[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2006]
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.