The amendments change the manner in which a Health Maintenance Organization’s (HMO) target loss ratio may be increased or reduced.

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NO.:RULE TITLE:

69O-191.055Actuarial Memorandum and Definitions

PURPOSE AND EFFECT: The amendments change the manner in which a Health Maintenance Organization’s (HMO) target loss ratio may be increased or reduced.

SUMMARY: An HMO may increase the target loss ratio for an individual or group policy form if it can justify the proposed change. An HMO may reduce the target loss ratio of an individual or group policy form upon demonstration and justification of an increase in administrative costs, but the reduction must comply with maximum amounts stated in the rule.

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: 641.31, 641.36 FS

LAW IMPLEMENTED: 641.22(2), 641.31(2), (3) 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., Chief Legal Counsel, Office of Insurance Regulation, [e-mail], [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69O-191.055 Actuarial Memorandum and Definitions

(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 9. No change.

10. Anticipated Loss Ratio for the Form:

a. through b. No change.

c. The anticipated loss ratio may not be reduced from the loss ratio in the prior approved filing without approval. The target loss ratio for an individual or group policy form may be increased through a justification of the proposed change. The target loss ratio for an individual or group policy form may be reduced upon demonstration and justification of an increase in administrative costs, but may not be reduced to less than the minimum required standard for the policy form in Rule 69O-149.005, F.A.C. The proposed decrease due to administrative costs cannot be more than 0.5% per year. If the HMO proposes to reduce the anticipated loss ratio for the form from the approved anticipated loss ratio, this section shall provide justification for such change. This shall include detailed expense information and the areas and reasons for expense increases.

11. through 15. No change.

(4) No change.

 

Rulemaking Authority 641.31, 641.36 FS. Law Implemented 641.22(2), 641.31(2), (3) FS. History–New 10-8-96, Amended 4-20-98, 8-15-02, 1-19-03, Formerly 4-191.055, Amended _____________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Michael Lawrence, Jr., Chief Legal Counsel

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

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 22, 2020

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: March 26, 2020