NAC687B.059. Insurer to submit disclosures regarding rate revisions and actuarial certification to Commissioner for approval.

     1. The provisions of this section do not apply to:

     (a) A long-term care insurance contract issued before October 1, 2008;

     (b) A policy of life insurance or a rider or endorsement to a policy of life insurance that contains accelerated benefits for long-term care; or

     (c) An annuity contract or a rider or endorsement to an annuity contract that contains benefits for long-term care.

     2. An insurer shall not offer for sale any form of long-term care insurance in this State unless, not later than 45 days before the offer for sale, the insurer submits to the Commissioner and the Commissioner approves:

     (a) A copy of the disclosures described in NAC 687B.0585; and

     (b) An actuarial certification that includes, without limitation:

          (1) 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 long-term care insurance contract with no anticipated future premium increases;

          (2) A statement that the long-term care insurance contract design and the coverage provided by the long-term care insurance contract have been reviewed and taken into consideration;

          (3) A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;

          (4) A complete description of the basis for contract reserves that are anticipated to be held under the long-term care insurance contract, which must include, without limitation:

               (I) Sufficient detail or sample calculations so as to provide a complete and accurate depiction of the amount of reserves to be held;

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

               (III) A statement that the net valuation premium for renewal years does not increase, except for attained-age ratings if such increases are authorized; and

               (IV) 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 any situations in which this does not occur;

          (5) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar long-term care insurance contract forms available from the insurer, except for reasonable differences attributable to benefits, or a comparison of the premium rate schedules for similar long-term care insurance contract forms that are currently available from the insurer with an explanation of the differences;

          (6) An actuarial demonstration that benefits are reasonable in relation to premiums, which must include:

               (I) Premium and claims experience on similar long-term care insurance contract forms adjusted for any premium or benefit differences;

               (II) Relevant and credible data from other studies; or

               (III) A combination of premium and claims experience on similar long-term care insurance contract forms and relevant and credible data from other studies; and

          (7) A statement that the actuarial certification was made by a qualified actuary.

     3. For the purposes of sub-subparagraph (IV) of subparagraph (4) of paragraph (b) of subsection 2, an aggregate distribution of anticipated issues may be used if the underlying gross premiums maintain a reasonably consistent relationship in accordance with generally accepted standards of actuarial practice. If the gross premiums for certain age groups appear to be inconsistent, the Commissioner may request a demonstration by the insurer that gross premiums maintain a reasonably consistent relationship based on a standard age distribution in accordance with generally accepted standards of actuarial practice.

     4. Any additional information requested by the Commissioner for the purposes of approval pursuant to subsection 2 is not subject to the requirement that the information be submitted not later than 45 days before the long-term care insurance is offered for sale.

     5. An initial filing for long-term care insurance must display the issue date clearly on the first page of the long-term care insurance contract or on the schedule of benefits page.

     (Added to NAC by Comm’r of Insurance by R121-07, 9-18-2008, eff. 10-1-2008; A by R028-10, 12-16-2010, eff. 10-1-2011)