Rule 20:06:13:21.01 Refund or credit calculation.
20:06:13:21.01. Refund or credit calculation. An issuer
shall collect and file with the director by May 31 of each year the data
required on the forms in Appendix A at the end of this chapter for each type in
a standard Medicare supplement benefit plan.
If, on the basis of the experience as reported, the
benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio
since inception (ratio 3), a refund or credit calculation is required. The
refund or credit calculation shall be done on a statewide basis for each type
in a standard Medicare supplement benefit plan. For purposes of the refund or
credit calculation, experience on policies issued with the reporting year shall
For purposes of this section, for policies or certificates
issued before July 17, 1992, the issuer shall make the refund or credit
calculation separately for all individual policies combined, including all
group policies subject to an individual loss ratio standard when issued, and
all other group policies combined for experience after the effective date of
this amendment. The first such report affected by this paragraph is due May 31,
The issuer may refund or credit only when the benchmark
loss ratio exceeds the adjusted experience loss ratio and the amount to be
refunded or credited exceeds the sum of $5. The refund shall include interest
from the end of the calendar year to the date of the refund or credit at a rate
specified by the secretary of health and human services, but it may not be less
than the average rate of interest for 13-week treasury notes on the date of
refund or credit calculation as established by the federal reserve board and
published in the Wall Street Journal. The issuer shall make a refund or credit
against premiums due by September 30 following the experience year upon which
the refund or credit is based.
Source: 18 SDR
225, effective July 17, 1992; 22 SDR 107, effective February 18, 1996.
SDCL 58-4-1, 58-17A-2.
SDCL 58-17A-2, 58-17A-5.
Combination of experience for calculation of refund or credit,
Notes: As of the
effective date of this rule, the secretary of the U.S. Department of Health and
Human Services had not specified an interest rate.
Forms may be obtained from the South Dakota Division of
Insurance, 445 East Capitol Avenue, Pierre, SD 57501, (605)
773-3563, free of charge.
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