14VAC5-170-220:1. APPENDIX A. MEDICARE SUPPLEMENT REFUND CALCULATION FORM.

APPENDIX A

8/05

APPENDIX A MEDICARE SUPPLEMENT REFUND CALCULATION FORM FOR CALENDAR YEAR _______
TYPE¹ ______________________________				SMSBP² ____________________________
FOR THE STATE OF ___________________________________________________________
Company Name _______________________________________________________________
NAIC Group Code ____________________				NAIC Company Code __________________
Address _____________________________________________________________________
Person Completing This Exhibit ___________________________________________________
Title _______________________________				Telephone Number ____________________
line					(a) Earned Premium³	(b) Incurred Claims⁴
1. Current Year's Experience
	a. Total (all policy years)
	b. Current year's issues⁵
	c. Net (for reporting purposes 1a - 1b)				____________	___________
2. Past Year's Experience (All Policy Years)					____________	___________
3. Total Experience (Net Current Year + Past Year's Experience)					____________	___________
4. Refund last year (Excluding Interest)
5. Previous Since Inception (Excluding Interest)					____________	___________
6. Refunds Since Inception (Excluding Interest)
7. Benchmark Ratio Since Inception (See Worksheet for Ratio 1)
8. Experienced Ratio Since Inception
	Total Actual Incurred Claims (line 3, col b) = Ratio 2
	Total Earned Prem. (line 3, col a) - Refunds Since Inception (line 6)
9. Life Years Exposed Since Inception ___________________________________________
	If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund.
10. Tolerance Permitted (obtained from credibility table) _____________________________
		Medicare Supplement Credibility Table Life Years Exposed
		Since Inception	Tolerance
		10,000 +	0.0%
		5,000 - 9,999	5.0%
		2,500 - 4,999	7.5%
		1,000 - 2,499	10.0%
		500 - 999	15.0%
		If less than 500, no credibility
11. Adjustment to Incurred Claims for Credibility _________________________
	Ratio 3 = Ratio 2 + Tolerance
	If Ratio 3 is more than Benchmark Ratio (Ratio 1), a refund or credit to premium is not required.
	If Ratio 3 is less than the Benchmark Ratio, then proceed.
12. Adjusted Incurred Claims = ___________________________________
	[Total Earned Premiums (line 3, col a) - Refunds Since Inception (line 6)] x Ratio 3 (line 11)
13. Refund = Total Earned Premiums (line 3, col a) - Refunds Since Inception (line 6) - Adjusted Incurred Claims (line 12)
	Benchmark Ratio (Ratio 1)__________________________
If the amount on the line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund and/or credit against premiums to be used must be attached to this form.
If the amount on line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund and/or credit against premiums to be used must be attached to this form.
¹Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
²SMSBP = Standardized Medicare Supplement Benefit Plan - Use P for prestandardized plans.
³Includes modal loadings and fees charged
⁴Excludes Active Life Reserves
⁵This is to be used as Issue Year Earned Premium for Year 1 of next year's Worksheet for Calculation of Benchmark Ratios

I certify that the above information and calculations are true and accurate to the best of my knowledge and belief.


	Signature

	Name - Please Type

	Title

	Date

8/05

APPENDIX A

REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR GROUP POLICIES FOR CALENDAR YEAR ________
TYPE⁽¹⁾ ____________________________	SMSBP⁽²⁾ _____________________________
FOR THE STATE OF ___________________________________________________________
Company Name _______________________________________________________________
NAIC Group Code ____________________	NAIC Company Code ____________________
Address _____________________________________________________________________
Person Completing This Exhibit ___________________________________________________
Title _______________________________	Telephone Number ______________________

