Record Adopted Standard

1. Date Adopted: December 12, 2021

2. Purpose and Scope: These standards apply to products advertised, marketed or offered to provide benefits for one or more of the following: nursing home care, assisted living care or home health care and adult day care. These standards apply to filings to make revisions (including increases) to premium rate schedules for in-force individual long-term care insurance.

Partnership: Approval by the Interstate Insurance Product Regulation Commission (“IIPRC”) of long-term care insurance product filings in compliance with one or more of the Uniform Standards for Individual Long-Term Care Insurance shall not be deemed as approval to use or provide any component of the product filing pursuant to any federal or state Individual Long-Term Care Insurance Partnership Program (“Partnership”).

3. Rules Repealed, Amended or Suspended by the Rule: None

4. Statutory Authority: Among the primary purposes and powers of the Interstate Insurance Product Regulation Commission (“IIPRC”) is to establish reasonable uniform standards for insurance products covered under the Interstate Insurance Product Regulation Compact (“Compact”), specifically pursuant to Article I §2, Article IV § 2 and Article VII § 1 of the Compact, as enacted into law by each IIPRC member state.

5. Required Findings: Except with respect to a rate revision request for a Compacting State that has opted out of these standards, these standards are not available to be used in combination with State Product Components as described in §111(b) of the Operating Procedure for the Filing and Approval of Product Filings. These standards are not available to be filed using the Rule for the Self Certification of Product Components Filed with the Interstate Insurance Product Regulation Commission.

6. Effective Date: April 4, 2022

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Scope: These standards apply to filings to make revisions (including increases) to premium rate schedules for in-force individual long-term care insurance. Long-term care insurance shall provide benefits for one or more of the following: nursing home care, assisted living care or home health care and adult day care. These standards apply to all policies, riders, endorsements and amendments subject to the Core Standards for Individual Long-Term Care Insurance Policies and all in-force rate schedules subject to the Rate Filing Standards for Individual Long-Term Care Insurance adopted by the Interstate Insurance Product Regulation Commission.

These standards shall apply to closed blocks of insurance (where sales have ceased) and to open blocks of insurance (where sales are currently being made) where the revised rate schedule will apply to in force policies. These standards shall not apply when a company files for a revised rate schedule that increases premium rates only with respect to new business issued under a policy form or for initial rate filings (for applicable requirements, see Rate Filing Standards for Individual Long-Term Care Insurance).

Opt-Out: Compacting States may opt out of the Standards for Filing Revisions to Rate Filing Schedules for Individual Long-Term Care Insurance in accordance with the Interstate Insurance Product Regulation Compact and the relevant operating procedures without opting out of the other Uniform Standards for individual long-term care insurance. When a Compacting State has exercised its right to opt out of this standard, a filer may not include such state in a filing to the Interstate Insurance Product Regulation Commission for in-force revisions to premium rate schedules and shall instead file for inforce rate revisions directly with such state. The individual long-term care insurance product and applicable premium rate schedule approved by the Interstate Insurance Product Regulation Commission shall be governed by the applicable Uniform Standards and shall not be contested by a Compacting State that has opted out of these standards and is reviewing Interstate Insurance Product Regulation Commission unless it follows the procedures in its law enacting the Interstate Insurance Product Regulation Compact, including but not limited to Article VIII.

Mix and Match: Except with respect to a rate revision request for a Compacting State that has opted out of these standards, these standards are not available to be used in combination with State Product Components as described in § 111(b) of the Operating Procedure for the Filing and Approval of Product Filings.

Self-Certification: These standards are not available to be filed using the Rule for the Self-Certification of Product Components Filed with the Interstate Insurance Product Regulation Commission.

All terms used in these standards shall have the same meaning as defined in the Core Standards for Individual Long-Term Care Insurance Policies.

