48.20.022  <<  48.20.025 >>   48.20.028

Schedule of rates for individual health benefit plansLoss ratioDefinitions.

(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Claims" means the cost to the insurer of health care services, as defined in RCW 48.43.005, provided to a policyholder or paid to or on behalf of the policyholder in accordance with the terms of a health benefit plan, as defined in RCW 48.43.005. This includes capitation payments or other similar payments made to providers for the purpose of paying for health care services for a policyholder.
(b) "Claims reserves" means: (i) The liability for claims which have been reported but not paid; (ii) the liability for claims which have not been reported but which may reasonably be expected; (iii) active life reserves; and (iv) additional claims reserves whether for a specific liability purpose or not.
(c) "Declination rate" for an insurer means the percentage of the total number of applicants for individual health benefit plans received by that insurer in the aggregate in the applicable year which are not accepted for enrollment by that insurer based on the results of the standard health questionnaire administered pursuant to *RCW 48.43.018(2)(a).
(d) "Earned premiums" means premiums, as defined in RCW 48.43.005, plus any rate credits or recoupments less any refunds, for the applicable period, whether received before, during, or after the applicable period.
(e) "Incurred claims expense" means claims paid during the applicable period plus any increase, or less any decrease, in the claims reserves.
(f) "Loss ratio" means incurred claims expense as a percentage of earned premiums.
(g) "Reserves" means: (i) Active life reserves; and (ii) additional reserves whether for a specific liability purpose or not.
(2) An insurer must file supporting documentation of its method of determining the rates charged for its individual health benefit plans. At a minimum, the insurer must provide the following supporting documentation:
(a) A description of the insurer's rate-making methodology;
(b) An actuarially determined estimate of incurred claims which includes the experience data, assumptions, and justifications of the insurer's projection;
(c) The percentage of premium attributable in aggregate for nonclaims expenses used to determine the adjusted community rates charged; and
(d) A certification by a member of the American academy of actuaries, or other person approved by the commissioner, that the adjusted community rate charged can be reasonably expected to result in a loss ratio that meets or exceeds the loss ratio standard of seventy-four percent, minus the premium tax rate applicable to the insurer's individual health benefit plans under RCW 48.14.020.


*Reviser's note: RCW 48.43.018 was repealed by 2019 c 33 § 7.
Effective date2011 c 314 §§ 10-12: "Sections 10 through 12 of this act take effect January 1, 2012." [ 2011 c 314 § 19.]
Effective date2001 c 196: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 7, 2001]." [ 2001 c 196 § 14.]
Effective dateSeverability2000 c 79: See notes following RCW 48.04.010.
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