Current through Register Vol. 22-07, April 1, 2022
(1) Loss ratio and
rating standards. For policies issued on or after July 1, 1992, and those
policies specifically approved by the commissioner under WAC
284-66-063 before July 1, 1992:
(a) A medicare supplement policy form or
certificate form must be rated on an issue-age level premium basis or community
rated basis, as described in WAC
284-66-243(7).
(b) A medicare supplement policy form or
certificate form may 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 seventy-five percent of
the aggregate amount of premiums earned in the case of group policies;
or
(ii) At least sixty-five percent
of the aggregate amount of premiums earned in the case of individual policies,
calculated on the basis of incurred claims experience or incurred health care
expenses where coverage is provided by a health maintenance organization or
health care service contractor on a service rather than reimbursement basis and
earned premiums for the period, according to accepted actuarial principles and
practices.
(c) All
filing of rates and rating schedules must 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 must 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.
(d) For purposes of applying subsection
(1)(b) of this section and WAC
284-66-243(3)(c)
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.
(e) For
policies issued before April 28, 1996, expected claims in relation to premiums
must meet:
(i) The originally filed
anticipated loss ratio when combined with the actual experience since
inception;
(ii) The appropriate
loss ratio requirement from WAC
284-66-203(1)(b)(i) and
(ii) when combined with actual experience
beginning with April 28, 1996, to date; and
(iii) The appropriate loss ratio requirement
from WAC
284-66-203(1)(b)(i) and
(ii) over the entire future period for which
the rates are computed to provide coverage.
(iv) In meeting the tests in (e)(i), (ii),
and (iii) of this subsection, and for purposes of attaining credibility, with
the prior written approval of the commissioner, an issuer may combine
experience under policy forms that provide substantially similar coverage. Once
a combined form is adopted, the issuer may not separate the experience, except
with the prior written approval of the commissioner.
(2) Refund or credit calculation.
(a) An issuer must collect and file with the
commissioner by May 31 of each year the data contained in the reporting form
contained in WAC
284-66-232 for each type in a
standard medicare supplement benefit plan.
(b) 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) in year three or later, then a
refund or credit calculation is required. The refund calculation must 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 must be excluded. This subsection applies only
to annual experience reporting. Any revision of premium rates must be filed
with and approved by the commissioner according to WAC
284-66-243.
(c) For policies or certificates issued
before July 1, 1992, the issuer must 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 section. The
first report is due by May 31, 1998.
(d) A refund or credit may 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 must
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 may it be less than the average rate of interest for 13-week
Treasury notes. A refund or credit against premiums due must be made by
September 30 following the experience year that is the basis for the refund or
credit.
(3) Annual
filing of premium rates.
On or before May 31 of each calendar year, an issuer of
standardized medicare supplement policies and certificates issued according to
WAC 284-66-063, must file its rates,
rating schedule, and supporting documentation including ratios of incurred
losses to earned premiums by policy duration for approval by the commissioner
on the form provided at subsection (6) of this section. The supporting
documentation must also demonstrate, according to 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 must exclude active life reserves. An expected
third-year loss ratio that is greater than or equal to the applicable
percentage must be demonstrated for policies or certificates in force less than
three years.
(4) As soon as
practicable, but before the effective date of enhancements in medicare
benefits, every issuer of medicare supplement policies or certificates in this
state must file with the commissioner, according to the applicable filing
procedures of this state:
(a)
(i) Appropriate premium adjustments necessary
to produce loss ratios as anticipated for the current premium for the
applicable policies or certificates. The supporting documents as necessary to
justify the adjustment must accompany the filing.
(ii) An issuer must make any premium
adjustments as are necessary to produce an expected loss ratio under the policy
or certificate to comply with minimum loss ratio standards for medicare
supplement policies and that 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 that would modify the loss ratio experience under the policy
other than the adjustments described in this section may be made with respect
to a policy at any time other than upon its renewal date or anniversary
date.
(iii) 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.
(b) 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 must provide a clear description of the
medicare supplement benefits provided by the policy or certificate.
(5) Public hearings.
(a) The commissioner may conduct a public
hearing to gather information concerning a request by an issuer for an increase
in a rate for 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
must be furnished in a manner deemed appropriate by the commissioner.
(b) This section does not in any way restrict
a commissioner's statutory authority to approve or disapprove rates.
(6) Annual medicare supplement
insurance reporting form:
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Annual Filing of Premium Rates and Experience
To be filed on or before May 31 of each
calendar year
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Experience from January 1 to December 31, of (year)
reported by duration for all business from inception to December 31, 20.
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Company Name
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Address
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NAIC Group Code
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NAIC Company Code
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CIC Code
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Plan
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Type
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Form No.
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Premium Rates [Attach schedule]
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Insurance is [check one]
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Group
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or, Individual
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Washington Experience. [Show all experience for the
reported calendar year (separately for each duration).]
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Policy
Duration
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Incurred
Losses
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Earned
Premiums
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Loss
Ratio
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Claim
Reserves
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I hereby certify that I have supervised the
preparation of this experience exhibit, that all durational information has
been furnished, and to the best of my knowledge, the data is accurate and is in
compliance with
RCW
48.66.150 and WAC
284-66-203.
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Signature of Officer
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Date
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Name and Title of Officer
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Prepared by
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Phone Number
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Phone Number
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