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054.00.27 APPENDIX A. MEDICARE SUPPLEMENT REFUND CALCULATION FORM

AR ADC 054.00.27 APPENDIX AArkansas Administrative CodeEffective: February 1, 2018

West's Arkansas Administrative Code
Title 054. Insurance Department
Division 00.
Rule 27. Minimum Standards for Medicare Supplement Policies
Effective: February 1, 2018
Ark. Admin. Code 054.00.27 APPENDIX A
054.00.27 APPENDIX A. MEDICARE SUPPLEMENT REFUND CALCULATION FORM
Currentness
MEDICARE SUPPLEMENT REFUND CALCULATION FORM FOR CALENDAR YEAR_______________
TYPE 1___________________________________ SMSBP 2___________________________________
For the State of ______________________________ Company Name ______________________________
NAIC Group Code _________________________ NAIC Company Code _________________________
Address ___________________________________ Person Completing Exhibit ____________________
Title ________________________________________ Telephone Number _________________________
Line
(a)
(b)
Earned Premium 3
Incurred Claims 4
1.
Current Year's Experience
a. Total (all policy years)
b. Current year's issues 5
c. Net (for reporting purposes = 1a--1b
2.
Past Years' Experience (all policy years)
3.
Total Experience
(Net Current Year + Past Year)
4.
Refunds Last Year (Excluding Interest)
5.
Previous Since Inception (Excluding Interest)
6.
Refunds Since Inception (Excluding Interest)
7.
Benchmark Ratio Since Inception (see worksheet for Ratio 1)
8.
Experienced Ratio Since Inception (Ratio 2)
Total Actual Incurred Claims (line 3, col. b)
Total Earned Prem. (line 3, col. a)--Refunds Since Inception (line 6)
9.
Life Years Exposed Since Inception
If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund.
10.
Tolerance Permitted (obtained from credibility table)
1  Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2  “SMSBP” = Standardized Medicare Supplement Benefit Plan -- Use “P” for pre-standardized plans.
3  Includes Modal Loadings and Fees Charged
4  Excludes Active Life Reserves
5  This is to be used as “Issue Year Earned Premium” for Year 1 of next year's “Worksheet for Calculation of Benchmark Ratios”
Medicare Supplement Credibility Table
Life Years Exposed
Since Inception
Tolerance
10,000 +
0.0%
5,000 -9,999
5.0%
2,500 -4,999
7.5%
1,000 -2,499
10.0%
500 -- 999
15.0%
If less than 500, no credibility.
MEDICARE SUPPLEMENT REFUND CALCULATION FORM FOR CALENDAR YEAR _________________________
TYPE1___________________________________ SMSBP2___________________________________
For the State of ______________________________ Company Name ______________________________
NAIC Group Code _________________________ NAIC Company Code _________________________
Address ___________________________________ Person Completing Exhibit ____________________
Title ________________________________________ Telephone Number _________________________
11.
Adjustment to Incurred Claims for Credibility
Ratio 3 = Ratio 2 + Tolerance
If Ratio 3 is more than Benchmark Ratio (Ratio 1), a refund or credit to premium is not required.
If Ratio 3 is less than the Benchmark Ratio, then proceed.
12.
Adjusted Incurred Claims
[Total Earned Premiums (line 3, col. a)--Refunds Since Inception (line 6)] x Ratio 3 (line 11)
13.
Refund =
Total Earned Premiums (line 3, col. a)--Refunds Since Inception (line 6)--[Adjusted Incurred Claims (line 12)/Benchmark Ratio (Ratio 1)]
If the amount on line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund or credit against premiums to be used must be attached to this form.
I certify that the above information and calculations are true and accurate to the best of my knowledge and belief.
___________________________________
Signature
___________________________________
Name -- Please Type
___________________________________
Title -- Please Type
___________________________________
Date
REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES FOR CALENDAR YEAR _________________________
TYPE 1___________________________________ SMSBP 2___________________________________
For the State of ___________________________________ Company Name _________________________
NAIC Group Code ______________________________ NAIC Company Code ____________________
Address ________________________________________ Person Completing Exhibit _______________
Title _____________________________________________ Telephone Number ____________________
(a) 3
(b) 4
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(o) 5
Year
Earned Premium
Factor
(b)x(c)
Cumulative Loss Ratio
(d)x(e)
Factor
(b)x(g)
Cumulative Loss Ratio
(h)x(i)
Policy Year Loss Ratio
1
2.770
0.507
0.000
0.000
0.46
2
4.175
0.567
0.000
0.000
0.63
3
4.175
0.567
1.194
0.759
0.75
4
4.175
0.567
2.245
0.771
0.77
5
4.175
0.567
3.170
0.782
0.80
6
4.175
0.567
3.998
0.792
0.82
7
4.175
0.567
4.754
0.802
0.84
8
4.175
0.567
5.445
0.811
0.87
9
4.175
0.567
6.075
0.818
0.88
10
4.175
0.567
6.650
0.824
0.88
11
4.175
0.567
7.176
0.828
0.88
12
4.175
0.567
7.655
0.831
0.88
13
4.175
0.567
8.093
0.834
0.89
14
4.175
0.567
8.493
0.837
0.89
15+ 6
4.175
0.567
8.684
0.838
0.89
Total:
(k):
(l):
(m):
(n):
Benchmark Ratio Since Inception: (l + n)/(k + m): __________
1  Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2  “SMSBP” = Standardized Medicare Supplement Benefit Plan -- Use “P” for pre-standardized plans
3  Year 1 is the current calendar year -- 1. Year 2 is the current calendar year -- 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4  For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5  These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6  To include the earned premium for all years prior to as well as the 15th year prior to the current year.
REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR INDIVIDUAL POLICIES FOR CALENDAR YEAR _________________________
TYPE 1___________________________________ SMSBP 2___________________________________
For the State of ______________________________ Company Name _________________________
NAIC Group Code ______________________________ NAIC Company Code ____________________
Address ________________________________________ Person Completing Exhibit _______________
Title _____________________________________________ Telephone Number ____________________
(a) 3
(b) 4
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(o) 5
Year
Earned Premium
Factor
(b)x(c)
Cumulative Loss Ratio
(d)x(e)
Factor
(b)x(g)
Cumulative Loss Ratio
(h)x(i)
Policy Year Loss Ratio
1
2.770
0.442
0.000
0.000
0.40
2
4.175
0.493
0.000
0.000
0.55
3
4.175
0.493
1.194
0.659
0.65
4
4.175
0.493
2.245
0.669
0.67
5
4.175
0.493
3.170
0.678
0.69
6
4.175
0.493
3.998
0.686
0.71
7
4.175
0.493
4.754
0.695
0.73
8
4.175
0.493
5.445
0.702
0.75
9
4.175
0.493
6.075
0.708
0.76
10
4.175
0.493
6.650
0.713
0.76
11
4.175
0.493
7.176
0.717
0.76
12
4.175
0.493
7.655
0.720
0.77
13
4.175
0.493
8.093
0.723
0.77
14
4.175
0.493
8.493
0.725
0.77
15+ 6
4.175
0.493
8.684
0.725
0.77
Total:
(k):
(l):
(m):
(n):
Benchmark Ratio Since Inception: (l + n)/(k + m): __________
1  Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2  “SMSBP” = Standardized Medicare Supplement Benefit Plan -- Use “P” for pre-standardized plans
3  Year 1 is the current calendar year -- 1. Year 2 is the current calendar year -- 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4  For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5  These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6  To include the earned premium for all years prior to as well as the 15th year prior to the current year.

Credits

Amended July 1, 2009; Feb. 1, 2018.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 054.00.27 APPENDIX A, AR ADC 054.00.27 APPENDIX A
End of Document