Utah Admin. Code R590-85-4 - General Requirements
(1)
When a Rate Filing is Required.
(a) Every
filing for a policy, certificate, or endorsement affecting benefits shall be
accompanied by a rate filing that complies with this rule.
(b) A rate filing is not required for an
endorsement that has no rating effect.
(c) Any subsequent addition to or change in
rates applicable to the policy, certificate, or endorsement shall also be filed
prior to use.
(2) General
Contents of All Rate Filings. Each rate submission shall include:
(a) rate sheets for current and proposed
rates, if applicable, that are clearly identified;
(b) an actuarial memorandum describing the
basis on which rates were determined, which includes:
(i) description of the policy, benefits,
renewability, general marketing methods, and issue age limits;
(ii) description of how rates were
determined, including a general description and source of each assumption
used;
(iii) estimated average
annual premium per policy for Utah;
(iv) anticipated loss ratio, including
interest, of the present value of the expected benefits to the present value of
the expected premiums over the entire period for which rates are computed to
provide coverage;
(v) minimum
anticipated loss ratio presumed reasonable in Subsection
R590-85-5(1);
and
(vi) signed certification by a
qualified actuary stating that, to the best of the actuary's knowledge and
judgment, the rate filing is in compliance with the applicable laws and rules
of Utah and the benefits are reasonable in relation to the premiums charged;
and
(c) a statement that
the rates have been filed with and approved by the home state, except as
provided in Subsection (3).
(3) If the home state does not require
approval, then alternative information must be submitted, including:
(i) a list of the states to which the rates
were submitted;
(ii) the date
submitted; and
(iii) any responses
received.
(4) Previously
Filed Form. Filing a rate change for a previously filed rate shall include the
following:
(a) a statement of the scope and
reason for the change;
(b) a
description of how revised rates were determined, including a general
description and source of each assumption used;
(c) an estimated average annual premium per
policy in Utah, before and after the proposed rate increase;
(d) a comparison of Utah and average
nationwide premiums, for representative rating cells based on the Utah
distribution of business;
(e) a
comparison of revised premiums with current scale;
(f) a statement as to whether the filing
applies to new business, in-force business, or both, and the reasons;
(g) a detailed history of national
experience, which includes the data in Subsection (5) that shows on a yearly
and durational basis:
(i) premiums
received;
(ii) earned
premiums;
(iii) benefits
paid;
(iv) incurred
benefits;
(v) increase in active
life reserves;
(vi) increase in
claim reserves;
(vii) incurred loss
ratio;
(viii) cumulative loss
ratio; and
(ix) any other available
data the insurer may wish to provide;
(h) detailed history of Utah experience,
which includes the data in Subsection (5) that shows on a yearly basis:
(i) earned premiums;
(ii) incurred benefits;
(iii) incurred loss ratio; and
(iv) cumulative loss ratio;
(i) anticipated nationwide future
loss ratio, which includes:
(i) projected
premiums;
(ii) projected
claims;
(iii) projected loss ratio;
and
(iv) assumptions and
calculations that include interest;
(j) anticipated Utah future loss ratio, which
includes:
(i) projected premiums;
(ii) projected claims;
(iii) projected loss ratio; and
(iv) description of assumptions and
calculations that include interest;
(k) cumulative past and projected future loss
ratio and description of the calculation;
(l) the number of policyholders in Utah;
and
(m) the date and magnitude of
all previous rate changes for Utah and nationwide.
(5) Experience Records.
(a) As required by the Accident and Health
Policy Experience Exhibit, an insurer shall maintain records of premiums
collected, earned premiums, benefits paid, incurred benefits and reserves for
each calendar year for each policy form, and applicable endorsements.
(i) Separate data may be maintained for each
endorsement to the extent appropriate.
(ii) Experience under policies that provide
substantially similar coverage may be combined.
(iii) The data shall be for all years of
issue combined, for each calendar year of experience since the year the form
was first issued.
(b) A
rate revision must provide the information required in Subsection (5)(a) on
both a national and a state basis.
(6) Evaluating Experience Data. In
determining the credibility and appropriateness of experience data, all
relevant factors shall be considered, including:
(a) statistical credibility of premiums and
benefits, for example low exposure or low loss frequency;
(b) experience and projected trends relative
to the kind of coverage, for example persistency, inflation in medical
expenses, or economic cycles affecting disability income experience;
(c) concentration of experience at early
policy durations where select morbidity and preliminary term reserves are
applicable and where loss ratios are expected to be substantially lower than at
later policy durations; and
(d) the
mix of business by risk classification.
(7) Implementation of a filed rate increase
must be initiated within 12 months from the filed date, otherwise a company
forfeits the right to implement the increase.
(8) A filing may be rejected or prohibited if
the company fails to submit all required information.
Notes
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