1. (a) This section shall apply to all long-term care insurance policies or certificates except those covered under § § 89a.109 and 89a.118 (relating to initial filing requirements; and premium rate schedule increases).

2. (b) Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums provided the expected loss ratio is at least 60%, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, due consideration shall be given to all relevant factors, including the following:

   1. (1) Statistical credibility of incurred claims experience and earned premiums.
   2. (2) The period for which rates are computed to provide coverage.
   3. (3) Experienced and projected trends.
   4. (4) Concentration of experience within early policy duration.
   5. (5) Expected claim fluctuation.
   6. (6) Experience refunds, adjustments or dividends.
   7. (7) Renewability features.
   8. (8) All appropriate expense factors.
   9. (9) Interest.
   10. (10) Experimental nature of the coverage.
   11. (11) Policy reserves.
   12. (12) Mix of business by risk classification.
   13. (13) Product features such as long elimination periods, high deductibles and high maximum limits.

Cross References

This section cited in 31 Pa. Code § 89a.123 (relating to nonforfeiture benefit requirement).