Utah Admin. Code 590-285-9

Current through Bulletin 2024-24, December 15, 2024

Section R590-285-9 - Initial Filing Requirements

(1) An insurer shall file the following information before making a policy form available for sale:

(a) a copy of the disclosure documents required under Section R590-285-8;

(b) a complete rate schedule; and

(c) an actuarial memorandum that includes:

(i) a statement regarding the actuary's qualifications;

(ii) an explanation of the review performed by the actuary;

(iii) a complete description of all pricing assumptions, including sources and credibility of the data;

(iv) development of the anticipated lifetime loss ratio supported by an exhibit showing lifetime projection of earned premiums and incurred claims based upon the pricing assumptions;

(v) a statement that the premium rate schedule is expected to result in a lifetime loss ratio not less than 55%;

(vi) a statement that the policy design and coverage provided have been reviewed and considered;

(vii) a statement that the underwriting and claim adjudication processes have been reviewed and considered;

(viii) a sensitivity analysis of the anticipated lifetime loss ratio to the changes in the individual assumptions, including sensitivity to the mix of business;

(ix) a statement that the reserve requirements have been reviewed and considered;

(x) a description of the valuation assumptions with sufficient detail or sample calculation as to have a complete depiction of the reserve amounts to be held;

(xi)

(A) a statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or

(B) if the statement in Subsection (1)(c)(xi)(A) cannot be made but the underlying gross premiums are expected to maintain a reasonably consistent relationship:

(A) a complete description of the situations where this does not occur; and

(B) an aggregate distribution of anticipated issues; and

(xii) an actuarial certification dated and signed by the qualified actuary that all information presented in the actuarial memorandum is accurate and complete.

(2) An insurer shall retain sufficient documentation from the initial pricing that a qualified actuary could recreate the initial rates.

(a) The documentation shall be sufficient to provide actual to expected analyses of:

(i) claims;

(ii) incidence rates;

(iii) persistency;

(iv) mix of business; and

(v) loss ratios at the same level of detail used in the initial pricing.

(b) If an insurer retains a consultant to price a policy form, the insurer shall require the consultant to provide the documentation to the insurer, rather than being retained solely by the consultant.

(c) If an insurer sells or cedes complete risk responsibility for a policy form, the insurer or cedant shall provide to the buyer or reinsurer the initial pricing documentation.

(d) An insurer that requests a future premium rate schedule increase but has not retained the initial pricing documentation is limited to a lifetime loss ratio not less than 80%.

(e) An insurer shall retain the initial pricing documentation until one year after the final policyholder is no longer eligible for benefits under the policy.

Utah Admin. Code R590-285-9

Adopted by Utah State Bulletin Number 2021-05, effective 2/23/2021

Adopted by Utah State Bulletin Number 2024-21, effective 10/22/2024