Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-55 - Medicare supplement insurance regulation › Section 284-55-115 - Standards for loss ratios

Current through Register Vol. 24-14, July 15, 2024
(1)
			 Medicare supplement insurance policies shall return to policyholders in the
			 form of aggregated benefits under such policy, for the entire period for which
			 rates are computed to provide coverage, loss ratios not less than those set
			 forth in this section. Such aggregated benefits shall be on the basis of
			 incurred claims experience and earned premiums for such period in accordance
			 with accepted actuarial principles. The loss ratio standards of this section
			 are more stringent and more appropriate than those imposed by
			 RCW
			  48.66.100, and are necessary for the
			 protection of the public interest. Where coverage is provided by a health
			 maintenance organization on a service rather than reimbursement basis, such
			 aggregated benefits shall be on the basis of incurred health care expenses and
			 earned premiums for such period.
(2) All filings of rates and rating schedules
			 shall demonstrate that actual and expected losses in relation to premiums
			 comply with the requirements of this chapter.
(3) Every insurer providing medicare
			 supplement policies in this state shall annually file its rates, rating
			 schedules, and supporting documentation including ratios of incurred losses to
			 earned premiums by number of years of policy duration demonstrating that it is
			 in compliance with the applicable loss ratio standards and that the period for
			 which the policy is rated is reasonable in accordance with accepted actuarial
			 principles and experience. Supporting documentation shall include the amounts
			 of unearned premium reserve, policy reserves, and claim reserves and
			 liabilities, both nationally and for this state. The form for filing this
			 information is provided at WAC
			 284-55-205 through
			 284-55-210.
(4) Incurred losses shall include claims paid
			 and the change in claim reserves and liabilities. Incurred losses shall not
			 include policy reserves, home office or field overhead, acquisition and selling
			 costs, taxes or other expenses, contributions to surplus, profit, or claims
			 processing costs.
(5) The following
			 criteria will be used to determine whether policy forms are in compliance with
			 the loss ratio standards of this section:
(a)
			 For the most recent year, the ratio of the incurred losses to earned premiums
			 is greater than or equal to the applicable percentages contained in this
			 section; and
(b) The expected
			 losses in relation to premiums over the entire period for which the policy is
			 rated complies with the requirements of this section, relying on the judgment
			 of the pricing actuary and acceptable to the commissioner; and
(c) An expected loss ratio for the third
			 policy year, greater than or equal to the applicable percentage, shall be
			 demonstrated for policies or certificates in force less than three years. The
			 applicable percentage shall be as defined in subsection (6), (7), or (8) of
			 this section.
(d) Similar policy
			 forms shall be grouped together according to the rules set forth in WAC
			 284-60-040.
(e) The commissioner may consider additional
			 criteria including, but not limited to:
(i)
			 Equitable treatment of policyholders; and
(ii) The amount of policy reserves as defined
			 for the insurer's statutory annual statement.