6.6.524 APPENDIX A - MEDICARE SUPPLEMENT REFUND CALCULATION FORM
(1) This is the appendix referred to in ARM 6.6.508(2) and (3) .
MEDICARE SUPPLEMENT REFUND CALCULATION FORM
FOR CALENDAR YEAR ______
TYPE1 _____________________________ SMSBP2 _________________________
For the State of ______________________ Company Name ____________________
NAIC Group Code ____________________ NAIC Company Code ________________
Address ___________________________ Person Completing Exhibit ____________
Title _______________________________ Telephone Number __________________
Line
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(a)
Earned Premium3
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(b)
Incurred Claims4
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1.
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Current Year's Experience
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a. Total (all policy years)
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b. Current year's issues5
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c. Net (for reporting
purposes - 1a-1b
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2.
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Past Year's Experience (all policy years)
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3.
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Total Experience
(Net Current Year + Past Year)
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4.
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Refunds Last year (Excluding Interest)
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5.
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Previous Since Inception (Excluding Interest)
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6.
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Refunds Since Inception (Excluding Interest)
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7.
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Benchmark Ratio Since Inception (see worksheet for Ratio 1)
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8.
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Experienced Ratio Since Inception (Ratio 2)
Total Actual Incurred Claims (line 3, col.
b)
Total Earned Premium (line 3, col. a) -
Refunds Since Inception (line 6)
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9.
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Life Years Exposed Since Inception
If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund
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10.
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Tolerance Permitted (obtained from credibility table)
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Medicare Supplement Credibility Table
Life Years Exposed
Since Inception
Tolerance
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10,000+
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0.0%
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5,000-9,999
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5.0%
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2,500-4,999
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7.5%
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1,000-2,499
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10.0%
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500-999
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15.0%
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If less than 500, no credibility.
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- Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
- "SMSBP" = Standardized Medicare Supplement Benefit Plan - Use "P" for prestandardized plans.
- Includes Modal Loadings and Fees Charged
- Excludes Active Life Reserves
- This is to be used as "Issue Year Earned Premium" for Year 1 of next year's "Worksheet for Calculation of Benchmark Ratios"
11.
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Adjustment to Incurred Claims for Credibility
Ratio 3 = Ratio 2 + Tolerance
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If Ratio 3 is more than Benchmark Ratio (Ratio 1) , a refund or credit to premium is not required.
If Ratio 3 is less than the Benchmark Ratio, then proceed.
12.
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Adjusted Incurred Claims
[Total Earned Premium (line 3, col. a) - Refunds Since Inception (line 6) ] x Ratio 3 (line 11)
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13.
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Refund =
Total Earned Premiums (line 3, col. a) - Refunds Since Inception (line 6) -[Adjusted Incurred Claims (line 12) /Benchmark Ratio (Ratio 1) ]
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If the amount on line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund or credit against premiums to be used must be attached to this form.
I certify that the above information and calculations are true and accurate to the best of my knowledge and belief.
