Current through Register Vol. 35, No. 18, September 24, 2024
A.
For
individual plans. The following general standards apply to individual
plans.
(1) An individual plan shall have a
minimum term of 12 months.
(2) A
"noncancellable," "guaranteed renewable," or "noncancellable and guaranteed
renewable" individual plan shall not provide for termination of coverage of the
domestic co-insured solely because of the occurrence of an event specified for
termination of coverage of the covered person, other than nonpayment of
premium. In addition, the plan shall provide that in the event of the covered
person's death, the domestic co-insured of the covered person, if covered under
the plan, shall become a covered person with the issuance of a new policy and
completed agreement.
(3) An
individual plan shall protect consumer rights as follows:
(a) The terms "noncancellable" or
"noncancellable and guaranteed renewable" may only be used in an individual
dental or vision plan if the covered person has the right to continue the
coverage by timely paying premiums, until the age of 65 or until eligibility
for Medicare, whichever is later, during which time the carrier has no
unilateral right to change any provision of the plan.
(b) The term "guaranteed renewable" may only
be used in a plan where the covered person has the right to continue in force,
by timely paying premiums, until the age of 65 or until eligibility for
Medicare, whichever is later, during which period the carrier has no unilateral
right to change any provision of the plan, other than changes in premium rates
by classes.
(c) A plan shall not
terminate the coverage of a covered person except for "good cause," as follows:
(i) failure of the covered person or
subscriber to pay the premiums and other applicable charges for
coverage;
(ii) material failure to
abide by the rules, policies or procedures of the plan;
(iii) fraud or misrepresentation affecting
coverage;
(iv) policyholder request
for cancellation;
(v) policy term
ends; or
(vi) a reason for
termination or failure to renew that the superintendent determines is not
objectionable.
(4) If an individual plan covers domestic
co-insureds, the age of the younger insured shall be used as the basis for
meeting the age and durational requirements of the definitions of
"noncancellable" or "guaranteed renewable." However, this requirement shall not
prevent termination of coverage of the older insured upon attainment of the
stated age so long as the policy may be continued in force as to the younger
spouse to the age or for the durational period specified in the
policy.
B.
For
individual and group plans. The following general standards apply to
both individual and group plans.
(1) A
carrier may not terminate a plan unless it provides written notice of
termination to a covered person one month prior to the coverage renewal date. A
notice of termination shall:
(a) be in
writing and dated;
(b) state the
reason(s) for termination, with specific references to the clauses of the
dental or vision plan giving rise to the termination;
(c) state that a covered person's plan cannot
be terminated because of health status, need for services, race, gender, or
sexual orientation of covered persons under the contract. Age may only be a
factor in termination of coverage as outlined in Paragraph (4) of Subsection A
and Paragraph (8) of Subsection B of this section;
(d) state that a covered person who alleges
that an enrollment has been terminated or not renewed because of the covered
person's health status, need for health care services, race, gender, age or
sexual orientation may file a complaint with the superintendent by phone or on
the OSI's website; and
(e) state
that in the event of termination by either the covered person or the plan,
except in the case of fraud or deception, the plan shall, within 30 calendar
days, return to the covered person or subscriber the pro rata portion of the
money paid to the plan that corresponds to any unexpired period for which
payment had been received together with amounts due on claims, if any, less any
amounts due to the plan, provided, however, that the superintendent may approve
other reasonable reimbursement practices.
(2) A plan shall include a notice prominently
printed on or attached to the first page of the plan stating that the covered
person shall have the right to return the plan within 30 days of its delivery,
and to have the premium and any required membership fees refunded, if after
examination of the plan the covered person is not satisfied for any reason,
provided no claim has been paid.
(3) If a plan includes a conversion
privilege, the provision shall be captioned, "Conversion Privilege." The
provision shall specify who is eligible for conversion and the circumstances
that govern conversion, or may state that the conversion coverage will be
provided as an approved plan form used by the carrier for that
purpose.
(4) If a carrier requires
submission of a claim form as a condition of payment, the carrier, upon receipt
of notice of a claim, shall furnish to the covered person a form to be
delivered in the manner offered by the carrier that is preferred by the covered
person. If the carrier does not furnish a claim form within 15 days after
notice of a claim, the claimant shall be deemed to have complied with the
requirement to provide proof of loss if the notice of claim contains written
proof describing the claim, including the character and extent of the loss of
which the claim is made. Adequate proof of loss must be in the possession of
the insurance company at the time funds are disbursed in payment of
claims.
