2006 Utah Code - 31A-22-807 — Filing and approval of forms -- Loss ratio standards.

     31A-22-807.   Filing and approval of forms -- Loss ratio standards.
     (1) All forms of policies, certificates of insurance, statements of insurance, endorsements, and riders intended for use in Utah are subject to Section 31A-21-201.
     (2) In addition to the grounds for disapproval under Subsection 31A-21-201(3), it is a ground for disapproval that the benefits provided in the form are not reasonable in relation to the premium charge.
     (3) In ascertaining whether the benefits are reasonable in relation to the premium charged, the commissioner shall consider the mortality cost of the life insurance and the morbidity cost of the accident and health insurance, and the reserves set up for the payment of claims unreported or in the process of settlement. The benefits are considered reasonable in relation to the premium charged if the premium rate charged develops or may reasonably be expected to develop a loss ratio of not less than 50% for credit life insurance and not less than 55% for credit accident and health insurance given the above costs.
     (4) Benefits are considered reasonable in relation to premium charged if the ratio of claims incurred to premium earned during the most recent four-year period at the rates in use produces a loss ratio that is equal to or exceeds the minimum loss ratio standard specified in Subsection (3).
     (5) If the minimum loss ratio test produces a loss ratio that exceeds Subsection (4)'s minimum loss ratio standard by five percentage points or more, the insurer may file for approval and use rates that are higher than prima facie rates, if it can be expected that the use of those higher rates will continue to produce a loss ratio for the accounts to which they are applied that will satisfy the minimum loss ratio test.
     (6) If the minimum loss ratio test produces a loss ratio that is lower than Subsection (4)'s minimum loss standard by five percentage points or more, the commissioner may require that the insurer file adjusted rates that can be expected to produce a loss ratio that will satisfy the minimum loss ratio test, or to submit reasons acceptable to the commissioner why the insurer should not be required to file these adjusted rates.

Amended by Chapter 116, 2001 General Session