2008 Interim Ceding Expenses - April 14, 2008

Bulletin No. 867 was posted to CAR's website on March 28, 2008 documenting each company's interim expense allowance.

Private Passenger interim ceding expense allowances for calendar year 2008 have been calculated using the approved 2008 residual market rate components, adjusted for relative claim frequency results evaluated at March, 2007. Reports with detail calculations for Private Passenger are available under the Financial Section of the Reports area to those users with a valid user-ID and password.

Note that due to the April 1, 2008 effective date for the 2008 private passenger rate change, the attached expense allowances will be used to determine expenses beginning with premiums reported in the April 2008 monthly accounting/statistical submission. Expenses for premium reported in the January, February, and March monthly accounting/statistical submissions will be based on interim 2007 ceding expense allowances as set forth in Bulletin No. 833. The final calendar year 2008 ceding expense true-up will use a premium based weighted average of the approved rate components in the 4/1/2007 and 4/1/2008 private passenger rate filings.

For Commercial classifications, the calendar year 2008 Servicing Carriers will be provided an interim expense allowance of 29.75% for liability premium, and 31.89% for physical damage premium. For a detailed summary of the calculation of these interim expenses, please reference Commercial Lines Notice No. 92, distributed on March 26, 2008.

For ceded taxi, limousine, and car service business, CAR will use the policy year 2008 per exposure allowances for company/ULAE expenses converted to a percentage of premium based upon the 2007 current average premium. The company/ULAE expenses are combined with the most recently approved rate components for commissions and premium tax. The resulting interim expense ratios are 21.96% for Taxis, 17.39% for Limousines, and 21.33% for Car Service.