Weekly Tip: Calculating Filing Fees – Does Your Filing Require Actuarial Review?

 

Weekly Tips

Calculating Filing Fees – Does Your Filing Require Actuarial Review?

3/1/2017

This week, we present to you the final tip in the series of Weekly Tips on the calculation of Insurance Compact filing fees. The first week, we reviewed the definitions found in the Filing Fee Rule. Last week, we reviewed the impact of your company’s Premium Volume on the filing fees. This week, we will review the other major variable – whether or not an actuarial review is required.

Insurance Compact filing fees are broken into two categories – filings that require an actuarial review and those that do not. In order to determine the proper filing fees for the filing submission, filers will need to review the actuarial submission requirements for the Uniform Standards governing the forms being filed. During the Intake process, the Product Filing Support Coordinator reviews the filer’s identification of the Uniform Standards applicable to the submission and whether or not an actuarial memorandum has been submitted. If an actuarial memorandum has been filed, then an actuary will be assigned to the filing and the actuarial fees will be required.

If there is any uncertainty as to whether or not an actuarial memorandum is required, please carefully review the Uniform Standards for an Actuarial Submission Requirements provision. On the Insurer Resources page of the Insurance Compact website, you will also find a list of the Uniform Standards without Actuarial Requirements. On occasion, a submission will include an actuarial memorandum when there is not one required by the applicable Uniform Standards, which leads to overpayments and confusion in the review process. Filers can save time and money by only including an actuarial memorandum ifrequired by the applicable Uniform Standards.

Wrapping up our guide on Insurance Compact filing fees, the following are examples combining the principles we’ve covered.

For filing submissions requiring an actuarial review:

Example 1:

ABC Life Insurance Company has an Asset-Based Premium Volume of $51 million as recorded on Schedule T Part 2 of the Annual Statement submitted in 2016. The company submits two whole life insurance policies with a two riders and one application – 5 forms total. The filing fees due to the Insurance Compact are equal to $2,500, as two policies requiring actuarial review were submitted ($1,250 x 2), and not $6,250 ($1,250 x 5).

Example 2:

XYZ Life and Annuity Insurance Company has an Asset-Based Premium Volume of $35 million as recorded on Schedule T Part 2 of the Annual Statement submitted in 2016. This company also submits two whole life insurance policies with two riders and one application – 5 forms total. The filing fees due to the Insurance Compact are equal to $1,200, as two policies requiring actuarial review were submitted ($600 x 2), not $3,000 ($600 x 5).

For filing submissions NOT requiring an actuarial review:

Example 1:
ABC Life Insurance Company has an Asset-Based Premium Volume of $51 million as recorded on Schedule T Part 2 of the Annual Statement submitted in 2016. The company submits three applications. This filing does NOT require an actuarial memo, because none of the applicable Uniform Standards contain Actuarial Submission Requirements. The filing fees due to the Insurance Compact are $600, and not $1,800 ($600 x 3).

Example 2:
XYZ Life and Annuity Insurance Company has an Asset-Based Premium Volume of $35 million as recorded on Schedule T Part 2 of the Annual Statement submitted in 2016. The company submits three applications. This filing does NOT require an actuarial memo because none of the applicable Uniform Standards contain Actuarial Submission Requirements. The filing fees due to the Insurance Compact are $300, and not $900 ($300 x 3).

All fees in these examples would be further reduced if the company qualifies as a Regional Filer as defined in the Filing Fee Rule.

If you have any questions regarding the calculation of the filing fees – either state or the Insurance Compact fees – please reach out to the Insurance Compact Office.