A. Every insurer shall maintain records for
each agent of that agent's amount of replacement sales as a percent of the
agent's total annual sales and the amount of lapses of long-term care insurance
policies sold by the agent as a percent of the agent's total annual
sales.
B. Every insurer shall
report annually by June 30, on a form prescribed by the superintendent, the
number of lapsed policies as of the end of the preceding calendar
year.
C. Every insurer shall report
annually by June 30, on a form prescribed by the superintendent, for qualified
long-term care insurance contracts, the number of claims denied for each class
of business, expressed as a percentage of claims denied, and:
(1) the number of denied claims appealed to a
first level review;
(2) the number
of first level appeals overturned and the number upheld;
(3) the number of denied claims appealed to a
second level review; and
(4) the
number of second level reviews overturned and the number upheld.
D. For purposes of this section:
(1) "Policy" means only long-term care
insurance;
(2) Subject to paragraph
(3), "claim" means a request for payment of benefits under an in force policy,
including a request for a determination that an insured is eligible for
benefits, regardless of whether the benefit claimed is covered under the policy
or any terms or conditions of the policy have been met;
(3) "Denied" means the insurer refuses to pay
a claim for any reason other than for claims not paid for failure to meet the
waiting period or because of an applicable preexisting condition; and
(4) "Report" means on a statewide
basis.
E. Reports
required under this section shall be filed with the superintendent.
F. Annual rate certification requirements.
For all long-term care policies issued in this state, the insurer shall file an
annual actuarial certification with the superintendent, prepared, dated, and
signed by a qualified actuary, no later than May 1 of each year beginning in
the second year following the year in which the initial rate schedules are
first used. At a minimum, the actuary shall certify the sufficiency of the
current premium rate schedule and provide all additional information required
by this subsection.
(1) For currently marketed
products, the certifying actuary must provide one of the following statements:
(a) The premium rate schedule continues to be
sufficient to cover anticipated costs under moderately adverse experience and
is reasonably expected to be sustainable over the life of the form with no
future premium increases anticipated; or
(b) If the above statement cannot be made, a
statement that margins for moderately adverse experience may no longer be
sufficient. In this situation, the insurer shall provide to the superintendent,
within sixty (60) days after the actuarial certification is submitted to the
superintendent, a plan of action, including a time frame, for the
re-establishment of adequate margins for moderately adverse experience so that
the ultimate premium rate schedule would be reasonably expected to be
sustainable over the future life of the form with no future premium increases
anticipated. Failure to submit a plan of action to the superintendent within
sixty (60) days or to comply with the time frame stated in the plan of action
constitutes grounds to withdraw or modify approval of the form for future sales
by the superintendent.
(2) For products that are no longer marketed,
the following information must be filed:
(a) A
statement that the premium rate schedule continues to be sufficient to cover
anticipated costs under best estimate assumptions; or a statement that the
premium rate schedule may no longer be sufficient. In the latter situation, the
insurer shall provide to the superintendent within sixty (60) days after the
actuarial certification is submitted to the superintendent, a plan of action,
including a time frame, for the re-establishment of adequate margins for
moderately adverse experience.
(b)
A description of the review performed that led to the statement.
(3) No less frequently than every
third year, the certification shall include an actuarial memorandum dated and
signed by the certifying actuary, providing at least the following information:
(a) A detailed explanation of the data
sources and review performed by the actuary before making the statement
required by Paragraph (1).
(b) A
complete description of experience assumptions and their relationship to the
initial pricing assumptions.
(c) A
description of the credibility of the experience data.
(d) An explanation of the analysis and
testing performed in determining the current margins.
