Section 71.12 - Policy Filings for Medicare Supplement Insurance and Rate Review(1)(a) An Issuer shall not offer, sell, deliver or issue for delivery, or otherwise make effective, or renew a Medicare Supplement Insurance Policy defined in 211 CMR 71.08(2) or an Alternate Innovative Benefit Rider defined in 211 CMR 71.09(5) to a resident of Massachusetts, unless the Policy form has been filed with and approved by the Commissioner.(b) An Issuer shall not offer, sell, deliver or issue for delivery, or otherwise make effective, or renew a Medicare Supplement Insurance Policy defined in 211 CMR 71.08(2) or an Alternate Innovative Benefit Rider defined in 211 CMR 71.09(5) to a resident of Massachusetts, unless the rates therefor have been filed with and approved by the Commissioner.(c) An Issuer shall not use or change premium rates for a Medicare Supplement Insurance Policy defined in 211 CMR 71.08(2) or an Alternate Innovative Benefit Rider defined in 211 CMR 71.09(5) and issued in accordance with the provisions of 211 CMR 71.12, unless the rates use a Community Rating method which has been approved by the Commissioner.(d) An Issuer shall not use or change premium rates for a Medicare Supplement Insurance Policy defined in 211 CMR 71.08(2) or Alternate Innovative Benefit Rider defined in 211 CMR 71.09(5), unless the rates, rating schedule and supporting documentation have been filed with and approved by the Commissioner in accordance with the filing requirements and procedures prescribed in 211 CMR 71.12. An Issuer may file the rate for an Alternate Innovative Benefit Rider separately from the associated Medicare Supplement Insurance Policy or may file a single rate for the Alternate Innovative Benefit Rider and the Medicare Supplement Insurance Policy with which it is associated.(2) An Issuer shall not change premium rates for a Medicare Supplement Insurance Policy originally issued to be effective prior to January 1, 1995, unless the rates, rating schedule and supporting documentation have been filed with and approved by the Commissioner in accordance with the filing requirements and procedures prescribed in 211 CMR 71.12.(3) An Issuer may use a Community Rating method to rate a Medicare Supplement Insurance Policy originally issued to be effective prior to January 1, 1995 subject to the prohibition against altering contractual terms as provided in M.G.L. c. 176K, § 9.(4)(a) Except as provided in 211 CMR 71.12(4)(b), an Issuer shall not file for approval more than one form of a Policy of each type of standard Medicare Supplement benefit plan and shall not file for approval more than one form of Alternate Innovative Benefit Rider for each type of standard Medicare Supplement benefit plan.(b) An Issuer may offer, with the approval of the Commissioner, except where otherwise prohibited by statute, up to two additional Policy forms of the same type for the same standard Medicare Supplement benefit plan, one for each of the following cases:1. The inclusion of new or innovative benefits;2. The addition of either direct response or agent marketing methods.(c) For the purposes of 211 CMR 71.12, a "type" means an individual Medicare Supplement Insurance Policy or a group Medicare Supplement Insurance Policy.(5) Except as provided in 211 CMR 71.06(5) and 71.12(5)(a), an Issuer shall continue to make available for purchase any Medicare Supplement Insurance Policy form issued on or after January 1, 1995 that has been approved by the Commissioner. A Policy form shall not be considered to be available for purchase, unless the Issuer has actively offered it for sale in the previous 12 months. (a) Subject to the requirements of 211 CMR 71.08(3), an Issuer may discontinue the availability of a Medicare Supplement Insurance Policy form or Alternate Innovative Benefit Rider form if the Issuer provides to the Commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the Policy. After receipt of the notice by the Commissioner, the Issuer shall no longer offer for sale the Policy form in Massachusetts. Nothing in 211 CMR 71.12(5) shall relieve an Issuer from the requirements of 211 CMR 71.22.(b) An Issuer that discontinues the availability of a Medicare Supplement Insurance Policy form pursuant to 211 CMR 71.12(5)(a) shall not file for approval a new Policy form of the same type for the same standard Medicare Supplement benefit plan as the discontinued form for a period of five years after the Issuer provides notice to the Commissioner of the discontinuance. The period of discontinuance may be reduced if the Commissioner determines that a shorter period is appropriate.(c) An Issuer that discontinues the availability of an Alternate Innovative Benefits Rider form pursuant to 211 CMR 71.12(5)(a) shall not file for approval a new Alternate Innovative Benefits Rider with the same benefits as the discontinued form for a period of five years after the Issuer provides notice to the Commissioner of the discontinuance. The period of discontinuance may be reduced if the Commissioner determines that a shorter period is appropriate. For the purposes of 211 CMR 71.12(5)(c), amendments to an existing Alternate Innovative Benefits Rider will be considered to be a discontinuance only if the Issuer removes all the benefits for alternative prescription drugs as described in 211 CMR 71.09(5)(a), all the benefits for alternative preventive care as described in 211 CMR 71.09(5)(b) or all the benefits for alternative foreign travel described in 211 CMR 71.09(5)(c) from the previously approved benefits in an Alternate Innovative Benefits Rider.