| (n) Appropriate use of previously approved or exempted
forms. The company is responsible for assuring the appropriate use
of previously approved or exempted forms. This includes the appropriate
use of any riders or other forms such as matrix and insert pages.
(o) Submission of a certificate for policies or contracts
issued outside of Texas. A copy of the master policy or contract issued
outside of Texas must accompany any life, annuity, credit, or accident
and health certificate filed for review or filed as exempt, along
with certification and evidence that the master policy for the group
was lawfully issued and delivered in a state in which the company
was authorized to do insurance business.
(p) Rates. Initial and subsequent rate filings must
include all specific descriptions and required information as follows:
(1) policy forms for which the rate filing applies
must be specified on the transmittal checklist or the transmittal
form, as applicable;
(2) credit life and credit accident and health filings
submitted under Insurance Code Chapter 1153 and Subchapter FF of this
chapter must include the rate information;
(3) group and individual Medicare supplement filings
submitted under Insurance Code §1652.101 and Subchapter T of
this chapter (relating to Minimum Standards for Medicare Supplement
Policies) must include the applicable rate schedule and experience
by plan;
(4) group and individual long-term care forms submitted
under Insurance Code Chapter 1651 and Chapter 3, Subchapter Y of this
title (relating to Standards for Long-Term Care Insurance Coverage
Under Individual and Group Policies) must include the rate schedule;
(5) all individual accident and health filings submitted
under Insurance Code Chapter 1701 must include the rate schedule;
and
(6) rate schedules submitted must be accompanied by
the actuarial information set forth in subsection (q) of this section.
(q) Actuarial information.
(1) Each life filing, including riders, insert pages,
or limited partial refilings, which changes the nonforfeiture values
of a particular policy or certificate must be accompanied by the information
set forth in subparagraphs (A) - (C) of this paragraph:
(A) The mathematical formulas and sample calculations
for the items set forth in clauses (i) - (iv) of this subparagraph.
(i) net premiums for the specimen age and plan of insurance;
(ii) specimen nonforfeiture calculations necessary
to verify consistency between the nonforfeiture values and the text
of the form for years one, 20, and 50;
(iii) terminal reserves for the specimen age and plan;
and
(iv) any other calculations necessary to verify nonforfeiture
values and reserves.
(B) An actuarial memorandum as specified in clauses
(i) and (ii) of this subparagraph, as applicable:
(i) for universal life and interest sensitive forms:
(I) an actuarial memorandum must provide the mortality
table, guaranteed interest rates, maximum surrender charges, maximum
expense charges, maximum risk rates (cost of insurance rates), maximum
loads, and maximum fees at issue. Upon a change in basic coverage,
bands and risk classes for all ages must be provided.
(II) actuarial proof must be provided that:
(-a-) cash surrender values meet the minimum requirements
of Insurance Code Chapter 1105;
(-b-) cash surrender values will always equal or exceed
the minimum values required by law; and
(-c-) provide a comparison table of all guaranteed
cash surrender values, standard nonforfeiture law minimum cash surrender
values, guaranteed death benefits, and reserves. Such comparison should
be based on the fill-in issue age (usually age 35) as defined in subsection
(d) of this section, a premium which will provide coverage to the
latest available maturity date, the minimum issue amount, minimum
guaranteed interest rates, maximum guaranteed cost of insurance rates
(mortality rates), maximum guaranteed charges, and a month-by-month
calculation of the values shown in the comparison for the first and
fiftieth years.
(ii) for variable life forms, actuarial information
must be provided as required by §3.804 of this title (relating
to Insurance Contract and Filing Requirements), and as required by
this section.
(C) A statement must be provided certifying that all
policies or certificates, in addition to the specimen language and
fill-in material, will have premiums, reserves, and nonforfeiture
values calculated in a manner consistent with the information furnished
with the specimen language and fill-in material. Any qualifications
to such certification must be specified, including any variation in
formulas at different ages at issue or at time of a change.
(2) For each annuity filing, an actuarial memorandum
must be provided to meet the minimum requirements of Insurance Code
Chapter 1107 and specify the guaranteed interest rates, the maximum
surrender charges, and any other maximum charges applicable in the
determination of nonforfeiture values. If the company intends to change
the guaranteed interest rates specified in the form, notification
must be submitted to the department prior to the change. The notification
must specify the new guaranteed interest rate and the date when the
new guaranteed interest rate will be effective for new issues of a
specified policy form, as required by §3.1004 of this title (relating
to Policy Form Review).
(A) For variable annuities, the actuarial information
must provide the information required in this paragraph and the information
required by §3.705 of this title (relating to Contract Requirements),
to the extent such material is applicable.
(B) For policies or contracts that contain a market-value
adjustment, the actuarial memorandum must:
(i) identify the name of the separate account;
(ii) indicate the basis for the market-value adjustment
formula and that the formula provides reasonable equity to both the
contract holder and the company;
(iii) detail that the reserve liabilities are established
in accordance with actuarial procedures that recognize that assets
of the separate account are based on market values, the variable nature
of the benefits provided, and any mortality guarantees;
(iv) include a table of minimum guaranteed policy values
and cash surrender values which:
(I) are based on the longest guaranteed investment
period,
(II) reflect both upward and downward market-value
adjustments; and
(III) show that the minimum guaranteed values prior
to the adjustment are not less than the minimum nonforfeiture values
required by law; and
(v) provide a numerical illustration reproducing the
values shown in the table for the first, second, and third years of
investment, and at the end of the guaranteed investment period.
(3) Group and individual Medicare supplement (including
Medicare SELECT) rate filings must be accompanied by supporting actuarial
information as required by Subchapter T of this chapter.
(4) Group and individual long-term care:
(A) rate filings must be accompanied by supporting
actuarial information as required by Subchapter Y of this chapter;
and
(B) annual reports must include the rates, rating schedule,
and supporting documentation as required by Insurance Code §1651.053(c).
(5) Individual accident and health premium rate increases
which result in any policyholder experiencing an increase in premium
rate greater than or equal to 50% in any 12-month period must be accompanied
by actuarial information which includes, at a minimum, the items of
information specified in subparagraphs (A) - (E) of this paragraph.
For the purpose of this paragraph, an increase in premium rate greater
than or equal to 50% in any 12-month period means the cumulative increase
with respect to such premium considered over a 12-month period.
(A) The form number or numbers to which the submitted
rate increase applies.
(B) The planned effective date of the increased rate.
(C) The schedule or schedules of rates to be used.
(D) A concise explanation of the rating process, including
assumptions, claims data, methodology, and formulas used in development
of gross premium rates.
(E) A statement of actual and projected experience
as a basis for the rate adjustments.
(6) Discretionary group filings must be accompanied
by supporting actuarial information as required by Insurance Code §1131.064
and §1251.056.
(r) Filing Fee.
(1) The appropriate filing fee for filings for approval
(excluding prepaid legal filings) are set forth in subparagraphs (A)
- (J) of this paragraph.
Cont'd... |
