Current through Reg. 50, No. 187; September 24, 2024
(1) Rate
increase filings for long term care insurance shall be filed in accordance with
filing requirements and standards of Rule Chapters 69O-149 and 69O-157,
F.A.C.
(2) The term "policies with
similar coverage" has the same meaning as "similar policy forms" as defined in
subsection 69O-157.103(17),
F.A.C.
(3) The footnote following
Section 627.9407, F.S., states that
Section 11, Chapter 2006-254, L.O.F., provides that "[t]his act shall apply to
long-term care insurance policies issued or renewed on or after July 1, 2006.
For any long-term care insurance policy issued prior to July 1, 2006, the
provisions of [Section
627.94076, F.S.] shall apply to
such policy only upon renewal of such policy on or after July 1, 2008, and the
policy shall so provide by endorsement to the policy."
(4) Pursuant to the provisions of Section
627.9407(7)(c),
F.S., for insurers that are currently actively marketing and issuing similar
coverage, the rates resulting after a rate increase filing shall not exceed the
insurer's new business rate.
(5)
(a) Section
627.9407(7)(c),
F.S., requires that the office annually determine and publish the currently
available new business rates for similar coverage being sold in Florida. The
published new business rates represent the maximum annual rate that may be
charged after a rate increase for insurers not currently issuing new
coverage.
(b) The published rates
shall be determined by first identifying those carriers currently issuing
policies with similar coverage. For each of the similar coverage categories,
the Florida new business earned premium, defined as first year premium in
Florida, is determined for the prior calendar year. Those insurers reporting at
least the top 80% of that earned premium, cumulatively, starting with the
largest, will be used to tabulate the new business rate. The new business rate
shall be the weighted average of the insurers' rates, using the market share,
as measured by first year premium in Florida, as the weight.
(c)
1. The
new business rates are for the standard underwriting class for the insurer.
Standard underwriting class is the underwriting class with the most predominant
sales, measured by number of policies, regardless of the name given to it by
the insurer.
2. The new business
rates for other underwriting classes shall bear the same relationship to the
standard rate schedules that the insurer has filed and approved. For example,
if an insurer's preferred rate is 85% of its standard rate, the premium limit
applicable to the rate increase for business sold as preferred will be 85% of
the standard rate schedule.
(d)
1. The
published new business rates represent the particular benefit configuration
listed. If an insurer has policies in force that have benefits different from
the benefit used to determine the published rates, the insurer may contact the
office for the new business rate that reflect the different benefits.
2. The office shall determine the new
business rates for the requested benefit configuration in the same manner as it
used for determining the published rates. The resulting rates shall be
consistent with the published new business rates reflecting benefit differences
only.
3. Insurers needing a
different benefit configuration should make such request of the office in
advance of a rate filing so as to give the office time to determine such rates
and provide them to the insurer.
4.
If the office is unable to determine the rates by a tabulation of the insurers
currently selling similar coverage, the office shall use its best actuarial
judgment in determining the new business rates using the information available
from the insurers in the 80% market share. Alternatively in such cases, at the
option of the insurer, the insurer may submit the results of a model used to
price new long term care products by an actuarial consulting firm currently
pricing long term care for other clients, who is independent of the insurer,
acceptable to the office, and contracted by the insurer. The assumptions used
shall be available to the office for review and approval. The model will be
used to develop the new business pricing for the insurer's policy benefit
configuration, the new business pricing for the published benefit
configuration, and to develop a factor which is the ratio of the insurer's
policy benefits to the published benefits. It is noted that the provisions of
Section 627.9407(7)(c),
F.S., provide that the differences shall be benefit differences only; all other
provisions of the two policies being modeled shall be identical. Such factor,
representing benefit differences only, shall be used to adjust the published
new business rates. Independent, as used in this section, shall mean that the
actuarial consulting firm or the actuary to be involved in the project has no
relationship currently or for the last three years with the insurers for
pricing, valuation, or other reviews.
(e) If the application of this rule results
in different increases being applied to different plans within the filing, the
requirements of subparagraph
69O-149.003(1)(a)
4., F.A.C. shall apply.
(f) The
published rates apply to sales in Hillsborough County. For all other counties,
the rate from the published table should be adjusted by the insurer's current
area factor applicable in that county relative to the insurer's area factor in
Hillsborough County.
(g) The
premium for all additional benefits provided in the policy or by rider to the
policy shall be the same proportion of the base rates after any rate change as
they were before such change.
Rulemaking Authority 627.9408(1) FS. Law Implemented
627.9407(7) FS.
New 11-1-07.
