Sec.38a-474-3. Rate review standards

(a) The commissioner shall not approve a rate for a Medicare supplement policy that is excessive, inadequate, unreasonable in relation to the benefits provided or unfairly discriminatory.

(b) Rates for Medicare supplement policy or certificate forms shall not be approved unless the form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders or certificate holders in the form of aggregate benefits (not including anticipated refunds or credits) provided under the policy form or certificate form:

(1) at least seventy-five (75%) of the aggregate amount of premiums earned in the case of group policies, or

(2) at least sixty-five percent (65%) of the aggregate amount of premiums earned in the case of individual policies, calculated on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health care center, and earned premiums for such period and in accordance with accepted actuarial principles and practices. All rate filings shall demonstrate that expected claims in relation to premiums comply with these loss ratio requirements when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate required loss ratio.

(Adopted effective November 28, 1995)