W. Va. Code R. § 114-31-2

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 114-31-2 - Application to Operate on a Guaranteed Loss Ratio Basis

2.1. In order to implement a guaranteed loss ratio as established by the Commissioner, an insurer offering individual sickness and accident insurance policies must make application to the Commissioner on the form described in subsection 2.2 of this rule. The Commissioner shall have the discretion to approve or reject any such application after reviewing the same. The application form is set forth in Appendix A to this rule.

2.2. Each application filed with the Commissioner pursuant to this rule must include a written loss ratio guarantee that at minimum contains the following information:

a. Policy form number;

b. The anticipated lifetime and durational target loss ratios contained in the original actuarial memorandum filed with the policy form when it was originally approved;

c. A designation of the first calendar year in which the loss ratio guarantee is to be effective;

d. A guarantee that the actual West Virginia or, if applicable, national loss ratios for each experience period shall meet or exceed the anticipated lifetime and durational target loss ratios contained in the original actuarial memorandum described in subdivision b of this subsection;

e. The source and dates of data used by the insurer in determining lifetime and durational target loss ratios and credibility data;

f. A guarantee that the actual West Virginia, or, if applicable, national, loss ratio results for the experience period at issue will be independently audited as described more fully in Section 4 of this rule;

g. The name and qualifications of the independent auditor who will perform the annual audit described in Section 4 of this rule;

h. A guarantee that if the actual loss ratio during an experience period is less than the anticipated loss ratio for that period, then West Virginia policyholders shall receive proportional refunds based on premium earned, which refunds shall be calculated and paid pursuant to W. Va. Code § 33-6C-5;

i. A sample calculation and illustration of the refund methodology used to comply with this rule;

j. A non-discrimination guarantee as required by W. Va. Code § 33-6C-4(c)(5); and

k. The signature of an officer of the insurer.

2.3. The Commissioner shall notify an insurer of the acceptance or rejection of an application to operate on a guaranteed loss ratio basis within sixty (60) days of the date that such an application is received.

W. Va. Code R. § 114-31-2