Section R20-6-2302. Disclosure of Preliminary Justification

A.      Preliminary Justification. For each threshold rate increase for each affected product, a health insurer shall submit to the Department and to CMS, on a form and in the manner pre- scribed by the Secretary in 45 CFR 154.215, a preliminary jus- tification that contains all of the following:

1.        Preliminary Justification Part I. A summary of the con- tent of the threshold rate increase that includes:

a.         Historical and projected claims experience;

b.        Trend projections related to utilization, and service or unit cost;

c.         Any claims assumptions related to benefit changes;

d.        Allocation of the overall rate increase to claims and non-claims costs;

e.         Per enrollee per month allocation of current and pro- jected premium; and

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

2.        Preliminary Justification Part II. A written description that justifies the rate increase and that contains a simple and brief narrative describing the data and assumptions the health insurer used to develop the rate increase, and includes the following:

a.         An explanation of the most significant factors caus- ing the rate increase, including a brief description of the relevant claims and non-claims expense increases reported in subsection (A)(1); and

b.        A brief description of the overall experience of the policy, including historical and projected expenses, and loss ratios.

B.       A health insurer may submit a single, combined preliminary justification that contains all the information in subsections (A)(1) and (2) for threshold rate increases that affect more than one product if the health insurer has aggregated the claims experience of all products to calculate the rate increases and the rate increases are the same for all products.

Historical Note

New Section made by final rulemaking at 18 A.A.R.

2721, effective October 3, 2012 (Supp. 12-4).