Section 3 AAC 28.568 - Reserve standards(a) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to the policies, policy reserves for the benefits shall be determined in accordance with AS 21.45.300. Claim reserves shall also be established in the case when the policy or rider is in claim status. Reserves for policies and riders subject to this subsection shall be based on the multiple decrement model utilizing all relevant decrements, except for voluntary termination rates. However, 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 take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, the reserves for the long-term care benefit and the life insurance benefit may not less than the reserves for the life insurance benefit assuming no long-term care benefit.(b) In the development and calculation of reserves for policies and riders subject to (a) of this section, consideration shall be given to the applicable policy provisions, marketing methods, administrative procedures, and all other considerations that have an effect on projected claim costs, including the following; (1) the definition of insured events;(2) the covered long-term care facilities;(3) the existence of home convalescence care coverage;(4) definition of facilities;(5) existence or absence of barriers to eligibility;(6) a premium waiver provision;(8) the ability to raise premiums;(10) underwriting procedures;(11) claims adjustment procedures;(13) the maximum benefit;(14) availability of eligible facilities;(15) margins in claim costs;(16) any optional nature of benefit;(17) any delay in eligibility for benefit;(18) inflation protection provisions; and (19) any guaranteed insurability option.(c) Any applicable valuation morbidity table, used in the calculation of reserves in accordance with this section, shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.(d) When long-term care benefits are provided other than as in (a) - (c) of this section, reserves shall be determined in accordance with AS 21.18.080 - 21.18.086.Eff. 3/27/2022, Register 241, April 2022Authority:
AS 21.06.090
AS 21.18.080
AS 21.18.082
AS 21.18.084
AS 21.18.086
AS 21.53.090