As used in these standards the following definitions apply:

“Dollar-for-Dollar Long-Term Care Insurance” is long-term care insurance provided under:

(1) Life insurance policies that permit payment of all or part of the death benefit when specified activities of daily living or cognitive impairment triggers are met and the payment of benefits is contingent upon receipt of long-term care services, and such payment does not exceed $1.00 for each $1.00 of reduction in death benefits (for flexible premium adjustable life products, the death benefit may be one of the death benefit options described in the Interstate Insurance Product Regulation Commission standards for such products); and

(2) Annuity contracts that provide for the waiver of any applicable surrender or withdrawal charges upon payment of all or part of the account value when specified activities of daily living or cognitive impairment triggers are met and the payment of benefits is contingent upon receipt of long-term care services, and such payment does not exceed $1.00 for each $1.00 of permanent reduction in the account value.

“Exceptional rate schedule increase” means only those rate schedule increases where the Interstate Insurance Product Regulation Commission determines that the need for the rate schedule increase is justified, and may be applicable to only one or more states as determined by the Interstate Insurance Product Regulation Commission:

(1) Due to changes in laws or regulations applicable to individual long-term care coverage; or

(2) Due to increased and unexpected utilization that affects the majority of companies of similar products to that for which the rate schedule increase filing applies.

Drafting Note: As appropriate, the Interstate Insurance Product Regulation Commission may refer to the NAIC Guidance Manual for the Rating Aspects of the Long-Term Care Insurance Model Regulation in reviewing filings under these standards.

§ 1. APPLICABLE AUTHORITY, REVIEW AND APPROVAL OF RATE SCHEDULE INCREASES

(1) When a rate schedule increase for a specified individual long-term care insurance policy form does not exceed a rate increase of fifteen percent (15%), the filing shall be subject to the review and approval or disapproval of the Interstate Insurance Product Regulation Commission on
behalf of the participating Compacting States.

(2) When a rate schedule increase filing request exceeds a rate increase of fifteen percent (15%), the filing shall be subject to the review and approval of each Compacting State. If a rate schedule
increase filing does not request a rate increase above fifteen percent (15%), but the Interstate Insurance Product Regulation Commission determines that a rate increase exceeding fifteen percent (15%) is necessary to comply with the Standards for Filing Revisions to Rate Filing
Schedules for Individual Long-Term Care Insurance, the filing shall be subject to the review and
approval or disapproval of each Compacting State.

(3) When a rate schedule increase filing is subject to the approval of the Interstate Insurance Product Regulation Commission, as provided in § 1(1), the Standards for Filing Revisions to Rate Filing Schedules for Individual Long-Term Care Insurance and other applicable Rules, Uniform Standards and Operating Procedures shall apply. When a rate schedule increase filing is subject to the approval of each Compacting State as provided in § 1(2), each Compacting State's
applicable state laws and regulations shall apply to the entire rate schedule increase filing.

(4) For rate schedule increase filings subject to the approval of each Compacting State as provided in § 1(2), the Interstate Insurance Product Regulation Commission shall review on an advisory basis the rate schedule increase filing, including corresponding with the filer to address
objections, and provide to each applicable Compacting State an advisory finding regarding compliance with the Standards for Filing Revisions to Rate Filing Schedules for Individual Long-Term Care Insurance and other applicable Uniform Standards. A review and advisory finding by the Interstate Insurance Product Regulation Commission shall not be considered an approval of the rate schedule increase filing nor shall it be binding on the Compacting States or the filing company.

(5) The original individual long-term care insurance product and premium rate schedule approved by the Interstate Insurance Product Regulation Commission and that is the subject of a rate schedule increase filing shall be governed by the applicable Uniform Standards.

(6) Once the Interstate Insurance Product Regulation Commission transmits the advisory finding to
each applicable Compacting State, the rate schedule increase filing, including the applicable Member State Filing Fee, shall be considered a filing of each applicable Compacting State and a withdrawn filing of the Interstate Insurance Product Regulation Commission.

