18 Del. Admin. Code § 1305-9.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1305-9.0 - Minimum Loss Ratio Guarantee Option

9.1 Notwithstanding the other provisions of this Regulation, premium rates may be used upon filing with the Commissioner of a minimum loss ratio guarantee. An insurer may not elect to use the filing procedure in this section for a rate filing that does not contain the minimum loss ratio guarantee. If an insurer elects to use the filing procedure in this subsection for a rate filing, the insurer shall not use a filing of premium rates that does not provide a minimum loss ratio guarantee for that policy form or forms.

9.2 The minimum loss ratio shall be in writing and shall contain at least the following:

9.2.1 An actuarial memorandum specifying the expected loss ratio that complies with the standards as set forth in this subsection;

9.2.2 Detailed experience information concerning the rate filing;

9.2.3 A step-by-step description of the process used to develop the experience loss ratio, including demonstration with supporting data from the original policy rate filing;

9.2.4 A guarantee of a specific lifetime minimum loss ratio, that shall be greater than or equal to the loss ration in 8.0;

9.2.5 A guarantee that the actual Delaware loss ratio for the calendar year in which the new rates take effect, and for each year thereafter until new rates are filed, will meet or exceed the minimum loss ratio standards referred to in 9.2.4 of this paragraph, adjusted for duration; and

9.2.6 A guarantee that the actual Delaware lifetime loss ratio shall meet or exceed the minimum loss ratio standards referred to in 9.2.4 of this paragraph.

9.3 The insurer shall refund or credit premiums in the amount necessary to bring the actual loss ratio up to the guaranteed minimum loss ratio.

9.4 A Delaware policyholder affected by the guaranteed minimum loss ratio shall receive a portion of the premium refund or credit relative to the premium paid by the policyholder. The refund or credit shall be made to all Delaware policyholders insured under the applicable policy form during the year at issue if the refund or credit would equal ten dollars ($10) or more per policy. The refund or credit shall include statutory interest until the date of payment. Payment shall be made not later than one hundred eighty (180) days after the end of the year at issue.

9.5 Premium refunds of less than ten dollars ($10) per insured shall be aggregated by the insurer and deposited into the State Treasury.

9.6 A guarantee that the actual Delaware loss ratio results for the year at issue will be independently audited at the request of the Commissioner.

9.7 Notwithstanding the provisions of this subsection, an insurer may amend the rate filing forms used before the effective date of this regulation to provide for a minimum loss ratio guarantee allowed under this subsection for policies issued, delivered, or renewed on or after the effective date of this regulation.

18 Del. Admin. Code § 1305-9.0

13 DE Reg. 939 (01/01/10)