Current through Register Vol. 63, No. 9, September 1, 2024
(1) The
following provisions apply to claim reserves generally:
(a) An insurer must maintain claim reserves
for all incurred but unpaid claims on all health insurance policies;
(b) An insurer must maintain appropriate
claim expense reserves with respect to the estimated expense of settlement of
all incurred but unpaid claims; and
(c) An insurer must test all such reserves
for prior valuation years for adequacy and reasonableness using claim runoff
schedules in accordance with the statutory financial statement, including
consideration of any residual unpaid liability.
(2) The following minimum standards apply to
claim reserves for disability income insurance:
(a) Interest. The maximum interest rate for
claim reserves is specified in OAR
836-031-0280;
(b) Morbidity. Minimum standards with respect
to morbidity are those specified in OAR
836-031-0270 except that at the
option of the insurer:
(A) For claims with a
duration from date of disablement of less than two years, reserves may be based
on the experience of the insurer, if such experience is considered credible, or
upon other assumptions that to place a sound value on the liabilities;
and
(B) For group disability income
claims with a duration from date of disablement of more than two years but less
than five years, reserves may, with the approval of the Director, be based on
the experience of the insurer. The request for such approval of a plan of
modification to the reserve basis must include:
(i) An analysis of the credibility of the
experience;
(ii) A description of
how the experience of the insurer is proposed to be used in setting
reserves;
(iii) A description and
quantification of the margins to be included;
(iv) A summary of the financial impact that
the proposed plan of modification would have had on the last filed annual
statement of the insurer;
(v) A
copy of the approval of the proposed plan of modification by the commissioner
of the state of domicile; and
(vi)
Any other information requested by the Director; and
(c) Duration of disablement. For
contracts with an elimination period, the duration of disablement must be
measured as dating from the time that benefits would have begun to accrue had
there been no elimination period.
(3) The following minimum standards apply to
claim reserves for all other benefits:
(a)
Interest. The maximum interest rate for claim reserves is specified in OAR
836-031-0280;
(b) Morbidity or other contingency. The
reserve must be based on the experience of the insurer, if such experience is
considered credible, or upon other assumptions that place a sound value on the
liabilities.
(4) Any
generally accepted or reasonable actuarial method or combination of methods may
be used to estimate all claim liabilities. The methods used for estimating
liabilities generally may be aggregate methods, or various reserve items may be
separately valued. Approximations based on groupings and averages may also be
employed. Adequacy of the claim reserves, however, shall be determined in the
aggregate.
Stat. Auth.: ORS
731.244 & ORS
733.080
Stats. Implemented: ORS
733.080