STATE OF NEW YORK
ONE COMMERCE PLAZA
ALBANY, NEW YORK 12257
|George E. Pataki
Gregory V. Serio
|Circular Letter No. 20 (2002)
October 31, 2002
|TO:||ALL INSURERS PARTICIPATING IN THE NEW YORK MARKET STABILIZATION POOLS FOR INDIVIDUAL AND SMALL GROUP HEALTH INSURANCE, OTHER THAN MEDICARE SUPPLEMENT INSURANCE|
|RE:||REPORTING AND CALCULATION REQUIREMENTS|
|STATUTORY REFERENCE: Section 3233 of the Insurance Law|
The Fourth Amendment to Regulation 146, 11 NYCRR 361, establishes new claim-based Market Stabilization Pools for individual and small group health insurance policies, other than Medicare Supplement insurance policies, for periods from January 1, 1999 forward. The purpose of this circular letter is to provide instructions and examples of the required calculations and data submissions. A separate circular letter will address submissions to the pools for Medicare Supplement Insurance policies.
As a means of ensuring uniformity and consistency in data reporting, and hence timely and accurate operation of the pools, carriers must submit a completed Exhibit I ("Market Stabilization Pool Data Listing by Member") and Exhibit II ("Summary Market Stabilization Pool Data Listing"), in the form, and containing such detail, as is more fully described in the instructions for completing Exhibit I and Exhibit II. Both the instructions and Exhibit I and Exhibit II (Examples A D) are attached.
Carriers reporting less than 64,000 individuals to the pools may report Exhibit I and Exhibit II in Excel spreadsheet format. A record layout for these Excel files will be provided under separate cover. Exhibit I should be provided on diskette or CD. Exhibit II should be provided in (i) hardcopy and (ii) diskette or CD.
Carriers reporting more than 64,000 individuals should provide Exhibit I in ASCII text format, with left-justified fixed length records. Exhibit II should be provided in Excel spreadsheet format. A record layout for these files will be provided by the administrator under separate cover as well. Exhibit I should be provided on CD only. Exhibit II should be provided in (i) hardcopy and (ii) diskette or CD.
The exhibits must be submitted in accordance with the following timetable:
The Fourth Amendment to Regulation 146 requires semi-annual reporting. As the table indicates, however, the requirement for semi-annual submissions has been modified for pool years that have already passed (1999 - 2001), and only a single initial filing using a mid-year calculation date will be required for each of these years. Since actual incurred claims are already known for 1999 - 2001, incurred claims as consistent with data reported on carriers statutory annual statements will be used in the initial filings for these years, instead of interim estimates of incurred claims based on the application of projected loss ratios to annualized premium. The semi-annual data filings required by Regulation 146 will commence with the January 1, 2002 calculation date. Reconciliations of 1999 - 2002 will be performed in 2003.
In accordance with Insurance Department Regulation 146, Section 361.6(a) (as renumbered by the Fourth Amendment), the New York Insurance Department has contracted with Alicare, Inc. to administer the Market Stabilization Pools. All data submissions should be sent to Alicare, Inc. at the address listed herein. The submissions and underlying records must be retained by carriers for at least six years for audit purposes. Section 361.6(a) also provides for the periodic audits of each carriers participation in the pools. Under its contract with the Insurance Department, Alicare, Inc. has been authorized to act on the Departments behalf in the conduct of such audits, and all carriers participating in the pools are required to supply Alicare, Inc. with any pool related data needed to conduct said audits and to cooperate in and facilitate the audit process.
Data submitted by hardcopy, diskette or CD, as well as written certifications should be mailed to following address:
New York Market Stabilization Pools
Attn: Martin Cohen, ASA
For answers to any filing or reporting questions regarding the pools, you may contact Alicares Melanie Kwan at (212) 539-5251 or Martin Cohen at (212) 539-5383. For any other questions you may contact James Carroll at the New York State Insurance Department at (518) 474-8975 or by e-mail at firstname.lastname@example.org.
1. Exhibit I: Market Stabilization Pool Data Listing
Example A - 1999 submission not requiring an assumed
As indicated above, examples are provided that demonstrate two cases in which carriers maintain records of all "dependents" and two cases in which carriers do not. The term "dependents" as used herein shall mean all insured "individuals" as defined in 11 NYCRR 361.5(b)(1) (i.e., dependents, spouses, or other insured persons) other than the primary insured or contract holder. Carriers that maintain this information must provide actual counts (Examples A and C). Carriers that do not maintain full dependent information must attest to the fact that they do not maintain such information, and must calculate the number of "assumed dependents" in family contracts (Examples B and D).
Each column of Exhibit I is described below.
Carrier Name Column (a)
Calculation Date Column (b)
Policy Form Number - Column (c)
Policy Type - Column (d)
The first digit will be an alphabetical code that indicates the pool region in which the policy is in force as follows:
A - Albany
For small groups, all members of the group shall be considered to be located in the same pool region as the group itself, regardless of the location or the residence of its members. In the case of multiple employer trusts or associations, the business address of each employer unit will determine that employers members location.
The second digit will be an alphabetical code that indicates policy classification as follows:
I - Individual - Non-Medicare Supplement
The third digit will be a numeric code that will further categorize the policy as follows:
Group Number - Column (e)
Individual ID Number - Column (f)
Primary Insured or Contract holder ID - Column (g)
ICD 9 Code - Column (h)
Relative Cost Factor (RCF) Column (i)
Individual Count Column (j):
2. Exhibit II: Summary Market Stabilization Pool Data
Example B - 1999 submission requiring an assumed dependent calculation;
Example C - 2002 submission not requiring an assumed dependent calculation;
Example D - 2002 submission requiring an assumed dependent calculation.
Each column of Exhibit II is described below.
Policy Form Column (a)
Policy Type Column (b)
Annualized Premium Column (c)
Then, sum the Total Annualized Premium by pool region in column (c).
Total Relative Cost Factors - Column (d)
Total Number of Individuals Column (e)
Assumed Dependents - Column (f)
Additional Relative Cost Factors for Assumed
Dependents - Column (g)
Average Relative Cost Factor (ARCF) - Column (h)
The "Totals" in Column (h) should reflect the Average Relative Cost Factor by pool region. This is calculated as: (Total of Column (d) by pool region plus the Total of Column (g) by pool region) divided by the Total of Column (e) by pool region.
The following column of Exhibit II is required only for submissions with a calculation date of 7/1/99, 7/1/00 and 7/1/01.
Incurred Claims Column (i)
Projected Incurred Loss Ratio (PILR) Column (i)
The following certification must be signed by an appropriate officer of the carrier and provided with all submissions:
All individual and small group insurance policies, contracts or certificates, other than Medicare Supplement insurance policies, contracts or certificates, issued by (carrier name) and subject to Chapter 501 of the Laws of 1992 pertaining to community rating and open enrollment have been included in this submission and apportioned to the appropriate region as defined in Regulation 146. No policies which are not subject to the laws of 1992 pertaining to community rating and open enrollment have been included in this submission. The calculations of the average relative cost factors are in accordance with Circular Letter Number 20 (October 31, 2002).