Section 26-A2212. LOSS RATIO STANDARDS

 

2212.1A Medicare supplement insurance policy form or certificate form shall not be delivered or issued for a delivery in the District unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregate benefits, (not including anticipated refunds or credits) provided under the policy form or certificate form:

 

(a)At least seventy-five percent (75%) of the aggregate amount of premiums earned in the case of group policies; or

 

(b)At least sixty-five percent (65%) of the aggregate amount of premiums earned in the case of individual policies.

 

2212.2The loss ratios set forth in subsection 2212.1 shall be calculated on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health maintenance organization shall not include:

 

(a)Home office and overhead costs;

 

(b)Advertising costs;

 

(c)Commissions and other acquisition costs;

 

(d)Taxes;

 

(e)Capital costs;

 

(f)Administrative costs; and

 

(g)Claims processing costs.

 

2212.3All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this section 2212 when combined with actual experience to date.

 

2212.4Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards.

 

2212.5For purposes of applying subsections 2212.1, 2212.2, and section 2216 only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising, including both print and broadcast advertising, shall be deemed to be individual policies.

 

2212.6For policies issued prior to October 1, 1992 expected claims in relation to premiums shall meet:

 

(a)The originally filed anticipated loss ratio when combined with the actual experience since inception;

 

(b)The appropriate loss ratio requirement from subsection 2212.1(a) and (b) when combined with actual experience beginning with May 1, 1999 to date; and

 

(c)The appropriate loss ratio requirement from subsection 2212.1(a) and (b) over the entire future period for which the rates are computed to provide coverage.

 

source

Final Rulemaking published at 46 DCR 10175 (December 17, 1999); as amended by Final Rulemaking published at 50 DCR 4166 (May 30, 2003); as amended by Final Rulemaking published at 50 DCR 5882 (July 25, 2003); as amended by Final Rulemaking published at 53 DCR 2955(April 14, 2006).