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(a) An issuer of medicare supplement policies and certificates shall file annually its forms, rates, rating schedule, and supporting documentation, including ratios of incurred losses to earned premiums by policy duration, for approval by the director. Supporting documentation must demonstrate in accordance with accepted actuarial practices and using reasonable assumptions that the appropriate loss ratio standards under 3 AAC 28.468 can be expected to be met over the entire period for which rates are computed, excluding active life reserves. An expected third-year loss ratio that is greater than or equal to the applicable percentage will be demonstrated for policies or certificates in force less than three years.
(b) As soon as practicable, but before the effective date of enhancements in medicare benefits, an issuer of medicare supplement policies or certificates in this state shall file with the director appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. The supporting documents necessary to justify the adjustment to produce loss ratios required by 3 AAC 28.468(a) must accompany the filing. An issuer shall make premium adjustments necessary to produce an expected loss ratio under a policy or certificate that will conform with 3 AAC 28.468 and that are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the medicare supplement policies or certificates. A premium adjustment that would modify the loss ratio experience under the policy other than the adjustments described in this section may not be made with respect to a policy at any time other than upon its renewal date or anniversary date. Any rider, endorsement, or policy form needed to accomplish the medicare supplement policy or certificate modification necessary to eliminate benefit duplication with medicare shall also be filed with the director in a manner that provides a clear description of the medicare supplement benefits provided by the policy or certificate.
(c) If an issuer fails to make premium adjustments acceptable to the director, the director will, in the director's discretion, order premium adjustments, refunds, or premium credits considered necessary by the director to achieve the loss ratio required by this section.
(d) The director will, in the director's discretion, conduct a public hearing on an increase in a rate for a policy form or certificate form if the experience of the form for the prior reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance will be made by the director without consideration of any refund or credit for the reporting period. Notice of a hearing will be published in a newspaper of general circulation and given in accordance with AS 21.06.200 .
History: Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126
Authority: AS 21.06.090
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Last modified 7/05/2006