Section
023 applies to all (group and
individual) long-term care insurance policies or certificates except those
covered under Sections
024 and
025 of this chapter.
(3-31-22)
01.
Expected Loss
Ratios. Benefits under long-term care insurance policies are reasonable
in relation to premiums provided the expected loss ratio is at least sixty
percent (60%), calculated in a manner which provides for adequate reserving of
the long-term care insurance risk. In evaluating the expected loss ratio, due
consideration is given to all relevant factors, including: (3-31-22)
a. Statistical credibility of incurred claims
experience and earned premiums; (3-31-22)
b. The period for which rates are computed to
provide coverage; (3-31-22)
c.
Experienced and projected trends; (3-31-22)
d. Concentration of experience within early
policy duration; (3-31-22)
e.
Expected claim fluctuation; (3-31-22)
f. Experience refunds, adjustments or
dividends; (3-31-22)
g.
Renewability features; (3-31-22)
h.
All appropriate expense factors; (3-31-22)
i. Interest; (3-31-22)
j. Experimental nature of the coverage;
(3-31-22)
k. Policy reserves;
(3-31-22)
l. Mix of business by
risk classification; and (3-31-22)
m. Product features such as long elimination
periods, high deductibles and high maximum limits.
(3-31-22)
02.
Policies That Accelerate Benefits. Subsection
023.01 cannot apply to life
insurance policies that accelerate benefits for long-term care. A life
insurance policy that funds long-term care benefits entirely by accelerating
the death benefit is considered to provide reasonable benefits in relation to
premiums paid, if the policy complies with all of the following provisions:
(3-31-22)
a. The interest credited internally
to determine cash value accumulations, including long-term care, if any, are
guaranteed not to be less than the minimum guaranteed interest rate for cash
value accumulations without long-term care set forth in the policy;
(3-31-22)
b. The portion of the
policy that provides life insurance benefits meets the nonforfeiture
requirements of Section
41-1927, Idaho Code, Standard
Nonforfeiture Law - Life Insurance. (3-31-22)
c. The policy meets the disclosure
requirements of Sections
41-4605(9),
41-4605(10), and
414605(11), Idaho Code. (3-31-22)
i. Any
policy illustration that meets the applicable requirements of the NAIC Life
Insurance Illustrations Model Regulation. (3-31-22)
d. An actuarial memorandum is filed with the
insurance department that includes: (3-31-22)
i. A description of the basis on which the
long-term care rates were determined; (3-31-22)
ii. A description of the basis for the
reserves; (3-31-22)
iii. A summary
of the type of policy, benefits, renewability, general marketing method, and
limits on ages of issuance; (3-31-22)
iv. A description and a table of each
actuarial assumption used. For expenses, an insurer will include percent of
premium dollars per policy and dollars per unit of benefits, if any;
(3-31-22)
v. A description and a
table of the anticipated policy reserves and additional reserves to be held in
each future year for active lives; (3-31-22)
vi. The estimated average annual premium per
policy and the average issue age; (3-31-22)
vii. A statement as to whether underwriting
is performed at the time of application. The statement indicates whether
underwriting is used and, if used, the statement includes a description of the
type or types of underwriting used, such as medical underwriting or functional
assessment underwriting. Concerning a group policy, the statement indicates
whether the enrollee or any dependent will be underwritten and when
underwriting occurs; and (3-31-22)
viii. A description of the effect of the
long-term care policy provision on the prescribed premiums, nonforfeiture
values and reserves on the underlying life insurance policy, both for active
lives and those in long-term care claim status.
(3-31-22)
