18 Del. Admin. Code § 1303-8.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1303-8.0 - Rate Revisions

8.1 With respect to filings of rate revisions for a previously approved form, benefits shall be deemed reasonable in relation to premiums provided the following standards are met:

8.1.1 With respect to policies issued on and after the effective date of the revision, the standards are the same as for new forms, except that the average annual premium shall be determined based on an actual rather than an anticipated distribution of business.

8.1.2 With respect to policies issued prior to the effective date of the revision, both 8.1.2.1 and 8.1.2.2 as follows shall be at least as great as the standards for new forms:

8.1.2.1 The anticipated loss ratio over the entire period for which the revised rates are computed to provide coverage;

8.1.2.2 The ratio of 8.1.2.2.1 and 8.1.2.2.2; where

8.1.2.2.1 is the sum of the accumulated benefits, from the later of the original effective date of the form or the effective date of this regulation to the effective date of the revision, and the present value of future benefits, and

8.1.2.2.2 is the sum of the accumulated premiums, from the later of the original effective date of the form or the effective date of this regulation to the effective date of the revision and the present value of future premiums, such present values to be taken over the entire period for which the revised rates are computed to provide coverage, and such accumulated benefits and premiums to include an explicit estimate of the actual benefits and premiums from the last date as of which an accounting has been made to the effective date of the revision. Interest shall be used in the calculation of these accumulated benefits and premiums and present values only if it is a significant factor in the calculation of this loss ratio.

8.1.3 Other methods, in addition to those in this Subsection, for new forms may be used to calculate rate revisions. However, the minimum anticipated loss ratio thus calculated must be at least as great as the standards for new forms, with consideration given to active life reserves, and such methods must be approved by the Insurance Commissioner.

18 Del. Admin. Code § 1303-8.0