Ga. Comp. R. & Regs. R. 120-2-16-.19 - Loss Ratio
(1) This section shall apply to all long-term
care insurance policies or certificates except those covered under Sections
120-2-16-.10 and
120-2-16-.20.
(2) Benefits under long-term care insurance
policies shall be deemed reasonable in relation to premiums provided the
expected loss ratio is at least 60 percent, calculated in a manner which
provides for adequate reserving of the long-term care insurance risk. In
evaluating the expected loss ratio, due consideration shall be given to all
relevant factors, including:
(a) Statistical
credibility of incurred claims experience and earned premiums;
(b) The period for which rates are computed
to provide coverage;
(c)
Experienced and projected trends;
(d) Concentration of experience within early
policy duration;
(e) Expected claim
fluctuation;
(f) Experience
refunds, adjustments or dividends;
(g) Renewability features;
(h) All appropriate expense
factors;
(i) Interest;
(j) Experimental nature of the
coverage;
(k) Policy
reserves;
(l) Mix of business by
risk classification; and
(m)
Product features such as long elimination periods, high deductibles and high
maximum limits.
(3)
Subsection (2) shall not apply to life insurance policies that accelerate
benefits for long-term care. A life insurance policy that funds long-term care
benefits entirely by accelerating the death benefit is considered to provide
reasonable benefits in relation to premiums paid, if the policy complies with
all of the following provisions:
(a) The
interest credited internally to determine cash value accumulations, including
long-term care, if any, are guaranteed not to be less than the minimum
guaranteed interest rate for cash value accumulations without long-term care
set forth in the policy;
(b) The
portion of the policy that provides life insurance benefits meets the
nonforfeiture requirements of O.C.G.A. Section
33-25-4;
(c) The policy meets the disclosure
requirements of O.C.G.A. Section
33-42-6;
(d) Any policy illustration that meets the
applicable requirements of the NAIC Life Insurance Illustrations Model
Regulation; and
(e) An actuarial
memorandum is filed with the insurance department that includes:
(i) A description of the basis on which the
long-term care rates were determined;
(ii) A description of the basis for the
reserves;
(iii) A summary of the
type of policy, benefits, renewability, general marketing method, and limits on
ages of issuance;
(iv) A
description and a table of each actuarial assumption used. For expenses, an
insurer must include percent of premium dollars per policy and dollars per unit
of benefits, if any;
(v) A
description and a table of the anticipated policy reserves and additional
reserves to be held in each future year for active lives;
(vi) The estimated average annual premium per
policy and the average issue age;
(vii) A statement as to whether underwriting
is performed at the time of application. The statement shall indicate whether
underwriting is used and, if used, the statement shall include a description of
the type or types of underwriting used, such as medical underwriting or
functional assessment underwriting. Concerning a group policy, the statement
shall indicate whether the enrollee or any dependent will be underwritten and
when underwriting occurs; and
(viii) A description of the effect of the
long-term care policy provision on the required premiums, nonforfeiture values
and reserves on the underlying life insurance policy, both for active lives and
those in long-term care claim status.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.