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Virginia Administrative Code (Last Updated: January 10, 2017) |
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Title 14. Insurance |
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Agency 5. State Corporation Commission, Bureau of Insurance |
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Chapter 130. Rules Governing the Filing of Rates for Individual and Certain Group Accidentand Sickness Insurance Policy Forms |
Section 50. General rules on rate filing; experience records and data
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A. Every policy, rider or endorsement form affecting benefits which is submitted for approval shall be accompanied by a rate filing unless such rider or endorsement form does not require a change in the rate. Any subsequent addition to or change in rates applicable to such policy, rider or endorsement form shall also be filed.
B. Each rate submission shall include an actuarial memorandum describing the basis on which rates were determined and shall indicate and describe the calculation of the anticipated loss ratio. Except for coverage issued in the small group market, interest at a rate consistent with that assumed in the original determination of premiums, shall be used in the calculation of this loss ratio. Each rate submission must also include a certification by a qualified actuary that to the best of the actuary's knowledge and judgment, the rate filing is in compliance with the applicable laws and regulations of this Commonwealth and that the benefits are reasonable in relation to the premiums.
C. Health insurance issuers shall maintain records of earned premiums and incurred benefits for each calendar year for each policy form, including data for rider and endorsement forms which are used with the policy form, on the same basis, including all reserves, as required for the Accident and Health Policy Experience Exhibit. Separate data may be maintained for each rider or endorsement form to the extent appropriate. Experience under forms which provide substantially similar coverage may be combined. The data shall be for each calendar year of experience since the year the form was first issued.
D. In determining the credibility and appropriateness of experience data, due consideration must be given to all relevant factors, such as:
1. Statistical credibility of premiums and benefits, e.g., low exposure, low loss frequency.
2. Experienced and projected trends relative to the kind of coverage, e.g., inflation in medical expenses, economic cycles affecting disability income experience.
3. The concentration of experience at early policy durations where select morbidity and preliminary term reserves are applicable and where loss ratios are expected to be substantially lower than at later policy durations.
4. The mix of business by risk classification.
E. Rates for coverage issued in the individual or small group markets are required to meet the following:
1. Premium rates with respect to a particular plan or coverage may only vary by:
a. Whether the plan or coverage covers an individual or family;
b. Rating area, as may be established by the commission;
c. Age, consistent with the Uniform Age Rating Curve table below; and
d. Tobacco use, except that the rate shall not vary by more than 1.5 to 1. Employees of a small employer may avoid this surcharge by participating in a wellness program that complies with § 2705(j) of the Public Health Service Act (42 USC § 300gg-4).
Uniform Age Rating Curve
AGE
PREMIUM RATIO
AGE
PREMIUM RATIO
AGE
PREMIUM RATIO
0-20
0.635
35
1.222
50
1.786
21
1.000
36
1.230
51
1.865
22
1.000
37
1.238
52
1.952
23
1.000
38
1.246
53
2.040
24
1.000
39
1.262
54
2.135
25
1.004
40
1.278
55
2.230
26
1.024
41
1.302
56
2.333
27
1.048
42
1.325
57
2.437
28
1.087
43
1.357
58
2.548
29
1.119
44
1.397
59
2.603
30
1.135
45
1.444
60
2.714
31
1.159
46
1.500
61
2.810
32
1.183
47
1.563
62
2.873
33
1.198
48
1.635
63
2.952
34
1.214
49
1.706
64 and older
3.000
2. A premium rate shall not vary by any other factor not described in this subsection.
3. With respect to family coverage, the rating variations permitted in this subsection shall be applied based on the portion of the premium that is attributable to each family member covered under the plan. With respect to family members under age 21, the premiums for no more than the three oldest covered children shall be taken into account in determining the total family premium.
4. The premium charged shall not be adjusted more frequently than annually, except that the premium rate may be changed to reflect changes to (i) the family composition of the member, (ii) the coverage requested by the member, or (iii) the geographic location of the member.
5. Premium rates for student health insurance coverage may be based on school-specific community rating and are exempt from subdivisions 1 through 4 of this subsection.
F. In the event of disapproval or withdrawal of approval by the commission of a rate submission, a health insurance issuer may proceed as indicated in § 38.2-1926 of the Code of Virginia.
Historical Notes
Derived from Regulation 22, Case No. INS810039, § 6, eff. October 1, 1981; amended, Volume 29, Issue 20, eff. July 1, 2013; Volume 32, Issue 09, eff. January 1, 2016.