1. (a) Carriers shall estimate the average annual premium per policy form based on an anticipated distribution of business by all significant criteria having a price difference, including:

   1. (1) Age;
   2. (2) Coverage amount;
   3. (3) Dependent status; and
   4. (4) Rider frequency.
2. (b) Carriers shall assume all policyholders elect a monthly mode. The average monthly premium, for purposes of this section, shall be based on the rates being filed.

3. (c) With respect to new forms, benefits shall be deemed reasonable in relation to the proposed premiums provided the anticipated loss ratio is at least as great as:

   1. (1) Sixty percent for optionally renewable;
   2. (2) Fifty-five percent for conditionally renewable;
   3. (3) Fifty percent for guaranteed renewable;
   4. (4) Forty-five percent for non-cancelable; and
   5. (5) Sixty percent for short term, limited duration medical expense coverage.
4. (d) For policy forms that provide automatic indexing of benefits in relation to some base that is not subject to control by either the carrier or the insured, the carrier may file rates on a basis that provides for automatic adjustment of premium rates on an actuarial basis, appropriate in relation to the automatic adjustment in the benefits.
5. (e) If a carrier provides a quote to a policyholder or prospective policyholder, where an alternative design exists with premium savings that are greater than the anticipated out of pocket expenses, the carrier shall disclose the availability of this policy alternative. Deductibles, co-insurance, and elimination periods are examples of benefit designs that shall be considered in calculating this difference. Variations in co-pays shall not be considered due to uncertainty with regard to utilization.

Source. #9690, eff 4-9-10; ss by #9938, eff 6-10-11; ss by #12799, eff 6-10-19