Current through Register Vol. XLI, No. 38, September 20, 2024
17.1. This section shall
apply to all long-term care insurance policies or certificates except those covered
under sections 8 and 18 of this rule.
17.2. Benefits under long-term care insurance
policies shall be deemed reasonable in relation to premiums provided the expected
loss ratio is at least sixty percent (60%), calculated in a manner which provides
for adequate reserving of the long-term care insurance risk. In evaluating the
expected loss ratio, due consideration shall be given to all relevant factors,
including:
17.2.a. Statistical credibility of
incurred claims experience and earned premiums;
17.2.b. The period for which rates are computed to
provide coverage;
17.2.c. Experienced
and projected trends;
17.2.d.
Concentration of experience within early policy duration;
17.2.e. Expected claim fluctuation;
17.2.f. Experience refunds, adjustments or
dividends;
17.2.g. Renewability
features;
17.2.h. All appropriate
expense factors;
17.2.i.
Interest;
17.2.j. Experimental nature of
the coverage;
17.2.k. Policy
reserves;
17.2.l. Mix of business by
risk classification; and
17.2.m. Product
features such as long elimination periods, high deductibles and high maximum
limits.
17.3. Subsection 17.2
of this section shall not apply to life insurance policies that accelerate benefits
for long-term care. A life insurance policy that funds long-term care benefits
entirely by accelerating the death benefit is considered to provide reasonable
benefits in relation to premiums paid, if the policy complies with all of the
following provisions:
17.3.a. The interest credited
internally to determine cash value accumulations, including long-term care, if any,
are guaranteed not to be less than the minimum guaranteed interest rate for cash
value accumulations without long-term care set forth in the policy;
17.3.b. The portion of the policy that provides
life insurance benefits meets the nonforfeiture requirements of W. Va. Code §
33-13-30;
17.3.c. The policy meets the disclosure
requirements of W. Va. Code §§
33-15A-6(i),
6(j), and 6(k) of the NAIC Long-Term Care Insurance Model Act;
17.3.d. Any policy illustration that meets the
applicable requirements of Series 11C of Title 114, West Virginia Code of State
Rules; and
17.3.e. An actuarial
memorandum is filed with the Commissioner that includes:
17.3.e.1. A description of the basis on which the
long-term care rates were determined;
17.3.e.2. A description of the basis for the
reserves;
17.3.e.3. A summary of the
type of policy, benefits, renewability, general marketing method, and limits on ages
of issuance;
17.3.e.4. A description and
a table of each actuarial assumption used. For expenses, an insurer must include
percent of premium dollars per policy and dollars per unit of benefits, if
any;
17.3.e.5. A description and a table
of the anticipated policy reserves and additional reserves to be held in each future
year for active lives;
17.3.e.6. The
estimated average annual premium per policy and the average issue age;
17.3.e.7. A statement as to whether underwriting
is performed at the time of application. The statement shall indicate whether
underwriting is used and, if used, the statement shall include a description of the
type or types of underwriting used, such as medical underwriting or functional
assessment underwriting. Concerning a group policy, the statement shall indicate
whether the enrollee or any dependent will be underwritten and when underwriting
occurs; and
17.3.e.8. A description of
the effect of the long-term care policy provision on the required premiums,
nonforfeiture values and reserves on the underlying life insurance policy, both for
active lives and those in long-term care claim status.
