Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-60 - Disability insurance loss ratios › Section 284-60-060 - Loss ratio requirement for group and blanket disability insurance policy forms and manual rates

Current through Register Vol. 24-14, July 15, 2024
The following standards and requirements apply to group and
				blanket disability insurance policy forms and manual rates:
(1) Specified disease group insurance shall
			 generate at least a seventy-five percent loss ratio regardless of the size of
			 the group.
(2) Group disability
			 insurance, other than specified disease insurance, as to which the insureds pay
			 all or substantially all of the premium shall generate loss ratios no lower
			 than those set forth in the following table.
Number of Certificate Holders at Issue, Renewal or
							 Rerating
Minimum Overall Loss Ratio
9 or less
60%
10 to 24
65%
25 to 49
70%
50 to 99
75%
100 or more
80%
(3)
			 Group disability policy forms, other than for specified disease insurance, for
			 issue to single employers insuring less than one hundred lives shall generate
			 loss ratios no lower than those set forth in subsection (2) of this section for
			 groups of the same size.
(4) The
			 calculating period may vary with the benefit and premium provisions. The
			 company may be required to demonstrate the reasonableness of the calculating
			 period chosen by the actuary responsible for the premium
			 calculations.
(5) A request for a
			 rate increase submitted at the end of the calculating period shall include a
			 comparison of the actual to the expected loss ratios and shall employ any
			 accumulation of reserves in the determination of rates for the selected
			 calculating period and account for the maintenance of such reserves for future
			 needs. The request for the rate increase shall be further documented by the
			 expected loss ratio for the new calculating period.
(6) A request for a rate increase submitted
			 during the calculating period shall include a comparison of the actual to the
			 expected loss ratios, a demonstration of any contributions to or support from
			 the reserves, and shall account for the maintenance of such reserves for future
			 needs. If the experience justifies a premium increase it shall be deemed that
			 the calculating period has prematurely been brought to an end. The rate
			 increase shall further be documented by the expected loss ratio for the next
			 calculating period.
(7) The
			 commissioner may approve a series of two or three smaller rate increases in
			 lieu of one larger increase. These should be calculated to reduce the lapses
			 and antiselection that often result from large rate increases. A demonstration
			 of such calculations, whether for a single rate increase or a series of smaller
			 rate increases, satisfactory to the commissioner, shall be attached to the
			 filing.
(8) Companies shall review
			 their experience periodically and file appropriate rate revisions in a timely
			 manner to reduce the necessity of later filing of exceptionally large rate
			 increases.
Statutory Authority:
				  RCW
				  48.02.060. 83-14-002 (Order R 83-1), §
										284-60-060, filed 6/23/83,
				  effective 9/1/83.