Tenn. Comp. R. & Regs. 0780-01-93-.05 - PREVIOUSLY APPROVED FORMS

The filing of revised premium rates on any previously approved policy, endorsement, rider, certificate or application shall also include the following:

(1) A statement of the scope and reason for the revision, and an estimate of the expected average effect on premiums, including the anticipated medical loss ratio for the form;

(2) A statement as to whether the filing applies only to new business, only to in-force business, or both, and the reasons it applies only to new or only to in-force business;

(3) A history of the experience under existing rates, including at least the data indicated in Rule 0780-1-93-.07. The history may also include, if available and appropriate, the ratios of actual claims to the claims expected according to the assumptions underlying the existing rates. Additional data should include: substitution of actual claim run-offs for claim reserves and liabilities; determination of medical loss ratios with the increase in policy reserves (other than unearned premium reserves) added to benefits rather than subtracted from premiums; accumulations of experience funds; substitution of net level policy reserves for preliminary term policy reserves; adjustment of premiums to an annual mode basis; or other adjustments or schedules suited to the form and to the records of the company. All additional data must be reconciled, as appropriate, to the required data;

(4) The date and magnitude of each previous rate change, if any;

(5) Data and documentation in connection with the following must be provided to the extent applicable to the filing under review, with an explanation as to how each item has or has not impacted the premium rate. If the item is not applicable to the filing under review, provide an explanation as to why the item has not impacted the premium rate:

(a) Medical trend changes by major service categories;

(b) Utilization changes by major service categories;

(c) Cost-sharing changes by major service categories;

(d) Benefit changes;

(e) Changes in enrollee risk profile;

(f) Any overestimate or underestimate of medical trend for prior year periods related to the rate increase;

(g) Changes in reserve needs;

(h) Changes in administrative costs related to programs that improve health care quality;

(i) Changes in other administrative costs;

(j) Changes in applicable taxes, licensing, or regulatory fees;

(k) Medical loss ratio;

(l) Health insurance issuer's capital and surplus; and

(m) Other information the Commissioner determines is necessary to review the rates for approval, the requirements will be posted in SERFF;

(6) Filing of Preliminary Justification - In the case of a rate increase of ten percent (10%) or more, or above the State-specific threshold as defined by the Secretary of the U.S. Department of Health and Human Services ("HHS"), pursuant to the HHS final regulation at 45 C.F.R. part 154, Subpart B, Section 200, a health insurance issuer must file with the Tennessee Department of Commerce and Insurance and HHS a Preliminary Justification. The Preliminary Justification must be prepared in accordance with the standards set forth in HHS final regulations at 45 C.F.R. part 154, Subpart B, Section 215, and must contain the following:

(a) Rate Increase Summary (Part I), which must be consistent with the requirements set forth in 45 C.F.R. § 154.215(e); and

(b) A written description justifying the rate increase (Part II), which must be consistent with the requirements set forth in 45 C.F.R. § 154.215(f); and

(7) The review process will include an examination of the following:

(a) The reasonableness of the assumptions used by the health insurance issuer to develop the proposed rate increase and the validity of the historical data underlying the assumptions; and

(b) The health insurance issuer's data related to past projections and actual experience.

Notes

Tenn. Comp. R. & Regs. 0780-01-93-.05

Emergency rule filed August 29, 2011; effective through February 25, 2012. Original rule filed November 22, 2011; effective February 20, 2012.

Authority: T.C.A. §§ 4-5-206, 56-1-212, 56-2-201, 56-2-301, 56-7-2802, 56-26-102, 56-26-103, 56-26- 114, 56-26-202, 56-27-112, 56-28-106, 56-29-117, 56-32-107, Public Law 111-148 as amended by Public Law 111-152 (2010), and 45 C.F.R. part 154, Subpart B, Section 200.