Loss ratio for long-term care insurance

(a) Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums; provided that the expected loss ratio is at least sixty per cent and calculated in a manner that provides for adequate reserving of the long-term care insurance risk. Prior to any approval, the commissioner shall evaluate the expected loss ratio, and due consideration shall be given 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, if applicable; and (13) Product features such as long elimination periods, high deductibles, and high maximum limits. (b) For purposes of this section, the commissioner shall consult with a qualified long-term care actuary. (c) Subsection (a) 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 for life insurance; (3) The policy meets the disclosure requirements of section 431:10H-114 as applicable; (4) Any policy illustration that meets the applicable requirements for policy illustration; (5) An actuarial memorandum is filed with the insurance division that includes: (A) A description of the basis on which the long-term care rates were determined; (B) A description of the basis for the reserves; (C) A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance; (D) A description and a table of each actuarial assumption used. For expenses, an insurer shall include per cent of premium dollars per policy and dollars per unit of benefits, if any; (E) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives; (F) The estimated average annual premium per policy and the average issue age; (G) 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 (H) 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. (d) This section shall apply to all long-term care insurance policies or certificates except those covered under sections 431:10H-207.5 and 431:10H-226.5.