Loss Ratio Standards.
Medicare supplement policy form or certificate form shall not be delivered or
issued for delivery unless the policy form or certificate form can be expected,
as estimated for the entire period for which rates are computed to provide
coverage, to return to policyholders and certificate holders in the form of
aggregate benefits, not including anticipated refunds or credits, provided
under the policy form or certificate form:
(i) at least 75% of the aggregate amount of
premiums earned in the case of group policies; or
(ii) at least 65% of the aggregate amount of
premiums earned in the case of individual policies.
The loss ratio shall be calculated on the
basis of incurred claims experience or incurred health care expenses where
coverage is provided by a health maintenance organization on a service rather
than reimbursement basis and earned premiums for the period and in accordance
with accepted actuarial principles and practices. Incurred health care expenses
where coverage is provided by a health maintenance organization shall not
(i) home office and overhead
(iii) commissions and other
(v) capital costs;
(vi) administration costs; and
(vii) claims processing costs.
(2) All filings of rates
and rating schedules shall demonstrate that expected claims in relation to
premiums comply with the requirements of this section when combined with actual
experience to date. Filings of rate revisions shall also demonstrate that the
anticipated loss ratio over the entire future period for which the revised
rates are computed to provide coverage can be expected to meet the appropriate
loss ratio standards, and comply with the requirements of R590-85.
(3) For purposes of applying Subsections (1)
and 15.D.(3) only, policies issued as a result of solicitations of individuals
through the mails or by mass media advertising, including both print and
broadcast advertising, shall be deemed to be individual policies.
For policies issued prior to July 30,
1992, expected claims in relation to premiums shall meet:
(a) the originally filed anticipated loss
ratio when combined with the actual experience since inception;
(b) the appropriate loss ratio requirement
from Subsections A(1)(a)(i) and (ii) when combined with actual experience
beginning with the effective date of October 31, 1994 as set forth in Bulletin
(c) the appropriate loss
ratio requirement from Subsections A(1)(a)(i) and (ii) over the entire future
period for which the rates are computed to provide
Refund or Credit Calculation.
shall collect and file with the commissioner by May 31 of each year each
(a) Medicare Supplement
of Benchmark Ratio Since Inception for Group Policies; and
(c) Calculation of the Benchmark Ratio Since
Inception For Individual Policies.
(2) If on the basis of the experience as
reported the benchmark ratio since inception, ratio 1, exceeds the adjusted
experience ratio since inception, ratio 3, then a refund or credit calculation,
is required. The refund calculation shall be done on a statewide basis for each
type in a standard Medicare supplement benefit plan. For purposes of the refund
or credit calculation, experience on policies issued within the reporting year
shall be excluded.
(3) For the
purposes of this section, policies or certificates issued prior to July 30,
1992, the issuer shall make the refund or credit calculation separately for all
individual policies, including all group policies subject to an individual loss
ratio standard when issued, combined and all other group policies combined for
experience after the effective date of this rule. The first report shall be due
by May 31 each year.
(4) A refund
or credit shall be made only when the benchmark loss ratio exceeds the adjusted
experience loss ratio and the amount to be refunded or credited exceeds a de
minimis level. The refund shall include interest from the end of the calendar
year to the date of the refund or credit at a rate specified by the Secretary
of Health and Human Services, but in no event shall it be less than the average
rate of interest for 13-week Treasury notes. A refund or credit against
premiums due shall be made by September 30 following the experience year upon
which the refund or credit is based.
Filing of Premium Rates.
Annual Filing of Premium Rates Report.
(a) An issuer of Medicare supplement policies
and certificates issued before or after the effective date of July 30, 1992 in
this state shall file annually its rates, rating schedule and supporting
documentation including ratios of incurred losses to earned premiums by policy
duration in accordance with the filing requirements and procedures prescribed
by the commissioner. The supporting documentation shall also demonstrate in
accordance with actuarial standards of practice using reasonable assumptions
that the appropriate loss ratio standards can be expected to be met over the
entire period for which rates are computed. The demonstration shall exclude
active life reserves. An expected third-year loss ratio, which is greater than
or equal to the applicable percentage, shall be demonstrated for policies or
certificates in force less than three years.
(b) The Annual Filing of Premium Rates Report
shall be filed no later than May 31 each year, and in compliance with
Medicare Supplement Rate and Enrollment Data.
(a) An issuer shall annually file by May 31
the Utah rate and enrollment information for 2010 Medicare Supplement plans as
specified in the "2010MedSuppRateDataUT_v1.0.xlsx'spreadsheet.
(b) The Annual Filing of Rate and Enrollment
Data shall be filed no later than May 31 each year, and in compliance with
(a) As soon as practicable, but prior to the
effective date of enhancements in Medicare benefits, every issuer of Medicare
supplement policies or certificates in this state shall file with the
commissioner, in accordance with the applicable filing procedures of this
state, 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
shall accompany the filing.
issuer shall make premium adjustments necessary to produce an expected loss
ratio under the policy or certificate to conform to minimum loss ratio
standards for Medicare supplement policies and which 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. No premium adjustment which would modify the loss ratio
experience under the policy other than the adjustments described herein shall
be made with respect to a policy at any time other than upon its renewal date
or anniversary date.
(c) If an
issuer fails to make premium adjustments acceptable to the commissioner, the
commissioner may order premium adjustments, refunds or premium credits deemed
necessary to achieve the loss ratio required by this section.
(4) Any appropriate riders,
endorsements or policy forms needed to accomplish the Medicare supplement
policy or certificate modifications necessary to eliminate benefit duplications
with Medicare. The riders, endorsements or policy forms shall provide a clear
description of the Medicare supplement benefits provided by the policy or
The commissioner may conduct a public hearing to gather
information concerning a request by an issuer for an increase in a rate for a
policy form or certificate form if the experience of the form for the previous
reporting period is not in compliance with the applicable loss ratio standard.
The determination of compliance is made without consideration of any refund or
credit for the reporting period. Public notice of the hearing shall be
furnished in a manner deemed appropriate by the commissioner.