Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-66 - Washington medicare supplement insurance regulation › Section 284-66-203 - Loss ratio and rating standards and refund or credit of premium

Current through Register Vol. 24-14, July 15, 2024
(1) Loss ratio and
			 rating standards. For policies issued on or after July 1, 1992, and those
			 policies specifically approved by the commissioner under WAC
			 284-66-063 before July 1, 1992:
(a) A medicare supplement policy form or
			 certificate form must be rated on an issue-age level premium basis or community
			 rated basis, as described in WAC
			 284-66-243(7).
(b) A medicare supplement policy form or
			 certificate form may not be delivered or issued for delivery unless the policy
			 form or certificate form can be expected, as estimated for the entire period
			 for which rates are computed to provide coverage, to return to policyholders
			 and certificate holders in the form of aggregate benefits (not including
			 anticipated refunds or credits) provided under the policy form or certificate
			 form:
(i) At least seventy-five percent of
			 the aggregate amount of premiums earned in the case of group policies;
			 or
(ii) At least sixty-five percent
			 of the aggregate amount of premiums earned in the case of individual policies,
			 calculated on the basis of incurred claims experience or incurred health care
			 expenses where coverage is provided by a health maintenance organization or
			 health care service contractor on a service rather than reimbursement basis and
			 earned premiums for the period, according to accepted actuarial principles and
			 practices.
(c) All
			 filing of rates and rating schedules must demonstrate that expected claims in
			 relation to premiums comply with the requirements of this section when combined
			 with actual experience to date. Filings of rate revisions must also demonstrate
			 that the anticipated loss ratio over the entire future period for which the
			 revised rates are computed to provide coverage can be expected to meet the
			 appropriate loss ratio standards.
(d) For purposes of applying subsection
			 (1)(b) of this section and WAC
			 284-66-243(3)(c) only, policies issued as a result of
			 solicitations of individuals through the mails or by mass media advertising
			 (including both print and broadcast advertising) shall be deemed to be
			 individual policies.
(e) For
			 policies issued before April 28, 1996, expected claims in relation to premiums
			 must meet:
(i) The originally filed
			 anticipated loss ratio when combined with the actual experience since
			 inception;
(ii) The appropriate
			 loss ratio requirement from WAC
			 284-66-203(1)(b)(i) and
			 (ii)  when combined with actual experience
			 beginning with April 28, 1996, to date; and
(iii) The appropriate loss ratio requirement
			 from WAC 284-66-203(1)(b)(i) and
			 (ii)  over the entire future period for which
			 the rates are computed to provide coverage.
(iv) In meeting the tests in (e)(i), (ii),
			 and (iii) of this subsection, and for purposes of attaining credibility, with
			 the prior written approval of the commissioner, an issuer may combine
			 experience under policy forms that provide substantially similar coverage. Once
			 a combined form is adopted, the issuer may not separate the experience, except
			 with the prior written approval of the commissioner.