(a) Each insurer
shall submit the rates on every Medicare supplement policy form for initial
approval by the Commissioner and annually thereafter.
(b) An insurer seeking to change rates on a
Medicare supplement policy form shall submit the revised rates to the insurance
department at least sixty days prior to the proposed effective date of the
change. The department shall review the revised rates and, with respect to any
request for an increase in rates, shall hold a public hearing on such request
in accordance with the department's rules of practice. The commissioner shall
approve or deny any request for a change in rates on a Medicare supplement
policy form within forty-five days of its receipt.
(c) Where an insurer does not seek to change
rates for a policy form, the insurer shall submit the previously approved rates
at least forty-five days before the expiration of twelve months from the
effective date of those rates. The commissioner shall either approve the
continued use of such rates or notify the insurer that premium adjustments are
necessary to achieve the appropriate loss ratio. If the insurer fails to make
premium adjustments acceptable to the commissioner, the commissioner shall
order premium adjustments, refunds or premium credits necessary to achieve the
appropriate loss ratio.
(d) All
submission of rates for Medicare supplement policy forms shall be made in
duplicate, accompanied by a postage paid return envelope of sufficient size to
accommodate the filing. An Actuarial Memorandum describing the basis on which
rates were determined shall accompany the submission and shall include the
following items:
(1) The policy form number
for which rates are being submitted.
(2) A cover letter that includes a
description of the form in sufficient detail to accurately illustrate its
benefits and terms.
(3) The method
of marketing used. A statement that the policy form is actively offered for
sale. If a policy has been discontinued, the date when sales ceased shall be
stated.
(4) The rates appropriate
for the state, including all modal factors. The assumed period for which the
rates are to be effective should be stated.
(5) The explicit assumptions and factors used
in calculating the community rate. These shall include, but are not limited to,
any loads for the guaranteed issue requirement, the required offering to the
disabled or the automatic crossover system (piggybacking). Experience rating by
case is not allowed for group policies.
(6) A statement of the anticipated loss ratio
over the total lifetime of the policy. A demonstration that the minimum loss
ratio requirements of 65% for individual policies and 75% for group policies
will be met. Such demonstration shall exclude active life reserves.
(7) The expected future loss ratio projected
through the period for which the rates will be effective. An expected
third-year loss ratio which is greater than or equal to the applicable loss
ratio standard shall be demonstrated for policies or certificates in force less
than three years.
(8) A statement
signed by a member of the American Academy of Actuaries or another individual
acceptable to the commissioner, certifying that: the loss ratios are in
compliance with section
38a-495(b)
or section
38a-522(b)
of the general statutes, or section
38a-495a-10
of the regulations of state agencies, as appropriate; the calculations were
made in accordance with actuarial standards of practice; the premiums are
neither excessive nor inadequate; and the premiums are reasonable in relation
to benefits. The address and phone number of the actuary should be stated on
the certification.
(9) A
demonstration that the rates do not incorporate factors for expenses which
exceed one hundred fifty per cent of the average expense ratio for the entire
written premium for all of the insurer's lines of health insurance for the
previous calendar year in accordance with section
38a-473
of the general statutes. The average expense factor shall be calculated from
Schedule H (Accident and Health Exhibit) of the prior year's annual financial
statement, as the ratio of A to B where:
A is equal to the Total General Insurance Expenses (excluding
taxes, licenses and fees), and
B is equal to the Total Premiums Written.
(10) If the insurer currently sells Medicare
supplement policies in this state, a demonstration that the insurer makes at
least standardized Plan A available to persons eligible for Medicare by reason
of disability. For group filings, a description of the eligibility requirements
of the group that includes at a minimum identification of the policyholder,
requirements for membership and the purpose of the group.
(11) For forms where underwriting is
permitted, a general statement of underwriting limitations.
(12) A table showing amounts proposed to be
charged to consumers if the rates are approved as submitted.
(13) Such additional information as the
commissioner may deem necessary for an adequate review of the proposed
rates.
(e) The Actuarial
Memorandum accompanying a submission of revised rates shall include in addition
to the information required under subsection (c) the following items:
(1) The policy inforce count and the age/sex
distribution both statewide and nationwide for the policy form.
(2) For each policy form, for each calendar
year since inception, both statewide and nationwide: incurred claims; earned
premium including modal loadings and policy fees; and resulting loss ratios.
All claim and premium figures shall reflect actual experience to
date.
(3) A history of rate changes
for the policy form in Connecticut, including the effective date and magnitude
of each previous rate change.
(4)
Such additional information as the commissioner may deem necessary for an
adequate review of the proposed revised rates.
