R590-148-22. Loss Ratio

(1) This section applies to all individual long-term care insurance policies except those covered in Sections R590-148-21 and R590-148-24. (2) Benefits under an individual policy are considered reasonable in relation to the premium if the expected loss ratio is at least 60%, calculated in a manner that provides for adequate reserving of the long-term care insurance risk. (3) In evaluating the expected loss ratio, consideration shall be given to each relevant factor, including: (a) statistical credibility of incurred claims experience and earned premiums; (b) the period that 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. (4) The premium charged to an insured may not increase due to: (a) the increasing age of the insured at an age beyond 65; or (b) the duration the insured has been covered under the policy. (5) Rate filing documents shall contain the information required in Section R590-85-4.