Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) This
regulation applies to all insurers who offer Medicare Supplement Insurance,
including pre-standardized Medicare Supplement Insurance plans, standardized
Medicare Supplement Insurance plans, and Medicare SELECT plans, whether to
individuals or groups.
(b) Annual
premium rates and loss ratio experience filings must be made regardless of Medicare
changes, an insurer's prior year loss ratio experience, future marketing plans, or
whether new premium rates are being requested.
(c) Insurers offering Medicare Supplement
Insurance must include the following in their annual filings with the Commissioner
of Insurance:
(1)
Premium Rate
Schedules. Submit premium rate schedules for each individual policy or
group certificate. Indicate all special rating factors used for California, such as
a zip code rating factor. Indicate whether a premium rate change is requested and,
if so, the percentage change.
(2)
Policy Forms. Submit specimens of each individual Medicare
Supplement Insurance individual policy or group certificate and outlines of coverage
for each plan, if revised, new, or not included in a filing for a previous
year.
(3)
Loss Ratio Experience
Exhibits. Provide complete loss ratio information for each Medicare
Supplement Insurance plan since the inception of that plan. For rate filings made in
anticipation of Medicare benefit changes, include at least nine months' of loss
ratio experience (unless the plan has not been marketed for at least nine months, in
which case, submit loss ratio experience information for the period the plan was
marketed). First quarter filings must include the entire previous year's loss ratio
experience. Such information for plans covering fewer than 100 California residents
may be combined if the coverages are similar. Re-state the loss ratio information
for the previous year, adjusted for run-off accruals to date. Include the number of
California residents covered by the plan.
(4)
Projected Loss Ratio
Experience. Provide projected loss ratio experience for at least five years
into the future, reflecting that projected experience both with and without any
requested premium rate increase.
(5)
NAIC Medicare Supplement Experience Exhibit. Provide a National
Association of Insurance Commissioners (NAIC) Experience Exhibit for each individual
policy form or group certificate which covers 100 or more California
residents.
(6)
Actuarial
Memorandum. Submit an actuarial memorandum for each Medicare Supplement
Insurance plan in accordance with subsection (d).
(d) Medicare Supplement Insurers must provide an
actuarial analysis for each individual plan or group certificate that covers 100 or
more California residents in an actuarial memorandum. More than one analysis can be
combined in one memorandum. Once actuarial analysis may be provided for all
individual plans or groups with certificates covering fewer than 100 California
residents. Each insurer must use its own data; however, actuarial studies from other
sources may be submitted to provide additional information regarding plan renewal
assumptions.
Each actuarial analysis and memorandum must include:
(1) Historical and projected premium income,
claims, and loss ratio experience for each plan.
(2) A description of coverage, including coverage
renewability, whether marketing of the plan is continuing, the date marketing began,
and the date marketing stopped, if it has stopped.
(3) For rate increase requests, the average
current premium rate and the average premium rate for the proposed new premium rates
for California residents, compared to the insurer's average premium rates for
current and proposed new premium rates nationally.
(4) Active life reserves at the end of the prior
calendar year.
(5) Monthly claim
triangulation lag reports for California residents and nationally for the most
recent 24 months for each plan or group policy covering 300 or more California
residents. Circle or highlight the relevant data showing how the lag reports are
used in developing incurred but not reported (IBNR) claims and claim
reserves.
(6) A description of the
experience and any premium rating request, including trend for benefits not covered
by Medicare (e.g., prescription drugs).
(7) National data and rating development presented
in the same format as provided for California insureds.
(8) Cost trend assumptions.
(9) Administrative costs, including, but not
limited to, commissions, claims processing, customer services, and taxes.
(10) A certification that the loss ratios comply
with statutory requirements for loss ratios; and, if a premium rate increase is
requested, that the loss ratios will continue to comply with such statutory
requirements if a premium rate increase is approved.
(11) A certification that the filed rates are
reasonable in relation to benefits provided for each individual policy form or group
certificate.
(e) Completion
and submission to the Commissioner of the documents and information required in
subsection (b), (c), and (d) above, together with evidence that statutorily required
minimum loss ratios are met constitutes the minimum standards necessary for approval
of a Medicare Supplement Insurance premium rate filing.
1. New section
filed 12-11-2000; operative 1-10-2001 (Register 2000, No.
50).
Note: Authority cited: Section
10195.1(d),
Insurance Code. Reference: Section
10195.1,
Insurance Code.
