20:06:13:22. Annual filing of premium rates. An issuer of Medicare supplement policies and certificates issued either before or after the effective date of this rule must file its rates, rating schedule, and supporting documentation annually, including ratios of incurred losses to earned premiums by policy duration, for approval by the director in accordance with SDCL 58-17A-4, 58-17-4.1, 58-17-4.2, ARSD chapter 20:06:22, and this chapter. The supporting documentation must also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the applicable loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third-year loss ratio which is greater than or equal to the applicable percentage must be demonstrated for policies or certificates in force less than 3 years.
Source: 8 SDR 174, effective July 1, 1982; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 15 SDR 143, effective March 29, 1989; 18 SDR 225, effective July 17, 1992.
General Authority: SDCL 58-4-1, 58-17A-2.
Law Implemented: SDCL 58-17A-2.
20:06:13:22.01. Filing of premium adjustments after Medicare benefit change. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, each issuer of Medicare supplement policies or certificates in this state shall file the following with the director, in accordance with the applicable provisions of SDCL 58-17A-4, 58-17-4.1, 58-17-4.2, ARSD chapter 20:06:22, and this chapter:
(1) The premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. Supporting documents necessary to justify the adjustment must accompany the filing.
An issuer shall make the premium adjustments necessary to produce an expected loss ratio under the policy or certificate that will conform with minimum loss ratio standards for Medicare supplement policies in § 20:06:13:21 and which are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates. No premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described in this section may be made to a policy at any time other than upon its renewal date or anniversary date.
If an issuer fails to make premium adjustments acceptable to the director, the director may order premium adjustments, refunds, or premium credits considered necessary to achieve the loss ratio required by this section;
(2) Any riders, endorsements, or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements, or policy forms must provide a clear description of the Medicare supplement benefits provided by the policy or certificate.
Source: 15 SDR 143, effective March 29, 1989; 16 SDR 174, effective May 2, 1990; 18 SDR 225, effective July 17, 1992.
General Authority: SDCL 58-4-1, 58-17A-2.
Law Implemented: SDCL 58-17A-2.
20:06:13:22.02. Public hearings. The director may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued either before or after the effective date of this rule if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notices of the hearing shall be furnished by the director in compliance with SDCL 1-26-16.
Source: 18 SDR 225, effective July 17, 1992.
General Authority: SDCL 58-4-1, 58-17A-2.
Law Implemented: SDCL 58-17A-2.
20:06:13:22.03. Filing and approval of policies and certificates and of premium rates required. An issuer may not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the director in accordance with SDCL 58-17A-4, 58-17-4.1, 58-17-4.2, ARSD chapter 20:06:22 and this chapter.
An issuer may not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and approved by the director in accordance with the applicable provisions of SDCL 58-17A-4, 58-17-4.1, 58-17-4.2, ARSD chapter 20:06:22, and this chapter.
An issuer shall not present for filing or approval a rate structure for its Medicare supplement policies or certificates issued after January 1, 2006, based upon a structure or methodology with any groupings of attained ages greater than one year. The ratio between rates for successive ages shall increase smoothly as age increases.
Source: 18 SDR 225, effective July 17, 1992; 31 SDR 214, effective July 6, 2005.
20:06:13:22.04. One policy or certificate form allowed -- Exceptions. An issuer may not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan except as provided in this section.
An issuer may offer, with the approval of the director, up to four additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:
(1) The inclusion of new or innovative benefits;
(2) The addition of either direct response or agent marketing methods;
(3) The addition of either guaranteed issue or underwritten coverage; and
(4) The offering of coverage to individuals eligible for Medicare by reasons of disability.
Source: 18 SDR 225, effective July 17, 1992; 19 SDR 160, effective April 27, 1993.
20:06:13:22.05. Discontinuance of availability. An issuer shall continue to make available for purchase any policy form or certificate form issued after the effective date of this rule that has been approved by the director, unless the issuer notifies the director of its discontinuance in accordance with this section. A policy form or certificate form is not considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.
An issuer may discontinue the availability of a policy form or certificate form if the issuer provides notice of its decision to do so to the director in writing at least 30 days prior to discontinuance. After receipt of the notice by the director, the issuer may no longer offer for sale the policy form or certificate form in this state.
An issuer that discontinues the availability of a policy form or certificate form pursuant to the notice procedure in this section may not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for five years after the issuer provides notice to the director of the discontinuance. The period of discontinuance may be reduced by the director at the director's discretion.
The sale or other transfer of Medicare supplement business to another issuer is considered a discontinuance for the purposes of this section.
A change in the rating structure or methodology is considered a discontinuance under the first paragraph of this section unless the issuer provides an actuarial memorandum describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates; and the issuer does not subsequently put into effect a change of rates or rating factors that would cause a change in the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum. The director may approve a change to the differential which is in the public interest.
Source: 18 SDR 225, effective July 17, 1992.
20:06:13:22.06. Combination of experience for calculation of refund or credit. The experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in § 20:06:13:21.01. Forms assumed under an assumption reinsurance agreement may not be combined with the experience of other forms for purposes of the refund or credit calculation.
Source: 18 SDR 225, effective July 17, 1992.
20:06:13:22.07. New or innovative benefits -- Policy or
certificate form allowed -- Exceptions -- Issued after May 31, 2010. An
issuer may, with the prior approval of the director, offer policies or
certificates with new or innovative benefits in addition to the standardized
benefits provided in a policy or certificate that otherwise complies with the
applicable standards. Such new or innovative benefits shall include only
benefits that are applicable to Medicare supplement insurance, are new or
innovative, are not otherwise available, and are cost-effective. Approval of
new or innovative benefits shall not adversely impact the goal of Medicare
supplement simplification. New or innovative benefits shall not include an
outpatient prescription drug benefit. New or innovative benefits shall not be
used to change or reduce benefits, including a change of any cost-sharing
provision, in any standardized plan.
Source:
35 SDR 183, effective February 2, 2009.
General
Authority: SDCL 58-4-1, 58-17A-2, 58-17A-5.
Law
Implemented: SDCL 58-17A-2, 58-17A-5.
