NAC690A.165. Use of rates that differ from prima facie rates; documentation required; maximum rate after change of insurer.

     1. An insurer may file for approval by the Commissioner to use rates that are higher than the prima facie rates set forth in NAC 690A.105 to 690A.155, inclusive, if the rates are reasonable in relation to the benefits provided. If rates higher than the prima facie rates set forth in NAC 690A.105 to 690A.155, inclusive, are filed for approval, the filing must specify the account to which the rates apply. The rates must be:

     (a) Applied uniformly to all accounts of the insurer;

     (b) Applied on an equitable basis, as approved by the Commissioner, to any account of the insurer for which the experience has been less favorable than expected; or

     (c) Applied according to the insurer’s application for approval of rates filed with the Commissioner.

     2. A rate that is different from the prima facie rate may be in effect for a period not longer than the experience period used to establish the rate. An insurer may file for a new rate before the end of a rate period but may not file more than once during any 12-month period.

     3. Each filing for a rate that is higher than the prima facie rates set forth in NAC 690A.105 to 690A.155, inclusive, must be accompanied by sufficient documentation to support the rate, including, without limitation:

     (a) Experience of earned premiums, incurred losses and calculated loss ratios for the immediately preceding 3 years, or all available experience if less than 3 years, based on credible data obtained in this State;

     (b) Information supporting the development of the rate;

     (c) An analysis of credibility and use of collateral data, including, without limitation:

          (1) The experience of the insurer in another state for a similar policy of insurance;

          (2) Industry experience; and

          (3) Mortality or morbidity tables; and

     (d) Certification by a qualified actuary.

     4. If an account changes insurers, the rate approved for the account by the prior insurer is the maximum rate that may be used by the succeeding insurer for the remainder of the rate period approved for the prior insurer or until a new rate is approved for use on the account, whichever occurs earlier.

     5. An insurer may use a rate for an account that is lower than its filed rate without notifying the Commissioner unless the rate applies to credit life insurance. If the rates for credit life insurance are lower than the prima facie rates set forth in NAC 690A.105, an insurer may file for approval for lower rates in the manner prescribed in subsections 1 and 2.

     6. Rates for benefits that are substantially different than those set forth in NAC 690A.105 to 690A.155, inclusive, must be approved by the Commissioner. In determining whether a benefit or plan is substantially different pursuant to this subsection, the Commissioner will consider any information submitted by the insurer, including, without limitation:

     (a) The amount of the benefit in relation to the amount of the balance of the insured loan;

     (b) The use or nonuse of any exclusionary or retroactive waiting period;

     (c) The age of the debtor;

     (d) The amount of underwriting used by the insurer; and

     (e) Any coverage for or exclusion of causes of loss.

     (Added to NAC by Comm’r of Insurance by R014-06, 3-23-2007, eff. 4-1-2007; A by R145-08, 9-18-2008)