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RTC Sec 12071-12078 (Definitions) Ocean Marine Insurance
REVENUE AND TAXATION CODE
12071. The definitions contained in this article apply with respect
to ocean marine insurance.
12072. "Current calendar year" means the calendar year for which
underwriting profit is computed pursuant to Section 12073.
12073. "Underwriting profit," as respects any one calendar year,
means the amount arrived at by deducting from the net earned premiums
of that calendar year on ocean marine insurance contracts written
within the United States:
(a) Losses incurred.
(b) Expenses incurred.
In arriving at "underwriting profit" there shall not be deducted
as expenses incurred an amount exceeding 40 per cent of the gross
premiums on ocean marine insurance contracts written during the
current calendar year.
12074. "Net earned premiums" means the amount arrived at by:
(a) Deducting all return premiums, premiums on policies not taken,
and premiums paid for reinsurance, from
(b) Gross premiums on ocean marine insurance contracts written
during the current calendar year, to which remainder is added
(c) Unearned premiums on outstanding ocean marine business at the
end of the preceding calendar year, and from which sum is deducted
(d) Unearned premiums on outstanding ocean marine business at the
end of the current calendar year.
12075. "Losses incurred" means gross losses incurred during the
current calendar year under ocean marine contracts written within the
United States, less reinsurance claims collected or collectible and
salvages or recoveries collectible from any source applicable to the
12076. "Expenses incurred" includes specific and general expenses
incurred in the current calendar year on ocean marine contracts
written within the United States.
12077. "Specific expenses" means expenses incurred directly and
specifically in connection with earned ocean marine premiums,
including all commissions, agency expenses, taxes, licenses, fees,
and loss-adjustment expenses, less recoveries or reimbursements on
account of or in connection with the commissions or other expenses
collected or collectible because of reinsurance or from any other
12078. "General expenses" means the portion of expenses not
chargeable specifically to a particular class of insurance which is
allocated to earned ocean marine premiums, consisting of that
proportion of general or overhead expenses, including salaries of
officers and employees, printing and stationery, and taxes of this
State and of the United States, which the net premiums of ocean
marine insurance written by the insurer bear to the total net
premiums from all classes of insurance written by it during the
current calendar year.