Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 031 - BUREAU OF INSURANCE › Chapter 425 - LONG-TERM CARE INSURANCE › Section 031-425-10 - Initial Rate Filing with Superintendent

Current through 2024-29, July 17, 2024
A. This
				section applies to any long-term care policy issued in this state on or after
				October 1, 2004, except that Subsection B(2)(d), Subsection B(2)(f), and
				Subsection B(3) apply only to policies issued on or after July 1,
				2022.
B. At least 30 days before
				making a long-term care insurance form available for sale, an insurer shall
				provide the superintendent with the following information:
(1) A copy of the disclosure documents
				required under Section
				9; and
(2) A certification by a qualified actuary
				consisting of at least:
(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 the form with no future
				premium increase 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 that the premiums contain a
				margin for moderately adverse experience that is not less than 10% of lifetime
				claims, or a justification for a lower margin meeting the requirements of
				clause (i):
(i) A composite margin that is
				less than 10% may be justified for long-term care benefits provided through a
				life insurance policy or annuity contract rather than a stand-alone long-term
				care policy, or in other extraordinary circumstances. The actuarial
				certification must include the proposed amount, full justification of the
				proposed amount, and methods to monitor developing experience to evaluate the
				validity of the lower margin on an ongoing basis. For products that combine
				long-term care with other types of benefits, the justification shall address
				margins and volatility for the entirety of the product.
(ii) A greater margin may be appropriate in
				circumstances where the company lacks sufficient credible experience to support
				the assumptions used to determine its premium rates, or for participating
				policies where policyholders receive distributions based on favorable claims
				experience.
(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
				to provide 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 such 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.
(3) The rate filing shall include an
				actuarial memorandum prepared, dated and signed by the certifying actuary. The
				memorandum shall 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 required by Paragraph (2)(b) and
				(c).
(b) A complete description of
				pricing assumptions; and
(c)
				Sources and levels of margins incorporated into the gross premiums that are the
				basis for the statement required by Paragraph (2)(a) and an explanation of the
				analysis and testing performed in determining the sufficiency of the margins.
				Deviations in margins between ages, sexes, plans or states shall be clearly
				described.
De minimis
variations resulting from actuarial
				methods for smoothing and interpolating gross premium scales are not considered
				"deviations" for purposes of this subparagraph.
(d) A demonstration that the gross premiums
				include the minimum composite margin specified in Paragraph (2)(d).