Current through Register Vol. 56, No. 6, March
18, 2024
(a) This
section applies to any long-term care insurance policy or certificate issued in
this State on or after June 19, 2006. Carriers may opt to comply with this
section prior to June 19, 2006.
(b)
A carrier shall provide the information listed below to the Commissioner at
least 60 days prior to making a long-term care insurance form available for
sale.
1. The premium rates, rate schedules or
rating formula. Where long-term care coverage is provided in combination with
other coverage, a description of how these filed premium rates interact with
the rates or premiums for the other coverage;
2. A copy of the disclosure documents
required by
11:4-34.7;
3. An actuarial certification consisting of
the following:
i. A statement that the
initial premium rate schedule is sufficient to cover anticipated costs under
moderately adverse experience and that the premium rate schedule is reasonably
expected to be sustainable over the life of the form with no future premium
increases anticipated;
ii. A
statement that the policy design and coverage provided have been reviewed and
taken into consideration in setting the assumptions and rates;
iii. A statement that the underwriting and
claims adjudication processes have been reviewed and taken into consideration
in setting the assumptions and rates; and
iv. A complete description of the basis for
contract reserves that are anticipated to be held under the form, which shall
include:
(1) Sufficient detail or sample
calculations provided so as to have a complete depiction of the reserve amounts
to be held;
(2) A statement that
the assumptions used for reserves contain reasonable margins for adverse
experience;
(3) A statement that
the net valuation premium for renewal years does not increase (except for
attained-age rating where permitted); and
(4) A statement that the difference between
the gross premium and the net valuation premium for renewal years is sufficient
to cover expected renewal expenses; or if such a statement cannot be made, a
complete description of the situations where this does not occur. For the
purposes of this statement:
(A) An aggregate
distribution of anticipated issues may be used as long as the underlying gross
premiums maintain a reasonably consistent relationship; and
(B) If the gross premiums for certain age
groups appear to be inconsistent with this requirement, the Commissioner may
request a demonstration under (c) below based on a standard age distribution;
and
4. A statement that the premium rate schedule
is not less than the premium rate schedule for existing similar policy forms
also available from the carrier except for reasonable differences attributable
to benefits; or a comparison of the premium schedules for similar policy forms
that are currently available from the carrier with an explanation of the
differences
(c) The
Commissioner may request an actuarial demonstration that benefits are
reasonable in relation to premiums. The actuarial demonstration shall include
either premium and claim experience on similar policy forms, adjusted for
premium or benefit differences, relevant and credible data from other studies,
or both. The Commissioner may also request an actuarial memorandum as specified
at 11:4-34.1 7(c) except for the
restrictions on interest rates in
11:4-34.1 7(c)5v and the
certification required by
11:4-34.1 7(c)7.
1. In the event the Commissioner asks for the
additional information described above, the 60-day time period referenced in
(b) above shall include the period during which the carrier is preparing the
requested information.
(d) A spousal and/or domestic partner
discount is permitted in individual long-term care insurance provided:
1. The objective basis of the rate
differential is included in an actuarial memorandum;
2. All conditions required to be satisfied in
order to receive and retain the discount shall be disclosed and shall be
related to the objective basis of the rate differential. When improved
morbidity is the objective basis for a spousal discount, carriers shall extend
the discount to all married individuals regardless of whether the insured's
spouse is covered under a long-term care policy; and
3. When a husband and wife both apply for and
are issued a long-term care policy offering a spousal discount, both
individuals shall receive the discount.