(7) Any future rate schedule increase requests on rate schedule increase filings subject to the approval of each Compacting State as provided in § 1(2) shall be filed directly with each applicable Compacting State and subject to the review and approval or disapproval of each Compacting State under its respective state laws and regulations.

§ 2. CRITERIA FOR REVIEW FOR ALL RATE REVISION FILINGS

A. GENERAL

The Interstate Insurance Product Regulation Commission will review rate revision filings for individual long-term care insurance policies and may disapprove any rate revision filing for in-force premium rate schedules (whether decrease or increase) for one or more of the following reasons:

(1) The premiums charged are unreasonable in relation to the benefits provided, excessive, inadequate, or unfairly discriminatory;

(2) The provisions permit the company to vary premiums for insureds, and the variances are not based upon sound underwriting and sound actuarial principles reasonably related to actual or
reasonably anticipated loss experience or expenses;

(3) The premiums unfairly discriminate between individuals of the same actuarial risk class, or between risks of essentially the same degree of hazard;

(4) The premiums discriminate on the basis of race, color, creed, national origin, or sexual orientation;

(5) The premiums unfairly discriminate on the basis of marital status or civil union status in states
where civil union relationships are recognized; however, this does not prohibit actuarially justified spousal, couple, partner, or civil union discounts; or

(6) The rate filing fails to comply with the standards.

B. GENERAL SUBMISSION REQUIREMENTS

(1) If the rate revision filing is being submitted on behalf of the company, include a letter or other 
document authorizing the firm to file on behalf of the company.

(2) The request for approval of a rate revision filing shall be submitted to the Interstate Insurance
Product Regulation Commission at least thirty (30) days prior to the required notice period for a change in the premium rate schedule as provided in the policy.

§ 3. ADDITIONAL SUBMISSION REQUIREMENTS FOR RATE SCHEDULE INCREASE FILINGS

Drafting Notes:

(1) These requirements do not apply when a company files for a revised rate schedule that increases premium rates only with respect to new business issued under a policy form or for initial rate filings. See Rate Filing Standards for Individual Long-Term Care Insurance for applicable requirements. 

(2) For dollar-for-dollar long-term care insurance, these requirements do not apply to changes in
premium rates for benefits that occur under an existing premium rate schedule where premiums are scheduled to change during the premium-paying period according to a specified pattern due to attained age or duration since issue.

(3) These requirements do not apply where a company has previously provided a certification, as
described in Rate Filing Standards for Individual Long-Term Care Insurance § 4B, that the basis for any base policy rate increase does not incorporate adverse experience for the dollar-for-dollar long-term care insurance.

The following additional submission requirements apply to rate schedule increase filings (i.e., a change to an approved in-force rate schedule that results in a new, higher rate schedule) that apply to in-force policies for individual long-term care insurance:

A. GENERAL

(1) Include the Long-Term Care Insurance Potential Rate Increase Disclosure Form required by § 9,
Required Disclosure of Rating Practices of the NAIC Long-Term Care Insurance Model Regulation (Model #641).

(2) A rate schedule increase with the same percentage increase applicable to all policies may be filed with the Interstate Insurance Product Regulation Commission based on the experience of such policy form in all states where the Interstate Insurance Product Regulation Commission has
approved the form for use. If requested by the reviewer, the company shall detail the basis for its
determination not to vary the rate increase percentage.

(3) (a) Where the same percentage rate schedule increase is not to be applied to all policies in
force under an Interstate Insurance Product Regulation Commission filed policy form, for other than dollar-for-dollar long-term care insurance, the overall rate schedule increase shall be consistent with the loss ratio requirements of § 3B(3) or B(4), below as applicable, when applied to such policy form in all states where the Interstate Insurance Product Regulation Commission has approved the form for use. 

(b) The company shall detail the basis for its determination to vary the rate increase e.g., certain states as an exceptional increase, certain level of benefits, and certain ages). Such basis shall be generally consistent with the experience under the Interstate Insurance Product Regulation Commission filed policy form, but may rely on credible experience from other sources (e.g., company’s national experience, industry experience).

