November 22, 1963

SUBJECT: INSURANCE

Circular Letter 63-6

TO INSURERS LICENSED TO WRITE LIFE OR ACCIDENT AND HEALTH INSURANCE IN NEW YORK STATE

For your information and guidance in submitting forms for review by this Department pursuant to Section 154 of the Insurance Law, I am enclosing a restatement of the Department's requirements for submission of forms, rates and commissions pertaining to life, accident, health and annuity contracts for filing or approval under the provisions of the New York Insurance Law.

Additional copies may be had upon request to either the Albany or New York City office of the Department.

Very truly yours,

S/RAYMOND M. DEFOSSEZ

Raymond M. Defossez

Deputy Superintendent

Enc.

E. Preparation of Forms

1. All blank spaces of each policy form, except an application, must be filled in and completed with hypothetical data to indicate the purpose and use of the form or, as an alternative, such purpose and use may be explained in the letter submitting the form. In individual life cases it is suggested that forms be filled in as of age 35, except juvenile, for which age 10 is suggested.

2. With respect to impairment riders, fill-in material should be submitted with the form. Any additional or alternative material should also be submitted at the time when such material is to be used. No such material shall be used with forms delivered in New York after receipt of non-acceptance by the Department.

3. Any new form which makes reference to the provisions of a form previously issued that did not require filing or approval shall be accompanied by such previous form for reference purposes.

4. When submitting a "policy form" to which a copy of the application will be attached when issued, a copy of the application shall be attached to the policy form. If the application has already been approved, the date of approval shall be shown either on the form or in the transmittal letter.

5. All endorsements (whether printed on the form or to be applied by stamp) should be separately submitted in duplicate on the insurer's letterhead for approval or filing.

6. In the case of forms containing an endorsement (whether printed on the form or to be applied by stamp) which endorsement has been previously filed or approved, the date of such filing or approval should be stated in the letter of submission.

7. "Policy forms" being submitted for either preliminary review or formal approval shall be submitted in duplicate, except combination group life and accident and health forms which should be submitted in triplicate.

F. Formal Approval

1. "Policy forms" may be submitted for formal approval either after or without a preliminary review. "Policy forms" submitted for formal approval should be submitted in the form intended for actual issue. In general, this will mean in printed form. If a "policy form" will not be printed, it is important that the form when reproduced be clear and legible and in reasonably permanent form considering its probable lifetime. Typewritten forms may be used only for single cases or when their use will be too infrequent to justify other preparation.

2. If it is the insurer's practice to attach a reduced size reproduction of the application to a form when issued, such copies should be attached to each copy of the form submitted. Any such application should be legibly reproduced in the size to be used in the contract.

3. With regard to individual life policy forms, the non-forfeiture values (for the age for which the form is filled in for a typical plan of insurance) to be issued under a particular policy form should be included and a detailed statement of the method of computation for such plan of insurance must be submitted. The submission letter shall contain a statement of the intended nature and scone of the use thereof. If no non-forfeiture values develop the submission letter should so state.

4. With respect to group forms, illustrative material may be used for items which may vary from case to case such as names, dates, eligibility requirements, premiums and schedules for determining the amount of insurance for each person insured. If an explanatory memorandum accompanying a covering letter or appropriate reference to material filed with schedules of premium rates (to be in duplicate) clearly indicates the nature and scope of the variations to be used, portions of other provisions such as insuring clauses, benefit provisions, restrictions, and termination of coverage provisions may be submitted as variable, if suitably indicated by red ink, underlining, bracketing or otherwise. For example, it may be indicated that variations will be made within the limits set out in the explanatory memorandum or that any one of several alternative provisions may be used or that a provision may be either included as submitted or else completely omitted. An explanation of variable material that the variations "will conform to law" or "as requested by the policyholder" is not acceptable. The alternative language, if any, should be supplied in duplicate, independent of the insurer's letter.

Open-face riders or endorsements may be filed for general use in amending illustrative or variable material within the limitations of the preceding paragraph.

G. Letters of Submission. The letter of submission shall be in duplicate signed by a representative of the company authorized to submit forms for filing or approval and shall contain the following information:

1. The identifying form number of each form submitted,

2. Brief statement of the coverage provided.

3. If the form is a new one, not replacing an existing form, a statement to that effect.

4. If the form is intended to supersede another approved or filed form, the form number of the form approved or filed by the Department, together with a statement, of the material changes made; if the previous form is still in process, the form number, control number and submission date.

