Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-091 - LONG TERM CARE INSURANCE
Section 482-1-091-.14 - Reserve Standards
Universal Citation: AL Admin Code R 482-1-091-.14
Current through Register Vol. 42, No. 5, February 29, 2024
(1)
(a) When long-term care benefits are provided
through the acceleration of benefits under group or individual life policies or
riders to such policies, policy reserves for such benefits shall be determined
in accordance with Section
27-36-7,
Code of Ala. 1975. Claim reserves must also be
established in the case when such policy or rider is in claim status.
(b) Reserves for policies and riders subject
to this Paragraph (1) should be based on the multiple decrement model utilizing
all relevant decrements except for voluntary termination rates. Single
decrement approximations are acceptable if the calculation produces essentially
similar reserves, if the reserve is clearly more conservative, or if the
reserve is immaterial. The calculations may take into account the reduction in
life insurance benefits due to the payment of long-term care benefits. However,
in no event shall the reserves for the long-term care benefit and the life
insurance benefit be less than the reserves for the life insurance benefit
assuming no long-term care benefit.
(c) In the development and calculation of
reserves for policies and riders subject to this Paragraph (1), due regard
shall be given to the applicable policy provisions, marketing methods,
administrative procedures and all other considerations which have an impact on
projected claim costs, including, but not limited to, the following:
1. Definition of insured events.
2. Covered long-term care
facilities.
3. Existence of home
convalescence care coverage.
4.
Definition of facilities.
5.
Existence or absence of barriers to eligibility.
6. Premium waiver provision.
7. Renewability.
8. Ability to raise premiums.
9. Marketing method.
10. Underwriting procedures.
11. Claims adjustment procedures.
12. Waiting period.
13. Maximum benefit.
14. Availability of eligible
facilities.
15. Margins in claim
costs.
16. Optional nature of
benefit.
17. Delay in eligibility
for benefit.
18. Inflation
protection provisions.
19.
Guaranteed insurability option.
(d) Any applicable valuation morbidity table
shall be certified as appropriate as a statutory valuation table by a member of
the American Academy of Actuaries.
(2) When long-term care benefits are provided other than as Paragraph (1) of this rule, reserves shall be determined in accordance with Section 27-36-5, Code of Ala. 1975.
Author: Reyn Norman, Associate Counsel
Statutory Authority: Code of Ala. 1975, §§ 27-2-17, 27-19-100, et seq.
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