Current through December 31, 2024
1. For a long-term care insurance contract or certificate to which subsection 2 does not apply, the Commissioner shall deem the benefits reasonable in relation to premiums charged if the expected loss ratio is at least 60 percent, calculated in a manner which provides for the adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, due consideration will be given to all relevant factors, including:
(a) The statistical credibility of incurred claims experience and earned premiums;
(b) The period for which rates are computed to provide coverage;
(c) Experienced and projected trends;
(d) The concentration of experience within early contract duration;
(e) Expected claim fluctuation;
(f) Experience refunds, adjustments or dividends;
(g) Renewability features;
(h) All appropriate expense factors;
(j) The experimental nature of the coverage;
(l) The mix of business by risk classification; and
(m) Product features such as long elimination periods, high deductibles and high maximum limits.
2. For a policy of life insurance or a rider or endorsement to a policy of life insurance that contains accelerated benefits for long-term care, the Commissioner shall deem the benefits reasonable in relation to the premiums charged if:
(a) The interest credited internally to determine cash value accumulations, including long-term care, 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;
(b) The portion of the policy that provides benefits for life insurance meets the nonforfeiture requirements of NRS 688A.290 to 688A.360, inclusive;
(c) The policy meets the disclosure requirements of NAC 687B.0683, 687B.0684 and 687B.112;
(d) Any policy illustration provided satisfies the requirements of NAC 686A.460 to 686A.479, inclusive; and
(e) An actuarial memorandum is filed with, and approved by, the Commissioner that includes, without limitation:
(1) A description of the basis on which the long-term care rates are determined;
(2) A description of the basis for the reserves;
(3) A summary of the type of policy, benefits, provisions for renewal, general marketing method and limits on ages of issuance;
(4) A description and a table of each actuarial assumption used and, for expenses, the percent of premium dollars per policy and dollars per unit of benefits;
(5) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
(6) The estimated average annual premium per policy and the average issue age;
(7) A statement which:
(I) Must indicate whether underwriting is performed at the time of application;
(II) If underwriting is performed at the time of application, must include a description of the type or types of underwriting used; and
(III) If the policy is a policy of group long-term care insurance, must indicate whether the enrollee or any dependent will be underwritten and when such underwriting occurs; and
(8) A description of the effect of the long-term care benefits on the required premiums, nonforfeiture values and reserves on the underlying policy of life insurance, both for active lives and those in long-term care claim status.
3. For an annuity contract that pays for benefits for long-term care entirely by accessing the contract value, the Commissioner shall deem the benefits reasonable in relation to the premium charged if:
(a) The interest credited internally to determine cash value accumulations, including long-term care, are guaranteed not to be less than the minimum guaranteed interest rate for cash-value accumulations without long-term care set forth in the contract;
(b) The portion of the contract that provides benefits for long-term care meets the nonforfeiture requirements of NRS 688A.361 to 688A.369, inclusive;
(c) The contract meets the disclosure requirements of NAC 687B.075 and 687B.112; and
(d) An actuarial memorandum is filed with, and approved by, the Commissioner that includes, without limitation:
(1) A description of the basis on which the long-term care rates are determined;
(2) A description of the basis for the reserves;
(3) A summary of the type of contract, benefits, provisions for renewal, general marketing method and limits on ages of issuance;
(4) A description and a table of each actuarial assumption used and, for expenses, the percent of premium dollars per contract and dollars per unit of benefits;
(5) A description and a table of the anticipated contract reserves and additional reserves to be held in each future year for active lives;
(6) The estimated average annual premium per contract and the average issue age;
(7) A statement which:
(I) Must indicate whether underwriting is performed at the time of application; and
(II) If underwriting is performed at the time of application, must include a description of the type or types of underwriting used; and
(8) A description of the effect of the long-term care benefits on the required premiums, nonforfeiture values and reserves on the underlying annuity contract, both for active lives and those insureds who are receiving benefits for long-term care.
4. Subsections 1 and 2 do not apply to a long-term care insurance contract or certificate if NAC 687B.059 or 687B.107 applies to the long-term care insurance contract or certificate.
5. Subsection 3 applies to any annuity contract or rider or endorsement on an annuity contract which contains benefits for long-term care insurance and which was issued on or after October 1, 2008.
Added to NAC by Comm'r of Insurance, eff. 11-21-88; A 1-4-91; R121-07, 9-18-2008, eff. 10-1-2008; R028-10, 12-16-2010, eff. 10-1-2011
NRS 679B.130