(4) A rate schedule increase shall not introduce a new rating characteristic that was not included as a rating characteristic in the initial rate filing.

Drafting Note: At the time of drafting these standards, the Interstate Insurance Product Regulation Commission generally does not believe that sufficient data on insured experience is available to vary a rate schedule increase by state or region, but cannot be sure sufficient data cannot be produced in the future. To the extent a company desires to vary a rate schedule increase by state or region, it should recognize that any lack of sufficient data for the form in each state or region may present a significant hurdle to the approval of such a rate schedule increase request.  However, it is recognized that any industry or actuarial study that indicates a clear and substantiated basis for varying the level or length of incurred claims by state or region could provide support for varying a rate schedule increase consistent with such study. If industry or actuarial study indicating a clear and substantiated basis to vary a rate schedule increase by state or region becomes available subsequent to adoption of these standards, the Interstate Insurance Product Regulation Commission will revisit the appropriateness of varying a rate schedule increase by state or region for future issues. 

Drafting Note: The use of “policy form” is not intended to eliminate the filing of a consistently based premium rate schedule increase to multiple policy forms with similar benefits and underwriting based on the same assumptions and their total experience to date.

B. ACTUARIAL SUBMISSION REQUIREMENTS

(1) An actuarial certification prepared, dated and signed by a member of the American Academy of
Actuaries who provides the information shall be included and shall provide at least the following
information:

(a) A statement that, if the requested rate schedule increase is implemented, and the underlying assumptions, which reflect moderately adverse conditions, are realized, no future rate schedule increases are anticipated;

(b) A statement that the rate schedule increase filing is in compliance with the requirements of these standards;

(c) A statement that the rate schedules submitted are those to which the information in the actuarial memorandum applies; and

Drafting Note: The inclusion of both § 3B(1)(a) and § 3B(1)(c) above is intended to preclude the ability of the Interstate Insurance Product Regulation Commission and the company to agree, independently of the actuary’s certification, to a rate schedule increase other than that to which the certification applies.

(2) For other than dollar-for-dollar long-term care insurance, an actuarial memorandum prepared,
dated and signed by a member of the American Academy of Actuaries who provides the information shall be included and shall comply with the Actuarial Standards of Practice (in
particular ASOP 18) and providing at least the following information with respect to the form as
approved for use in Interstate Insurance Product Regulation Commission states:

(a) Lifetime projections of earned premiums and incurred claims based on the filed rate schedule increase and consistent with the requirements of § 4 A(2) and (3) to provide complete experience; and the method and assumptions used in determining the projected values, including a reflection and disclosure of any assumptions that deviate from those used in pricing other policy forms approved by the Interstate Insurance Product Regulation Commission and currently available for sale; 

(i) Annual values for the five (5) years preceding and the three (3) years following the projection date shall be provided separately; 

(ii) The projections shall include the development of the lifetime loss ratio, unless the rate schedule increase is an exceptional rate schedule increase;

(iii) The projections shall demonstrate compliance with § 3B(3) or B(4), below as applicable;

(iv) For an exceptional rate schedule increase:

(I) The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional rate schedule increase; and

(II) In the event that the Interstate Insurance Product Regulation Commission determines that there are potential offsets to the higher claims costs associated with the exceptional rate schedule increase, the appropriate net projected experience shall be used; and 

(v) The projections shall be based on the expected premium income and claims experience to which the rate increase will be applied with a separate projection for the expected premium income and claims experience to which no rate increase will be applied;

Drafting Note: Projected experience performed according to § 3A(2) may use actuarial judgment based on the experience of the company or industry using Interstate Insurance Product Regulation
Commission, state or national data.

