S Medicare Supplement Refund Calculation Format

Section 2008.APPENDIX S   Medicare Supplement Refund Calculation Format Type (1) SMSBP (2) For the State of Company Name NAIC Group Code NAIC Company Code Address Person Completing this Form Title Telephone Number (a) Earned Premium (3) (b) Incurred Claims (4) Line 1. Current Year's Experience a. Total (all policy years) b. Current year's issues (z) c. Net (for reporting purposes = 1a - 1b) 2. Past Years' Experience (all policy years) 3. Total Experience (net current year  +  past years' experience) 4. Refunds last year (excluding interest) 5. Previous since Inception (excluding interest) 6. Refunds since Inception (excluding interest) 7. Benchmark Ratio since Inception (see worksheet for Ratio 1) 8. Experienced Ratio since Inception Total Actual Incurred Claims (line 3, col. b) / Total Premium After Refunds = Ratio 2 Where Total Earned Premium after Refunds = Total Earned Premiums (line 3, col. a) − Refunds since Inception (line 6) 9. Life Years Exposed Since Inception If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund. 10. Tolerance Permitted (obtained from credibility table) 11. Adjustment to Incurred Claims for Credibility Ratio 3 = Ratio 2 + Tolerance If ratio 3 is more than benchmark ratio (ratio 1), a refund or credit to premium is not required. If ratio 3 is less than the benchmark ratio, then proceed. 12. Adjusted Incurred Claims = Total Earned Premiums (line 3, col. a) - Refunds since Inception (line 6) x Ratio 3 (line 11). 13. Refund = Total Earned Premium after Refunds – [Adjusted Incurred Claims (line 12) /Benchmark Ratio (Ratio 1)] Where Total Earned Premium after Refunds = Total Earned Premiums (line 3, col. a) – Refunds since Inception (line 6) If the amount on line 13 is less than .005 times the annualized premium in force as of December  31 of the reporting year, then no refund is made.  Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund and/or credit against premiums to be used must be attached to this form. Medicare Supplement Credibility Table Life Years Exposed Since Inception Tolerance 10,000 + 0.0% 5,000 - 9,999 5.0% 2,500 - 4,999 7.5% 1,000 - 2,499 10.0% 500 – 999 15.0% If less than 500, no credibility. (1) Individual, Group, Individual Medicare Select, or Group Medicare Only. (2) "SMSBP" = Standard Medicare Supplement Benefit Plan-Use "P" for prestandardized plans. (3) Includes modal loadings and fees charged (4) Excludes Active Life Reserves (5) This is to be used as "Issue Year Earned Premium" for 1 of next year's  "Worksheet for Calculation of Benchmark Ratios" I certify that the above information and calculations are true and accurate to the best of my knowledge and belief. Signature Title – please type Name − please type Date REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES For Calendar Year ________ Type (1) SMSBP (2) For the State of Company Name NAIC Group Code NAIC Company Code Address Person Completing Form Title Telephone Number (a3) (b4) (c) (d) (e) (f) (g) (h) (i) (j) (o5) Year Earned Premium Factor (b4) x (c) Cumulative Loss Ratio (d) x (e) Factor (b4) x (g) Cumulative Loss Ratio (h) x (i) Policy Year Loss Ratio 1 2.770 0.507 0.000 0.000 0.46 2 4.175 0.567 0.000 0.000 0.63 3 4.175 0.567 1.194 0.759 0.75 4 4.175 0.567 2.245 0.771 0.77 5 4.175 0.567 3.170 0.782 0.8 0 6 4.175 0.567 3.998 0.792 0.82 7 4.175 0.567 4.754 0.802 0.84 8 4.175 0.567 5.445 0.811 0.87 9 4.175 0.567 6.075 0.818 0.88 10 4.175 0.567 6.650 0.824 0.88 11 4.175 0.567 7.176 0.828 0.88 12 4.175 0.567 7.655 0.831 0.88 13 4.175 0.567 8.093 0.834 0.89 14 4.175 0.567 8.493 0.837 0.89 15 4.175 0.567 8.684 0.838 0.89 Total: (k): (l): (m): (n): Benchmark Ratio Since Inception:  Ratio 1 = (l + n) / (k + m): (1): Individual, Group, Individual Medicare Select, or Group Medicare Select Only. (2): "SMSBP" = Standardized Medicare Supplement Benefit Plan – Use "P" for pre-standardized plans. (3): Year 1 is the current calendar year-1 Year 2 is the current calendar year-2 (etc.) (Example: If the current year is 2022, then Year 1 is 2021; Year 2 is 2020, etc.) (4): For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year. (5): These loss ratios are not explicitly used in computing the benchmark loss ratios.  They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only. (6): To include the earned premium for all years prior to as well as the 15 th year to the current year. REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR INDIVIDUAL POLICIES For Calendar Year ________ Type (1) SMSBP (2) For the State of Company Name NAIC Group Code NAIC Company Code Address Person Completing Form Title Telephone Number (a3) (b4) (c) (d) (e) (f) (g) (h) (i) (j) (o5) Year Earned Premium Factor (b4) x (c) Cumulative Loss Ratio (d) x (e) Factor (b4) x (g) Cumulative Loss Ratio (h) x (i) Policy Year Loss Ratio 1 2.770 0.442 0.000 0.000 0.4 2 4.175 0.493 0.000 0.000 0.55 3 4.175 0.493 1.194 0.659 0.65 4 4.175 0.493 2.245 0.669 0.67 5 4.175 0.493 3.170 0.678 0.69 6 4.175 0.493 3.998 0.686 0.71 7 4.175 0.493 4.754 0.695 0.73 8 4.175 0.493 5.445 0.702 0.75 9 4.175 0.493 6.075 0.708 0.76 10 4.175 0.493 6.650 0.713 0.76 11 4.175 0.493 7.176 0.717 0.76 12 4.175 0.493 7.655 0.720 0.77 13 4.175 0.493 8.093 0.723 0.77 14 4.175 0.493 8.493 0.725 0.77 15 4.175 0.493 8.684 0.725 0.77 Total: (k): (l): (m): (n): Benchmark Ratio Since Inception:  Ratio 1 = (l + n) / (k + m): (1): Individual, Group, Individual Medicare Select, or Group Medicare Only. (2): "SMSBP" = Standardized Medicare Supplement Benefit Plan – Use "P" for pre-standardized plans. (3): Year 1 is the current calendar year-1 Year 2 is the current calendar year-2 (etc.) (Example: If the current year is 2022, then Year 1 is 2021; Year 2 is 2020, etc.) (4): For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year. (5): These loss ratios are not explicitly used in computing the benchmark loss ratios.  They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only. (6): To include the earned premium for all years prior to as well as the 15 th year to the current year.