Current through Register 1531, September 27, 2024
(1)
(a) An
Issuer shall not offer, sell, deliver or issue for delivery, or otherwise make
effective, or renew a Medicare Supplement Insurance Policy defined in
211 CMR 71.08(2)
or an Alternate Innovative Benefit Rider
defined in
211 CMR 71.09(5)
to a resident of Massachusetts, unless the
Policy form has been filed with and approved by the Commissioner.
(b) An Issuer shall not offer, sell, deliver
or issue for delivery, or otherwise make effective, or renew a Medicare
Supplement Insurance Policy defined in
211 CMR 71.08(2)
or an Alternate Innovative Benefit Rider
defined in
211 CMR 71.09(5)
to a resident of Massachusetts, unless the
rates therefor have been filed with and approved by the Commissioner.
(c) An Issuer shall not use or change premium
rates for a Medicare Supplement Insurance Policy defined in
211 CMR 71.08(2)
or an Alternate Innovative Benefit Rider
defined in
211 CMR 71.09(5)
and issued in accordance with the provisions
of 211 CMR 71.12, unless the rates use a Community Rating method which has been
approved by the Commissioner.
(d)
An Issuer shall not use or change premium rates for a Medicare Supplement
Insurance Policy defined in
211 CMR 71.08(2)
or Alternate Innovative Benefit Rider
defined in
211 CMR
71.09(5), unless the rates,
rating schedule and supporting documentation have been filed with and approved
by the Commissioner in accordance with the filing requirements and procedures
prescribed in 211 CMR 71.12. An Issuer may file the rate for an Alternate
Innovative Benefit Rider separately from the associated Medicare Supplement
Insurance Policy or may file a single rate for the Alternate Innovative Benefit
Rider and the Medicare Supplement Insurance Policy with which it is
associated.
(2) An
Issuer shall not change premium rates for a Medicare Supplement Insurance
Policy originally issued to be effective prior to January 1, 1995, unless the
rates, rating schedule and supporting documentation have been filed with and
approved by the Commissioner in accordance with the filing requirements and
procedures prescribed in 211 CMR 71.12.
(3) An Issuer may use a Community Rating
method to rate a Medicare Supplement Insurance Policy originally issued to be
effective prior to January 1, 1995 subject to the prohibition against altering
contractual terms as provided in M.G.L. c. 176K, § 9.
(4)
(a)
Except as provided in 211 CMR 71.12(4)(b), an Issuer shall not file for
approval more than one form of a Policy of each type of standard Medicare
Supplement benefit plan and shall not file for approval more than one form of
Alternate Innovative Benefit Rider for each type of standard Medicare
Supplement benefit plan.
(b) An
Issuer may offer, with the approval of the Commissioner, except where otherwise
prohibited by statute, up to two additional Policy forms of the same type for
the same standard Medicare Supplement benefit plan, one for each of the
following cases:
1. The inclusion of new or
innovative benefits;
2. The
addition of either direct response or agent marketing methods.
(c) For the purposes of 211 CMR
71.12, a "type" means an individual Medicare Supplement Insurance Policy or a
group Medicare Supplement Insurance Policy.
(5) Except as provided in
211 CMR 71.06(5)
and 71.12(5)(a), an Issuer shall continue to
make available for purchase any Medicare Supplement Insurance Policy form
issued on or after January 1, 1995 that has been approved by the Commissioner.
A Policy form shall not be considered to be available for purchase, unless the
Issuer has actively offered it for sale in the previous 12 months.
(a) Subject to the requirements of
211 CMR
71.08(3), an Issuer may
discontinue the availability of a Medicare Supplement Insurance Policy form or
Alternate Innovative Benefit Rider form if the Issuer provides to the
Commissioner in writing its decision at least 30 days prior to discontinuing
the availability of the form of the Policy. After receipt of the notice by the
Commissioner, the Issuer shall no longer offer for sale the Policy form in
Massachusetts. Nothing in 211 CMR 71.12(5) shall relieve an Issuer from the
requirements of
211
CMR 71.22.
