Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69O - OIR - Insurance Regulation › Chapter 69O-154 - HEALTH INSURANCE POLICIES › Section 69O-154.202 - Definitions

Current through Reg. 50, No. 138; July 16, 2024
As used in this rule chapter, the following terms have the
				  following meaning:
(1) Annual Claim
				Cost. The net annual cost per unit of benefit before the addition of expenses,
				including claim settlement expenses, and a margin for profit or contingencies.
				For example, the annual claim cost for a $100 monthly disability benefit, for a
				maximum disability benefit period of one year, with an elimination period of
				one week, with respect to a male at age 35, in a certain occupation might be
				$12, while the gross premium for this benefit might be $18. The additional $6
				would cover expenses and profit or contingencies.
(2) Claims Accrued. That portion of claims
				incurred on or prior to the valuation date which result in liability of the
				insurer for the payment of benefits for medical services which have been
				rendered on or prior to the valuation date, and for the payment of benefits for
				days of hospitalization and days of disability which have occurred on or prior
				to the valuation date, which the insurer has not paid as of the valuation date,
				but for which it is liable, and will have to pay after the valuation date. This
				liability is sometimes referred to as a liability for accrued
				benefits.
(3) Claims Reported. For
				annual statement purposes, a reported claim is a claim that has been incurred
				on or before the valuation date and has been reported on or before the
				valuation date.
(4) Claims
				Unaccrued. That portion of claims incurred on or prior to the valuation date
				which result in liability of the insurer for the payment of benefits for
				medical services expected to be rendered after the valuation date, and for
				benefits expected to be payable for days of hospitalization and days of
				disability occurring after the valuation date. This liability is sometimes
				referred to as a liability for unaccrued benefits.
(5) Claims Unreported. For annual statement
				purposes, an unreported claim is a claim that has been incurred on or before
				the valuation date but has not been reported on or before the valuation
				date.
(6) Date of Disablement. The
				earliest date the insured is considered disabled under the definition of
				disability in the contract, based on a doctor's evaluation or other evidence.
				Normally this date will coincide with the start of any elimination
				period.
(7) Elimination Period. A
				specified number of days, weeks, or months starting at the beginning of each
				period of loss during which no benefits are payable.
(8) Gross Premium. The amount of premium
				charged by the insurer. It includes the net premium (based on claim-cost) for
				the risk, together with any loading for expenses, profit, or
				contingencies.
(9) Group Insurance.
				The term group insurance includes blanket insurance, franchise insurance, and
				any other forms of group insurance.
(10) Group Long-Term Disability Income. The
				term group long-term disability income includes group contracts providing group
				disability income coverage with a maximum benefit duration longer than two
				years. Group long-term disability income contracts are based on a group pricing
				structure. The term "group long-term disability" does not include group
				short-term disability (coverage with benefit periods of two years or less in
				maximum duration). It also does not include voluntary group disability income
				coverage that is priced on an individual risk structure and generally sold in
				the workplace.
(11) Level Premium.
				A premium calculated to remain unchanged throughout either the lifetime of the
				policy or for some shorter projected period of years. The premium need not be
				guaranteed, in which case, although it is calculated to remain level, it shall
				be changed if any of the assumptions on which it was based are revised at a
				later time.
Generally, the annual claim costs are expected to increase
				  each year and the insurer, instead of charging premiums that correspondingly
				  increase each year, charges a premium calculated to remain level for a period
				  of years or for the lifetime of the contract. In this case the benefit portion
				  of the premium is more than needed to provide for the cost of benefits during
				  the earlier years of the policy and less than the actual cost in the later
				  years. The building of a prospective contract reserve is a natural result of
				  level premiums.
(12)
				Long-Term Care Insurance. Insurance as defined in section
				627.9404, F.S.
(13) Medicare Supplement Insurance. Insurance
				as defined in section
				627.672, F.S.
(14) Modal Premium. Refers to the premium
				paid on a contract based on a premium term which could be annual, semi-annual,
				quarterly, monthly, or weekly. Thus if the annual premium is $100, and instead
				monthly premiums of $9 are paid, then the modal premium is $9.
(15) Negative Reserve. Normally the terminal
				reserve is a positive value. However, if the values of the benefits are
				decreasing with advancing age or duration it could be a negative value, called
				a negative reserve.
(16)
				Preliminary Term Reserve Method. Under this method of valuation the valuation
				net premium for each year falling within the preliminary term period is exactly
				sufficient to cover the expected incurred claims of that year, so the terminal
				reserves shall be zero at the end of the year. As of the end of the preliminary
				term period, a new constant valuation net premium (or stream of changing
				valuation premiums) becomes applicable so the present value of all such
				premiums is equal to the present value of all claims expected to be incurred
				following the end of the preliminary term period.
(17) Present Value of Amounts Not Yet Due on
				Claims. The reserve for claims unaccrued which may at the option of the insurer
				be discounted at interest.
(18)
				Reserve. Includes all items of benefit liability, whether in the nature of
				incurred claim liability or of contract liability relating to future periods of
				coverage, and whether the liability is accrued or unaccrued. An insurer under
				its contracts promises benefits which result in:
(a) Claims which have been incurred; that is,
				for which the insurer has become obligated to make payment, on or prior to the
				valuation date. On these claims, payments expected to be made after the
				valuation date for accrued and unaccrued benefits are liabilities of the
				insurer which shall be provided for by establishing claim reserves;
				or
(b) Claims which are expected to
				be incurred after the valuation date. Any present liability of the insurer for
				these future claims shall be provided for by the establishment of contract
				reserves and unearned premium reserves.