| (e) Annual filing of premium rates required. Every
issuer of Medicare supplement policies and certificates issued before
or after March 1, 1992, in this state must file annually its rates,
rating schedule, and supporting documentation, including ratios of
incurred losses to earned premiums, for the most recent calendar year
broken down by calendar year of issue or by policy duration, for purposes
of demonstrating that the issuer is in compliance with the loss ratio
standards and for approval by the department in accordance with the
filing requirements of this section and the requirements of §3.3323
of this title (relating to Increases to Premium Rates). The supporting
documentation must also demonstrate, in accordance with actuarial
standards of practice using reasonable assumptions, that the appropriate
loss ratio standards can be expected to be met over the entire period
for which rates are computed. The demonstration must exclude active
life reserves. An expected third-year loss ratio that is greater than
or equal to the applicable percentage must be demonstrated for policies
or certificates in force less than three years. The annual filing
requirements in this subsection must be as follows:
(1) the NAIC Medicare supplement experience exhibit,
which summarizes the experience of each individual form with business
in force in Texas;
(2) the NAIC Medicare supplement experience exhibit,
which summarizes the experience of each group form with business in
force in Texas;
(3) rates and rating schedules for each form with business
in force in Texas;
(4) a certification by the qualified actuary that the
policies or certificates in force less than three years are anticipated
to produce a third-year loss ratio that is greater than or equal to
the applicable loss ratio percentage; and
(5) a certification by the qualified actuary that the
expected losses in relation to premiums over the entire period for
which the policy is rated comply with the required minimum aggregate
loss ratio standard.
(f) Refund or credit calculation. An issuer must perform
the refund or credit calculation consistent with the instructions
contained in Figure: 28 TAC §3.3307(f) of this section. Issuers
must retain documentation supporting the calculations required by
this subsection for a period of five years and provide the calculations
and supporting documentation to the Commissioner on request and in
the manner prescribed by the Commissioner.
Attached Graphic
(1) If, on the basis of the experience as reported,
the benchmark ratio since inception (ratio 1) exceeds the adjusted
experience ratio since inception (ratio 3), then a refund or credit
calculation is required. The refund calculation must be done on a
statewide basis for each type in a standard Medicare supplement benefit
plan. For purposes of the refund or credit calculation, experience
on policies issued within the reporting year must be excluded.
(2) A refund or credit will be made only when the benchmark
loss ratio exceeds the adjusted experience loss ratio and the amount
to be refunded or credited exceeds a de minimis level. The refund
must include interest from the end of the calendar year to the date
of the refund or credit at a rate specified by the Secretary, but
in no event may it be less than the average rate of interest for 13-week
treasury notes. A refund or credit against premiums due must be made
by September 30 following the experience year on which the refund
or credit is based.
(3) For an individual or group policy or certificate
issued before March 1, 1992, the issuer, for purposes of complying
with this subsection, must make the refund or credit calculation separately
for all individual policies combined and all group policies combined
for experience after June 1, 1996.
(g) Premium adjustments to conform with minimum standards
for loss ratios. As soon as practicable, but before the effective
date of enhancements to Medicare benefits, every issuer of Medicare
supplement insurance policies, contracts, or coverage in this state
must file with the Commissioner, in accordance with the applicable
filing procedures of this state, the items required in paragraphs
(1) and (2) of this subsection.
(1) Issuers must file the appropriate premium adjustments
necessary to produce loss ratios as anticipated for the current premium
for the applicable policies or contracts. Documents necessary to justify
the adjustment must accompany the filing.
(A) Every issuer of Medicare supplement insurance or
benefits to a resident of this state under Insurance Code Chapter
1652 must make premium adjustments:
(i) necessary to produce an expected loss ratio under
the policy or contract that will conform with the minimum loss ratio
standards for Medicare supplement policies; and
(ii) expected to result in a loss ratio at least as
great as that originally anticipated in the rates used to produce
current premium by the issuer for the Medicare supplement insurance
policies or contracts.
(B) No premium adjustment that would modify the loss
ratio experience under the policy, other than the adjustments described
in this subsection, should be made with respect to a policy at any
time other than on its renewal date or anniversary date.
(C) If an issuer fails to make premium adjustments
that are acceptable to the Commissioner, the Commissioner may order
premium adjustments, refunds, or premium credits deemed necessary
to achieve the loss ratio required by this section.
(2) Any appropriate riders, endorsements, or policy
forms needed to accomplish the Medicare supplement insurance modifications
necessary to eliminate benefit duplications with Medicare must be
filed. The riders, endorsements, or policy forms must provide a clear
description of the Medicare supplement benefits provided by the policy
or contract.
(h) Maintenance of data. Incurred claims and earned
premium experience must be maintained for each policy form with business
in force in Texas, by calendar year of issue, and must be made available
to the department.
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| Source Note: The provisions of this §3.3307 adopted to be effective June 1, 1982, 7 TexReg 1303; amended to be effective February 14, 1990, 15 TexReg 540; amended to be effective December 1, 1990, 15 TexReg 6594; amended to be effective April 15, 1992, 17 TexReg 2238; amended to be effective January 1, 1997, 21 TexReg 10753; amended to be effective May 10, 2005, 30 TexReg 2669; amended to be effective June 13, 2018, 43 TexReg 3787; amended to be effective August 9, 2021, 46 TexReg 4856 |
