§431:10H-226  Loss ratio.  (a)  Benefitsunder long-term care insurance policies shall be deemed reasonable in relationto 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-termcare insurance risk.  In evaluating the expected loss ratio due considerationshall be given to all relevant factors, including:

(1)  Statistical credibility of incurred claimsexperience and earned premiums;

(2)  The period for which rates are computed toprovide coverage;

(3)  Experienced and projected trends;

(4)  Concentration of experience within early policyduration;

(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, ifapplicable; and

(13)  Product features such as long eliminationperiods, high deductibles, and high maximum limits.

(b)  For purposes of this section, thecommissioner shall consult with a qualified long-term care actuary.

(c)  Subsection (a) shall not apply to lifeinsurance policies that accelerate benefits for long-term care.  A life insurancepolicy that funds long-term care benefits entirely by accelerating the deathbenefit is considered to provide reasonable benefits in relation to premiumspaid, if the policy complies with all of the following provisions:

(1)  The interest credited internally to determinecash value accumulations, including long-term care, if any, are guaranteed notto be less than the minimum guaranteed interest rate for cash valueaccumulations without long-term care set forth in the policy;

(2)  The portion of the policy that provides lifeinsurance benefits meets the nonforfeiture requirements for life insurance;

(3)  The policy meets the disclosure requirements ofsection 431:10H-114 as applicable;

(4)  Any policy illustration that meets the applicablerequirements for policy illustration;

(5)  An actuarial memorandum is filed with theinsurance division that includes:

(A)  A description of the basis on which thelong-term care rates were determined;

(B)  A description of the basis for thereserves;

(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 eachactuarial assumption used.  For expenses, an insurer shall include per cent ofpremium dollars per policy and dollars per unit of benefits, if any;

(E)  A description and a table of theanticipated policy reserves and additional reserves to be held in each futureyear for active lives;

(F)  The estimated average annual premium perpolicy and the average issue age;

(G)  A statement as to whether underwriting isperformed at the time of application.  The statement shall indicate whetherunderwriting is used, and if used, the statement shall include a description ofthe type or types of underwriting used such as medical underwriting orfunctional assessment underwriting.  Concerning a group policy, the statementshall indicate whether the enrollee or any dependent will be underwritten andwhen underwriting occurs; and

(H)  A description of the effect of the long-termcare policy provision on the required premiums, nonforfeiture values, andreserves on the underlying life insurance policy, both for active lives andthose in long-term care claim status.

(d)  This section shall apply to all long-termcare insurance policies or certificates except those covered under sections431:10H-207.5 and 431:10H-226.5. [L 1999, c 93, pt of §2; am L 2007, c 233, §18]