(a)⁽³⁾	(b)⁽⁴⁾	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(o)⁽⁵⁾
Year	Earned Premium	Factor	(b) x (c)	Cumulative Loss Ratio	(d) x (e)	Factor	(b) x (g)	Cumulative Loss Ratio	(h) x (i)	Policy Year Loss Ratio
1		2.770		0.507		0.000		0.000		0.46
2		4.175		0.567		0.000		0.000		0.63
3		4.175		0.567		1.194		0.759		0.75
4		4.175		0.567		2.245		0.771		0.77
5		4.175		0.567		3.170		0.782		0.8
6		4.175		0.567		3.998		0.792		0.82
7		4.175		0.567		4.754		0.802		0.84
8		4.175		0.567		5.445		0.811		0.87
9		4.175		0.567		6.075		0.818		0.88
10		4.175		0.567		6.650		0.824		0.88
11		4.175		0.567		7.176		0.828		0.88
12		4.175		0.567		7.655		0.831		0.88
13		4.175		0.567		8.093		0.834		0.89
14		4.175		0.567		8.493		0.837		0.89
15+⁽⁶⁾		4.175		0.567		8.684		0.838		0.89
Total:			(k):___		(l):___		(m):__		(n):___

Benchmark Ratio Since Inception: (l + n)/(k + m):

⁽¹⁾: Individual, Group, Individual Medicare Select, or Group Medicare Select Only.

⁽²⁾: "SMSBP" = Standardized Medicare Supplement Benefit Plan - Use "P" for pre-standardized plans.

⁽³⁾: Year 1 is the current calendar year - 1 Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990, Year 2 is 1989, etc.)

⁽⁴⁾: For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.

⁽⁵⁾: These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.

⁽⁶⁾: To include the earned premium for all years prior to as well as the 15th year prior to the current year.

8/05

APPENDIX A

REPORTING FORM FOR THE CALCULATION OF BENCHMARK RATIO SINCE INCEPTION FOR INDIVIDUAL POLICIES FOR CALENDAR YEAR ___________
TYPE⁽¹⁾ ____________________________	SMSBP⁽²⁾ _____________________________
FOR THE STATE OF ___________________________________________________________
Company Name _______________________________________________________________
NAIC Group Code ____________________	NAIC Company Code ____________________
Address _____________________________________________________________________
Person Completing This Exhibit ___________________________________________________
Title _______________________________	Telephone Number ______________________

(a)⁽³⁾	(b)⁽⁴⁾	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(o)⁽⁵⁾
Year	Earned Premium	Factor	(b) x (c)	Cumulative Loss Ratio	(d) x (e)	Factor	(b) x (g)	Cumulative Loss Ratio	(h) x (i)	Policy Year Loss Ratio
1		2.770		0.442		0.000		0.000		0.4
2		4.175		0.493		0.000		0.000		0.55
3		4.175		0.493		1.194		0.659		0.65
4		4.175		0.493		2.245		0.669		0.67
5		4.175		0.493		3.170		0.678		0.69
6		4.175		0.493		3.998		0.686		0.71
7		4.175		0.493		4.754		0.695		0.73
8		4.175		0.493		5.445		0.702		0.75
9		4.175		0.493		6.075		0.708		0.76
10		4.175		0.493		6.650		0.713		0.76
11		4.175		0.493		7.176		0.717		0.76
12		4.175		0.493		7.655		0.720		0.77
13		4.175		0.493		8.093		0.723		0.77
14		4.175		0.493		8.493		0.725		0.77
15+⁽⁶⁾		4.175		0.493		8.684		0.725		0.77
Total:			(k):___		(l):___		(m):___		(n):___

Benchmark Ratio Since Inception: (l + n)/(k + m):

⁽¹⁾: Individual, Group, Individual Medicare Select, or Group Medicare Select Only.

⁽²⁾: "SMSBP" = Standardized Medicare Supplement Benefit Plan - Use "P" for pre-standardized plans.

⁽³⁾: Year 1 is the current calendar year - 1 Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990, Year 2 is 1989, etc.)

⁽⁴⁾: For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.

⁽⁶⁾: To include the earned premium for all years prior to as well as the 15th year prior to the current year.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation 35, Case No. INS920112, § 19, eff. July 30, 1992; amended, Virginia Register Volume 21, Issue 25, eff. August 15, 2005.

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