<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns="http://www.w3.org/TR/REC-html40"> <head> <title>Rule 20:06:22:02 Anticipated loss ratio requirements -- Exception.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:22:02"> <META NAME="Description" Content="Administrative Rules 20:06:22:02 Anticipated loss ratio requirements -- Exception."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=ProgId content=Word.Document> <meta name=Generator content="Microsoft Word 10"> <meta name=Originator content="Microsoft Word 10"> <link rel=File-List href="2006220000200d_files/filelist.xml"> <!--[if gte mso 9]><xml> <o:DocumentProperties> <o:Author>lrpr14533</o:Author> <o:LastAuthor>lrpr14296</o:LastAuthor> <o:Revision>2</o:Revision> <o:TotalTime>1</o:TotalTime> <o:Created>2011-02-02T17:20:00Z</o:Created> <o:LastSaved>2011-02-02T17:20:00Z</o:LastSaved> <o:Pages>1</o:Pages> <o:Words>314</o:Words> <o:Characters>1795</o:Characters> <o:Company>State of South Dakota</o:Company> <o:Lines>14</o:Lines> <o:Paragraphs>4</o:Paragraphs> <o:CharactersWithSpaces>2105</o:CharactersWithSpaces> <o:Version>10.6867</o:Version> </o:DocumentProperties> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:PunctuationKerning/> <w:DrawingGridHorizontalSpacing>5.5 pt</w:DrawingGridHorizontalSpacing> <w:DisplayHorizontalDrawingGridEvery>2</w:DisplayHorizontalDrawingGridEvery> <w:DisplayVerticalDrawingGridEvery>2</w:DisplayVerticalDrawingGridEvery> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> </w:WordDocument> </xml><![endif]--> <style> <!-- /* Font Definitions */ @font-face {font-family:Times; 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mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:Calibri;} </style> <![endif]--><!--[if gte mso 9]><xml> <o:shapedefaults v:ext="edit" spidmax="2050"/> </xml><![endif]--><!--[if gte mso 9]><xml> <o:shapelayout v:ext="edit"> <o:idmap v:ext="edit" data="1"/> </o:shapelayout></xml><![endif]--> </head> <body lang=EN-US style='tab-interval:.5in'> <div class=Section1> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b style='mso-bidi-font-weight:normal'>20:06:22:02.&nbsp;&nbsp;Anticipated loss ratio requirements -- Exception.</b> The anticipated loss ratio for a policy form of excepted benefits on which the average annual premium is expected to be $250 or more must be equal to or greater than the applicable percentage shown in the following table:<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b style='mso-bidi-font-weight:normal'>Type of Coverage<span style='mso-tab-count:11'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Type of Renewal Clause<o:p></o:p></b></span></p> <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 style='border-collapse:collapse;mso-padding-alt:0in 5.4pt 0in 5.4pt'> <tr style='mso-yfti-irow:0;mso-yfti-lastrow:yes'> <td width=427 valign=top style='width:4.45in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> </td> <td width=54 valign=top style='width:40.45pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>OR<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:38.85pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>CR<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:35.2pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>GR<o:p></o:p></span></p> </td> <td width=45 valign=top style='width:33.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>NC<o:p></o:p></span></p> </td> </tr> </table> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 style='border-collapse:collapse;mso-padding-alt:0in 5.4pt 0in 5.4pt'> <tr style='mso-yfti-irow:0'> <td width=38 valign=top style='width:.4in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> </td> <td width=389 valign=top style='width:4.05in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>Medical Expense<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>70%<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>65%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>65%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>60%<o:p></o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:1'> <td width=38 valign=top style='width:.4in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> </td> <td width=389 valign=top style='width:4.05in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>Other<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>70%<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>65%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>60%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>55%<o:p></o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:2;mso-yfti-lastrow:yes'> <td width=38 valign=top style='width:.4in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> </td> <td width=389 valign=top style='width:4.05in;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>Disability Income<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>60%<o:p></o:p></span></p> </td> <td width=52 valign=top style='width:39.3pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>55%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>50%<o:p></o:p></span></p> </td> <td width=47 valign=top style='width:34.95pt;padding:0in 5.4pt 0in 5.4pt'> <p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt; font-family:"Times New Roman"'>45%<o:p></o:p></span></p> </td> </tr> </table> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Special consideration may be given to disability policies in determining the timeframe in which the anticipated loss ratio is to be achieved.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>If the expected average annual premium for a policy form is $150, but less than $250, subtract 5 percentage points from the numbers in the table in this section. If the expected average annual premium is less than $150, subtract 10 percentage points.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>When justified by the insurer, the director may give special consideration and may permit anticipated loss ratios lower than those indicated in this section based on the type of coverage or a lower average annual premium, or both.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Nothing in this section applies to credit life, credit health, or credit unemployment insurance policies.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>The loss ratio percentages required by this section apply to all policies issued after December 18, 1995, regardless of the date of approval of the policy form and accompanying rates.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>For individual and small group policies other than excepted benefits, the minimum loss ratio is 80%. The minimum loss ratio for large group policies other than excepted benefits is 85%. In calculating the loss ratio for policies other than excepted benefits, the earned premium may be reduced by federal and state taxes and incurred claims may be increased by expenses to improve health care quality.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b style='mso-bidi-font-weight:normal'>Source:</b> 16 SDR 208, effective June 3, 1990; 20 SDR 60, effective November 3, 1993; 22 SDR 97, effective December 18, 1995; 24 SDR 86, effective December 31, 1997; 37 SDR 131, effective January 11, 2011.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b style='mso-bidi-font-weight:normal'>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-4-1">58-4-1</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-17-4.2">58-17-4.2</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-17-64">58-17-64</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-17-87">58-17-87</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-63">58-18-63</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-79">58-18-79.</A><o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><span style='mso-tab-count: 1'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b style='mso-bidi-font-weight:normal'>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-17-4.2">58-17-4.2</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-17-64">58-17-64.</A><o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify;tab-stops:.4in .6in .9in 1.1in 1.4in 1.6in 1.9in 2.1in 2.4in 2.6in 2.9in 3.1in 3.4in 3.6in 3.9in 4.1in'><span style='font-size:12.0pt;font-family:"Times New Roman"'><o:p>&nbsp;</o:p></span></p> </div> </body> </html>