Loss ratio

Benefits under long-term care insurance policies must be deemed reasonable in relation to premiums provided the expected loss ratio is at least sixty 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 must be given to all relevant factors, including: 1. Statistical credibility of incurred claims experience and earned premiums; 2. The period for which rates are computed to provide coverage; 3. Experienced and projected trends; 4. Concentration of experience within early policy duration; 5. Expected claim fluctuation; 6. Experience refunds, adjustments, or dividends; 7. Renewability features; 8. All appropriate expense factors; 9. Interest; 10. Experimental nature of the coverage; 11. Policy reserves; 12. Mix of business by risk classification; and 13. Product features such as long elimination periods, high deductibles, and high maximum limits.