§431:10H-226  Loss ratio.  (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,
calculated in a manner that provides for adequate reserving of the long-term
care insurance risk.  In evaluating the expected loss ratio 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. [L 1999, c 93, pt of §2; am L 2007, c 233, §18]