Section 2026.50  Submission of Rate Filing Justification

a)         If any product is subject to a rate increase, a health insurance issuer must submit a Rate Filing Justification for all products in the single risk pool, including new or discontinuing products, to the Director on a form and in a manner prescribed by the Secretary in 45 CFR 154.215(a).

b)         The Rate Filing Justification must consist of the following Parts (as required in 45 CFR 154.205(b)):

1)         Unified rate review template (Part I), as described in subsection (d).

2)         Written description justifying the rate increase (Part II), as described in subsection (e).

3)         Rating filing documentation (Part III), as described in subsection (f).

c)         A health insurance issuer must complete and submit Parts I and III of the Rate Filing Justification described in subsections (b)(1) and (b)(3) to the Director as required by 45 CFR 154.215(c). If a rate increase is subject to review, the health insurance issuer must also complete and submit to the Director Part II of the Rate Filing Justification described in subsection (b)(2).

d)         Content of unified rate review template (Part I): The unified rate review template must include the following, as determined appropriate by the Director and in accordance with 45 CFR 154.215(d):

1)         Historical and projected claims experience.

2)         Trend projections related to utilization, and service or unit cost.

3)         Any claims assumptions related to benefit changes.

4)         Allocation of the overall rate increase to claims and non-claims costs.

5)         Per enrollee per month allocation of current and projected premium.

6)         Three year history of rate increases for the product associated with the rate increase.

e)         Content of written description justifying the rate increase (Part II): The written description of the rate increase must include a simple and brief narrative describing the data and assumptions that were used to develop the rate increase and must include the following as required by 45 CFR 154.215(e):

1)         Explanation of the most significant factors causing the rate increase, including a brief description of the relevant claims and non-claims expense increases reported in the rate increase summary; and

2)         Brief description of the overall experience of the policy, including historical and projected expenses, and loss ratios.

f)         Content of rate filing documentation (Part III) as required by 45 CFR 154.215(f): The rate filing documentation must include an actuarial memorandum that contains the reasoning and assumptions supporting the data contained in Part I of the Rate Filing Justification. Parts I and III must be sufficient to conduct an examination satisfying the requirements of 45 CFR 154.301(a)(3) and (4) and to determine whether the rate increase is an unreasonable increase.

g)         If the level of detail provided by the issuer for the information under subsections (d) and (f) does not provide sufficient basis for the Director to determine whether the rate increase is an unreasonable rate increase, the Director will request the additional information necessary to make a determination, as allowed by 45 CFR 154.215(g).