N.J. Admin. Code § 11:4-34.8

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:4-34.8 - Initial filing requirement

(a) This section applies to any long-term care insurance policy or certificate issued in this State on or after June 19, 2006. Carriers may opt to comply with this section prior to June 19, 2006.

(b) A carrier shall provide the information listed below to the Commissioner at least 60 days prior to making a long-term care insurance form available for sale.

1. The premium rates, rate schedules or rating formula. Where long-term care coverage is provided in combination with other coverage, a description of how these filed premium rates interact with the rates or premiums for the other coverage;

2. A copy of the disclosure documents required by N.J.A.C. 11:4-34.7;

3. An actuarial certification consisting of the following:

i. A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;

ii. A statement that the policy design and coverage provided have been reviewed and taken into consideration in setting the assumptions and rates;

iii. A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration in setting the assumptions and rates; and

iv. A complete description of the basis for contract reserves that are anticipated to be held under the form, which shall include:

(1) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;

(2) A statement that the assumptions used for reserves contain reasonable margins for adverse experience;

(3) A statement that the net valuation premium for renewal years does not increase (except for attained-age rating where permitted); and

(4) 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 if such a statement cannot be made, a complete description of the situations where this does not occur. For the purposes of this statement:

(A) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; and

(B) If the gross premiums for certain age groups appear to be inconsistent with this requirement, the Commissioner may request a demonstration under (c) below based on a standard age distribution; and

4. A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the carrier except for reasonable differences attributable to benefits; or a comparison of the premium schedules for similar policy forms that are currently available from the carrier with an explanation of the differences

(c) The Commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for premium or benefit differences, relevant and credible data from other studies, or both. The Commissioner may also request an actuarial memorandum as specified at N.J.A.C. 11:4-34.1 7(c) except for the restrictions on interest rates in N.J.A.C. 11:4-34.1 7(c)5v and the certification required by N.J.A.C. 11:4-34.1 7(c)7.

1. In the event the Commissioner asks for the additional information described above, the 60-day time period referenced in (b) above shall include the period during which the carrier is preparing the requested information.

(d) A spousal and/or domestic partner discount is permitted in individual long-term care insurance provided:

1. The objective basis of the rate differential is included in an actuarial memorandum;

2. All conditions required to be satisfied in order to receive and retain the discount shall be disclosed and shall be related to the objective basis of the rate differential. When improved morbidity is the objective basis for a spousal discount, carriers shall extend the discount to all married individuals regardless of whether the insured's spouse is covered under a long-term care policy; and

3. When a husband and wife both apply for and are issued a long-term care policy offering a spousal discount, both individuals shall receive the discount.

N.J. Admin. Code § 11:4-34.8