69O-157.022. Loss Ratio Requirements

Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums charged provided the expected loss ratio is at least sixty percent for individual policies and for group policies, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In determining whether loss ratio requirements are being met, the Office will exercise its best judgment as to the credibility of the data submitted and what constitutes a reasonable rate structure for the benefits being provided. In evaluating the expected loss ratio, due consideration shall be given to all relevant factors, including:

(1) Statistical credibility of incurred claims experience and earned premiums;

(2) The period for which rates are computed to provide coverage;

(3) Experienced and projected trends;

(4) Concentration of experience within early policy duration;

(5) Expected claim fluctuation;

(6) Experience refunds, adjustment or dividends;

(7) Renewability features;

(8) All appropriate expense factors;

(9) Interest;

(10) Experimental nature of the coverage;

(11) Policy reserves;

(12) Mix of business by risk classification; and

(13) Product features such as long elimination periods, high deductibles and high maximum limits.

Specific Authority 624.308(1), 627.9407(1) FS. Law Implemented 624.307(1), 627.9407(6), 627.411 FS. History–New 5-17-89, Formerly 4-81.022, 4-157.022.