(5) A grace period of at
least 10 days for a monthly premium plan and at least 31 days for any plan
billed less frequently shall be granted for the payment of each premium falling
due after the first premium. During this grace period, the plan shall continue
in force.
(6) A carrier shall not
use any untrue statement or inducement not specified in a policy to solicit a
prospective plan enrollee.
(a) A statement
shall be deemed untrue if it does not conform to fact in any respect and would
be considered significant to a person contemplating enrollment with a
plan.
(b) Inducements shall meet
the requirements of Subsections G and H of Section
59A-16-17 NMSA 1978.
(7) If coverage of dependents is
provided, a carrier shall not terminate coverage of an unmarried dependent by
reason of the dependent's age before the dependent's 26th birthday, regardless
of whether the dependent is enrolled in an educational institution.
(8) A plan may terminate the coverage of a
dependent due to limiting age for a dependent per the plan's contracted age
limits. However, a plan must offer coverage to dependents, regardless of age,
who are physically or mentally disabled prior to reaching the limiting age and
are incapable of self-sustaining employment. Coverage for a child who is
physically or mentally disabled prior to reaching the limiting age and
incapable of self-sustaining employment on the date the child would otherwise
age out of coverage shall continue if the child depends on the covered person
for support and maintenance. The plan may require that within 31 days of the
date the company receives proof of the child's incapacity, the covered person
may elect to continue the plan in force with respect to the child.
C.
For group
coverage.. A group plan that offers dental or vision coverage shall
comply with all sections of this rule.
D.
Prior approval of forms
required. A carrier shall not issue, deliver, or use a form associated
with applicable dental and vision plans, unless and until such form has been
filed with and approved by the superintendent.
E.
Prior approval of rates
required. A carrier shall not use rates or modified rates for dental and
vision plans unless and until such rates are filed with and approved by the
superintendent.
F.
Minimum
loss ratios for group and individual dental plans. Benefits dental plans
shall be subject to a sixty-five percent minimum loss ratio
requirement.
G.
Minimum loss
ratios for group and individual vision plans. Benefits under vision
plans shall be subject to a fifty-five percent minimum loss ratio
requirement.
H.
Rate filing
requirements. Each carrier providing dental or vision insurance must
provide an actuarial analysis in an actuarial memorandum, certified by a
qualified actuary, for each individual or group plan sold in New Mexico.
Experience data may be aggregated for those policies or certificates that are
rated together due to noncredible experience. A rate filing for a plan which
provides both dental and vision benefits under the same policy must provide
information in the actuarial memorandum and other supporting documentation to
separately identify and support the premiums attributed to the dental and
vision coverages. The superintendent shall post on its website requirements for
filing actuarial memorandums and rates for rate filing requests. These
requirements may differ for:
(1) dental and
vision plans;
(2) individual,
small group, and large group dental and vision plans;
(3) dental and vision plans sold on and off
the health benefits exchange.
I.
Calculating the loss ratio for
individual and group dental and vision plans. The loss ratio is
calculated as the ratio of the numerator to the denominator, as defined in
Paragraphs (1) and (2) below. The loss ratio shall be calculated separately for
dental and vision coverages, even if both dental and vision benefits are
included in a single policy or contract.
(1)
Numerator. The numerator is equal to the incurred claims for the
loss ratio reporting year.
(2)
Denominator. The denominator is the earned premiums for the loss
ratio reporting year.
J.
Rate revisions. The following requirements shall apply to rate
revision requests: With respect to filing rate revisions for a previously
approved form, or a group of previously approved forms combined for experience,
benefits may be deemed reasonable in relation to premiums provided the revised
rates meet the minimum loss ratio requirements of Subsections F or G of this
rule, as applicable, and most current standards applicable to rate filings as
prescribed by the superintendent, pursuant to Subsection I above based on
actual experience and expected experience in the rating period.
K.
Rates for new plans. The
following requirements shall apply to rates for dental and vision plans not
previously offered for sale in New Mexico: with respect to filing rates for a
new plan, benefits may be deemed reasonable in relation to premiums provided
the proposed rates meet the minimum loss ratio requirements of this rule, as
applicable, and most current standards applicable to rate filings as prescribed
by the superintendent, based on expected experience in the first three
years.
L.
Disapproval of
forms and rates. The superintendent shall issue a disapproval:
(1) if the benefits provided therein are
unreasonable in relation to the premium charged. For purposes of this rule, a
dental or vision plan that meets the minimum loss ratio requirements will be
considered to have benefits that are reasonable in relation to the premium
charged;
(2) If there is
misrepresentation of the benefits, advantages, conditions or terms of any plan
or if the plan is characterized as more favorable to the covered person than
the actual terms of the plan, such as naming coverage for services or
conditions for which the primary forms of treatment are listed as
exclusions;
(3) If there are false
or misleading statements;
(4) If
the name or title of a form is misrepresenting the true nature thereof;
or
(5) If the plan contains
provisions that are contrary to law, discriminatory, deceptive, unfair,
impractical, unnecessary or unreasonable.