(d) The sale or other transfer of Medicare Supplement business to another Issuer shall be considered a discontinuance for the purposes of 211 CMR 71.12(5).(e) A change in the rating structure or methodology shall be considered a discontinuance under 211 CMR 71.12(5)(a) and (b), unless the Issuer complies with the following requirements: 1. The Issuer provides an actuarial memorandum, in a form and manner prescribed by the Commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates.2. The Issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The Commissioner may approve a change to the differential that is in the public interest.(6) Except as provided in 211 CMR 71.12(5)(d), the experience of all Policy forms of the same type in a standard Medicare Supplement benefit plan issued on or after July 30, 1992, and the experience of all Medicare Supplement Insurance Policy forms providing substantially the same coverage issued prior to July 30, 1992, shall be combined for purposes of the refund or credit calculation prescribed in 211 CMR 71.12(12).(7) Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.(8)Medicare Supplement Insurance Policy Forms.(a) All submissions shall be submitted in a form specified by the Commissioner.(b) The statutory filing fee shall accompany each Medicare Supplement Insurance Policy form, or Alternate Innovative Benefit Rider form if filed separately, submitted each time it is submitted, whether for preliminary or final review according to the Division's filing fee instructions.(c) Each submission shall be accompanied by the specified checklist.(d) Each form submitted for final approval must be printed, be a printer's proof, or be in the form in which it will be issued.(e) Any form in which the printed text has been altered will not be accepted for review or final approval.(f) Each form shall display an identification code on the lower left-hand corner of the first page.(g) Each submission shall be accompanied by a cover letter that states whether the form is new or replaces an approved or previously filed form or forms.(h) The submission of a rider, application or endorsement shall specify the Policy or group of Policies with which it will be used. The identification code of such Policy or group of Policies shall be given together with, if possible, the approximate date of the original filing to expedite review. If a new form makes reference to the provisions of a form previously used that did not require filing or approval, it shall be accompanied by such previous form for reference purposes.(i) Revisions shall not be made by rider, endorsement or amendment, except with prior approval of the Commissioner. No such riders, endorsements or amendments shall be submitted for approval, unless the Issuer is notified in advance by the Commissioner that revision by rider, endorsement or amendment is permissible.(j) All submitted material shall be filled in with appropriate hypothetical data.(k) Applications to be attached to Policy forms upon issue must be attached to such forms upon submission. If such an application was previously filed and approved, the approximate date of such approval must be noted, if possible. Policy outlines of coverage prescribed in 211 CMR 71.13 must also be filed with the corresponding Policy forms; as well as application forms and notices pursuant to 211 CMR 71.14.(l) If a form replaces a previously approved or filed form, the identification code of the replaced form must be given and differences from the text of the replaced form must be noted. Where an entire form has been rewritten to improve its readability, a general description of changes is sufficient. Substantive changes shall be carefully noted.(m) If a form was previously disapproved, this fact must be specifically identified within the filing with the reasons why the form is resubmitted.(n) Each submission must include a certification by a company official that each form and outline of coverage comply with all applicable laws and regulations including, but not limited to, 211 CMR 71.00 and the objective standards of M.G.L. c. 175, § 2B; as well as a certification by a company official that each form meets the minimum Flesch score requirements established by M.G.L. c. 175, § 2B. If an Issuer contends that a form is exempt from M.G.L. c. 175, § 2B, the basis for this contention must be stated in the cover letter.(o) No Medicare Supplement Insurance Policy shall be offered, sold, delivered or issued for delivery, or otherwise made effective, or renewed in Massachusetts which provides benefits which duplicate benefits provided by Medicare. Except as otherwise approved by the Division, no such Policy shall provide lower benefits than are required by 211 CMR 71.00, except where duplication of Medicare benefits would otherwise result.