(b) An Issuer that discontinues the
availability of a Medicare Supplement Insurance Policy form pursuant to 211 CMR
71.12(5)(a) shall not file for approval a new Policy form of the same type for
the same standard Medicare Supplement benefit plan as the discontinued form for
a period of five years after the Issuer provides notice to the Commissioner of
the discontinuance. The period of discontinuance may be reduced if the
Commissioner determines that a shorter period is appropriate.
(c) An Issuer that discontinues the
availability of an Alternate Innovative Benefits Rider form pursuant to 211 CMR
71.12(5)(a) shall not file for approval a new Alternate Innovative Benefits
Rider with the same benefits as the discontinued form for a period of five
years after the Issuer provides notice to the Commissioner of the
discontinuance. The period of discontinuance may be reduced if the Commissioner
determines that a shorter period is appropriate. For the purposes of 211 CMR
71.12(5)(c), amendments to an existing Alternate Innovative Benefits Rider will
be considered to be a discontinuance only if the Issuer removes all the
benefits for alternative prescription drugs as described in
211 CMR
71.09(5)(a), all the
benefits for alternative preventive care as described in
211 CMR 71.09(5)(b)
or all the benefits for alternative foreign
travel described in
211 CMR 71.09(5)(c)
from the previously approved benefits in an
Alternate Innovative Benefits Rider.
(d) The sale or other transfer of Medicare
Supplement business to another Issuer shall be considered a discontinuance for
the purposes of 211 CMR 71.12(5).
(e) A change in the rating structure or
methodology shall be considered a discontinuance under 211 CMR 71.12(5)(a) and
(b), unless the Issuer complies with the following requirements:
1. The Issuer provides an actuarial
memorandum, in a form and manner prescribed by the Commissioner, describing the
manner in which the revised rating methodology and resultant rates differ from
the existing rating methodology and existing rates.
2. The Issuer does not subsequently put into
effect a change of rates or rating factors that would cause the percentage
differential between the discontinued and subsequent rates as described in the
actuarial memorandum to change. The Commissioner may approve a change to the
differential that is in the public interest.
(6) Except as provided in 211 CMR
71.12(5)(d), the experience of all Policy forms of the same type in a standard
Medicare Supplement benefit plan issued on or after July 30, 1992, and the
experience of all Medicare Supplement Insurance Policy forms providing
substantially the same coverage issued prior to July 30, 1992, shall be
combined for purposes of the refund or credit calculation prescribed in 211 CMR
71.12(12).
(7) Forms assumed under
an assumption reinsurance agreement shall not be combined with the experience
of other forms for purposes of the refund or credit calculation.
(8)
Medicare Supplement Insurance
Policy Forms.
(a) All submissions
shall be submitted in a form specified by the Commissioner.
(b) The statutory filing fee shall accompany
each Medicare Supplement Insurance Policy form, or Alternate Innovative Benefit
Rider form if filed separately, submitted each time it is submitted, whether
for preliminary or final review according to the Division's filing fee
instructions.
(c) Each submission
shall be accompanied by the specified checklist.
(d) Each form submitted for final approval
must be printed, be a printer's proof, or be in the form in which it will be
issued.
(e) Any form in which the
printed text has been altered will not be accepted for review or final
approval.
(f) Each form shall
display an identification code on the lower left-hand corner of the first
page.
(g) Each submission shall be
accompanied by a cover letter that states whether the form is new or replaces
an approved or previously filed form or forms.
(h) The submission of a rider, application or
endorsement shall specify the Policy or group of Policies with which it will be
used. The identification code of such Policy or group of Policies shall be
given together with, if possible, the approximate date of the original filing
to expedite review. If a new form makes reference to the provisions of a form
previously used that did not require filing or approval, it shall be
accompanied by such previous form for reference purposes.
(i) Revisions shall not be made by rider,
endorsement or amendment, except with prior approval of the Commissioner. No
such riders, endorsements or amendments shall be submitted for approval, unless
the Issuer is notified in advance by the Commissioner that revision by rider,
endorsement or amendment is permissible.
(j) All submitted material shall be filled in
with appropriate hypothetical data.
