| (C) a loss ratio of at least 65% over the entire future period for which the rates are computed to provide coverage. (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 shall 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 shall 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. Such demonstration shall exclude active life reserves. An expected third-year loss ratio which is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than three years. The annual filing requirements in this subsection shall 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 which 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 shall collect and file with the commissioner by May 31 of each year the data contained in the "Medicare Supplement Refund Calculation Form," published as Figure 1 to this section, for each type in a standard Medicare supplement benefit plan. This form is published by the Texas Department of Insurance and copies of this form are available from the Life/Health Group, Mail Code 106-1A of the Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. (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 shall 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 shall be excluded. (2) A refund or credit shall 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 shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the secretary of health and human services, but in no event shall it be less than the average rate of interest for 13-week treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based. (3) For an individual or group policy or certificate issued prior to March 1, 1992, the issuer, for purposes of complying with this subsection, shall make the refund or credit calculation separately for all individual policies combined and all group policies combined for experience after June 1, 1996. Attached Graphic (g) Premium adjustments to conform with minimum standards for loss ratios. As soon as practicable, but prior to the effective date of enhancements to Medicare benefits, every issuer of Medicare supplement insurance policies, contracts, or coverage in this state shall 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) Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or contracts shall be filed. Documents necessary to justify the adjustment shall accompany the filing. (A) Every issuer of Medicare supplement insurance or benefits to a resident of this state pursuant to the Insurance Code, Article 3.74 shall make premium adjustments: (i) necessary to product an expected loss ratio under the policy or contract as 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 which 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 upon its renewal date or anniversary date. (C) If an issuer fails to make premium adjustments 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 shall be filed. The riders, endorsements, or policy forms shall 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 shall be maintained for each policy form with business in force in Texas, by calendar year of issue, and shall be made available to the Texas Department of Insurance. |
| 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 |
