02-031 C.M.R. ch. 940, § 6 - Requirements for Individual and Small Group Rate Submissions other than ACA Rate Filings

Current through 2022-14, April 6, 2022

A. In addition to the requirements of Section 5, the following rate filings must meet the requirements of this section, unless the Superintendent determines that the requirement is not appropriate for a particular filing:

1. All individual health insurance rate filings, except rate filings for policies subject to the ACA rating requirements;

2. Small group rate filings subject to Title 24-A M.R.S.A. § 2808-B, except policies subject to the ACA rating requirements;

3. Association groups as defined by Title 24-A M.R.S.A. § 2805-A and other groups as defined by Title 24-A M.R.S.A. § 2808, except as to any employer subgroups of the association group when:

a. The employer is a member of the group and provides coverage through the group as a bona fide employee benefit; and

b. Either the employer is a large employer or the employer is a small employer and the carrier's anticipated average number of members in all small group health plans during the period for which the rates will be in effect meets standards for full or partial credibility pursuant to the ACA; and

4. Credit union groups as defined by Title 24-A M.R.S.A. § 2807-A.

B. Every policy, rider, or endorsement form affecting benefits which is submitted for approval must be accompanied by a rate filing or, if the form does not require a change in the premium, the submission must include a complete explanation of the effect on the anticipated loss ratio. The rate filing must include all rates, rating formulas, and revisions. Rates must be filed with the form rather than separately.

C. If the filing is a rate revision, the reason for the revision must be stated.

D. Individual rates must be filed separately from group rates. Small group rates must be filed separately from individual or large group rates. The filing must clearly identify the market to which the filing applies. The filing must be received by the Bureau at least 60 days before the implementation date unless the Superintendent waives this requirement pursuant to Title 24-A M.R.S.A. § 2736(1) or § 2808-B(2-A)(A).Every effort will be made to process filings within 30 days. If the Bureau requests additional information or finds rates not to be in compliance, rates approved previously must continue to be used.

E. The filing must include sufficient supporting information to demonstrate that the rates are not excessive, inadequate, or unfairly discriminatory. Carriers are required to review their experience no less frequently than annually and to file rate revisions, upward or downward, as appropriate. Upward revisions must be filed in a timely manner to avoid the necessity of large increases.

1. All PDF documents must be submitted in a searchable format, not scanned.

2. All PDF documents must be unlocked so that information can be copied from the document.

3. All spreadsheets must be in Excel format and include formulas. A PDF copy of each spreadsheet must also be included.

F. If any rates will be automatically adjusted subsequent to the effective date of the filing based on a trend factor or other factor, this must be clearly disclosed in the filing. Automatic trend increases must be limited to one year from the effective date. No automatic trend increases may be implemented one year or more after the effective date of the filing unless a new filing is submitted and approved.

G. In addition to the general filing requirements for all filings, rate submissions subject to this section must contain to the extent applicable for the type of filing:

1. Morbidity:Describe the morbidity basis for the form, including the source or sources used. Any substantive adjustments from the source or earlier assumptions must be explained. The morbidity assumed must be adequately justified by supporting data.

2. Mortality:If applicable, state the mortality basis and any substantive adjustments from earlier assumptions must be explained.

3. Issue Age Range:Specify the issue age range of the form and whether premiums are on an issue age, attained age, or other basis.

4. Average Premium:Display the average annual premium per individual policy or group certificate for both Maine and all states in which the form is or was sold. If a rate adjustment is proposed, the filing must disclose the average percentage increase a policyholder will experience as well as the largest percentage increase that any in-force policy will receive. The average increase must be determined by comparing the aggregate premium before and after the increase (assuming no lapses) for all policies renewing during the period during which the rates are intended to be in effect. The maximum increase is the largest increase for an in-force policy, including changes due to trend, aging, and changes in demographic, area, industry rating factors, but excluding changes in the covered population under a group policy.

5. Medical Trend Assumptions:Provide the medical trend and any other trends used and the assumptions used to calculate the trend(s).

6. Maine Experience on the Form (Past and Future Anticipated): Consider experience solely within the State of Maine in developing rates. However, if there is insufficient experience within Maine upon which a rate can be based, the carrier may use nationwide experience. In considering experience outside the State of Maine, as much weight as possible must be given to Maine experience. If nationwide experience is used, premiums must be adjusted to the Maine rate level and, where appropriate, claims must be adjusted to Maine utilization and price levels. If premiums incorporate area factors that adjust for variations in utilization and price levels such that adjusting experience to Maine levels would result in the same percentage adjustment to both premiums and claims, then neither adjustment need be made. The carrier in its rate filing shall expressly show what geographic experience it is using. Experience from inception for each calendar year and, where appropriate, each policy year must be displayed, except that for small group business only the past three years must be displayed, including the following information :

(1) Year

(2) Collected premium

(3) Earned premium

(4) Paid claims

(5) Paid pure loss ratio

(6) Change in claim liability and reserve

(7 ) Incurred claims

(8 ) Incurred pure loss ratio

(9 ) Expected incurred claims

(10) Actual-to-expected claims

(11) Active Life Reserves

For future years, columns (3), (7), and (8) must be displayed. For periods where the actual claim runoff is complete, that data must be displayed to replace (6). Past experience must be presented on both an actual basis and a constant premium rate basis.

7. National Experience:Provide the same data as for paragraph 6 for all states in which the form is or was sold.

8. History of Rate Adjustments:List the approval dates and average percentage rate adjustments for the form both nationwide and in Maine since inception of the policy form, except that for small group business only data for the past three years need be listed.

9. Renewability Clause:Identify the renewability classification of the form.

10. Loss Ratios:State the minimum pure loss ratio determined according to Section 7, 8, or 9, as applicable, and the anticipated future and lifetime pure loss ratios.

11. Premium Classes:State all the attributes upon which the premium rates vary. If the form is area-rated, a complete table of area factors for all states must be included.

12. Marketing Method:Provide a brief description of the market and the marketing method. Specify whether the form is still being sold and whether the filing applies only to new business, only to in-force business, or both, and the reasons therefor.

13. Medical Underwriting:Provide a description of the extent to which this product will be medically underwritten, if any, and the expected impact by duration and in total, on claim costs.

14. Active Life Reserves: If applicable, the filing must state whether the policy includes active life reserves and describe the basis for these reserves.

15. Actuarial Certification:Provide certification by a qualified actuary that to the best of the actuary's knowledge and judgment, the entire rate filing is in compliance with the applicable laws of the State of Maine and with the rules of the Bureau of Insurance. "Qualified actuary," as used herein, means a member in good standing of the American Academy of Actuaries.

Notes

02-031 C.M.R. ch. 940, § 6