(p) As soon as practicable, but prior to the effective date of any changes in benefits provided by Medicare, Massachusetts laws regarding mandated health benefits and/or by the Medicare Supplement Insurance Policy, every Issuer shall file with the Division, in accordance with applicable filing procedures, any appropriate riders, endorsements or Policy forms needed to accomplish such Medicare Supplement Insurance modifications. Any such riders, endorsements or Policy forms shall provide a clear description of the Medicare Supplement benefits provided by the Policy.(q) Within 90 days of the effective date of any changes in benefits provided by Medicare, Massachusetts laws regarding mandated health benefits and/or by the Medicare Supplement Insurance Policy, every Issuer shall have on file new Medicare Supplement Insurance Policies that eliminate any duplication of benefits provided by Medicare. Each filing shall provide a clear description of the Policy benefits.(9)Rate Manual. Every Issuer shall maintain on file with the Division an up-to-date rate manual for all Medicare Supplement Insurance Policies, riders, and endorsements currently available for sale in Massachusetts.(10)Rate Filings. (a)Rate Filings for Medicare Supplement Insurance.1. An Issuer shall submit a rate filing for any Medicare Supplement Insurance Policy described in 211 CMR 71.08(2) or Alternate Innovative Benefit Rider described in 211 CMR 71.09(5) for which the Issuer seeks an initial rate or a change in rates, or any Medicare Supplement Insurance Policy issued to be effective prior to January 1, 1995 to a resident of Massachusetts for which the Issuer seeks a change in rates. All rate filings must comply with the provisions of 211 CMR 71.12(10).2. Every Issuer desiring to increase or decrease premiums for any Medicare Supplement Insurance Policy, or desiring to set the initial premium for a new Medicare Supplement Insurance Policy described set forth in 211 CMR 71.08(2) or Alternate Innovative Benefit Rider described in 211 CMR 71.09(5) shall, in accordance with applicable filing procedures, file with the Division a rate filing which complies with the provisions of 211 CMR 71.12(10).3. For any Medicare Supplement Insurance Policy defined in 211 CMR 71.08(2) or Alternate Innovative Benefit Rider described in 211 CMR 71.09(5), a rate filing shall be determined to have been filed only when it has been submitted in complete form in compliance with 211 CMR 71.12(10), and any accompanying Policy forms have been submitted in complete form in compliance with 211 CMR 71.12(8).4. For any Medicare Supplement Insurance Policy originally issued to be effective prior to January 1, 1995, a rate filing shall be determined to have been filed only when it has been submitted in complete form in compliance with 211 CMR 71.12(10), and a copy of the Policy form and a statement of the date upon which that form had been approved have been submitted.5. Every Issuer shall include in its filing all documents and information as are necessary to support the proposed rates, including where applicable, all documents required by 211 CMR 71.12(8) and (10) and applicable regulations specifying the procedures for rate hearings on such rate filings.6. Any rate filing for Medicare Supplement Insurance Policies for which the proposed rate shall be filed at least 30 days prior to the proposed effective date of such new rates when the proposed rate:a. represents an increase in premium of less than 10% more than the premium previously charged by the Issuer for the same Policy or Alternate Innovative Benefit Rider;b. represents an initial premium request that is less than 10% more than the average premium for the same Policies or Alternate Innovative Benefit Rider charged by Issuers in the same class under 211 CMR 71.12(11); orc. represents the initial premium request for a Medicare Supplement Policy 1A created to add to an Issuer's existing Medicare Supplement product offerings.7. Any rate filing for Medicare Supplement Insurance Policies or Alternate Innovative Benefit Riders for which the proposed rate shall be filed at least 90 days prior to the proposed effective date of such new rates when the proposed rate: a. represents an increase in premium of 10% or more than the premium previously charged by the Issuer for the same Policy or Alternate Innovative Benefit Rider;b. represents an initial premium request that is 10% or more than the average premium for the same Policies or Alternate Innovative Benefit Rider charged by Issuers in the same class under 211 CMR 71.12(11); orc. represents an initial premium for a new Medicare Supplement Insurance Policy to conform with the requirements of 211 CMR 71.00, except for a new Medicare Supplement Policy 1A, or except if the filing is for a new Medicare Supplement Insurance Policy only because it contains the filing of a new Alternate Innovative Benefits Rider.