(k) Applications to be attached to Policy
forms upon issue must be attached to such forms upon submission. If such an
application was previously filed and approved, the approximate date of such
approval must be noted, if possible. Policy outlines of coverage prescribed in
211 CMR
71.13 must also be filed with the
corresponding Policy forms; as well as application forms and notices pursuant
to
211 CMR
71.14.
(l) If a form replaces a previously approved
or filed form, the identification code of the replaced form must be given and
differences from the text of the replaced form must be noted. Where an entire
form has been rewritten to improve its readability, a general description of
changes is sufficient. Substantive changes shall be carefully noted.
(m) If a form was previously disapproved,
this fact must be specifically identified within the filing with the reasons
why the form is resubmitted.
(n)
Each submission must include a certification by a company official that each
form and outline of coverage comply with all applicable laws and regulations
including, but not limited to,
211 CMR 71.00 and the
objective standards of M.G.L. c. 175, § 2B; as well as a certification by
a company official that each form meets the minimum Flesch score requirements
established by M.G.L. c. 175, § 2B. If an Issuer contends that a form is
exempt from M.G.L. c. 175, § 2B, the basis for this contention must be
stated in the cover letter.
(o) No
Medicare Supplement Insurance Policy shall be offered, sold, delivered or
issued for delivery, or otherwise made effective, or renewed in Massachusetts
which provides benefits which duplicate benefits provided by Medicare. Except
as otherwise approved by the Division, no such Policy shall provide lower
benefits than are required by
211 CMR 71.00, except where
duplication of Medicare benefits would otherwise result.
(p) As soon as practicable, but prior to the
effective date of any changes in benefits provided by Medicare, Massachusetts
laws regarding mandated health benefits and/or by the Medicare Supplement
Insurance Policy, every Issuer shall file with the Division, in accordance with
applicable filing procedures, any appropriate riders, endorsements or Policy
forms needed to accomplish such Medicare Supplement Insurance modifications.
Any such riders, endorsements or Policy forms shall provide a clear description
of the Medicare Supplement benefits provided by the Policy.
(q) Within 90 days of the effective date of
any changes in benefits provided by Medicare, Massachusetts laws regarding
mandated health benefits and/or by the Medicare Supplement Insurance Policy,
every Issuer shall have on file new Medicare Supplement Insurance Policies that
eliminate any duplication of benefits provided by Medicare. Each filing shall
provide a clear description of the Policy benefits.
(9)
Rate Manual.
Every Issuer shall maintain on file with the Division an up-to-date rate manual
for all Medicare Supplement Insurance Policies, riders, and endorsements
currently available for sale in Massachusetts.
(10)
Rate Filings.
(a)
Rate Filings for Medicare
Supplement Insurance.
1. An
Issuer shall submit a rate filing for any Medicare Supplement Insurance Policy
described in
211 CMR 71.08(2)
or Alternate Innovative Benefit Rider
described in
211 CMR 71.09(5)
for which the Issuer seeks an initial rate
or a change in rates, or any Medicare Supplement Insurance Policy issued to be
effective prior to January 1, 1995 to a resident of Massachusetts for which the
Issuer seeks a change in rates. All rate filings must comply with the
provisions of 211 CMR 71.12(10).
2.
Every Issuer desiring to increase or decrease premiums for any Medicare
Supplement Insurance Policy, or desiring to set the initial premium for a new
Medicare Supplement Insurance Policy described set forth in
211 CMR 71.08(2)
or Alternate Innovative Benefit Rider
described in
211 CMR 71.09(5)
shall, in accordance with applicable filing
procedures, file with the Division a rate filing which complies with the
provisions of 211 CMR 71.12(10).
3.
For any Medicare Supplement Insurance Policy defined in
211 CMR 71.08(2)
or Alternate Innovative Benefit Rider
described in
211 CMR
71.09(5), a rate filing
shall be determined to have been filed only when it has been submitted in
complete form in compliance with 211 CMR 71.12(10), and any accompanying Policy
forms have been submitted in complete form in compliance with 211 CMR
71.12(8).
4. For any Medicare
Supplement Insurance Policy originally issued to be effective prior to January
1, 1995, a rate filing shall be determined to have been filed only when it has
been submitted in complete form in compliance with 211 CMR 71.12(10), and a
copy of the Policy form and a statement of the date upon which that form had
been approved have been submitted.