(b) Disclosure of how reserves have been incorporated into the rate schedule increase whenever the rate schedule increase will trigger a contingent benefit on lapse; 

(c) Disclosure of the analysis performed to determine why a rate schedule increase is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied upon by the actuary in providing the certification in § 3B(1), above. The disclosure should describe the sources and levels of margins incorporated into the premiums after the rate schedule increase that are the basis for the statement in § 3B(1)(a) of the actuarial certification and an explanation of the analysis and testing performed in determining the sufficiency of the margins. Significant deviations in margins between ages, sexes, plans or states shall be clearly described. Significant deviations in margins are other than those produced utilizing generally accepted actuarial methods for smoothing and interpolating premium schedules;

(d) A statement that the policy design, underwriting and claims adjudication practices have
been taken into consideration; and 

(e) A statement that the rate schedule after the rate schedule increase is not greater than the rate schedule for new business approved for use by the Interstate Insurance Product Regulation Commission except for differences attributable to benefits, unless sufficient information to demonstrate such differences are justified is provided; and 

(f) A demonstration that actual and projected costs exceed costs anticipated at the time of initial pricing under moderately adverse experience and that the composite margin specified in the Rate Filing Standards for Individual Long-Term Care Insurance §2B(1)(d) is projected to be exhausted.

(3) For other than dollar-for-dollar long-term care insurance, all rate schedule increases applicable to policies issued under policy forms filed prior to December 26, 2017 shall comply with the following requirements with respect to the portion of the business to which the rate schedule
increase is to apply:

(a) Exceptional rate schedule increases shall provide that seventy percent (70%) of the present value of projected additional premiums resulting from the exceptional increase will be returned as benefits;

(b) Rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, excluding active life reserves, and the present value of future projected incurred claims, excluding active life reserves, are not less than the sum of:

(i) The accumulated value of the initial earned premium times fifty-eight percent (58%);

(ii) Eighty-five percent (85%) of the accumulated value of prior rate schedule increases filed with the Interstate Insurance Product Regulation Commission under this standard on an earned basis;

(iii) The present value of future projected initial earned premiums times fifty-eight percent (58%); and 

(iv) Eighty-five percent (85%) of the present value of projected premiums not included in (iii), above, on an earned basis;

(c) In the event that the rate filing incorporates an exceptional rate schedule increase and other increases, the values in § 3B(3)(b)(ii) and § 3B(3)(b)(iv) shall also include seventy percent (70%) for exceptional rate schedule increase amounts; and 

(d) All present and accumulated values used in the determination of any rate schedule increase shall use the maximum valuation interest rate for contract reserves specified in Appendix A of the NAIC Health Insurance Reserves Model Regulation (Model #10).

(4) For other than dollar-for-dollar long-term care insurance, all rate schedule increases applicable to policies issued under policy forms filed on or after December 26, 2017 shall comply with the
following requirements with respect to the portion of the business to which the rate schedule
increase is to apply:

(a) Exceptional rate schedule increases shall provide that seventy percent (70%) of the present value of projected additional premiums resulting from the exceptional increase will be returned as benefits;

(b) Rate schedule increases shall be calculated such that the sum of the lesser of (i) accumulated value of actual incurred claims, excluding active life reserves, or (ii) the accumulated value of historic expected claims, excluding active life reserves, plus the present value of future expected incurred claims, excluding active life reserves, will not be less than the sum of:

(i) The accumulated value of the initial earned premium times the greater of (A) fifty-eight percent (58%) and (B) the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience;

(ii) Eighty-five percent (85%) of the accumulated value of prior rate schedule increases filed with the Interstate Insurance Product Regulation Commission under this standard on an earned basis;

(iii) The present value of future projected initial earned premiums times the greater of (A) fifty-eight percent (58%) and (B) the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience; and

(iv) Eighty-five percent (85%) of the present value of projected premiums not included in § 3A(4)(b)(iii), above, on an earned basis;

(v) Expected claims shall be calculated based on the original filing assumptions assumed until new assumptions are filed as part of a rate increase. New assumptions shall be used for all periods beyond each requested effective date of a rate increase. Expected claims are calculated for each calendar year based on the in-force at the beginning of the calendar year. Expected claims shall include margins for moderately adverse experience; either amounts included in the claims that were used to determine the lifetime loss ratio consistent with the original filing or as modified in any rate increase filing.