5. If a form being filed for formal approval had previously been submitted for preliminary review, a reference to the previous submission and a statement setting out either (1) that the formal filing agrees precisely with the previous submission or (2) the changes made in the form since the time of preliminary review.

6. If the form is other than a policy or contract, give the form number of the policy or contract form or forms with which it will be used, or, if for more general use describe the type or group of such forms.

7. If the form is a policy or contract submitted for approval, there shall be a statement appropriately identifying the specific type of coverage provided.

8. When the policy form is designed as an insert page form the insurer must submit a statement of the pages which must always be included in the policy form and a list of all optional pages, if any, together with an explanation of the use thereof.

9. If a form is intended to replace a very recently approved form because of an error found in the approved form, the insurer should, if the approved form has not been issued, return the approved form with a statement in the submission letter that the form has not been issued. The insurer may, under these circumstances, use the same form number on the corrected form being submitted. If, however, the form has been issued, the insurer must place a new form number on the corrected form and need not return the previously approved form.

II. RATE FILINGS FOR ACCIDENT AND HEALTH FORMS

A. Individual Forms

1. RATES FOR FORMS SUBMITTED FOR APPROVAL.

Every "policy form," including every rider or endorsement thereon affecting the premium rate or coverage, submitted for approval shall be accompanied by a rate filing, in duplicate, in the form prescribed under Rule II - A -2.

a. Contents of Covering Letter.

(1) The covering letter, in duplicate, and/or actuarial memorandum accompanying it, shall describe how the rates were computed. The letter and/or memorandum should include the anticipated loss ratios and suitable evidence of the basis thereof, such as expected claim rates and claim costs, the tables or experience, if any, upon which the rates have been based, the method of deriving the premium rates from such tables or experience, the extent to which modifications based on judgment have been introduced, or other relevant information which the company feels appropriate to show that benefits are not unreasonable in relation to premiums.

The following list of relevant information is supplied for illustrative purposes to assist companies in preparing the filing letter or actuarial memorandum to accompany it.

(a) The anticipated loss ratios.

(b) The expected claim rates and claim costs.

(c) Adequate identification of the experience statistics, morbidity and/or mortality tables used, and if these data are not well-known, adequate explanation to enable the Department to evaluate their validity.

(d) If the insurer making a filing feels that the experience or premium rates of another insurer for similar coverage are relevant and pertinent, it may cite such rates or experience.

(e) If a company has had experience on similar forms, such experience shall be cited to the extent that it is relevant.

(f) If the premium rates filed differ from those the company has on file or has had on file for identical or substantially similar coverages, the reasons for the changes should be made clear in the filings.

(2) A statement indicating the specific rate manual pages being submitted or already on file applicable to such forms.

(3) In case of risks classified by occupation, a statement as to the occupational manual being submitted or already on file applicable to such forms.

b. Special Requirements For Guaranteed Renewable Policies Under Which The Premium Rates Can Be Changed At A Future Date. In the case of guaranteed renewable forms with adjustable premiums, the covering letter shall contain a commitment from the company that:

(1) In the event the scale of premiums should be changed at some future date, the new rates, before becoming effective, will first be submitted to the Department with supporting data and its acceptance obtained,

(2) Adequate records of experience on such policy will be maintained so that any filing of a change in rates will be accompanied by adequate experience data to support it,

(3) In the case of level premium policies, adequate reserves will be carried.

2. RATE FILINGS. Rate filings shall be in duplicate and separate from the covering letter (also in duplicate).

a. Copies of a rate manual shall be filed.

b. Such rate manual may be presented in typewritten, mimeographed, or other duplicating processes, on uniform size paper, preferably 81/2"x 11", and in the form of numbered pages of a loose leaf notebook or other binder. The manual should contain a table of contents, revised whenever necessary because rates are added, revised or deleted. When rate books or schedules for use by the agent are prepared, they are to be furnished to the Department.

c. The filed rate manual shall contain the following information:

(1) Company name - on each sheet.

(2) The form number of each policy, rider or endorsement to which the rates apply. An identifying symbol may also be shown.

(3) A schedule of rates showing policy fee or rate changes at renewal, if any, and variations, if any, based upon age, sex, occupation or other classification. Where rates are graded by age, the filing shall state whether the rates for older ages apply to renewals or only to new policies; that is, whether the rates remain level in accordance with the original issue age or increase in accordance with the age attained at time of renewal. Where a separate charge is made for optional or miscellaneous benefits, the filing should so indicate.