(b) A rate filing must be submitted with each submission of a Medicare Supplement Insurance Policy, rider, or endorsement that affects the premium rate to be charged, and with all changes in premium rates, whether made by endorsement to a Policy, by incorporating into a Policy by reference a table of rates on file with the Commissioner, or unless otherwise provided by the Commissioner. In the case of rate changes, filings shall note the extent of the changes. The Issuer shall also provide a copy of data included in the filing in a form specified by the Commissioner, unless otherwise provided by the Commissioner. Rate filings shall include properly identified rate manual pages, which may be in typed draft or other preliminary form. Policies submitted for rate approval by the Commissioner shall not state or imply that the Massachusetts Division of Insurance does not review the reasonableness of rate increases. For rate filings subject to prior approval by the Commissioner, an Issuer shall provide all advertisements in, and notifications to, newspapers of the rate hearing required by 211 CMR 71.12(16)(b) for publication in a format and at a time specified by the Commissioner or as provided in applicable regulations specifying the procedures for rate hearings on such rate filings; and shall file evidence thereof with the Commissioner in a format and at a time specified by the Commissioner or as provided in applicable regulations specifying the procedures for rate hearings on such rate filings. The Issuer shall obtain the date of the rate hearing and other information pertinent to the advertisement or notice from the Division.
(c) As soon as practicable, but prior to the effective date of any changes in benefits provided by Medicare and/or by the Medicare Supplement Insurance Policy, every Issuer providing Medicare Supplement Insurance in Massachusetts shall file with the Division, in accordance with applicable filing procedures, appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the applicable Policies. The supporting documents as are necessary to justify the adjustments shall accompany the filing.(d)1. Every Issuer providing a Medicare Supplement Insurance Policy form to a resident of Massachusetts shall make premium adjustments necessary to produce an expected loss ratio under such Policy, and Alternate Innovative Benefit Rider if rated separately from the associated Medicare Supplement Insurance Policy, in accordance with 211 CMR 71.12(1), to conform to minimum loss ratio standards as prescribed by 211 CMR 71.12(11) where applicable and which is expected to result in a loss ratio at least as great as that originally anticipated by the Issuer for the Policies. No premium adjustments which would modify the loss ratio experience under the Policy other than the adjustments described herein shall be made with respect to a Policy at any time other than upon its renewal date, except as otherwise approved by the Division. Premium adjustments may be in the form of refunds or premium credits and shall be made no later than the lesser of 90 days after the date the premium adjustment is determined to be due, or upon renewal if a credit is given, or within the lesser of 90 days after the date the premium adjustment is determined to be due, or 60 days of the renewal date if a refund is provided to the premium payer. No Insured or Member may assign his or her rights to such premium adjustments to another person or entity. 2. If an Issuer fails to make premium adjustments acceptable to the Commissioner, the Commissioner may order premium adjustments, refund or premium credits deemed necessary to achieve the loss ratio required by 211 CMR 71.12(11).(e) Each rate filing shall be accompanied by an Actuarial Opinion and supporting actuarial memorandum prepared and certified by a qualified actuary, as defined in the instructions for the Life and Accident and Health Annual Statement Blank or Actuarial Standard of Practice No. 16, Actuarial Practice Concerning Health Maintenance Organizations and Other Managed-care Health Plans, as appropriate. Such memorandum shall contain: 1. the formulas or methods used to obtain the gross premiums;2. a list of all assumptions made in the rate calculations, including identification of mortality, morbidity, and lapse rate tables or experience studies used; as well as a list of all assumptions made in the calculation of any premium surcharge or discount to be charged to Insureds or Members, including the actuarial basis for the selection of the percentage surcharge or discount, and the identification of mortality, morbidity, lapse rate tables or experience used, and the extent to which the experience of Insureds or Members in different products was combined;3. the pattern of the commission scale applicable to each form and a detailed list of all other anticipated expenses including, but not limited to, per claim expenses, taxes, underwriting and acquisition expenses, including where possible identification of those expenses which are fixed and those which are variable;4. the expected claim or service costs;5. the anticipated loss ratios for each of the first five years of coverage, year by year, and for the entire period (the lifetime) for which rates are computed to provide coverage in the Policy form. The anticipated loss ratio during the first five years shall be calculated on an earned incurred rather than a written paid basis. An anticipated loss ratio is defined as the present value at issue of the expected future benefits, excluding dividends, divided by the present value of the expected future annualized premiums from the first day the Policy is sold to the last day that the form is in force. For a given time period, a reasonable interest rate must be used. The aggregate anticipated loss ratios, based on reasonable assumptions as to the distribution of the policy form by age and by various options available shall also be calculated for each of the above time periods. The calculations of the expected claims costs and the non-aggregated loss ratios shall be clearly described and illustrated.
