415:24 Rate Modifications for Accident and Health Insurance Policies. –
I. Rate modifications on individual accident and health policy forms shall be filed with the commissioner prior to implementation.
II. At the time of filing new premium rates on any previously approved individual accident and health insurance policy form, other than forms for Medicare supplement policies and long-term care policies, the benefits provided by the policy form shall be deemed reasonable to the premium charge and the rates deemed approved, so long as the insurer complies with the terms of a loss ratio guarantee filed with the commissioner. The loss ratio guarantee agreement shall be in writing and shall include at least the following:
(a) A recitation of the anticipated annual and lifetime loss ratio standards included in the original actuarial memorandum filed with the policy form at the time of the initial approval of the policy form.
(b) A guarantee that the actual loss ratios in this state for the experience period in which the rates take effect, and for each experience period thereafter, will meet or exceed the anticipated annual loss ratio standards as recited in accordance with RSA 415:24, II(a). If the annual earned premium volume in this state under a policy form is less than $1,000,000, the loss ratio guarantee shall be based on the actual nationwide loss ratio for the policy form. If the annual earned premium volume nationwide is less than $1,000,000, the experience period shall be extended until the end of the calendar year in which $1,000,000 of earned premiums is attained.
(c) A guarantee that the actual loss ratio results for each calendar year the rates are in effect shall be independently audited during the second quarter of the following year at the expense of the insurer. The audited results shall be reported to the commissioner no later than the date for filing the applicable accident and health policy experience exhibit. The audit shall be conducted in accordance with generally accepted auditing or actuarial standards and shall be signed by a certified public accountant or a member of the American Academy of Actuaries.
(d) A guarantee that affected policyholders in this state shall be issued a proportional refund of premiums paid in the amount necessary to bring the actual loss ratio up to the anticipated annual loss ratio standards as recited in accordance with RSA 415:24, II(a). If national loss ratios are used, the total amount refunded in this state shall equal the dollar amount necessary to achieve the loss ratio standards, multiplied by the total premium earned in this state on the policy form and divided by the total premiums earned in all states on the policy form. The refund shall be made to all policyholders insured under the applicable policy form as of the last day of the experience period at issue and whose individual refund would equal $5 or more. The refund shall include interest at the then current accident and health reserve interest rate established by the National Association of Insurance Commissioners calculated from the last day of the experience period at issue until the date of payment, which shall be during the third quarter of the following year.
(e) A guarantee that refunds of less than $5 shall be aggregated by the insurer and paid to the department of insurance.
(f) A guarantee that no increase in premium rate obtained pursuant to this section will be implemented on any individual policy in this state until after the policyholder has received at least 30 days advance notice of the planned increase.
(g) For the purposes of this section, "loss ratio" means the ratio of incurred claims to earned premium by number of years of policy duration, for all combined durations.
(h) The commissioner shall adopt rules under RSA 541-A necessary for the proper administration of this section.