Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 031 - BUREAU OF INSURANCE › Chapter 420 - Nursing Home Care Insurance and Long-Term Care Insurance › Section 031-420-6 - Rating standards on or after May 1, 2008

Current through 2024-29, July 17, 2024
The requirements of this section apply to rates in effect on
				  or after May 1, 2008, for policies subject to this rule pursuant to Section
				  3.
A. Rate filings may be filed electronically,
				using the System for Electronic Rate and Form Filing (SERFF), or on paper.
				Paper filings must include two copies of the cover letter. If the filing is
				found to be in compliance with the law, one copy of the cover letter (and any
				other materials sent in duplicate) will be returned to the insurer stamped to
				confirm that the rates are acceptable. Every rate submission must contain the
				following information:
1.
Insurer
				Information
: Include the name and address of the insurer. The name,
				title, email address, and direct phone number of the person responsible for the
				filing must also be included.
2.
Description of Benefits
: Include a brief description of the
				benefits provided by each policy form and any attached riders or
				endorsements.
3.
Dates of
				Issue
: State the period during which the policy form was issued in
				Maine.
4.
In Force
				Business
: State the policy or certificate count and annualized premium
				of Maine policyholders or certificate holders who will be affected by the
				proposed rate revision.
5.
Proposed Effective Date
: State the proposed effective date and
				method of the proposed rate revision implementation (e.g. next anniversary or
				next premium due date).
6.
History of Rate Adjustments
: List the approval dates and average
				percentage rate adjustments for the form both nationwide and in Maine since
				inception of the policy form.
7.
Maine and National Experience on the Form
(Past and Future
				Anticipated): Experience from inception for each calendar year and, where
				appropriate, each policy year must be displayed. If there have been prior rate
				adjustments, past experience must be presented on both an actual basis and a
				current premium rate basis. Show experience separately for Maine and for all
				states in which the form is or was sold. State whether the proposed rates are
				based on Maine experience, national experience, or a combination and explain
				the reasons this basis was used. If nationwide experience is used, premiums
				must be adjusted to the Maine rate level.
8.
Waiver of Premium
: Specify
				whether waived premiums are included in earned premiums and incurred claims.
a. If waived premiums are included, include
				the following:
(i) Specify the amount of
				waived premiums over the last 12 months.
(ii) Specify the amount of reserves held for
				future waived premiums.
(iii)
				Indicate the effect of the proposed rate increase on future waived premiums and
				reserves.
b. If waived
				premiums are not included, specify the amount of waived premiums in each year.
9.
Supporting
				Information
: The filing must include sufficient supporting information
				to demonstrate that the rates are not excessive, inadequate, or unfairly
				discriminatory. At a minimum, the filing must include an analysis of actual and
				projected experience with respect to morbidity, mortality, lapsation, and any
				other relevant factors. Include a comparison to original pricing assumptions
				and to the assumptions at the time of any previous rate adjustment. Include a
				demonstration that the actual and projected experience meets the standards of
				subsection B.
10.
Premium
				breakdown
: Separately for the future period and for the lifetime of the
				form, show the following items as a percentage of earned premium. Past
				experience must be accumulated with interest. Future experience must be on a
				present value basis.
a. Initial contract
				reserves (applies to future period only; zero for lifetime);
b. Incurred claims;
c. Commissions;
d. Administrative expenses other than
				commissions that are a percentage of premium (e.g., premium tax);
e. Fixed administrative expenses;
				and
f. Profit = 100% + (a) - (b) -
				(c) - (d) - (e).
For purposes of this section, incurred claims do not include
				  any active life reserves, claim adjustment expenses, or cost containment
				  expenses.
11.
Similar forms
a. If the form is
				no longer actively marketed, a statement must be included as to whether a
				similar form is actively marketed and, if so, a discussion of equity between
				the two forms, including a comparison of the benefits and premium rates, must
				also be included. "Similar forms" means all of the long-term care or nursing
				home care policies and certificates issued by an insurer in the same benefit
				classification as the policy form being considered. Certificates of employee
				groups as defined in
				24-A M.R.S.A.
				§2804, labor union groups as defined in
				 24-A M.R.S.A.
				§2805, or trustee groups as defined in
				24-A M.R.S.A.
				§2806 are not considered similar to
				certificates or policies otherwise issued as long-term care or nursing home
				care insurance but are similar to other comparable certificates with the same
				benefit classifications. The different benefit classifications are:
				institutional benefits only, non-institutional benefits only, and comprehensive
				(institutional and non-institutional) benefits.
b. Rates for individual policy forms for
				closed blocks must not exceed rates for an open block, unless the difference is
				justified by differences in benefits or other conditions, or unless the fact
				that renewal rates would exceed new business rates was disclosed at issue. The
				Superintendent may approve exceptions to this requirement, if the enrollees are
				permitted to change to the new form based on original issue age and the
				Superintendent determines that the change would be in the best interest of the
				enrollees.
12.
Actuarial Certification
: There must be certification by a
				qualified actuary that, to the best of the actuary's knowledge and judgment,
				the entire rate filing is in compliance with the applicable laws of the State
				of Maine and with the rules of the Bureau of Insurance. "Qualified actuary," as
				used herein, means a member in good standing of the American Academy of
				Actuaries.
13. Any additional
				information that the Superintendent deems necessary.