Disability income actuarial memo requirements
The actuarial memo must be prepared and signed by a qualified actuary and include, but not limited to, the following:
Policy and certificate form numbers,
A brief description of the:
- Type of policy,
- Renew ability,
- General marketing method, and
- The issue age limits.
Target groups and group sizes, if applicable,
A description of the purpose(s) of the memo,
A description of how rates were determined for both new and renewal business, including the general description and source of each assumption used. Assumptions should contain, but not be limited to:
- Voluntary lapse by duration if calculating period is longer than one year
- Morbidity rates and expected claim costs
- Length of calculating period
- Anticipated loss ratio by duration, if calculating period is longer than one year
- If applicable, mortality rates/tables, and underwriting and selection wear-off factors
Overall anticipated loss ratio for the policy,
Minimum anticipated loss ratio requirements,
A demonstration illustrating the development of anticipated loss ratio by duration for the entire calculating period. (For example: For long-term care, it is recommended that carriers furnish the demonstration by issue-age and on a composite basis with the expected distribution of policies.)
Expense assumptions by duration if calculating period is longer than one year, including the following:
- Fixed and variable expenses,
- Schedule of commission,
- Premium tax,
- Risk and contingency, and
Estimated average premium for Washington state and nationwide per policy,
Appropriate rate formulas and rate factors for renewal policies if the manual rates are not applicable.
Samples of rate calculation for specified policyholders.
A certification of the memo signed by a qualified actuary.
A statement as to the status of this rate filing in the company's home state.