1. (a) Carriers shall estimate the average annual premium, both before and after the revision, 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 the monthly mode, unless such mode is not available, and shall consider fractional premium loads in the average annual premium calculation. If the monthly mode is not available, carriers shall assume the mode selected, or anticipated to be selected, by the greatest proportion of policyholders.

3. (c) If the policy forms constitute an open block, that is, they are still being actively marketed, then benefits shall be deemed reasonable in relation to premiums, provided the revised rates meet the following standards derived from the previously approved rate filing for the form or forms:

   1. (1) The anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage shall be at least as great as the anticipated loss ratio calculated over the entire future period using the durational loss ratios from the previously approved rate filing; and

   2. (2) The anticipated loss ratio shall be at least as great as the anticipated loss ratio from the previously approved filing where the anticipated loss ratio shall be computed by dividing:

      1. a. The sum of the accumulated benefits from the original effective date of the form to the effective date of the revision, and the present value of future benefits; and
      2. b. The sum of the accumulated premiums from the original effective date of the form to the effective date of the revision, and the present value of future premiums.
4. (d) If the policy forms constitute a closed block, that is, they are not still being actively marketed, then the loss ratios in Ins 4106.05 shall be adjusted so that no additional revenue is generated to support the administration of these policy forms unless the demonstration includes supporting documentation demonstrating that the cost to administer this business has increased.
5. (e) Carriers that fail to review their experience and file rate revisions at least annually shall not be permitted to increase rates beyond what would be needed to provide for just one year of experience deviations. Carriers shall not be permitted to rate revisions in future years to recoup rate revisions disallowed by this subsection.
6. (f) Carriers shall not be permitted rate revisions to recoup prior year losses.
7. (g) Carriers under receivership or some other similar department oversight shall be exempt from the restrictions in (e) and (f) above.

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