31 Pa. Code § 89a.109 - Initial filing requirements
(a)
This section applies to a long-term care policy issued in this Commonwealth on
or after September 16, 2002.
(b) An
insurer shall provide the information listed in this subsection to the
Commissioner prior to making a long-term care insurance form available for sale
subject to sections 3 and 4 of the Accident and Health Filing Reform Act (40 P.
S. §§ 3803 and 3804).
(1) A copy of
the disclosure documents required in §
89a.108 (relating to required
disclosure of rating practices to consumer).
(2) An actuarial certification consisting of
at least the following:
(i) A statement that
the initial premium rate schedule is sufficient to cover anticipated costs
under moderately adverse experience and that the premium rate schedule is
reasonably expected to be sustainable over the life of the form with no future
premium increases anticipated.
(ii)
A statement that the policy design and coverage provided have been reviewed and
taken into consideration.
(iii) A
statement that the underwriting and claims adjudication processes have been
reviewed and taken into consideration.
(iv) A complete description of the basis for
contract reserves that are anticipated to be held under the form, to include
the following:
(A) Sufficient detail or
sample calculations provided so as to have a complete depiction of the reserve
amounts to be held.
(B) A statement
that the assumptions used for reserves contain reasonable margins for adverse
experience.
(C) A statement that
the net valuation premium for renewal years does not increase (except for
attained-age rating where permitted).
(D) A statement that the difference between
the gross premium and the net valuation premium for renewal years is sufficient
to cover expected renewal expenses; or if this statement cannot be made, a
complete description of the situations where this does not occur.
(I) An aggregate distribution of anticipated
issues may be used as long as the underlying gross premiums maintain a
reasonably consistent relationship.
(II) If the gross premiums for certain age
groups appear to be inconsistent with this requirement, the Commissioner may
request a demonstration under subsection (c) based on a standard age
distribution.
(v) A statement that the premium rate
schedule is not less than the premium rate schedule for existing similar policy
forms also available from the insurer except for reasonable differences
attributable to benefits and a comparison of the premium schedules for similar
policy forms that are currently available from the insurer with an explanation
of the differences.
(c) The Commissioner may request an actuarial
demonstration that benefits are reasonable in relation to premiums. The
actuarial demonstration shall include either premium and claim experience on
similar policy forms , adjusted for premium or benefit differences; relevant and
credible data from other studies, or both. In the event the Commissioner asks
for additional information under this provision, the period in subsection (a)
does not include the period during which the insurer is preparing the requested
information.
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