5. Every Issuer shall include in its filing
all documents and information as are necessary to support the proposed rates,
including where applicable, all documents required by 211 CMR 71.12(8) and (10)
and applicable regulations specifying the procedures for rate hearings on such
rate filings.
6. Any rate filing
for Medicare Supplement Insurance Policies for which the proposed rate shall be
filed at least 30 days prior to the proposed effective date of such new rates
when the proposed rate:
a. represents an
increase in premium of less than 10% more than the premium previously charged
by the Issuer for the same Policy or Alternate Innovative Benefit
Rider;
b. represents an initial
premium request that is less than 10% more than the average premium for the
same Policies or Alternate Innovative Benefit Rider charged by Issuers in the
same class under 211 CMR 71.12(11); or
c. represents the initial premium request for
a Medicare Supplement Policy 1A created to add to an Issuer's existing Medicare
Supplement product offerings.
7. Any rate filing for Medicare Supplement
Insurance Policies or Alternate Innovative Benefit Riders for which the
proposed rate shall be filed at least 90 days prior to the proposed effective
date of such new rates when the proposed rate:
a. represents an increase in premium of 10%
or more than the premium previously charged by the Issuer for the same Policy
or Alternate Innovative Benefit Rider;
b. represents an initial premium request that
is 10% or more than the average premium for the same Policies or Alternate
Innovative Benefit Rider charged by Issuers in the same class under 211 CMR
71.12(11); or
c. represents an
initial premium for a new Medicare Supplement Insurance Policy to conform with
the requirements of
211 CMR 71.00, except for a
new Medicare Supplement Policy 1A, or except if the filing is for a new
Medicare Supplement Insurance Policy only because it contains the filing of a
new Alternate Innovative Benefits Rider.
(b) A rate filing must be submitted with each
submission of a Medicare Supplement Insurance Policy, rider, or endorsement
that affects the premium rate to be charged, and with all changes in premium
rates, whether made by endorsement to a Policy, by incorporating into a Policy
by reference a table of rates on file with the Commissioner, or unless
otherwise provided by the Commissioner. In the case of rate changes, filings
shall note the extent of the changes. The Issuer shall also provide a copy of
data included in the filing in a form specified by the Commissioner, unless
otherwise provided by the Commissioner. Rate filings shall include properly
identified rate manual pages, which may be in typed draft or other preliminary
form. Policies submitted for rate approval by the Commissioner shall not state
or imply that the Massachusetts Division of Insurance does not review the
reasonableness of rate increases.
For rate filings subject to prior approval by the Commissioner,
an Issuer shall provide all advertisements in, and notifications to, newspapers
of the rate hearing required by 211 CMR 71.12(16)(b) for publication in a
format and at a time specified by the Commissioner or as provided in applicable
regulations specifying the procedures for rate hearings on such rate filings;
and shall file evidence thereof with the Commissioner in a format and at a time
specified by the Commissioner or as provided in applicable regulations
specifying the procedures for rate hearings on such rate filings. The Issuer
shall obtain the date of the rate hearing and other information pertinent to
the advertisement or notice from the Division.
(c) As soon as practicable, but prior to the
effective date of any changes in benefits provided by Medicare and/or by the
Medicare Supplement Insurance Policy, every Issuer providing Medicare
Supplement Insurance in Massachusetts shall file with the Division, in
accordance with applicable filing procedures, appropriate premium adjustments
necessary to produce loss ratios as originally anticipated for the applicable
Policies. The supporting documents as are necessary to justify the adjustments
shall accompany the filing.
(d)
1. Every Issuer providing a Medicare
Supplement Insurance Policy form to a resident of Massachusetts shall make
premium adjustments necessary to produce an expected loss ratio under such
Policy, and Alternate Innovative Benefit Rider if rated separately from the
associated Medicare Supplement Insurance Policy, in accordance with 211 CMR
71.12(1), to conform to minimum loss ratio standards as prescribed by 211 CMR
71.12(11) where applicable and which is expected to result in a loss ratio at
least as great as that originally anticipated by the Issuer for the Policies.
