The rules are being amended to allow an exemption to paragraph 14(b) of 69O-149.005 for certain types of plans issued by an insurer, to update the Experience on the Form requirements, and to update the actuarial certification requirements.

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NO.:RULE TITLE:

69O-149.005Reasonableness of Benefits in Relation to Premiums

69O-149.006Actuarial Memorandum

PURPOSE AND EFFECT: The rules are being amended to allow an exemption to paragraph 69O-149.005(14)(b), F.A.C. for certain types of plans issued by an insurer, to update the Experience on the Form requirements, and to update the actuarial certification requirements.

SUMMARY: Rule 69O-149.005, F.A.C. is amended to allow the types of insurance referenced in subsection 69O-149.005(15), F.A.C. to be exempt from the requirements of paragraph 69O-149.005(14)(b), F.A.C. Rule 69O-149.006 F.A.C. is amended to update the Experience on the Form requirements in subparagraph 69O-149.006(3)(b)23, F.A.C. and the actual certification requirements in subparagraph 69O-149.006 (3)(b)28, F.A.C.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Agency personnel familiar with the subject matter of the rule amendment have performed an economic analysis of the rule amendment that shows that the rule amendment is unlikely to have an adverse impact on the State economy in excess of the criteria established in Section 120.541(2)(a), Florida Statutes.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 624.308(1), 627.410(6)(b), (d), (e) FS.

LAW IMPLEMENTED: 626.9541(1), 627.410(1), (2), (6), 627.410(7), 627.411(1)(a), (e), 627.9175 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Michael Lawrence, Jr., Assistant General Counsel, [e-mail], [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

69O-149.005 Reasonableness of Benefits in Relation to Premiums.

(1) through (13) No change.

(14) An insurer may issue multiple year rate guarantee or rating cap provisions subject to the following:

(a) No change.

(b) The provision may not apply for greater than 24 months unless otherwise exempted by the Office;

(c) through (e) No change.

(15) Accident only, accidental death and dismemberment, dental, hearing, hospital indemnity, hospital/surgical medical expense, intensive care, and vision plans issued by an insurer are exempt from the requirement of paragraph (14)(b). This provision may not apply for greater than 60 months for accident only, accidental death and dismemberment, dental, hearing, hospital indemnity, hospital/surgical medical expense, intensive care, and vision plans issued by an insurer.

Rulemaking Authority 624.308(1), 627.410(6)(b), (d), (e) FS. Law Implemented 626.9541(1), 627.410(6)(d), (e), 627.410(7), 627.411(1)(a), (e), 627.9175 FS. History–New 7-1-85, Formerly 4-58.05, 4-58.005, Amended 4-18-94, 11-20-02, Formerly 4-149.005, Amended 5-18-04, 11-2-06, 6-18-07, 10-1-08, ____________.

 

69O-149.006 Actuarial Memorandum.

(1) through (2) No change.

(3) Descriptions.

(a) No change.

(b) The descriptions, by item number, of the terms listed above in subsection (2), follow:

1. through 22. No change.

23. Experience on the Form (Past and Future Anticipated): This section shall display the actual experience on the form and that expected for the future.

a. Past Experience: Experience from inception (or the last 3 years for annually rated group coverages) shall be displayed, although, with proper interest adjustment, the experience for calendar years more than 10 years in the past may be combined. Excluding annually rated group policy forms, earned premiums, actual incurred and expected claims experience shall also be displayed, for each policy year or issue year, within the calendar year. The following information shall be displayed (A sample experience exhibit is illustrated in Appendix A, Illustrative Experience Exhibit (2/04), which is hereby incorporated by reference):

(I) through (II) No change.

(III) Claims incurred and paid, Paid claims, for past periods only;

(IV) Remaining claim liability and reserve, Change in claim liability and reserve, for past periods only. These reserves shall be updated to reflect actual claim runoff as it develops;

(V) through (XI) No change.

b. Future periods where the projected values are based on inforce experience:

(I) through (VI) No change.

(VII) Two projections will be required to be submitted to the Office. Projections shall be based on existing inforce business with and without no new sales assumed during the projection period.

(VIII) No change.

c. Projections for new forms or otherwise not based on experience shall:

(I) Two projections will be required to be submitted to the Office. Project an initial assumed cohort of new business with and without no new sales assumed during the projection period; and,

(II) No change.

d. No change.

24. through 27. No change.

28. Actuarial Certification:

a. Certification by a qualified actuary that to the best of the actuary’s knowledge and judgment:

(I) No change.

(II) Complies with the Commonly Accepted Actuarial Practice as defined in subsection 69O-154.202(28), F.A.C. all applicable Actuarial Standards of Practice; and,

(III) No change.

b. In making the certification:

(I) No change.

(II) The actuary’s opinion shall comply with the Commonly Accepted Actuarial Practice as defined in subsection 69O-154.202(28), F.A.C. The applicable Actuarial Standards of Practice, incorporated in subsection 69O-154.202(27), F.A.C., are as provided in the Applicability Guidelines for Actuarial Standards of Practice, second edition, as developed by the Council on Professionalism of the American Academy of Actuaries, August 1999, which standard is hereby adopted and incorporated by reference.

c. A copy of the Applicability Guidelines for Actuarial Standards of Practice may be obtained from the Bureau of Life and Health Forms and Rates, Office of Insurance Regulation, Larson Building, Tallahassee, FL 32399-0328.

c.d. A qualified actuary is one who is a member of the Society of Actuaries or the American Academy of Actuaries, and who is qualified in the area of health insurance.

d.e. If the actuary is unable to provide the certification without qualification, a detailed explanation and reason for the qualification shall be provided as part of the certification.

Rulemaking Authority 624.308(1), 627.410(6)(b), (e) FS. Law Implemented 627.410(1), (2), (6), 627.411(1)(e) FS. History–New 7-1-85, Formerly 4-58.06, 4-58.006, Amended 4-18-94, 4-9-95, 11-20-02, 6-19-03, Formerly 4-149.006, Amended 5-18-04, 11-2-06, 10-1-08, ____________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Michael Lawrence, Jr., Assistant General Counsel

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: March 12, 2019

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: January 22, 2019