(f) The following standards for maintaining experience data shall apply to support rate revisions.1.Maintaining Experience. Premium and loss data shall be recorded for each Policy form on the following basis for each calendar year: premiums written or paid; each reserve component; earned premiums; paid losses; and incurred losses.2.Combining Experience. Experience under different Policy forms where the premium and coverage are substantially the same must be combined.3.Fund Accounting. Experience data shall be maintained on the basis of fund accounts that will reflect premiums, investment income, losses, expenses, and provision for reserves.(g) Each rate filing shall contain data supporting the expenses of the Issuer in offering a Medicare Supplement Insurance, which are charged in the rates, including information concerning its utilization review programs and other techniques that have had or are expected to have a demonstrated impact on the prevention of reimbursement for services that are not medically necessary; provided however, that Medicare Eligible Expenses which are determined medically necessary by Medicare shall be considered medically necessary by an Issuer.(h) Each rate filing shall contain a legal opinion that the Issuer is in compliance with the provisions of M.G.L. c. 176K, and 211 CMR 71.00.(i) Each rate filing for rates that represent an increase of 10% or more than the premium previously charged by the Issuer, or for initial rates that are 10% or more than the premium charged by the average of Issuers in the same class under 211 CMR 71.12(11), or for initial rates for a new Medicare Supplement Insurance Policy issued to conform with 211 CMR 71.08(2), or a new Alternate Innovative Benefit Rider issued under 211 CMR 71.09(5), shall provide information that the Issuer employs a utilization review program and other techniques acceptable to the Commissioner which have had or are expected to have a demonstrated impact on the prevention of reimbursement by the Issuer for services which are not medically necessary; provided however, that Medicare Eligible Expenses which are determined medically necessary by Medicare shall be considered medically necessary by an Issuer.(j) Any requested rate increases for a Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider in excess of 10% from the premium previously charged by the Issuer shall be communicated by written notice to each Insured so that the Insured receives such notice at least 90 days prior to the effective date of such increase, unless otherwise provided by the Commissioner.(11)Loss Ratio Standards.(a) No Medicare Supplement Insurance Policy, Alternate Innovative Benefit Rider if rated separately from the associated Medicare Supplement Insurance Policy in accordance with 211 CMR 71.12(1), shall be issued, renewed, delivered, or issued for delivery unless the Policy or Alternate Innovative Benefit Rider form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to Policyholders the form of aggregate benefits (not including anticipated refunds or credits) provided under the Policy or Alternate Innovative Benefit Rider form: 1. At least 90% of premium for Medicare Supplement Insurance or Alternate Innovative Benefit Riders issued by a nonprofit hospital service corporation or medical service corporation, and all Medicare Select Insurance Policies;2. At least 65% of premium earned from individual Medicare Supplement Insurance Policies or Alternate Innovative Benefit Riders issued by commercial Issuers including, but not limited to, Policies or Alternate Innovative Benefit Riders issued as a result of solicitations of individuals through the mails or through mass media advertising, including both print and broadcast advertising;3. At least 75% of the aggregate amount of premiums earned in the case of group Policies or Alternate Innovative Benefit Riders including, but not limited to, Policies or Alternate Innovative Benefit Riders issued as a result of solicitations of individuals through the mails or by mass media advertising (including both print and broadcast advertising); or(b) Each type of Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider rated separately in accordance with in 211 CMR 71.12(11)(a) offered by an Issuer shall independently meet the applicable minimum loss ratio standard.(c) All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of 211 CMR 71.12 when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards.(d) For Medicare Supplement Insurance Policies issued prior to July 30, 1992, expected claims in relation to premiums shall meet:1. The originally filed anticipated loss ratio when combined with the actual experience since inception;2. The appropriate loss ratio requirement from 211 CMR 71.12(11)(a)2. and 3. when combined with actual experience beginning with April 19, 1996 to date; and3. The appropriate loss ratio requirement from 211 CMR 71.12(11)(a)2. and 3. over the entire future period for which the rates are computed to provide coverage.4. In demonstrating compliance with the tests in 211 CMR 71.12(11)(d)1. through 3. and for the purposes of attaining credibility, the Issuer shall provide loss ratios based on combined experience under Policy forms which provide substantially the same coverage, provided however, that the experience of individual Policies (including all group Policies subject to an individual loss ratio standard when issued) may not be combined with any group Policies.(12)Refund or Credit Calculation.(a) Each Issuer shall collect and file with the Commissioner by May 31st of each year, addressed to the Director of the State Rating Bureau, the data contained in the applicable reporting form prescribed by the Commissioner for each type of Medicare Supplement benefit plan, or in another format prescribed or approved by the Commissioner. Issuers offering an Alternate Innovative Benefit Rider may either collect and file this data separately or consolidated together with the Alternate Innovative Benefit Rider's associated Medicare Supplement Insurance Policy.(b) If on the basis of the experience as reported the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type of Medicare Supplement benefit plan or Alternate Innovative Benefit Rider if reported separately. For purposes of the refund or credit calculation, experience on Policies issued within the reporting year shall be excluded.(c) For the purposes of 211 CMR 71.12(12), for Medicare Supplement Insurance Policies issued prior to July 30, 1992, the Issuer shall make the refund or credit calculation separately for all individual Policies (including all group Policies subject to an individual loss ratio standard when issued) combined and all other group Policies combined for experience after April 19, 1996.(d) For the purposes of 211 CMR 71.12(12), beginning with reports for calendar year 2001, Non profit Hospital Service Corporations and Medical Service Corporations shall calculate the benchmark loss ratio that is part of the refund calculation using the applicable reporting form specified by the Commissioner (2001 through 2016 and thereafter). All other Issuers shall calculate the benchmark loss ratio that is part of the refund calculation using the applicable reporting forms specified by the Commissioner.(e) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a de minimis level. The refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the Secretary of Health and Human Services, but in no event shall it be less than the average rate of interest for 13-week Treasury notes. Premium adjustments may be in the form of refunds or premium credits and shall be made no later than the lesser of 90 days after the date the premium adjustment is determined to be due, or upon renewal if a credit is given, or within the lesser of 90 days after the date the premium adjustment is determined to be due, or 60 days of the renewal date if a refund is provided to the premium payer. No Insured may assign his or her rights to such premium adjustments to another person or entity.(f) The refund or credit calculation for each Medicare Supplement Insurance Policy or Alternate Innovative Benefit Rider made pursuant to 211 CMR 71.12(12) shall be based on actual monies received and spent.(g) A separate accounting of surcharges and discounts shall be filed with the Issuer's annual loss ratio filing.(13)Annual Filing of Premium Rates. (a) An Issuer of Medicare Supplement Insurance Policies issued before or after January 1, 1995 in Massachusetts shall file annually its rates, rating schedule and supporting documentation, including ratios of incurred losses to earned premiums, by Policy, Alternate Innovative Benefit Rider if rated separately from the associated Medicare Supplement Insurance Policy in accordance with 211 CMR 71.12(1), and duration for approval by the Commissioner in accordance with the filing requirements and procedures prescribed by the Commissioner.(b) The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. Such demonstration shall exclude active life reserves. An expected third-year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for Policies, Alternate Innovative Benefit Riders, if rated separately from the associated Medicare Supplement Insurance Policy in accordance with 211 CMR 71.12(1), and in force less than three years.(c) The filing shall also include data on the number of new Medicare Supplement Insurance Policies, along with separate data on the number of persons newly covered under Alternate Innovative Benefit Riders sold and Policies lapsed in the previous year, and the total number of Policies and persons newly covered under Alternate Innovative Benefit Riders in force as of December 31st of the previous year.