An HMO must submit schedule of charges information with the
certificate of authority application in compliance with §11.204(11)
and (12) of this title (relating to Contents). After the commissioner
issues a certificate of authority, the HMO must file rates and supporting
documentation before use as follows:
(1) rates for a new product:
(A) evidences of coverage to which the rates apply;
(B) for individual and small group plans, a new rate
sheet including rates for each plan and each combination of rating
factors used by the HMO; and
(C) actuarial memorandum:
(i) a brief description of benefits and general marketing
method;
(ii) a brief description of how rates were determined,
including a general description and source of each assumption used;
(iii) a list of retention components, including, but
not limited to, expenses, taxes, fees, and profit expressed as a percent
of premium, dollars per policy, or dollars per unit of benefit;
(iv) the target loss ratio, including a brief description
of how it was calculated and all components used in its calculation;
(v) a description of the experience used in developing
the HMO's rates, including the level of credibility and appropriateness
of experience data, and justification for the use of proposed manual
rates if the HMO's own experience is not credible;
(vi) the assumptions and support used in developing
rates, including, but not limited to, adjustments for trend, morbidity,
lapses, risk-mitigating programs, and changes in benefits;
(vii) any other data used to support the proposed rate;
and
(viii) an actuarial certification required by §11.702
of this title (relating to Actuarial Certification);
(2) rate adjustments for an existing product:
(A) evidences of coverage to which the rates adjustments
apply;
(B) for individual and small group plans, a new rate
sheet that includes rates for each plan and each combination of rating
factors used by the HMO; and
(C) actuarial memorandum:
(i) a brief description of benefits and general marketing
method;
(ii) the scope and reason for the rate revision;
(iii) a description of the experience used in developing
the HMO's rates, including past experience, loss ratio(s) for all
applicable prior experience periods, the level of credibility and
appropriateness of experience data;
(iv) a brief description of how revised rates were
determined, including a general description and source of each assumption
used, which must also include a list of expenses, taxes, fees, and
profit, expressed as a percent of premium, dollars per policy or dollars
per unit of benefit, or both;
(v) the target loss ratio and description of how it
was calculated;
(vi) the assumptions and support used in developing
rates, including, but not limited to, adjustments for trend, morbidity,
lapses, risk-mitigating programs, and changes in benefits;
(vii) any other data used to support the proposed rate
increase; and
(viii) an actuarial certification required by §11.702
of this title.
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