No premium adjustments which would modify the loss ratio experience under the
Policy other than the adjustments described herein shall be made with respect
to a Policy at any time other than upon its renewal date, except as otherwise
approved by the Division. Premium adjustments may be in the form of refunds or
premium credits and shall be made no later than the lesser of 90 days after the
date the premium adjustment is determined to be due, or upon renewal if a
credit is given, or within the lesser of 90 days after the date the premium
adjustment is determined to be due, or 60 days of the renewal date if a refund
is provided to the premium payer. No Insured or Member may assign his or her
rights to such premium adjustments to another person or entity.
2. If an Issuer fails to make premium
adjustments acceptable to the Commissioner, the Commissioner may order premium
adjustments, refund or premium credits deemed necessary to achieve the loss
ratio required by 211 CMR 71.12(11).
(e) Each rate filing shall be accompanied by
an Actuarial Opinion and supporting actuarial memorandum prepared and certified
by a qualified actuary, as defined in the instructions for the Life and
Accident and Health Annual Statement Blank or Actuarial Standard of Practice
No. 16, Actuarial Practice Concerning Health Maintenance Organizations and
Other Managed-care Health Plans, as appropriate. Such memorandum shall contain:
1. the formulas or methods used to obtain the
gross premiums;
2. a list of all
assumptions made in the rate calculations, including identification of
mortality, morbidity, and lapse rate tables or experience studies used; as well
as a list of all assumptions made in the calculation of any premium surcharge
or discount to be charged to Insureds or Members, including the actuarial basis
for the selection of the percentage surcharge or discount, and the
identification of mortality, morbidity, lapse rate tables or experience used,
and the extent to which the experience of Insureds or Members in different
products was combined;
3. the
pattern of the commission scale applicable to each form and a detailed list of
all other anticipated expenses including, but not limited to, per claim
expenses, taxes, underwriting and acquisition expenses, including where
possible identification of those expenses which are fixed and those which are
variable;
4. the expected claim or
service costs;
5. the anticipated
loss ratios for each of the first five years of coverage, year by year, and for
the entire period (the lifetime) for which rates are computed to provide
coverage in the Policy form. The anticipated loss ratio during the first five
years shall be calculated on an earned incurred rather than a written paid
basis. An anticipated loss ratio is defined as the present value at issue of
the expected future benefits, excluding dividends, divided by the present value
of the expected future annualized premiums from the first day the Policy is
sold to the last day that the form is in force. For a given time period, a
reasonable interest rate must be used. The aggregate anticipated loss ratios,
based on reasonable assumptions as to the distribution of the policy form by
age and by various options available shall also be calculated for each of the
above time periods.
The calculations of the expected claims costs and the
non-aggregated loss ratios shall be clearly described and illustrated.
(f) The following
standards for maintaining experience data shall apply to support rate
revisions.
1.
Maintaining
Experience. Premium and loss data shall be recorded for each
Policy form on the following basis for each calendar year: premiums written or
paid; each reserve component; earned premiums; paid losses; and incurred
losses.
2.
Combining
Experience. Experience under different Policy forms where the
premium and coverage are substantially the same must be combined.
3.
Fund Accounting.
Experience data shall be maintained on the basis of fund accounts that will
reflect premiums, investment income, losses, expenses, and provision for
reserves.
(g) Each rate
filing shall contain data supporting the expenses of the Issuer in offering a
Medicare Supplement Insurance, which are charged in the rates, including
information concerning its utilization review programs and other techniques
that have had or are expected to have a demonstrated impact on the prevention
of reimbursement for services that are not medically necessary; provided
however, that Medicare Eligible Expenses which are determined medically
necessary by Medicare shall be considered medically necessary by an
Issuer.