(4) Each rate filing should contain an outline of the essential benefits, coverages, limitations, exclusions, renewal conditions, and limits thereof. For illustrative purposes, see Appendix A, attached.

(5) An outline of rules pertaining to limits in respect to age, amounts, and classifications of eligible risks should also be included. In the case of a rider or endorsement, the form numbers, identifying symbols or types of policies with which it will be used should be indicated.

d. The filed rate manual shall contain separate sections for (1) rates for use with currently issued forms; (2) rates in effect for forms no longer issued.

3. OCCUPATIONAL CLASSIFICATION MANUAL. Where a company classifies risks by occupation, the manual shall be filed, in duplicate, and shall contain a classification for each occupation which a company has classified. It may include a statement that an unlisted occupation may be classified on a basis consistent with the listed occupations. The pages shall be numbered.

4. SUBSTANDARD RATES. Where a company charges an extra premium for impaired risks on a specified impairment or class basis, rate schedules, supplementing 2. above, shall indicate such extra premiums. The rates for each specified impairment or class, as the case may be, shall be stated either in dollar amount or a percentage of the standard premium. If classes are used, the specified impairments contained therein shall be set forth. The pages shall be numbered.

5. RATE REVISIONS, INCLUDING ADDITIONS, FOR PREVIOUSLY APPROVED FORMS. Every such rate revision shall include a revised rate schedule, in duplicate, accompanied by a covering letter, also in duplicate.

a. Contents of Covering Letter. Such letter shall include at least:

(1) A statement as to the anticipated loss ratio previously stated in filing the existing rates, any changes in the anticipated loss ratio, and the reason therefor,

(2) A statement as to the reason for the revision, the nature of the revision, the areas revised, a comparison of the revised and existing rates, and an estimate as to the expected average increase or decrease in premiums.

(3) The recent experience under the existing rates, showing premiums on both a written and on earned basis, and showing losses on both a paid and an incurred basis.

(4) If the premium rates filed differ from those the company has on file or has had on file for identical or substantially similar coverages, the reasons for the changes should be made clear in the filings.

(5) A statement as to whether the revised rates apply to inforce issues only, to new issues only, or both inforce and new issues.

(6) In the case of revision of rates for policies issued prior to July 1, 1959, the letter should indicate how compliance has been, or will be, made with Chapters 945 and 946 of the Laws of 1958, (commonly referred to as the Metcalf revisions) of the New York Insurance Law.

(7) A statement explicitly indicating pages of the rate manual on file, to be deleted or replaced, and the pages to be added.

(8) In case of a complete revised occupation manual, a statement should be made that the new manual replaces the former manual for all new risks.

b. Rate Manual. The pages of the rate manual should conform to the requirements of II-A-2 above. Where feasible, revisions may be made by deleting, replacing and/or adding numbered pages and accompanied by a revised table of contents.

B. Group Forms

1. REFERENCE TO RATES IN LETTER OF TRANSMITTAL OF FORMS

a. Forms Submitted for Filing or Approval on a General Basis

(1) If the form is one which does not affect either benefits, coverages, or exclusions, and accordingly no rate charged, specific reference to this fact should be made.

(2) If the form does affect either benefits, coverages, or exclusions, reference should be made to the rates regardless of whether or not the charge is changed, (e. g. a rider increasing benefits without any change in previously filed rates is in effect a rate change).

(a) If the rate applicable to the proposed form is already on file, reference to the specific page number(s) of the manual from which the rate is obtained should be made.

(b) If there is no applicable rate on file, reference should be made to a concurrent rate filing which has been or is to be submitted independently and in duplicate, accompanied by a covering letter, also in duplicate, to the Accident and Health Rates Section. This independent rate submission shall be in accordance with II-B-2 below.

b. Forms for Use on a One-Case Basis. The insurer shall submit forms for filings or approval on a one-case basis accompanied by letter of transmittal in duplicate signed by a representative of the company authorized to submit forms for filing or approval containing the following information regarding the rates therein:

(1) Rates for the first year business

(a) If rates are on file in the group rate manual, the company should indicate the specific page number(s) of the manual from which such rates are obtained.

