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PDFWAC 284-24D-340

If defense services are provided by company employees, must company overhead be reported with ALAE?

(1) Some insuring entities and self-insurers use the services of internal staff to defend claims. For example, an insuring entity or self-insurer may:
(a) Ask its professional medical staff to:
(i) Evaluate medical care;
(ii) Review medical records; or
(iii) Assist in case preparation.
(b) Retain in-house legal counsel to:
(i) Assess risk of litigation;
(ii) Evaluate legal issues;
(iii) Engage in case preparation or management activities, or settlement negotiations.
(2) When calculating ALAE, a reporting entity that uses internal staff to defend a claim as described in subsection (1) of this section and WAC 284-24D-020(1):
(a) Must include salary, benefits and an allocation for overhead for those employees; and
(b) May use average salaries and time studies when calculating ALAE.
[Statutory Authority: RCW 48.02.060, 48.140.060, and 7.70.140. WSR 07-12-057 (Matter No. R 2006-02), ยง 284-24D-340, filed 6/4/07, effective 7/22/07.]
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