NAC687B.235. Calculation and payment of refunds and credits.

     1. An issuer shall collect and file with the Commissioner by May 31 of each year the data contained in the reporting form prescribed by the Commissioner for each type of policy in a standardized benefit plan to supplement Medicare. The appropriate reporting form may be obtained from the Office of the Commissioner.

     2. If, on the basis of the experience reported, the loss ratio since inception, commonly referred to as ratio 1, exceeds the loss ratio adjusted for experience incurred since inception, commonly referred to as ratio 3, a refund or credit must be calculated. The refund must be calculated on a statewide basis for each type of policy in a standardized benefit plan to supplement Medicare. To calculate the refund or credit, experience incurred for:

     (a) Policies to supplement Medicare issued within the reporting year must be excluded.

     (b) All policy forms and certificate forms of the same type in a standardized benefit plan to supplement Medicare must be combined.

     (c) A policy form or certificate form assumed pursuant to an agreement to assume reinsurance must not be combined with the experience incurred for other forms.

     3. An issuer shall pay a refund or credit to the policyholder or certificate holder if the loss ratio since inception exceeds the loss ratio adjusted for experience incurred since inception and the amount to be refunded or credited is not de minimis.

     4. An issuer shall calculate the refund or credit due on policies or certificates issued before July 16, 1992, on an individual basis, by using the combined loss ratios of all individual policies, including all group policies subject to an individual loss ratio standard when issued and all other group policies combined for experience after May 13, 1996.

     5. A refund or credit must 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 may the rate be less than the average rate of interest for 13-week United States treasury notes.

     6. Any refund or credit made against premiums due must be made by September 30th following the year of experience upon which the refund or credit is based.

     7. The provisions of this section apply to any policy to supplement Medicare or certificate delivered or issued for delivery in this State, regardless of the date of its delivery or issuance.

     (Added to NAC by Comm’r of Insurance, 2-21-89, eff. 3-15-89; A 11-16-90; 7-16-92, eff. 7-30-92; 8-2-94; 5-13-96)