Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 200 - RULES GOVERNING LONG-TERM CARE INSURENCE › Section 14VAC5-200-154 - Premium rate increases for policies issued after September 1, 2015

Current through Register Vol. 40, No. 24, July 15, 2024
A. An insurer shall
				request the commission's approval of a pending premium rate schedule increase,
				including an exceptional increase, prior to the notice to the policyholders and
				shall include:
1. Information required by
				14VAC5-200-75;
2. Certification by a qualified actuary that:
a. If the requested premium rate schedule
				increase is implemented and the underlying assumptions, which reflect
				moderately adverse conditions, are realized, no further premium rate schedule
				increases are anticipated; and
b.
				The premium rate filing is in compliance with the provisions of this
				section;
3. An actuarial
				memorandum justifying the rate schedule change request that includes:
a. Lifetime projections of earned premiums
				and incurred claims based on the filed premium rate schedule increase and the
				method and assumptions used in determining the projected values, including
				reflection of any assumptions that deviate from those used for pricing other
				forms currently available for sale;
(1)
				Annual values for the five years preceding and the three years following the
				valuation date shall be provided separately;
(2) The projections shall include the
				development of the lifetime loss ratio, unless the rate increase is an
				exceptional increase;
(3) The
				projections shall demonstrate compliance with subsection B of this section;
				and
(4) For exceptional increases:
(a) The projected experience should be
				limited to the increases in claims expenses attributable to the approved
				reasons for the exceptional increase; and
(b) In the event the commission determines as
				provided in the definition of exceptional increase in
				14VAC5-200-40 that offsets may
				exist, the insurer shall use appropriate net projected experience;
b. Disclosure of how
				reserves have been incorporated in this rate increase whenever the rate
				increase will trigger contingent benefit upon lapse;
c. Disclosure of the analysis performed to
				determine why a rate adjustment is necessary, which pricing assumptions were
				not realized and why, and what other actions taken by the company have been
				relied on by the actuary;
d. A
				statement that policy design, underwriting, and claims adjudication practices
				have been taken into consideration;
e. In the event that it is necessary to
				maintain consistent premium rates for new policies and policies receiving a
				rate increase, the insurer will need to file composite rates reflecting
				projections of new policies; and
f.
				A demonstration that actual and projected costs exceed costs anticipated at the
				time of initial pricing under moderately adverse experience and that the
				composite margin is projected to be exhausted;
4. A statement that renewal premium rate
				schedules are not greater than new business premium rate schedules except for
				differences attributable to benefits, unless sufficient justification is
				provided to the commission; and
5.
				Sufficient information for review and approval of the premium rate schedule
				increase by the commission.
An insurer may request a series of scheduled rate increases
				  that are actuarially equivalent to a single amount requested over the lifetime
				  of the policy. The entire series may be approved at one time as part of the
				  current rate increase filing. The insurer shall be required to include
				  contingent benefit upon lapse at the time of each scheduled increase.
The insurer may request a premium rate schedule increase less
				  than what is required under this section and the commission may approve such
				  premium rate schedule increase, without submission of the certification in
				  subdivision 2 a of this subsection, if the actuarial memorandum discloses the
				  premium rate schedule increase necessary to make such certification required,
				  the premium rate schedule increase filing satisfies all other requirements of
				  this section, and is, in the opinion of the commission, in the best interest of
				  policyholders.