Minn. Stat. § 62S.26 — MN Code / Part 59A_79A / Chapter 62S / Section 62S.26
§ 62S.26 LOSS RATIO.
Status: in_force

§ Subdivision 1. Minimum loss ratio. The minimum loss ratio must be at least 60 percent, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, the commissioner shall give consideration to all relevant factors, including: (1) statistical credibility of incurred claims experience and earned premiums; (2) the period for which rates are computed to provide coverage; (3) experienced and projected trends; (4) concentration of experience within early policy duration; (5) expected claim fluctuation; (6) experience refunds, adjustments, or dividends; (7) renewability features; (8) all appropriate expense factors; (9) interest; (10) experimental nature of the coverage; (11) policy reserves; (12) mix of business by risk classification; and (13) product features such as long elimination periods, high deductibles, and high maximum limits.

§ Subd. 2. Life insurance policies. Subdivision 1 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: (1) 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; (2) the portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of section 61A.24 ; (3) the policy meets the disclosure requirements of sections 62S.09 , 62S.10 , and 62S.11 ; (4) any policy illustration that meets the applicable requirements of the NAIC Life Insurance Illustrations Model Regulation; and (5) an actuarial memorandum is filed with the commissioner that includes: (i) a description of the basis on which the long-term care rates were determined; (ii) a description of the basis for the reserves; (iii) a summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance; (iv) a description and a table of each actuarial assumption used. For expenses, an insurer must include percentage of premium dollars per policy and dollars per unit of benefits, if any; (v) a description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives; (vi) the estimated average annual premium per policy and the average issue age; (vii) 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 (viii) 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.

§ Subd. 3. Nonapplication. This section does not apply to policies or certificates that are subject to sections 62S.021 , 62S.081 , and 62S.265 , and that comply with those sections.