Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 28 - Life, Health, Variable, and Related Insurance › Article 7 - Long-term Care Insurance › 3 AAC 28.557 - Initial filing requirements

Current through May 31, 2024
(a) This section
				  applies to a long-term care policy issued in this state on or after January 1,
				  2023.
(b) An insurer shall provide
				  to the director 45 days before making a long-term care insurance form available
				  for sale the following information:
(1) a copy
				  of the disclosure documents required in 3 AAC 28.556;
(2) an actuarial certification consisting of
				  at least the following:
(A) a statement that
				  the initial premium rate schedule is sufficient to cover anticipated costs
				  under moderately adverse experience and that the premium rate schedule is
				  reasonably expected to be sustainable over the life of foe form with no future
				  premium increases anticipated;
(B)
				  a statement that the policy design and coverage provided have been reviewed and
				  taken into consideration,
(C) a
				  statement that the underwriting and claims adjudication processes have been
				  reviewed and taken into consideration:
(D) a statement, as follows that the premiums
				  include at least the minimum margin set out in (i) of this subparagraph or the
				  specification of and justification for a lower margin as required by (ii) of
				  this subparagraph:
(i) a composite margin for
				  moderately adverse experience may not be less than 10 percent of lifetime
				  claims;
(ii) a composite margin for
				  moderately adverse experience that is less than 10 percent may be justified in
				  uncommon circumstances; the proposed amount, full justification of the proposed
				  amount and methods to monitor developing experience that would be the basis for
				  withdrawal of approval for the lower margins must be submitted;
(iii) a composite margin for moderately
				  adverse experience lower than otherwise considered appropriate for the
				  standalone long-term care policy may be justified for long-term care benefits
				  provided through a life policy or an annuity contract; the lower composite
				  margin, if utilized, shall be justified by appropriate actuarial demonstration
				  addressing margins and volatility when considering the entirety of the
				  product;
(iv) a greater margin may
				  be appropriate in circumstances where the company has less credible experience
				  to support its assumptions used to determine the premium rates;
(v) for purposes of this subparagraph, a
				  composite margin is the total of all margins reflected in actuarial
				  assumptions, such as morbidity, mortality, lapse, underwriting selection
				  wear-off, and over best estimate assumptions.
(E) a statement that the premium rate
				  schedule is not less than the premium rate schedule for existing similar policy
				  forms also available from the insurer except for reasonable differences
				  attributable to benefits; or a comparison of the premium schedules for similar
				  policy forms that are currently available from the insurer with an explanation
				  of the differences;
(F) a statement
				  that reserve requirements have been reviewed and considered; Support for this
				  statement shall include
(i) sufficient detail
				  or sample calculations provided so as to have a complete depiction of the
				  reserve amounts to be held; and
(ii) a statement that the difference between
				  the gross premium and the net valuation premium for renewal years is sufficient
				  to cover expected renewal expenses; or if a statement cannot be made, a
				  complete description of the situations where this does not occur; an aggregate
				  distribution of anticipated issues may be used as long as the underlying gross
				  premiums maintain a reasonably consistent relationship; and
(3) an actuarial
				  memorandum prepared, dated and signed by a member of the Academy of Actuaries;
				  the memorandum address and support each specific item required as part of the
				  actuarial certification and provide at least the following information:
(A) an explanation of the review performed by
				  the actuary before making the statements in (2)(B) and (C) of this
				  subsection;
(B) a complete
				  description of pricing assumptions;
(C) sources and levels of margins
				  incorporated into the gross premiums that are the basis for the statement in
				  (2)(A) of this subsection of the actuarial certification and an explanation of
				  the analysis and testing performed in determining the sufficiency of the
				  margin; deviations in margins between ages, sexes, plans, or states shall be
				  clearly described; deviations in margins required to be described are other
				  than those produced utilizing generally accepted actuarial methods for
				  smoothing and interpolating gross premium scales; and
(D) a demonstration that the gross premiums
				  include the minimum composite margin specified in (2)(D) of this
				  subsection.