(b) If rates are derived from manual rates, the company shall furnish a statement as to the consistency of such rates by referring to the specific page numbers of the manual from which such rates were derived and shall incorporate into the letter the actual rates being charged.

(c) If rates for the coverage provided by the form are neither on file nor derived from manual rates, the company shall indicate the rates, the nature and extent of any deviation from the manual in determination of these rates, and the reasons and basis for such deviation. In addition, the following information is also required:

(i) Company name

(ii) Form number (if rider, furnish policy number to which such rider is attached)

(iii) Name and location of policyholder

(iv) Outline of the essential benefits, coverages, exclusions and limitations.

(2) Additions to or changes in existing contracts. If the form is to be used for a revision of coverage on a case on which coverage has been in force for at least one year, so state.

2. INDEPENDENT RATE SUBMISSIONS. Schedules of premium rates, rules and classification of risks as required to be filed under subsection 7 of Section 221 shall be submitted in duplicate separate from the covering letter, also in duplicate.

a. Initial Submissions for New or Additional Types of Coverages

(1) Contents of covering letter. The covering letter shall contain the following information:

(a) Specific information, such as section and page numbers and edition dates so as to clearly identify the rate pages being submitted.

(b) The basis of such rates and any other relevant information used in the development of such basis.

(c) A reference to the basic forms (and approval dates thereof) with which such rates are intended for use. In the case of pending forms, reference to the letter of transmittal of such forms

(d) A reference that this is a new filing for coverage not previously offered where such is the fact.

(2) Bates. The rates shall be filed in duplicate in the form of numbered pages of a rate manual, preferably in loose leaf form, and shall contain the following information:

(a) Name of company.

(b) Table of contents showing coverage, section numbers, if used, and page numbers.

(c) An outline of the essential benefits, coverages, exclusions, and limitations, including, if applicable, one or more surgical, diagnostic x-ray and laboratory and similar schedules. In connection with such schedules include a statement indicating how modifications thereof are evaluated.

(d) A schedule of the premium rates, rules and classification of risks used in connection with the issuance of policies. Such schedule shall include any loading for sex, age and industry.

(e) Where a premium discount is allowed because of the size of the risk, a statement as to what constitutes one risk.

(f) A schedule of any premium discounts for and definition of self-administration or self-accounting.

(g) Where rates for other plans are determined by appropriate interpolation and extrapolation, a statement to this effect should be included, and where possible, instructions as to the manner of computation, and sufficient points should be filed so that rates for such other plans can be easily determined.

b. Revisions of and Additions to Previously Filed Rates. Whenever rates are revised, added to, or deleted, such changes shall be submitted in duplicate, separate from the covering letter, also in duplicate.

(1) Contents of Covering letter:

(a) Specific reference to section and page numbers and edition dates of rates previously on file being deleted or revised or additional rates being submitted.

(b) The basis of such rates, including reference to any relevant information used in the development of such basis.

(c) Reference to the basic forms with which rates are to be used, specifying whether such forms are approved or pending, and giving dates of approval or dates of letters of transmittal as appropriate.

(d) An explanation as to the area and nature of such changes and additions.

(2) Rates, Deletions, revisions, and additions are to be made by deleting, replacing or adding numbered manual pages in accordance with II-B-2-a-(2) above, and accompanied by a new table of contents, if appropriate.

III. GROUP LIFE AND GROUP ACCIDENT AND HEALTH COMMISSIONS, COMPENSATION AND OTHER FEES OR ALLOWANCES

Schedules of rates of commissions, compensation and other fees or allowances required to be filed under subsection 4 of Section 204 and subsection 7 of Section 221 shall be filed in triplicate separate from the covering letter, also in triplicate.

A. Contents of Covering Letter

1. Specific reference to the section and page numbers and edition dates being submitted.

2. In the case of revisions, the area and nature of such revisions, the pages on file being replaced, and the new pages being submitted.

B. Commissions, Compensation and Other Fees or Allowances

Filings as called for in Sections 204-4 and 221-7, respectively, shall be in the form of numbered manual pages, either as part of the Group Accident and Health Rate Manual or as an independent commission manual and shall contain the following:

1. The schedule of rates payable.

2. The factors to which applicable, clearly stated, (e.g. a percentage of the annual premium or a dollar amount per certificate, or a dollar amount per $ 100 of weekly indemnity).

3. Where rates are applicable to premiums, the filing shall state the premiums to which they apply, as for instance, monthly, yearly, first year or renewal.

