New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 6 - MINIMUM RESERVE STANDARDS FOR INDIVIDUAL AND GROUP HEALTH INSURANCE CONTRACTS
Section 11:4-6.9 - Contract reserves-general requirements
Universal Citation: NJ Admin Code 11:4-6.9
Current through Register Vol. 56, No. 18, September 16, 2024
(a) Contract reserves are required, unless otherwise specified in 11:4-6.9(b), for:
1. All individual and group contracts with
which level premiums are used; or
2. All individual and group contracts with
respect to which, due to the gross premium pricing structure at issue, the
value of the future benefits at any time exceeds the value of any appropriate
future valuation net premiums at that time. This valuation may be applied on a
rating block basis if the total premiums for the block were developed to
support the total risk assumed and expected expenses for the block each year,
and a qualified actuary certifies the premium development. The actuary shall
state in the certification that premiums for the rating block were developed
such that each year's premium was intended to cover the year's costs without
any prefunding. If the premium is also intended to recover costs for any prior
years, the actuary shall also disclose the reasons for and magnitude of such
recovery. The values specified in this paragraph shall be determined on the
basis specified in
11:4-6.1 0.
(b) Contracts not requiring a contract reserve are contracts:
1. Which cannot be
continued after one year from issue; or
2. Are already in force on January 21, 2003
for which no contract reserve was required under the immediately preceding
standards.
(c) The contract reserve is in addition to claim reserves and premium reserves.
(d) The methods and procedures for contract reserves shall be consistent with those for claim reserves for a contract, or else appropriate adjustment shall be made when necessary to assure provision for the aggregate liability. The definition of the date of incurral shall be the same in both determinations.
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