(c) In the event that the rate filing incorporates an exceptional rate schedule increase and other increases, the values in § 3A(4)(b)(ii) and (iv) shall also include seventy percent (70%) for exceptional rate schedule increase amounts; and 

(d) All present and accumulated values used in the determination of any rate schedule 
increase shall use the maximum valuation interest rate for contract reserves specified in Appendix A of the NAIC Health Insurance Reserves Model Regulation (Model #10).

(5) For guaranteed renewable policies, if the company has guaranteed premiums will not increase after the insured has attained a specified age, the actuary shall certify that the basis for the proposed rate increase does not include adverse experience for such insureds.

§ 4. REQUIREMENTS SUBSEQUENT TO APPROVAL OF A RATE SCHEDULE INCREASE FILING APPROVED BY THE INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION FOR OTHER THAN DOLLAR-FOR-DOLLAR LONG-TERM CARE INSURANCE

A. For each rate schedule increase that is implemented, the company shall file with the Interstate
Insurance Product Regulation Commission for review updated projections, as defined in § 3B(2)(a) above, annually for the next three (3) years and include a comparison of actual results to projected values. The Interstate Insurance Product Regulation Commission may extend the period to greater than three years if actual results are not consistent with projected values from prior projections.

B. If any premium rate in an implemented rate schedule increase is greater than 200% of the comparable rate in the initial premium schedule, lifetime projections, as defined in § 3B(2)(a) above, shall be filed with the Interstate Insurance Product Regulation Commission for review
every five (5) years following the end of the required period in § 4.A, above.

C. If the Interstate Insurance Product Regulation Commission determines that the actual  experience following a rate schedule increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed the proportions of premiums specified in § 3B(3) or 3B(4) above as applicable, the Interstate Insurance Product Regulation Commission may require the company to implement either of the following:

(1) Premium rate schedule adjustments; or

(2) Other measures to reduce the difference between the projected and actual experience. 

Drafting Note: It is expected that actual experience will not exactly match projected. During the period when projections are monitored as indicated in Items (1) and (2) above, the Interstate Insurance Product Regulation Commission shall determine that there is not an adequate match if the differences in earned premiums and incurred claims are not in the same direction or the difference as a percentage of the projected is not of the same order.

D. If the majority of policies to which the rate schedule increase filing is applicable are eligible for
the contingent benefit on lapse, as defined in the policy, the company shall file:

(1) A plan, subject to Interstate Insurance Product Regulation Commission approval, for improved administration or claims processing procedures, or both, designed to eliminate the potential for a further deterioration of experience that would require future rate schedule increases (or demonstrate that appropriate administrative and claims processing procedures have been implemented); otherwise the Interstate Insurance Product Regulation Commission may impose the condition in E below; and 

(2) The original anticipated lifetime loss ratio, and the rate schedule increase that would have been calculated according to § 3B(3) or 3B(4), above as applicable, had the greater of the original anticipated lifetime loss ratio or fifty-eight percent (58%) been used in the calculation in § 3B(3)(b)(i) and (iii) or 3B(4)(b)(I) and (ii), above as applicable.

E. For a rate schedule increase filing that meets the following criteria, the Interstate Insurance
Product Regulation Commission shall review, for all policies subject to the filing, the projected lapse rates and past lapse rates during the twelve (12) months following each rate schedule increase to determine if significant adverse lapsation has occurred or is anticipated:

(1) The rate schedule increase is not the first rate schedule increase requested for the subject
policy form(s);

(2) The rate schedule increase is not an exceptional rate schedule increase; and

(3) The majority of the policies to which the rate schedule increase is applicable are eligible for the contingent benefit on lapse, as defined in the policy.

