Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69O - OIR - Insurance Regulation › Chapter 69O-157 - LONG-TERM CARE INSURANCE › Section 69O-157.301 - Rate Increase Standards

Current through Reg. 50, No. 138; July 16, 2024
(1) Rate
				increase filings for long term care insurance shall be filed in accordance with
				filing requirements and standards of Rule Chapters 69O-149 and 69O-157,
				F.A.C.
(2) The term "policies with
				similar coverage" has the same meaning as "similar policy forms" as defined in
				subsection 69O-157.103(17),
				F.A.C.
(3) The footnote following
				Section 627.9407, F.S., states that
				Section 11, Chapter 2006-254, L.O.F., provides that "[t]his act shall apply to
				long-term care insurance policies issued or renewed on or after July 1, 2006.
				For any long-term care insurance policy issued prior to July 1, 2006, the
				provisions of [Section
				627.94076, F.S.] shall apply to
				such policy only upon renewal of such policy on or after July 1, 2008, and the
				policy shall so provide by endorsement to the policy."
(4) Pursuant to the provisions of Section
				627.9407(7)(c),
				F.S., for insurers that are currently actively marketing and issuing similar
				coverage, the rates resulting after a rate increase filing shall not exceed the
				insurer's new business rate.
(5)
(a) Section
				627.9407(7)(c),
				F.S., requires that the office annually determine and publish the currently
				available new business rates for similar coverage being sold in Florida. The
				published new business rates represent the maximum annual rate that may be
				charged after a rate increase for insurers not currently issuing new
				coverage.
(b) The published rates
				shall be determined by first identifying those carriers currently issuing
				policies with similar coverage. For each of the similar coverage categories,
				the Florida new business earned premium, defined as first year premium in
				Florida, is determined for the prior calendar year. Those insurers reporting at
				least the top 80% of that earned premium, cumulatively, starting with the
				largest, will be used to tabulate the new business rate. The new business rate
				shall be the weighted average of the insurers' rates, using the market share,
				as measured by first year premium in Florida, as the weight.
(c)
1. The
				new business rates are for the standard underwriting class for the insurer.
				Standard underwriting class is the underwriting class with the most predominant
				sales, measured by number of policies, regardless of the name given to it by
				the insurer.
2. The new business
				rates for other underwriting classes shall bear the same relationship to the
				standard rate schedules that the insurer has filed and approved. For example,
				if an insurer's preferred rate is 85% of its standard rate, the premium limit
				applicable to the rate increase for business sold as preferred will be 85% of
				the standard rate schedule.
(d)
1. The
				published new business rates represent the particular benefit configuration
				listed. If an insurer has policies in force that have benefits different from
				the benefit used to determine the published rates, the insurer may contact the
				office for the new business rate that reflect the different benefits.
2. The office shall determine the new
				business rates for the requested benefit configuration in the same manner as it
				used for determining the published rates. The resulting rates shall be
				consistent with the published new business rates reflecting benefit differences
				only.
3. Insurers needing a
				different benefit configuration should make such request of the office in
				advance of a rate filing so as to give the office time to determine such rates
				and provide them to the insurer.
4.
				If the office is unable to determine the rates by a tabulation of the insurers
				currently selling similar coverage, the office shall use its best actuarial
				judgment in determining the new business rates using the information available
				from the insurers in the 80% market share. Alternatively in such cases, at the
				option of the insurer, the insurer may submit the results of a model used to
				price new long term care products by an actuarial consulting firm currently
				pricing long term care for other clients, who is independent of the insurer,
				acceptable to the office, and contracted by the insurer. The assumptions used
				shall be available to the office for review and approval. The model will be
				used to develop the new business pricing for the insurer's policy benefit
				configuration, the new business pricing for the published benefit
				configuration, and to develop a factor which is the ratio of the insurer's
				policy benefits to the published benefits. It is noted that the provisions of
				Section 627.9407(7)(c),
				F.S., provide that the differences shall be benefit differences only; all other
				provisions of the two policies being modeled shall be identical. Such factor,
				representing benefit differences only, shall be used to adjust the published
				new business rates. Independent, as used in this section, shall mean that the
				actuarial consulting firm or the actuary to be involved in the project has no
				relationship currently or for the last three years with the insurers for
				pricing, valuation, or other reviews.
(e) If the application of this rule results
				in different increases being applied to different plans within the filing, the
				requirements of subparagraph
				69O-149.003(1)(a)
				4., F.A.C. shall apply.
(f) The
				published rates apply to sales in Hillsborough County. For all other counties,
				the rate from the published table should be adjusted by the insurer's current
				area factor applicable in that county relative to the insurer's area factor in
				Hillsborough County.
(g) The
				premium for all additional benefits provided in the policy or by rider to the
				policy shall be the same proportion of the base rates after any rate change as
				they were before such change.