(h) Each rate filing shall
contain a legal opinion that the Issuer is in compliance with the provisions of
M.G.L. c. 176K, and
211 CMR 71.00.
(i) Each rate filing for rates that represent
an increase of 10% or more than the premium previously charged by the Issuer,
or for initial rates that are 10% or more than the premium charged by the
average of Issuers in the same class under 211 CMR 71.12(11), or for initial
rates for a new Medicare Supplement Insurance Policy issued to conform with
211 CMR
71.08(2), or a new Alternate
Innovative Benefit Rider issued under
211 CMR
71.09(5), shall provide
information that the Issuer employs a utilization review program and other
techniques acceptable to the Commissioner which have had or are expected to
have a demonstrated impact on the prevention of reimbursement by the Issuer for
services which are not medically necessary; provided however, that Medicare
Eligible Expenses which are determined medically necessary by Medicare shall be
considered medically necessary by an Issuer.
(j) Any requested rate increases for a
Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider in
excess of 10% from the premium previously charged by the Issuer shall be
communicated by written notice to each Insured so that the Insured receives
such notice at least 90 days prior to the effective date of such increase,
unless otherwise provided by the Commissioner.
(11)
Loss Ratio
Standards.
(a) No Medicare
Supplement Insurance Policy, Alternate Innovative Benefit Rider if rated
separately from the associated Medicare Supplement Insurance Policy in
accordance with 211 CMR 71.12(1), shall be issued, renewed, delivered, or
issued for delivery unless the Policy or Alternate Innovative Benefit Rider
form can be expected, as estimated for the entire period for which rates are
computed to provide coverage, to return to Policyholders the form of aggregate
benefits (not including anticipated refunds or credits) provided under the
Policy or Alternate Innovative Benefit Rider form:
1. At least 90% of premium for Medicare
Supplement Insurance or Alternate Innovative Benefit Riders issued by a
nonprofit hospital service corporation or medical service corporation, and all
Medicare Select Insurance Policies;
2. At least 65% of premium earned from
individual Medicare Supplement Insurance Policies or Alternate Innovative
Benefit Riders issued by commercial Issuers including, but not limited to,
Policies or Alternate Innovative Benefit Riders issued as a result of
solicitations of individuals through the mails or through mass media
advertising, including both print and broadcast advertising;
3. At least 75% of the aggregate amount of
premiums earned in the case of group Policies or Alternate Innovative Benefit
Riders including, but not limited to, Policies or Alternate Innovative Benefit
Riders issued as a result of solicitations of individuals through the mails or
by mass media advertising (including both print and broadcast advertising);
or
(b) Each type of
Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider
rated separately in accordance with in 211 CMR 71.12(11)(a) offered by an
Issuer shall independently meet the applicable minimum loss ratio
standard.
(c) All filings of rates
and rating schedules shall demonstrate that expected claims in relation to
premiums comply with the requirements of 211 CMR 71.12 when combined with
actual experience to date. Filings of rate revisions shall also demonstrate
that the anticipated loss ratio over the entire future period for which the
revised rates are computed to provide coverage can be expected to meet the
appropriate loss ratio standards.
(d) For Medicare Supplement Insurance
Policies issued prior to July 30, 1992, expected claims in relation to premiums
shall meet:
1. The originally filed
anticipated loss ratio when combined with the actual experience since
inception;
2. The appropriate loss
ratio requirement from 211 CMR 71.12(11)(a)2. and 3. when combined with actual
experience beginning with April 19, 1996 to date; and
3. The appropriate loss ratio requirement
from 211 CMR 71.12(11)(a)2. and 3. over the entire future period for which the
rates are computed to provide coverage.
4. In demonstrating compliance with the tests
in 211 CMR 71.12(11)(d)1. through 3. and for the purposes of attaining
credibility, the Issuer shall provide loss ratios based on combined experience
under Policy forms which provide substantially the same coverage, provided
however, that the experience of individual Policies (including all group
Policies subject to an individual loss ratio standard when issued) may not be
combined with any group Policies.
(12)
Refund or Credit
Calculation.
(a) Each Issuer
shall collect and file with the Commissioner by May
31st of each year, addressed to the Director of the
State Rating Bureau, the data contained in the applicable reporting form
prescribed by the Commissioner for each type of Medicare Supplement benefit
plan, or in another format prescribed or approved by the Commissioner. Issuers
offering an Alternate Innovative Benefit Rider may either collect and file this
data separately or consolidated together with the Alternate Innovative Benefit
Rider's associated Medicare Supplement Insurance Policy.