F. In the event that significant adverse lapse experience has occurred, is anticipated in the rate 
schedule increase filing, or is evidenced in the actual results as presented in the updated projections provided by the company following the requested rate schedule increase, the
Interstate Insurance Product Regulation Commission may determine that a rate spiral exists.  Following the determination that a rate spiral exists, the Interstate Insurance Product Regulation
Commission may require the company to offer, without underwriting, to all in force insureds subject to the rate schedule increase, the option to replace existing coverage with one or more reasonably comparable products being offered by the company or its affiliates.

(1) The offer shall:

(a) Be subject to the approval of the Interstate Insurance Product Regulation Commission;

(b) Be based on sound actuarial principles and be based on an issue age rate schedule; and

(c) Provide that the maximum benefits payable under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy; and

(2) The company shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate schedule increase on the policy form, the rate schedule increase shall be limited to the lesser of:

(a) The maximum rate schedule increase determined based on the combined experience; and

(b) The maximum rate increase determined based only on the experience of the insureds originally issued the form plus ten percent (10%).

§5. ADDITIONAL STANDARDS FOR DOLLAR-FOR_DOLLAR LONG-TERM CARE
INSURANCE 

Drafting Note: As used in these standards, “premium rate schedule” or premium rate” or “rate schedule” shall include but not be limited to the following:

(1) The separately identifiable premium charged for the dollar-for-dollar long-term care insurance,
or

(2) Charges that are expressed as an amount per $1,000 of insurance (charges that are expressed as a per $1,000 net amount of insurance or as a percentage rate applied to the policy cost of insurance rates are included in this category), or

(3) Charges that are expressed as a percentage of the life policy or annuity contract account.

The following additional filing submission requirements shall apply:

A. ACTUARIAL SUBMISSION REQUIREMENTS FOR RATE SCHEDULE INCREASE FILINGS

(1) In addition to the requirements of the actuarial certification of § 3B(1) include:

(a) A statement that the dollar-for-dollar long-term care insurance design and coverage provided have been reviewed and taken into consideration;

(b) A statement that the underwriting and claims adjudication processes applicable to dollar-for-dollar long-term care insurance have been reviewed and taken into consideration; and

(c) If the rate premium schedule increase submitted applies to a premium rate schedules where premiums are initially based on issue age and where premiums are scheduled to change during the premium-paying period according to a specified pattern due to attained age or duration since issue, a statement that the premium rate schedule following the rate increase continues to comply with the requirements for a rate schedule as set forth in § 4A(2) of the Rate Filing Standards for Individual Long-Term Care Insurance.

(2) An actuarial memorandum prepared, dated and signed by a member of the Academy of Actuaries who provided the information shall be provided and shall comply with the Actuarial Standards of Practice (in particular ASOP No. 18) and providing at least the following information with respect to the form as approved for use in Interstate Insurance Product Regulation  Commission states:

(a) Disclosure of the analysis performed to determine why a premium rate schedule increase is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied upon by the actuary in providing the certification in § 5A(1), above. The disclosure should describe the sources and levels of margins incorporated into the premiums after the rate schedule increase that are the basis for the statement in § 5A(1)(a) of the actuarial 
certification and an explanation of the analysis and testing performed in determining the sufficiency of the margins. Deviations in margins between ages, sexes, plans or states must be clearly described. Deviations in margins are other than those produced utilizing generally accepted actuarial methods for smoothing and interpolating premium schedules; and

(b) A statement that the rate schedule after the premium rate schedule increase is not greater than the premium rate schedule for new business approved for use by the Interstate Insurance Product Regulation Commission except for differences attributable to benefits and premium paying pattern, unless sufficient information to demonstrate such differences are justified is provided.

Drafting Note: The requirements of § 5A(1) do not contain a loss ratio demonstration to support the reasonableness of premiums in relation to the premiums for dollar-for-dollar long-term care insurance benefits.