M.
Disclosure and reporting compliance
with minimum loss ratio requirements. By July
31st following each reporting year, carriers
providing dental or vision benefit coverage must submit to the superintendent
an actuarial memorandum prepared by a qualified actuary, which discloses the
actual loss ratio for each plan, form or certificate subject to this rule. The
annual filing shall, at a minimum, include rates, rating schedules, and
supporting documentation, including ratios of incurred claims to earned
premiums for each calendar year since issue. Information shall be in the form
prescribed by the superintendent and shall demonstrate that each plan complies
with the minimum loss ratio standards. Carriers that provide dental or vision
insurance coverage that acquire a line or block of business from another
carrier during a reporting year are responsible for submitting the required
information and reports for the assumed business, including for that part of
the reporting year that preceded the acquisition.
(1)
General. Carriers shall meet
the minimum loss ratio established, and in the manner calculated, under this
section of the rule.
(2)
Aggregation. Experience data may be aggregated for those policies
or certificates that are rated together due to noncredible
experience.
(3)
Measurement
period. Compliance with the minimum loss ratio shall be measured over
the last three calendar years of experience and for each calendar year of
experience utilized in the rate determination process, but never less than the
last three calendar years, after the initial transition period (2024 to 2026).
The initial measurement period shall be calendar year 2024; the second
measurement year shall be calendar years 2024 and 2025; the third measurement
period shall be calendar years 2024, 2025 and 2026. Each year thereafter, the
subsequent calendar year shall be added to the rolling three-year period and
the oldest calendar year shall be removed. For example, the fourth measurement
period shall be calendar years 2025, 2026, and 2027.
(4)
Frequency. Loss ratios shall
be calculated annually by carriers that issue vision or dental plans specified
in this rule, beginning with the 2024 reporting year.
(5)
Timeline. The evidence of
compliance with the minimum loss ratio requirements shall be filed with the
superintendent by July 31 of the year following the reporting year. For
noncredible blocks of business, the company may request a waiver of the
requirement. The request shall be made annually and must be accompanied by a
letter indicating the nature of the filing, the type of plan, and the reason
for the request.
(6)
Methodology. For existing plans, actual loss ratios shall be
calculated using company historical claim data including an estimate for claims
incurred but not reported, as appropriate.
(a) The superintendent shall assure that
reserves are reasonable and based on sound actuarial principles with respect to
the aggregate dollar amount of reserves for claims that are incurred but not
yet paid, and for claims that are incurred but not yet reported.
(b) The claims will be reported for each
calendar year of experience utilized in the rate determination process, but
never less than the last three years after the third year of experience is
available.
(c) A plan shall be
deemed to comply with the purposes of this section if the expected losses in
relation to expected premiums over the entire period for which the plan is
rated comply with the requirements of this section and either of the following
applies:
(i) For policies or certificates
that have been in force for three years or more, for the last three years, the
ratio of incurred losses to earned premiums is greater than or equal to the
minimum loss ratios established by this rule.
(ii) For policies or certificates that have
been in force for fewer than three years, the expected third-year loss ratio
can be demonstrated to be greater than or equal to the minimum loss
ratio.
(7)
Credibility. The certifying actuary shall include a statement
related to the credibility of the data and the methodology used to determine
such credibility in accordance with the applicable actuarial standards of
practice.
(8)
Compliance with
minimum loss ratios. Each carrier shall submit to the superintendent an
exhibit showing the calculation of the applicable loss ratios and:
(a) a statement signed by a qualified actuary
that the minimum loss ratio requirements have been met; or
(b) a rate filing to justify the rates,
revise rates, modify benefits through a benefit endorsement or to return excess
premium.
(9)
Corrective action plan. The superintendent may require a
corrective action plan to return excess premiums or increase benefits if the
minimum loss ratio requirements are not met.
(a) A carrier shall not return excess
premiums per the above guidelines, until the carrier files a corrective action
plan and obtains approval of such plan by the superintendent.
(b) If, in the opinion of the superintendent,
a plan's failure to meet the minimum loss ratio requirements is due to unusual
reserve fluctuations, economic conditions, or other nonrecurring conditions,
the superintendent may elect not to issue a corrective action plan. Any such
exemption shall be in writing.
