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Indiana Department of Insurance

IDOI > Company Compliance > Accident & Health  > Product Filing Information/Instructions  > 4.4(A) INDIVIDUAL and GROUP RATE REQUIREMENTS for MEDICARE SUPPLEMENT 4.4(A) INDIVIDUAL and GROUP RATE REQUIREMENTS for MEDICARE SUPPLEMENT

RATE ADJUSTMENTS for EXISTING PRODUCTS

The Indiana Department of Insurance (IDOI) requests data/information for the following two requirements as part of the rate review process for existing rates and/or forms, if applicable, filed: Implementation Date and Actuarial Memorandum.

Data for requirement I is entered into SERFF fields.

I. IMPLEMENTATION DATE

  1. Enter the date requested for the filing to be implemented.
    1. Date must be a minimum of 60+ days from the submission date.
    2. Date entered may not be the date the filing officially becomes effective.
      1. IDOI will determine the definitive effective date.
      2. If “Upon Approval” is chosen, the filing will not be closed until this field is revised with an actual date.
    3. If date changes during the review process, the following action is needed:
      1. Update SERFF field before the filing is completed and closed.
        1. SERFF field can be revised during a “Post Submission Update” at the time a response is provided for the objection.

II. ACTUARIAL MEMORANDUM

Provide the data listed below in the actuarial memorandum as an attachment under the Supporting Documentation tab in SERFF.

  1. Benefit Structure
    1. Provide sufficient detail for an analysis of the pricing.
    2. Provide a copy of the policy form.
    3. Provide any changes from the most recent filing.
    4. Provide the prior SERFF tracking number.
    5. Provide the commission structure by duration as a percent of premium for each commission schedule to be used.
  2. Current Rates
    1. Include a complete set of current rates.
    2. Include the following items and any other guidelines that impact policyholder’s premium payment:
      1. Modal Factors
      2. Geographic Factors
      3. Additional Fees
  3. Proposed Rates
    1. Include a complete set of proposed rates.
    2. Include the following items and any other guidelines that impact policyholder’s premium payment:
      1. Modal Factors
      2. Geographic Factors
      3. Additional Fees
  4. Assumptions
    1. Include the following data and a detailed description of the basis for the assumptions used in pricing: (Follow the guidelines from Actuarial Standards of Practice (ASOP) No. 8.) http://www.actuarialstandardsboard.org/pdf/asops/asop008_129.pdf
      1. Anticipated Loss Ratios
        1. Provide the anticipated lifetime and durational loss ratios as initially filed with the department when the forms were approved.
          1. These should be the anticipated loss ratios, not the minimum standards.
      2. Credibility Standard
        1. Provide a description of the company’s credibility standard.
          1. Include the level of credibility assigned to Indiana experience and nationwide experience.
          2. Include a description of how experience with less than full credibility is adjusted.
      3. Premium Rate Differences
        1. Provide a description of how current and historical differences between Indiana and nationwide premium rates have been considered if rate increase request is based on nationwide experience.
          1. Include versions of nationwide experience exhibits with premium rates adjusted to the actual Indiana premium rate basis in each period.
      4. Claims Experience
        1. Provide an explanation of how claim seasonality has been reflected in completing that policy years’ experience if the most recent experience year is a partial year.
      5. Future Anticipated Loss Ratio
        1. Provide the anticipated future loss ratio consistent with original pricing assumptions for issue age related business, reflecting the durational mix of the business.
  5. Premium Guarantee Provision
    1. Provide a detailed description of the premium rate guarantee provision.
  6. Rating Factors
    1. Identify from the following which rate structure or any other is used for this product:
      1. Attained age
      2. Issue age
      3. Community rated
  7. Historical Experience
    (Provide Indiana and Nationwide aggregate data below.)
    (All experience should be for each plan.)
    1. Earned Premium
      1. Provide the historical earned premium for each calendar year from inception.
      2. Include all premium regardless of ownership of this block.
        1. Provide as much of the earned premium paid in the current year since the last calendar year as possible.
      3. Include the following items and any other changes that impact policyholder’s premium payment:
        1. Fees
        2. Taxes
        3. Modal loading
    2. Incurred Losses
      (Losses should exclude ALR, exclude LAE, show detail of IBNR and indicate the paid-to-date.)
      1. Provide the historical incurred losses for each calendar year from inception.
      2. Include all ownership regardless of ownership of this block.
        1. Provide as much of the earned premium paid in the current year since the last calendar year as possible.
    3. Rate Change History
      (Provide Indiana and Nationwide data for below.)
      1. Provide a three year rate increase history that includes the rate increase percent with a month/year effective date.
      2. Label clearly.
    4. Rate Change Indicated
      (Provide Indiana and Nationwide data for below.)
      1. Provide the rate change indicated to achieve the original target loss ratio.
      2. Label clearly.
    5. Rate Change Requested
      (Provide Indiana and Nationwide data for below.)
      1. Provide the rate change requested.
      2. Provide the desired effective dates.
      3. Label clearly.
  8. Projected Experience with Requested Rate Change
    (Provide Indiana and Nationwide aggregate data below.)
    (All experience should be for each plan.)
    1. Earned Premium
      1. Provide the projected earned premium using realistic assumptions for the following:
        1. Next 10 years
        2. Next full calendar year
        3. Anticipated implementation date
    2. Incurred Claims
      1. Provide the anticipated projected incurred claims using realistic assumptions for the following:
        1. Next 10 years
        2. Next full calendar year
    3. Anticipated Loss Ratios
      (Individual Target Loss Ratio 65%.)
      (Group Target Loss Ratio 75%.)
      1. Provide the anticipated loss ratios for the following:
        1. Next 12 months
        2. Next full calendar year
  9. Projected Experience without Requested Rate Change
    (Provide Indiana and Nationwide aggregate data below.)
    (All experience should be for each plan.)
    1. Earned Premium
      1. Provide the projected earned premium using realistic assumptions for the following:
        1. Next 10 years
        2. Next full calendar year
        3. Anticipated implementation date
    2. Incurred Claims
      1. Provide the anticipated projected incurred claims using realistic assumptions for the following:
        1. Next 10 years
        2. Next full calendar year
    3. Anticipated Loss Ratios
      (Individual Target Loss Ratio 65%.)
      (Group Target Loss Ratio 75%.)
      1. Provide the anticipated loss ratios for the following:
        1. Next 12 months
        2. Next full calendar year
  10. Projection of Lifetime Loss Ratio
    (Provide Indiana and Nationwide aggregate data below.)
    (All experience should be for each plan.)
    1. Provide historical experience for the following:
      1. Discounted earned premium and incurred losses using original filed interest rate.
    2. Provide Projected Future Experience for the following:
      1. Incurred premium and incurred losses.
      2. Discount at original filed interest rate.
      3. Assume requested rate increase.
      4. Assume no rate increase.
    3. Provide discounted lifetime experience for the following:
      1. Assume requested rate increase.
      2. Assume no rate increase.
  11. Claim Reserves
    1. Provide current claim reserves and liabilities consistent with the incurred claims shown in the historical experience.

Attestations

  1. Actuarial Certification/Rate Attestation
    1. Provide an actuarial certification with a clear statement attesting to the following:
      1. Compliance with all applicable state and federal statutes and regulations.
      2. Compliance with actuarial standards of practice (ASOP).

Rate Filing Submittal Guidelines

The following provides additional information to properly submit rate filings:

  • Unless filing approved, do not implement a rate increase as related to manual rates.
  • File proper TOI and Sub-TOI for rate request.