Subdivision 1.Minimum loss ratio.
The minimum loss ratio must be at least 60 percent, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, the commissioner shall give consideration to all relevant factors, including:
(1)statistical credibility of incurred claims experience and earned premiums;
(2)the period for which rates are computed to provide coverage;
(3)experienced and projected trends;
(4)concentration of experience within early policy duration;
(5)expected claim fluctuation;
(6)experience refunds, adjustments, or dividends;
(7)renewability features;
(8)all appropriate expense factors;
(10)experimental nature of the coverage;
(12)mix of business by risk
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Subdivision 1.Minimum loss ratio.
The minimum loss ratio must be at least 60 percent, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, the commissioner shall give consideration to all relevant factors, including:
(1) statistical credibility of incurred claims experience and earned premiums;
(2) the period for which rates are computed to provide coverage;
(3) experienced and projected trends;
(4) concentration of experience within early policy duration;
(5) expected claim fluctuation;
(6) experience refunds, adjustments, or dividends;
(7) renewability features;
(8) all appropriate expense factors;
(9) interest;
(10) experimental nature of the coverage;
(11) policy reserves;
(12) mix of business by risk classification; and
(13) product features such as long elimination periods, high deductibles, and high maximum limits.
Subd. 2.Life insurance policies.
Subdivision 1 shall not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if the policy complies with all of the following provisions:
(1) the interest credited internally to determine cash value accumulations, including long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;
(2) the portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of section61A.24;
(3) the policy meets the disclosure requirements of sections62S.09,62S.10, and62S.11;
(4) any policy illustration that meets the applicable requirements of the NAIC Life Insurance Illustrations Model Regulation; and
(5) an actuarial memorandum is filed with the commissioner that includes:
(i) a description of the basis on which the long-term care rates were determined;
(ii) a description of the basis for the reserves;
(iii) a summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
(iv) a description and a table of each actuarial assumption used. For expenses, an insurer must include percentage of premium dollars per policy and dollars per unit of benefits, if any;
(v) a description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
(vi) the estimated average annual premium per policy and the average issue age;
(vii) a statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and
(viii) a description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.
Subd. 3.Nonapplication.
This section does not apply to policies or certificates that are subject to sections62S.021,62S.081, and62S.265, and that comply with those sections.