No. 27844 (Amendment): R590-148-22. Premium Rate Schedule Increases

DAR File No.: 27844
Filed: 04/29/2005, 08:38
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The change to this rule is being made to clarify that long-term care rate filings must not only comply with this rule, R590-148, but they must also comply with the requirements of Rule R590-85, Individual Disability Insurance Forms and Individual and Group Medicare Rates.

 

Summary of the rule or change:

The new subsection to this rule clarifies that a health insurer's long-term care rate filing must also comply with Rule R590-85.

 

State statutory or constitutional authorization for this rule:

Sections 31A-2-201 and 31A-22-1404

 

Anticipated cost or savings to:

the state budget:

The changes to this rule will not require anything new of the department licensee, therefore, there will be no change in filings required or fees paid to the department or state's budget.

 

local governments:

This rule only applies to the relationship between the Insurance Department and their licensees. It does not affect local government laws or procedures.

 

other persons:

The changes to this rule will create no change in what is already required of insurers of long-term care insurance. It simply clarifies that they must also comply with Rule R590-85. As a result, this change will have no fiscal impact on insurers or their insureds.

 

Compliance costs for affected persons:

The changes to this rule will create no change in what is already required of insurers of long-term care insurance. It simply clarifies that they must also comply with Rule R590-85. As a result, this change will have no fiscal impact on insurers or their insureds.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

The changes to this rule will create no fiscal impact on Utah businesses. D. Kent Michie, Commissioner

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

 

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2005

 

This rule may become effective on:

06/15/2005

 

Authorized by:

Jilene Whitby, Information Specialist

 

 

RULE TEXT

R590. Insurance, Administration.

R590-148. Long-Term Care Insurance Rule.

R590-148-22. Premium Rate Schedule Increases.

(1) This section shall apply as follows:

(a) except as provided in Subsection R590-148-22(1)(b), this section applies to any long-term care policy or certificate issued in this state on or after January 1, 2002,

(b) for certificates issued on or after January 1, 2002, under a group long-term care insurance policy, which policy was in force at the time this rule became effective, the provisions of this section shall apply on the policy anniversary following July 1, 2002.

(2) An insurer shall file the information listed in this subsection to the commissioner prior to making a long-term care insurance form available for sale:

(a) a copy of the disclosure documents required in Section R590-148-20; and

(b) 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:

(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; and

(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 such a 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; and

(II) if the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under Subsection R590-148-22(3) based on a standard age distribution;

(v)(A) 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; or

(B) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

(3) 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 any premium or benefit differences, relevant and credible data from other studies, or both.

(4) The premiums charged to an insured for long-term care insurance may not increase due to either:

(a) the increasing age of the insured at ages beyond 65; or

(b) the duration the insured has been covered under the policy.

(5) Rate filings must comply with the requirements of R590-85, Individual Disability Insurance Forms and Individual and Group Medicare Rates.

 

KEY: insurance

[April 18, 2002]2005

Notice of Continuation August 14, 2002

31A-2-201

31A-22-1404