Current through Register Vol. 50, No. 9, September 20, 2024
A. This Section shall apply to all long-term
care insurance policies or certificates except those covered under §1917,
§1937, and
§1939
B. Benefits under long-term care insurance
policies shall be deemed reasonable in relation to premiums, provided the
expected loss ratio is at least 60 percent, calculated in a manner which
provides for adequate reserving of the long-term care insurance risk. In
evaluating the expected loss ratio, due consideration shall be given to all
relevant factors, including:
1. statistical
credibility of incurred claims experience and earned premiums;
2. the period for which rates are computed to
provide coverage;
3. experienced
and projected trends;
4.
concentration of experience within early policy duration;
5. expected claim fluctuation;
6. experience refunds, adjustments, or
dividends;
7. renewability
features;
8. all appropriate
expense factors;
9.
interest;
10. experimental nature
of the coverage;
11. policy
reserves;
12. mix of business by
risk classification; and
13.
product features such as long elimination periods, high deductibles, and high
maximum limits.
C.Section 1935. B shall not
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:
1. 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;
2. the portion of the
policy that provides life insurance benefits meets the nonforfeiture
requirements of
R.S.
22:936;
3. the policy meets the disclosure
requirements of
R.S.
22:1186(H), (I) and (J);
4. any policy illustration that
meets the applicable requirements of Regulation 55; and
5. an actuarial memorandum is filed with the
insurance department that includes:
a. a
description of the basis on which the long-term care rates were
determined;
b. a description of the
basis for the reserves;
c. a
summary of the type of policy, benefits, renewability, general marketing
method, and limits on ages of issuance;
d. a description and a table of each
actuarial assumption used. For expenses, an insurer must include percent of
premium dollars per policy and dollars per unit of benefits, if any;
e. a description and a table of the
anticipated policy reserves and additional reserves to be held in each future
year for active lives;
f. the
estimated average annual premium per policy and the average issue
age;
g. a statement as to whether
underwriting is performed at the time of application. The statement shall
indicate whether underwriting is used and, if used, the statement shall include
a description of the type or types of underwriting used, such as medical
underwriting or functional assessment underwriting. Concerning a group policy,
the statement shall indicate whether the enrollee or any dependent will be
underwritten and when underwriting occurs; and
h. a description of the effect of the
long-term care policy provision on the required premiums, nonforfeiture values
and reserves on the underlying life insurance policy, both for active lives and
those in long-term care claim status.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
22:1186(A),
22:1186(E),
22:1188(C),
22:1189,
and
22:1190.
