Section 760IAC1-70-8. Form for calculating the total projected costs

   The form required by sections 3 and 4 of this rule is as follows:

Plan for handling receivership in accordance with IC 27-13-16-1
Company Name:__________________________________________ NAIC No._________			Completed by: _________
For purposes of this calculation, estimated costs will be based on 30 days of continued benefits after an insolvency (IC 27-13-16-1)			Input Required
1. Premium Revenue less Federal Employees Health Benefit Plan less Medicare less Medicaid
(If prepared on a quarterly basis, use annualized premium revenue)			Financial Statement, Analysis of Operations by Lines of Business
2. Medical Expense (Total Hospital and Medical Expense less Federal Employees Health Benefit Plan less Medicare less Medicaid less 50% Capitated Medical Expense)
(If prepared on a quarterly basis, use annualized medical expense)			Financial Statement, Analysis of Operations by Lines of Business; Summary of Transactions of Providers
3. Administrative Expense less Federal Employees Health Benefit Plan less Medicare less Medicaid
(If prepared on a quarterly basis, use annualized administrative expense)			Financial Statement, Analysis of Operations by Lines of Business
Assumptions
A) Increased medical expense, as a % of premium			10%
B) Admin costs
Month 1, as a percent of current			70%
Month 2, as a percent of current			50%
Month 3, as a percent of current			40%
C) Costs for Indiana insolvency, legal and consulting			$400,000
D) Premium Collection percentage			96%
4. Medical Expense Ratio (Medical Expenses/Premium Revenue)
5. Administrative Expenses Ratio (Administrative Expenses/Premium Revenue)
6. Assumed Insolvent Medical Expense Ratio (Medical Expense Ratio + Assumption A)
Calculation for Costs of Continued Benefits
Medical Expense ((Annualized Premium Revenue * Assumed Insolvent Medical Exp Ratio)/12)
Less: Premium ((Annualized Premium Revenue * Assumption D)/12)
7. Net Medical Costs
Administration
Month 1 (((Annualized Premium Revenue * Administrative Expense Ratio)/12)*Assumption B)
Month 2 (((Annualized Premium Revenue * Administrative Expense Ratio)/12)*Assumption B)
Month 3 (((Annualized Premium Revenue * Administrative Expense Ratio)/12)*Assumption B)
8. Administrative Costs
9. Closing Costs (Fixed Costs)			$400,000
10. Projected Costs (Medical Costs + Administrative Costs + Closing Costs)
11. Deposits-IC 27-13-13			$500,000
12. Total Projected Costs (Projected Costs - Deposits)
13. Amount to be financed – the greater of Total Projected Costs (line 12) or one million dollars ($1,000,000)

(Department of Insurance; 760 IAC 1-70-8; filed Jan 5, 2005, 9:37 a.m.: 28 IR 1481; readopted filed Nov 29, 2011, 9:14 a.m.: 20111228-IR-760110553RFA)