Sec. 723.
(1) A review shall be made annually of the insurer's prospective contract liabilities on health insurance policies and certificates valued by tabular reserves, to determine the continuing adequacy and reasonableness of the tabular reserves giving consideration to future gross premiums. The insurer shall make appropriate increments to the tabular reserves if the tests indicate that the basis of the reserves is no longer adequate, subject to the minimum standards of section 719.
(2) If an insurer has a health insurance policy or certificate for which future gross premiums will be restricted by contract, insurance bureau regulations, or for other reasons, such that the future gross premiums reduced by expenses for administration, commissions, and taxes will be insufficient to cover future claims, the insurer shall establish contract reserves for the insufficiency in the aggregate.
History: Add. 1994, Act 148, Imd. Eff. June 7, 1994 Popular Name: Act 218
Structure Michigan Compiled Laws
Chapter 500 - Insurance Code of 1956
Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302)
218-1956-7 - Chapter 7 Reserve Standards for Disability Insurance (500.701...500.737)
Section 500.701 - Definitions.
Section 500.702 - Health Insurance Reserves; Determination of Adequacy; Basis.
Section 500.709 - Estimation of Claim Liabilities; Methods.
Section 500.715 - Premium Reserves; Computation.
Section 500.725 - Reinsurance; Determination of Increases To, or Credit Against, Reserves.
Section 500.733 - Maximum Interest Rates.
Section 500.735 - Mortality Basis; Use of Other Mortality Tables; Request for Approval.