Current through Register Vol. 39, No. 6, September 16, 2024
(a) With
respect to any individual accident and health insurance policy governed by G.S.
58, Articles 1 through 64, for which an adjustment of premium rate is allowed
by law, the insurer shall submit an actuarial memorandum describing and
demonstrating the development of any requested premium rate revision. The
actuarial memorandum shall contain a subsection identified as "Additional Data
Requirements." The initial rate revision filing shall be submitted to the
Department's Life and Health Division. An insurer shall submit all data
required by this Rule within 45 days after the date that the initial rate
revision filing is stamped received by the Division. Subsequent data
submissions on incomplete initial rate revision filings shall be made directly
to the Department's Actuarial Services Division within the 45 day period. The
"Additional Data Requirements" subsection shall include:
(1) identification of the submitted data as
North Carolina or countrywide and consistent use of this data identification
throughout this Section;
(2)
identification of all previously approved policy forms included in the rate
revision submission, by North Carolina policy form number;
(3) the month, year, and percentage amount of
all previous rate revisions;
(4)
the month and year that the rate revision is scheduled to be implemented
(hereinafter referred to as the "implementation date");
(5) the type of renewability provision
contained in each policy form; such as guaranteed renewable;
(6) the type of coverage provided by each
policy form; such as medical expense;
(7) identification of the type of rating
methodology; such as issue age, attained age, or community rate;
(8) the National Association of Insurance
Commissioners minimum guideline loss ratio and, if different, the insurer's
minimum guideline loss ratio;
(9)
the average annual premium for North Carolina and countrywide before and after
the implementation date;
(10) the
number of North Carolina and countrywide policyholders affected by the rate
revision;
(11) the requested rate
revision percentage attributable to experience;
(12) the requested rate revision percentage
attributable to changes in benefits promulgated by Medicare, if applicable, and
the calculation used to develop this percentage;
(13) identification and actuarial
justification of all groupings of policy forms;
(14) the historical calendar year earned
premium divided by duration and expressed on an actual and a current premium
rate basis for the period of time from the earliest date that experience is
recorded to the most recent date that experience is recorded;
(15) the "expected" incurred loss ratios by
duration based upon original pricing assumptions for all policy durations
considered in the original pricing;
(16) the "expected" lapse rates by duration
based upon original pricing assumptions for all policy durations considered in
the original pricing, including assumptions for voluntary lapse rates and
mortality rates;
(17) the "actual"
lapse rates for duration one through the duration coinciding with the calendar
year for which the most recent experience is recorded;
(18) the historical calendar year incurred
claims, for other than Medicare supplement insurance, covering the period of
time from the earliest date that experience is recorded to the most recent date
that experience is recorded;
(19)
the historical calendar year incurred claims, for Medicare supplement
insurance, expressed on an actual and a current benefit level basis covering
the period of time from the earliest date experience is recorded to the most
recent date that experience is recorded;
(20) a count of the number of incurred claims
for each calendar year of data provided. The count shall be calculated by
adding the total number of claims reported during the calendar year, whether
paid or in the process of payment, plus the number of incurred but not reported
claims at the end of the calendar year, minus the number of incurred but not
reported claims at the beginning of the calendar year. For disability income
insurance, only the initial claim payment for each period of disablement shall
be counted. For each type of medical expense benefit, only the initial claim
payment per cause shall be counted; for example, payments for continuation of a
claim, such as refills on a prescription drug, shall be excluded from the
incurred claim count;
(21) an
estimation of the amount of policy year exposure contributed by all
policyholders within each calendar year of data provided;
(22) a statement declaring whether this is an
open block of business or a closed block of business;
(23) an estimation of the annual earned
premium on new issues stated at the current premium rate basis for the period
of time from the date that the most recent experience is last recorded to a
date not exceeding the fifth year following the implementation date;
(24) the number of months that the rate will
be guaranteed to an individual policyholder;
(25) the rate revision implementation method,
such as the next premium due date following a given date, the next policy
anniversary date, or otherwise. If otherwise, an explanation shall be
included;
(26) a statement
declaring the month and year of the earliest anticipated date of the next rate
revision;
(27) an explanation and
actuarial justification of the apportionment of the aggregate rate revision
within each policy form or between policy forms that have been grouped and a
demonstration that the apportionment of the aggregate rate revision yields the
same premium income as if the rate revision had been applied
uniformly;
(28) an explanation and
actuarial justification, if applicable, for changing any factor that affects
the premium;
(29) an explanation of
the effect that the rate revision will have on the incurred loss ratio on those
policies in force for three years or more as exhibited in the Medicare
Supplement Experience Exhibit of the Annual Statement; and
(30) the name, address, and telephone number
of an insurance company representative who will be available to answer
questions relating to the rate revision.
(b) For the following individual accident and
health policies, except Medicare supplement and long-term care, data shall not
be required to be subdivided by policy year duration and the data in
Subparagraphs (a)(15), (a)(16), and (a)(17) of this Rule may be omitted:
(1) short term non-renewable; e.g., airline
trip, student, or accident;
(2)
annual renewable term that are repriced every year; and
(3) any closed block of business for which
all in force policies have exceeded the seventh year duration.
