(a) An issuer of medicare supplement policies
and certificates shall file annually its forms, rates, rating schedule, and
supporting documentation, including ratios of incurred losses to earned
premiums by policy duration, for approval by the director. Supporting
documentation must demonstrate in accordance with accepted actuarial practices
and using reasonable assumptions that the appropriate loss ratio standards
under
3 AAC 28.468 can be expected to be
met over the entire period for which rates are computed, excluding active life
reserves. An expected third-year loss ratio that is greater than or equal to
the applicable percentage will be demonstrated for policies or certificates in
force less than three years.
(b) As
soon as practicable, but before the effective date of enhancements in medicare
benefits, an issuer of medicare supplement policies or certificates in this
state shall file with the director appropriate premium adjustments necessary to
produce loss ratios as anticipated for the current premium for the applicable
policies or certificates. The supporting documents necessary to justify the
adjustment to produce loss ratios required by
3
AAC 28.468(a) must accompany the
filing. An issuer shall make premium adjustments necessary to produce an
expected loss ratio under a policy or certificate that will conform with
3
AAC 28.468 and that are expected to result in a loss
ratio at least as great as that originally anticipated in the rates used to
produce current premiums by the issuer for the medicare supplement policies or
certificates. A premium adjustment that would modify the loss ratio experience
under the policy other than the adjustments described in this section may not
be made with respect to a policy at any time other than upon its renewal date
or anniversary date. Any rider, endorsement, or policy form needed to
accomplish the medicare supplement policy or certificate modification necessary
to eliminate benefit duplication with medicare shall also be filed with the
director in a manner that provides a clear description of the medicare
supplement benefits provided by the policy or certificate.
(c) If an issuer fails to make premium
adjustments acceptable to the director, the director will, in the director's
discretion, order premium adjustments, refunds, or premium credits considered
necessary by the director to achieve the loss ratio required by this
section.
(d) The director will, in
the director's discretion, conduct a public hearing on an increase in a rate
for a policy form or certificate form if the experience of the form for the
prior reporting period is not in compliance with the applicable loss ratio
standard. The determination of compliance will be made by the director without
consideration of any refund or credit for the reporting period. Notice of a
hearing will be published in a newspaper of general circulation and given in
accordance with
AS
21.06.200.
