Ala. Admin. Code r. 482-1-091-.14
Current through Register Vol. 43, No. 1, October 31, 2024
Section 482-1-091-.14 - Reserve Standards(1)(a) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for such benefits shall be determined in accordance with Chapter 36A of Title 27, Code of Ala. 1975. Claim reserves must also be established when such a policy or rider is in claim status.(b) Reserves for policies and riders subject to this Paragraph (1) should be based on the multiple decrement model utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may include the reduction in life insurance benefits due to the payment of long-term care benefits. However, the reserves for the longterm care benefit and the life insurance benefit may not be less than the reserves for the life insurance benefit assuming no long-term care benefit.(c) In the development and calculation of reserves for policies and riders subject to this Paragraph (1), due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures, and all other considerations which have an impact on projected claim costs, including, but not limited to, the following: 1. Definition of insured events.2. Covered long-term care facilities.3. Existence of home convalescence care coverage.4. Definition of facilities.5. Existence or absence of barriers to eligibility.6. Premium waiver provision.8. Ability to raise premiums.10. Underwriting procedures.11. Claims adjustment procedures.14. Availability of eligible facilities.15. Margins in claim costs.16. Optional nature of benefit.17. Delay in eligibility for benefit.18. Inflation protection provisions.19. Guaranteed insurability option.(d) Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.(2) When long-term care benefits are provided other than as Paragraph (1) of this rule, reserves shall be determined in accordance with Section 27-36-5, Code of Ala. 1975.Ala. Admin. Code r. 482-1-091-.14
New Rule: June 14, 1991; effective October 1, 1991. Revised: August 16, 2000; effective January 1, 2001. Filed for codification in the Alabama Administrative Code by the Department of Insurance on January 17, 2003, pursuant to the Code of Ala. 1975, § 27-7-43.Amended by Alabama Administrative Monthly Volume XLII, Issue No. 09, June 28, 2024, eff. 7/1/2024.Author: Reyn Norman, Associate Counsel
Statutory Authority:Code of Ala. 1975, §§ 27-2-17 and 27-19-100 to 27-19-110.