(b) If on the basis of the experience as
reported the benchmark ratio since inception (ratio 1) exceeds the adjusted
experience ratio since inception (ratio 3), then a refund or credit calculation
is required. The refund calculation shall be done on a statewide basis for each
type of Medicare Supplement benefit plan or Alternate Innovative Benefit Rider
if reported separately. For purposes of the refund or credit calculation,
experience on Policies issued within the reporting year shall be
excluded.
(c) For the purposes of
211 CMR 71.12(12), for Medicare Supplement Insurance Policies issued prior to
July 30, 1992, the Issuer shall make the refund or credit calculation
separately for all individual Policies (including all group Policies subject to
an individual loss ratio standard when issued) combined and all other group
Policies combined for experience after April 19, 1996.
(d) For the purposes of 211 CMR 71.12(12),
beginning with reports for calendar year 2001, Non profit Hospital Service
Corporations and Medical Service Corporations shall calculate the benchmark
loss ratio that is part of the refund calculation using the applicable
reporting form specified by the Commissioner (2001 through 2016 and
thereafter). All other Issuers shall calculate the benchmark loss ratio that is
part of the refund calculation using the applicable reporting forms specified
by the Commissioner.
(e) A refund
or credit shall be made only when the benchmark loss ratio exceeds the adjusted
experience loss ratio and the amount to be refunded or credited exceeds a
de minimis level. The refund shall include interest from the
end of the calendar year to the date of the refund or credit at a rate
specified by the Secretary of Health and Human Services, but in no event shall
it be less than the average rate of interest for 13-week Treasury notes.
Premium adjustments may be in the form of refunds or premium credits and shall
be made no later than the lesser of 90 days after the date the premium
adjustment is determined to be due, or upon renewal if a credit is given, or
within the lesser of 90 days after the date the premium adjustment is
determined to be due, or 60 days of the renewal date if a refund is provided to
the premium payer. No Insured may assign his or her rights to such premium
adjustments to another person or entity.
(f) The refund or credit calculation for each
Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider made
pursuant to 211 CMR 71.12(12) shall be based on actual monies received and
spent.
(g) A separate accounting of
surcharges and discounts shall be filed with the Issuer's annual loss ratio
filing.
(13)
Annual Filing of Premium Rates.
(a) An Issuer of Medicare Supplement
Insurance Policies issued before or after January 1, 1995 in Massachusetts
shall file annually its rates, rating schedule and supporting documentation,
including ratios of incurred losses to earned premiums, by Policy, Alternate
Innovative Benefit Rider if rated separately from the associated Medicare
Supplement Insurance Policy in accordance with 211 CMR 71.12(1), and duration
for approval by the Commissioner in accordance with the filing requirements and
procedures prescribed by the Commissioner.
(b) The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice using reasonable
assumptions that the appropriate loss ratio standards can be expected to be met
over the entire period for which rates are computed. Such demonstration shall
exclude active life reserves. An expected third-year loss ratio that is greater
than or equal to the applicable percentage shall be demonstrated for Policies,
Alternate Innovative Benefit Riders, if rated separately from the associated
Medicare Supplement Insurance Policy in accordance with 211 CMR 71.12(1), and
in force less than three years.
(c)
The filing shall also include data on the number of new Medicare Supplement
Insurance Policies, along with separate data on the number of persons newly
covered under Alternate Innovative Benefit Riders sold and Policies lapsed in
the previous year, and the total number of Policies and persons newly covered
under Alternate Innovative Benefit Riders in force as of December
31st of the previous year.
(d) Every Issuer that issues Medicare
Supplement Insurance Policies subject to
211 CMR 71.00 shall file
annually with the Commissioner an Actuarial Opinion and a legal opinion that
certifies that the Issuer's rating methodologies and rates comply with the
requirements of M.G.L. c. 176K, and
211 CMR 71.00, and shall
maintain at its principal place of business (or, if such principal place of
business is not in Massachusetts, at a location within the City of Boston) a
complete and detailed description of its rating practices for inspection by the
Commissioner or his or her designee.
