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 Virginia Administrative Code (Last Updated: January 10, 2017)
 Title 14. Insurance
 Agency 5. State Corporation Commission, Bureau of Insurance
 Chapter 130. Rules Governing the Filing of Rates for Individual and Certain Group Accidentand Sickness Insurance Policy Forms

  Section 75. Reasonableness of benefits in relation to revised premiums  

Latest version.

  • A. For individual accident and sickness insurance, group Medicare supplement insurance, and coverage issued in the individual market, with respect to filings of rate revisions for a previously approved form, benefits shall be deemed reasonable in relation to premiums provided that both subdivisions 1 and 2 of this subsection shall be at least as great as the standards in 14VAC5-130-70 B 11.

    1. The anticipated loss ratio over the entire period for which the revised rates are computed to provide coverage; and

    2. The ratio of (a) to (b) where (a) is the sum of the accumulated benefits, from the original effective date of the form to the effective date of the revision, and the present value of future benefits, and (b) is the sum of the accumulated premiums from the original effective date of the form to the effective date of the revision and the present value of future premiums.

    Present values shall be taken over the entire period for which the revised rates are computed to provide coverage. Accumulated benefits and premiums shall include an explicit estimate of benefits and premiums from the last accounting date to the effective date of the revision. Interest, at a rate consistent with that assumed in the original determination of premiums shall be used in the calculation of this loss ratio.

    B. For coverage issued in the small group market, the anticipated loss ratio over the entire period for which the revised rates are computed to provide coverage shall be at least as great as the standards in 14VAC5-130-70 B 11.

    C. If a health insurance issuer wishes to charge a premium for policies issued on or after the effective date of the rate revision that is different from the premium charged for such policies issued prior to the revision date, then with respect to policies issued prior to the effective date of the revision the requirements of subsection A of this section must be satisfied, and with respect to policies issued on and after the effective date of the revision, the standards are the same as in 14VAC5-130-65, except that the average annual premium shall be determined based on an actual rather than an anticipated distribution of business.

§§ 12.1-13 and 38.2-223 of the Code of Volume 29, Issue 20, eff. July 1, 2013.