<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><title></title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0 { margin-top: 0; margin-bottom: 0; margin-left: 0; margin-right: 0; text-indent: 0.00in; text-align: justify; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; } span.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000000 { color: #0000FF; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000001 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000003 { color: #0000FF; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:21:64"><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000000">20:06:21:64</span></a><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000001">.  Premium rate schedule increase requirements.</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> All premium rate schedule increases shall be determined in accordance with the following requirements:</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    (1)  Exceptional increases shall provide that 70</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">%</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    (2)  Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">        (a)  The accumulated value of the initial earned premium times 58</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">%</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">;</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">        (b)  </span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">85%</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> of the accumulated value of prior premium rate schedule increases on an earned basis;</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">        (c)  The present value of future projected initial earned premiums times 58</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">%</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">; and</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">        (d)  </span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">85%</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> of the present value of future projected premiums not in subdivision (2)(c) of this section on an earned basis;</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    (3)  In the event that a policy form has both exceptional and other increases, the values in subdivision</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">s</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> (2)(b) and (d) of this section will also include 70</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">%</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> for exceptional rate increase amounts; and</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    (4)  All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified in SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-71"><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000003">58-26-71</span></a><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> and </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-75"><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000003">58-26-75</span></a><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">;</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    (5)  After December 31, 2018, expected claims shall be calculated based on the original filing assumptions assumed until new assumptions are filed as part of a rate increase. New assumptions shall be used for all periods beyond each requested effective date of a rate increase. Expected claims are calculated for each calendar year based on the in-force at the beginning of the calendar year. Expected claims shall include margins for moderately adverse experience, either amounts included in the claims that were used to determine the lifetime loss ration consistent with the original filing or as modified in any rate increase filing</span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">.</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    </span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000001">Source:</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> 28 SDR 157, effective May 19, 2002; 44 SDR 184, effective June 25, 2018.</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    </span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000001">General Authority:</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-17B-4"><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000003">58-17B-4</span></a><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">.</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">    </span><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000001">Law Implemented:</span><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-17B-4"><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0-000003">58-17B-4</span></a><span class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75C0">.</span></p><p dir="ltr" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75P0"><span xml:space="preserve" class="s3a7d0abf-9c59-4dff-8b68-c3bff02cec75000002"> </span></p></div></body></html>