[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR403.254]



[Page 42-43]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 403_SPECIAL PROGRAMS AND PROJECTS--Table of Contents

 

                Subpart B_Medicare Supplemental Policies

 

Sec. 403.254  Calculation of premiums.



    (a) General provisions. To calculate the amount of ``premiums'', 

calculate the present value on the initial calculation date of expected 

earned premiums for the loss ratio calculation period.

    (b) Specific provisions. (1) Earned premium for a given period 

means--

    (i) Written premiums for the period; plus--

    (ii) The total premium reserve at the beginning of the period; 

less--

    (iii) The total premium reserve at the end of the period.

    (2) Written premiums in a period means--

    (i) Premiums collected in that period; plus--

    (ii) Premiums due and uncollected at the end of that period; less--

    (iii) Premiums due and uncollected at the beginning of that period.

    (3) Total premium reserve means the sum of--

    (i) The unearned premium reserve;

    (ii) The advance premium reserve; and

    (iii) The reserve for rate credits.

    (4) Unearned premium reserve means the portion of gross premiums due 

that provide for days of insurance coverage after the valuation date.



[[Page 43]]



    (5) Advance premium reserve means premiums received by the insuring 

organization that are due after the valuation date.

    (6) Reserve for rate credits means rate credits on a group policy 

that--

    (i) Accrue by the valuation date of the policy; and

    (ii) Are paid or credited after the valuation date.