(14)
Standards for Disapproval of
Rates. Rate filings may be disapproved by the Commissioner if the
benefits provided therein are unreasonable in relation to the rate charged, or
if the rates are excessive, inadequate or unfairly discriminatory or do not
otherwise comply with the requirements of M.G.L. c. 176K or 211 CMR 71.12.
Notwithstanding the foregoing, where applicable, rate filings made under 211
CMR 71.12 are also subject to the provisions of applicable regulations
specifying the procedures for rate hearings on such rate filings.
(15)
Time Provisions for Medicare
Supplement Insurance Rate Filings Required to Be Filed at Least 30 Days before
a Proposed Effective Date. For all Medicare Supplement Insurance
rate filings required to be filed at least 30 days before a proposed rate
effective date pursuant to 211 CMR 71.12(10)(a)6., the following time
provisions shall apply:
(a) If not disapproved
by the Commissioner, such filing shall be deemed to be approved by the
Commissioner 30 days after filing, unless a hearing has commenced within 30
days of the filing and a decision thereon is pending.
(b) Such filing shall not be disapproved by
the Commissioner except after a hearing conducted pursuant to M.G.L. c. 30A and
applicable regulations specifying the procedures for rate hearings on such rate
filings within 30 days after such filing.
(c) Filings resubmitted to conform to the
terms of a decision disapproving proposed rates shall be reviewed as part of
the same hearing as that in which the Division considered the original filings.
All other filings resubmitted thereafter shall be considered to be new filings
for the purposes of
211 CMR 71.00.
(d) Any initial premium rate increase and any
other increase in premium rates shall continue in effect for not less than 12
months, except that an increase in benefits or a decrease in rates may be
permitted at any time.
(16)
Time Provisions for Rate
Filings Required to Be Filed at Least 90 Days before a Proposed Rate Effective
Date. For all rate filings for Medicare Supplement Insurance
required to be filed at least 90 days before a proposed rate effective date
pursuant to 211 CMR 71.12(10)(a)7., the following time provisions shall apply:
(a) The Issuer shall file the rate request no
later than 90 days prior to the requested effective date.
(b) The Division shall hold a public hearing
pursuant to applicable regulations specifying the procedures for rate hearings
on such rate filings within 30 days after the filing is made. Notice of the
public hearing will be given to, or advertised in, newspapers in Boston,
Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford, and
Lowell as provided in 211 CMR 71.12(11)(c).
(c) The Commissioner shall approve or
disapprove the requested rates within 30 days following the conclusion of the
public hearing. If the filing is disapproved and a revised filing conforming to
the terms of the decision is resubmitted in accordance with applicable
regulations specifying the procedures for rate hearings on such rate filings,
it shall be approved. Filings resubmitted thereafter shall be considered to be
new filings for the purposes of
211 CMR 71.00 and applicable
regulations specifying the procedures for rate hearings on such rate
filings.
(d) Any increase in
premium rates shall continue in effect for not less than 12 months, except that
an increase in benefits or a decrease in rates may be permitted at any
time.
(e) Notice shall be given to
all Insureds of such requested increase in premium rates no less than 90 days
before the proposed rate effective date, unless otherwise provided by the
Commissioner pursuant to 211 CMR 71.12(10)(k).
(17)
Appeals. The
submission and approval of a revised rate filing by an Issuer shall not affect
the Issuer's right to appeal from those elements of the requested rate filing
that were disapproved. Any order, decree, or judgment of the Supreme Judicial
Court modifying, amending, annulling, or reversing a decision of the
Commissioner disapproving a rate filing, and any further decision of the
Commissioner pursuant to such an order, decree, or judgment that affects the
overall rate approved shall be effective as of the effective date permitted by
the order from which the appeal was taken.
(18)
Public
Hearings. The Commissioner may conduct a public hearing to gather
information concerning a request by an Issuer for an increase in a rate for a
Policy, Alternate Innovative Benefit Rider form issued before or after January
1, 1995, and if the experience of the form for the previous reporting period is
not in compliance with the applicable loss ratio standard. The determination of
compliance is made without consideration of any refund or credit for such
reporting period. Public notice of the hearing shall be furnished in accordance
with applicable statutory requirements.