The insurance company said in its filing that the requested rates were justified because of medical cost inflation. The rate hike would have affected 117 people covered by 81 different policies sold by the insurance company, according to the report.
American Republic Insurance earned $712,117 in premiums from its 81 Connecticut policies during the first 10 months of 2010, but it paid $978,598 in medical claims during the same period. This is the first year the federal healthcare reform law requires insurers to spend at least 85 percent of premiums on claims for large-group plans and at least 80 percent for individual and small-group plans.
According to the report, the rejection of American Republic Insurance’s request is the first indication of the Connecticut Insurance Department’s intolerance for high rate requests under Insurance Commissioner Thomas Leonardi. This is the first major rate request to be declined since Commissioner Leonardi started work on March 4.
Read the Hartford Courant report on Connecticut insurance rates.
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