___________________________________
Signature
___________________________________
Name - Please Type
___________________________________
Title - Please Type
___________________________________
Date
REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES
FOR CALENDAR YEAR ____________
TYPE1 ________________________________ SMSBP2 _____________________________
For the State of _________________ Company Name _______________________
NAIC Group Code _____________________ NAIC Company Code___________________
Address _____________________________ Person Completing Exhibit___________
Title _______________________________ Telephone Number ___________________
(a)3
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(b)4
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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(o)5
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Year
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Earned Premium
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Factor
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(b)x(c)
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Cumulative Loss Ratio
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(d)x(e)
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Factor
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(b)x(g)
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Cumulative Loss Ratio
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(h)x(i)
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Policy Year Loss Ratio
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1
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2.770
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0.507
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0.000
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0.000
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0.46
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2
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4.175
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0.567
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0.000
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0.000
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0.63
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3
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4.175
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0.567
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1.194
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0.759
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0.75
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4
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4.175
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0.567
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2.245
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0.771
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0.77
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5
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4.175
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0.567
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3.170
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0.782
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0.80
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6
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4.175
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0.567
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3.998
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0.792
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0.82
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7
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4.175
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0.567
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4.754
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0.802
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0.84
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8
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4.175
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0.567
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5.445
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0.811
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0.87
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9
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4.175
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0.567
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6.075
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0.818
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0.88
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10
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4.175
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0.567
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6.650
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0.824
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0.88
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11
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4.175
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0.567
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7.176
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0.828
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0.88
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12
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4.175
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0.567
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7.655
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0.831
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0.88
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13
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4.175
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0.567
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8.093
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0.834
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0.89
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14
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4.175
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0.567
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8.493
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0.837
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0.89
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15+6
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4.175
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0.567
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8.684
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0.838
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0.89
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Total
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(k):
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(l):
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(m):
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(n):
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Benchmark Ratio Since Inception (1 + n)/(k + m): ____________
1Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2 "SMSBP" = Standardized Medicare Supplement Benefit Plan - Use "P" for pre-standardized plans
3 Year 1 is the current calendar year - 1. Year 2 is the current calendar year - 2 (etc). (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4 For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5 These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6 To include the earned premium for all years prior to as well as the 15th year prior to the current year.
REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR INDIVIDUAL POLICIES
FOR CALENDAR YEAR ____________
TYPE1 ______________________________ SMSBP2 _____________________________
For the State of ___________________ Company Name _______________________
NAIC Group Code ____________________ NAIC Company Code __________________
Address ____________________________ Person Completing Exhibit __________
Title ______________________________ Telephone Number ___________________
(a)3
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(b)4
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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(o)5
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Year
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Earned Premium
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Factor
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(b)x(c)
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Cumulative Loss Ratio
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(d)x(e)
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Factor
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(b)x(g)
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Cumulative Loss Ratio
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(h)x(i)
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Policy Year Loss Ratio
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1
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2.770
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0.442
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0.000
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0.000
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0.40
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2
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4.175
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0.493
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0.000
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0.000
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0.55
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3
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4.175
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0.493
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1.194
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0.659
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0.65
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4
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4.175
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0.493
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2.245
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0.669
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0.67
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5
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4.175
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0.493
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3.170
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0.678
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0.69
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6
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4.175
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0.493
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3.998
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0.686
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0.71
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7
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4.175
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0.493
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4.754
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0.695
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0.73
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8
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4.175
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0.493
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5.445
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0.702
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0.75
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9
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4.175
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0.493
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6.075
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0.708
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0.76
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10
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4.175
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0.493
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6.650
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0.713
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0.76
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11
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4.175
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0.493
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7.176
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0.717
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0.76
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12
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4.175
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0.493
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7.655
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0.720
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0.77
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13
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4.175
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0.493
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8.093
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0.723
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0.77
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14
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4.175
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0.493
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8.493
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0.725
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0.77
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15+6
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4.175
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0.493
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8.684
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0.725
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0.77
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Total
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(k):
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(l):
|
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(m):
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(n):
|
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Benchmark Ratio Since Inception (1 + n)/(k + m): ____________
1Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2 "SMSBP" = Standardized Medicare Supplement Benefit Plan - Use "P" for pre-standardized plans
3 Year 1 is the current calendar year - 1. Year 2 is the current calendar year - 2 (etc). (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4 For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5 These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6 To include the earned premium for all years prior to as well as the 15th year prior to the current year.
History: 33-22-904 and 33-22-905, MCA; IMP, 33-15-303, 33-22-901, 33-22-902, 33-22-903, 33-22-904, 33-22-905, 33-22-906, 33-22-907, 33-22-908, 33-22-909, 33-22-910, 33-22-911, 33-22-921, 33-22-922, 33-22-923, and 33-22-924, MCA; NEW, 2005 MAR p. 1672, Eff. 9/9/05.