HRS §431:10A-306
Medicare supplement policies must give fair value for premiums
This section says Medicare supplement insurance policies must pay benefits that are fair compared to the premium charged. The state insurance commissioner will make rules to set minimum standards for how much of the premium is returned as benefits, using standard insurance math. Policies sold to groups or through mail or ads are treated as group policies for these rules.
The statute, as written — Loss ratio standards
Medicare supplement policies shall return to policyholders benefits which are reasonable in relation to the premium charged. The commissioner shall adopt reasonable rules to establish minimum standards for loss ratios of medicare supplement policies on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices. For the purposes of rules adopted under this section, group medicare supplement policies and certificates issued as a result of solicitations of individuals through the mail or mass media advertising, including both print and broadcast advertising, shall be regarded as group policies.
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