4. Where different rates are payable for different types of coverages, agents, areas, etc. the filing shall clearly indicate the nature of such classes.

5. The nature of administrative services shall be set forth, together with the allowances therefor.

6. Where rates are varied by policy years, the filing shall explicitly state the rates and policy years. Where such rates can be payable under an alternative scale, the formula for converting to such alternate scales shall be stated or the alternate scale included.

7. Where rates are graded, the complete scale shall be included or the nature and factors of the graduation shall be stated.

IV. D. B. L. FORMS

A. D.B.L. Forms should be filed simultaneously with the Workmen's Compensation Board of the Labor Department.

B. D.B.L. forms must have the letters D.B.L. as a part of the form number.

V. SUPERSEDEAS PROVISION

A. Nothing in these rules shall supersede or affect any other rule or regulation of this Department except the following rules which are hereby superseded and replaced:

1. Rules for filing individual life forms dated March 1, 1928.

2. Rules for group forms dated March 3, 1953 as amended August 20, 1953 and August 16, 1955.

3. Rules for individual and blanket A & H forms dated January 20, 1954.

4. Circular letter dated May 7, 1957, in relation to specific applicable sections of the Insurance Law.

B. These rules and requirements will take effect immediately with respect to the filing of all forms and rates on and after this date.

APPENDIX A

ILLUSTRATIVE OUTLINE

A. General Items. All rate sheets, in duplicate, should contain specific reference to the following -- whether variable or not.

1. Company name

2. Form number or identification symbol of each policy

3. Form number of rider and form numbers of policies with which used

4. Ages -- issue or attained (i.e. whether rates are level or step rate)

5. Sex

6. Occupational or non-occupational coverage

7. Occupational classes

8. Renewal age limit or period limit

9. Type of renewability

a. Renewable at option of company

b. Right to refuse renewal limited by Section 164(6) of New York Insurance Law

c. Guaranteed Renewable - Adjustable Premiums

d. Guaranteed Renewable - Guaranteed Premiums

e. Other special renewal conditions (e.g. franchise)

10. Rates, including policy fee and rate changes

11. Mode of payment; adjustment factors for other modes

12. Coverages, exclusions (e.g. common carrier only as a fare paying passenger, etc.)

B. Specific Types of Benefits and Coverages. Where pertinent, whether variable or constant, the following items should be noted for each type of coverage.

1. Loss of Time -- Where separate charges are made, so note.

a. Accident only, sickness only, or accident and sickness

b. Elimination period for both accident and sickness

c. Note of elimination period waived for hospital confinement

d. Indemnity period -- Total Disability

(1) Note periods for "His" and "any" occupations

(2) Note periods for confining and non-confining

e. Partial disability -- amount and length

(1) Accident

(2) Sickness

f. Non-Disabling Injury -- Physician Expense

g. Blanket Medical Expense

h. Double Indemnity for Specified Accidents

i. Minimum Indemnity for Specified Injuries

j. Other Miscellaneous

2. Accidental Death

a. Accidental death only

b. Accidental death and dismemberment

3. Hospital, Surgical, Medical

a. Daily Hospital Benefit (D.H.B.) -- number of days, including any increase or decrease with policy year or attained age

b. Miscellaneous

(1) Amount or multiple of D.H.B.

(2) Scheduled or Non-Scheduled

c. In Hospital Physician -- amount and number of visits

d. Surgical -- maximum amount

e. Outpatient -- amount or multiple of D.H.B.

f. Maternity -- regular policy benefits or separate maximum amount

g. Husband and wife rates

h. Child rates -- single or for all children

i. Nursing -- amount and number of days

j. Deductible

(1) Amounts or periods

(2) Applicable to what benefits

k. Coinsurance, if any, and to what applicable

l. Aggregate limit

4. Major Medical -- In Hospital or In and Out of Hospital

a. Maximum amount -- each benefit period

b. Aggregate amount -- all periods

c. Benefit period

d. Deductible

e. Coinsurance

f. Inside limits

(1) Surgical Schedule -- maximum

(2) D.H.B. -- amount and length

(3) Daily convalescent home limit

(4) Nursing

g. Underwriting rules as to income levels if different averages assumed for different plan maximums

5. Other Miscellaneous Forms - Specify benefits as stated in policy

a. Travel Accident

b. Dread Disease

c. Blanket Medical Accident

d. Blanket or Special Risk