoenas.

Transcripts of testimony: stenographers' fees and fees for

transcripts of testimony.

Medical examinations: fees for medical examinations, fees for

performing autopsies, fees for impartial examination, X-rays,

etc., for the purpose of trial and determining questions of

liability. This does not include fees for medical examinations,

X-rays, etc., made to determine necessary treatment, or made

solely to determine the extent or continuation of disability, or

first aid charges, as such fees and charges are includible in

losses.

Miscellaneous: costs of appraisals, expert examinations, surveys,

plans, estimates, photographs, maps, weather reports, detective

reports, audits, credit or character reports, watchman. Charges

for hospital records and records of other kinds, notary fees,

certified copies of certificates and legal documents. Charges for

claim adjustment services by underwriting syndicates, pools and

associations.

Exclude:

Compensation to employees (see salaries).

Expenses of salaried employees (see travel and travel items).

Items includible in allowances to managers and agents.

Payments to State industrial commissions (see taxes, licenses and

fees).

Payments to claim adjusting organizations except where the expense

is billed specifically to individual companies (see boards,

bureaus and associations).

Cost of services of medical examiners for underwriting purposes

(see surveys and underwriting reports).

Salvage and subrogation recovery expense, rewards, lost and found

advertising, expenses for disposal of salvage. Such expenses shall

be deducted from salvage.

Any expenses which by these instructions are includible elsewhere.

(b) Separation of claim adjustment services.

The statistical plans filed by certain rating bureaus contain definitions of “allocated loss adjustment expenses” which exclude for rating purposes certain types of claim adjustment services as defined herein. For the lines of business thus affected, companies which are members of such rating bureaus shall maintain records necessary to the reporting of claim adjustment services—direct, as follows:

(1) as defined in statistical plans; and

(2) other than as defined in statistical plans.

(c) Reinsurance assumed.

Include: Claim adjustment expenses in bills rendered by ceding companies.

(d) Reinsurance ceded.

Include: Claim adjustment expenses billed to assuming insurers.