(d) Every Issuer that issues Medicare Supplement Insurance Policies subject to 211 CMR 71.00 shall file annually with the Commissioner an Actuarial Opinion and a legal opinion that certifies that the Issuer's rating methodologies and rates comply with the requirements of M.G.L. c. 176K, and 211 CMR 71.00, and shall maintain at its principal place of business (or, if such principal place of business is not in Massachusetts, at a location within the City of Boston) a complete and detailed description of its rating practices for inspection by the Commissioner or his or her designee.(14)Standards for Disapproval of Rates. Rate filings may be disapproved by the Commissioner if the benefits provided therein are unreasonable in relation to the rate charged, or if the rates are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of M.G.L. c. 176K or 211 CMR 71.12. Notwithstanding the foregoing, where applicable, rate filings made under 211 CMR 71.12 are also subject to the provisions of applicable regulations specifying the procedures for rate hearings on such rate filings.(15)Time Provisions for Medicare Supplement Insurance Rate Filings Required to Be Filed at Least 30 Days before a Proposed Effective Date. For all Medicare Supplement Insurance rate filings required to be filed at least 30 days before a proposed rate effective date pursuant to 211 CMR 71.12(10)(a)6., the following time provisions shall apply:(a) If not disapproved by the Commissioner, such filing shall be deemed to be approved by the Commissioner 30 days after filing, unless a hearing has commenced within 30 days of the filing and a decision thereon is pending.(b) Such filing shall not be disapproved by the Commissioner except after a hearing conducted pursuant to M.G.L. c. 30A and applicable regulations specifying the procedures for rate hearings on such rate filings within 30 days after such filing.(c) Filings resubmitted to conform to the terms of a decision disapproving proposed rates shall be reviewed as part of the same hearing as that in which the Division considered the original filings. All other filings resubmitted thereafter shall be considered to be new filings for the purposes of 211 CMR 71.00.(d) Any initial premium rate increase and any other increase in premium rates shall continue in effect for not less than 12 months, except that an increase in benefits or a decrease in rates may be permitted at any time.(16)Time Provisions for Rate Filings Required to Be Filed at Least 90 Days before a Proposed Rate Effective Date. For all rate filings for Medicare Supplement Insurance required to be filed at least 90 days before a proposed rate effective date pursuant to 211 CMR 71.12(10)(a)7., the following time provisions shall apply: (a) The Issuer shall file the rate request no later than 90 days prior to the requested effective date.(b) The Division shall hold a public hearing pursuant to applicable regulations specifying the procedures for rate hearings on such rate filings within 30 days after the filing is made. Notice of the public hearing will be given to, or advertised in, newspapers in Boston, Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford, and Lowell as provided in 211 CMR 71.12(11)(c).(c) The Commissioner shall approve or disapprove the requested rates within 30 days following the conclusion of the public hearing. If the filing is disapproved and a revised filing conforming to the terms of the decision is resubmitted in accordance with applicable regulations specifying the procedures for rate hearings on such rate filings, it shall be approved. Filings resubmitted thereafter shall be considered to be new filings for the purposes of 211 CMR 71.00 and applicable regulations specifying the procedures for rate hearings on such rate filings.(d) Any increase in premium rates shall continue in effect for not less than 12 months, except that an increase in benefits or a decrease in rates may be permitted at any time.(e) Notice shall be given to all Insureds of such requested increase in premium rates no less than 90 days before the proposed rate effective date, unless otherwise provided by the Commissioner pursuant to 211 CMR 71.12(10)(k).(17)Appeals. The submission and approval of a revised rate filing by an Issuer shall not affect the Issuer's right to appeal from those elements of the requested rate filing that were disapproved. Any order, decree, or judgment of the Supreme Judicial Court modifying, amending, annulling, or reversing a decision of the Commissioner disapproving a rate filing, and any further decision of the Commissioner pursuant to such an order, decree, or judgment that affects the overall rate approved shall be effective as of the effective date permitted by the order from which the appeal was taken.(18)Public Hearings. The Commissioner may conduct a public hearing to gather information concerning a request by an Issuer for an increase in a rate for a Policy, Alternate Innovative Benefit Rider form issued before or after January 1, 1995, and if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for such reporting period. Public notice of the hearing shall be furnished in accordance with applicable statutory requirements.Amended by Mass Register Issue 1345, eff. 8/11/2017.Amended by Mass Register Issue 1397, eff. 8/9/2019.