Connecticut Administrative Code › Title 38a - Insurance Department › 78 - Connecticut Standard Valuation Law Actuarial Opinion and Memorandum › Minimum Reserve Standards for Individual and Group Health Insurance Contracts › Section 38a-78-11 - Introduction

Current through July 10, 2024
(a)
Scope.
Sections 38a-78-11 to
				38a-78-16, inclusive, of these
				regulations shall apply to all individual and group health (accident and
				sickness) insurance coverages, including, but not limited to, single premium
				credit disability insurance. All other credit insurance is not subject to this
				regulation.
When an insurer determines that adequacy of its health
				  insurance reserves requires reserves in excess of the minimum standards
				  specified herein, such increased reserves shall be held and shall be considered
				  the minimum reserves for that insurer.
With respect to any block of contracts, or with respect to an
				  insurer's health business as a whole, a prospective gross premium valuation is
				  the ultimate test of reserve adequacy as of a given valuation date. Such a
				  gross premium valuation will take into account, for contracts in force, in a
				  claims status, or in a continuation of benefits status on the valuation date,
				  the present value as of the valuation date of: all expected benefits unpaid,
				  all expected expenses unpaid, and all unearned or expected premiums, adjusted
				  for future premium increases reasonably expected to be put into effect.
Such a gross premium valuation is to be performed whenever a
				  significant doubt exists as to reserve adequacy with respect to any major block
				  of contracts, or with respect to the insurer's health business as a whole. In
				  the event inadequacy is found to exist, immediate loss recognition shall be
				  made and the reserves restored to adequacy. Adequate reserves (inclusive of
				  claim, premium and contract reserves, if any) shall be held with respect to all
				  contracts, regardless of whether contract reserves are required for such
				  contracts under these standards.
Whenever minimum reserves, as defined in these standards,
				  exceed reserve requirements as determined by a prospective gross premium
				  valuation, such minimum reserves remain the minimum requirement under these
				  standards.
(b)
Categories of Reserves.
The following sections set forth minimum
				standards for three categories of health insurance reserves:
Sec.
				  38a-78-13. Claim reserves
Sec.
				  38a-78-14. Premium
				  reserves
Sec.
				  38a-78-15. Contract
				  reserves
Adequacy of an insurer's health insurance reserves is to be
				  determined on the basis of all three categories combined. However, these
				  standards emphasize the importance of determining appropriate reserves for each
				  of the three categories separately.
(c)
Appendices.
These standards
				contain two appendices: one is an integral part of the standards, and one is a
				"supplementary" appendix which is not part of the standards as such, but is
				included for explanatory and illustrative purposes only.
Appendix A. Specific minimum standards with respect to
				  morbidity, mortality and interest, which apply to claim reserves according to
				  year of incurral and to contract reserves according to year of issue.
Appendix B. (Supplementary) Waiver of Premium
				  Reserves.