iii. Projections demonstrating compliance with par. (b).
Ins 3.455(9m)(a)3.b.b. Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse.
Ins 3.455(9m)(a)3.c.c. Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the insurer have been relied on by the actuary.
Ins 3.455(9m)(a)3.d.d. A statement that policy design, underwriting and claims adjudication practice have been taken into consideration.
Ins 3.455(9m)(a)3.e.e. If it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer shall file composite rates reflecting projections of new certificates.
Ins 3.455(9m)(a)4.4. A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner.
Ins 3.455(9m)(a)5.5. Sufficient information for review of the premium rate schedule increase by the commissioner.
Ins 3.455(9m)(a)6.6. For exceptional increases, the projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase. If the commissioner determines that offsets may exist, the insurer shall use appropriate net projected experience.
Ins 3.455(9m)(a)7.7. The commissioner may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase.
Ins 3.455(9m)(b)(b) All premium rate schedule increases shall be determined in accordance with all of the following requirements:
Ins 3.455(9m)(b)1.1. The commissioner, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.
Ins 3.455(9m)(b)2.2. Exceptional increases shall provide that 70% of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits.
Ins 3.455(9m)(b)3.3. 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:
Ins 3.455(9m)(b)3.a.a. The accumulated value of the initial earned premium times 58%.
Ins 3.455(9m)(b)3.b.b. Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis.
Ins 3.455(9m)(b)3.c.c. The present value of future projected initial earned premiums times 58%.
Ins 3.455(9m)(b)3.d.d. Eighty-five percent of the present value of future projected premiums not in this subd. 3. c. on an earned basis.
Ins 3.455(9m)(b)4.4. If a policy form has both exceptional and other increases, the values in subd. 3. b. and d. shall also include 70% for exceptional rate increase amount.
Ins 3.455(9m)(b)5.5. All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified in s. Ins 3.17. The actuary shall disclose, as part of the actuarial memorandum, the use of any appropriate averages.
Ins 3.455(9m)(c)(c) For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections as defined in par. (a) 3. a. annually for the next 3 years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than 3 years if actual results are not consistent with projected values from prior projections.
Ins 3.455(9m)(d)(d) If any premium rate in the revised premium rate schedule is greater than 200% of the comparable rate in the initial premium schedule, lifetime projections, as defined in par. (a) 3. a., shall be filed for review by the commissioner every 5 years following the end of the required period in par. (c).
Ins 3.455(9m)(e)(e) If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in par. (b), the commissioner may require the insurer to make premium rate schedule adjustments or take other measures to reduce the difference between the projected and actual experience. In determining whether the actual experience adequately matches the projected experience, consideration should be given to par. (a) 3. e., if applicable.
Ins 3.455(9m)(f)(f) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file all of the following:
Ins 3.455(9m)(f)1.1. A plan, subject to commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the commissioner may impose the condition in par. (g).
Ins 3.455(9m)(f)2.2. The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to par. (b) had the greater of the original anticipated lifetime loss ratio or 58% been used in the calculations described in par. (b) 3. a. and c.
Ins 3.455(9m)(g)(g)
Ins 3.455(9m)(g)1.1. For a rate increase filing that meets the following criteria, the commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated when all of the following conditions occur:
Ins 3.455(9m)(g)1.a.a. The rate increase is not the first rate increase requested for the specific policy form or forms.
Ins 3.455(9m)(g)1.b.b. The rate increase is not an exceptional increase.