Medigap Insurance: Insurers' Compliance With Federal Minimum Loss Ratio
Standards, 1988-91 (Letter Report, 02/07/94, GAO/HEHS-94-47).

From 1988 through 1991, the market for Medicare supplemental
insurance--commonly called Medigap--grew by more than 50 percent;
premiums rose from about $7 billion to $11 billion.  In the first half
of this period, Medigap insurers' loss ratios fell for both individual
and group policies.  Beginning in 1990, loss ratios rose, and the 1991
aggregate loss ratios were about at their 1988 levels--80 percent for
policies sold to individuals and 90 percent for group policies.  The
loss ratios for individual policies represent a dramatic improvement
from the early 1980s when the federal minimum standards became effective
and aggregate loss ratios were about 60 percent.  The premiums
associated with companies whose aggregate loss ratios did not meet the
federal minimum standards fell from $388 million in 1988 to $206 million
three years later.  Although this decline suggests that insurers'
compliance with the loss ratio standards improved during the four-year
period, some companies did not meet the minimum loss ratio standards in
every state in which they did business.  The premiums collected by these
companies steadily declined during the period, from $126 million in 1988
to $35 million in 1991.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-94-47
     TITLE:  Medigap Insurance: Insurers' Compliance With Federal 
             Minimum Loss Ratio Standards, 1988-91
      DATE:  02/07/94
   SUBJECT:  Loss ratio
             Elderly persons
             Health insurance cost control
             Insurance regulation
             Medicare programs
             Insurance premiums
             Insurance companies
             Compliance
             Reporting requirements
IDENTIFIER:  Medigap
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Health, Committee on Ways and
Means, House of Representatives

February 1994

MEDIGAP INSURANCE - INSURERS'
COMPLIANCE WITH FEDERAL MINIMUM
LOSS RATIO STANDARDS, 1988-91

GAO/HEHS-94-47

Medigap Insurance


Abbreviations
=============================================================== ABBREV

  NAIC - National Association of Insurance Commissioners
  OBRA1990 - Omnibus Budget Reconciliation Act of 1990

Letter
=============================================================== LETTER


B-252803

February 7, 1994

The Honorable Fortney H.  (Pete) Stark
Chairman, Subcommittee on Health
Committee on Ways and Means
House of Representatives

Dear Mr.  Chairman: 

This is our third report in response to your December 1988 request
that we monitor the value of Medicare supplemental
insurance--commonly called Medigap--to policyholders through 1994.\1
Also, this report is our first under the requirement contained in the
Omnibus Budget Reconciliation Act of 1990\2

(OBRA 1990) that we audit compliance of Medigap policies with federal
loss ratio standards every 3 years. 

From 1980 through the enactment of OBRA 1990, the Congress has
periodically passed legislation and conducted oversight hearings to
improve the value of Medigap insurance to the elderly.  One measure
of the value of this insurance is the percentage of premiums returned
to policyholders as benefits, which is called the loss ratio.  For
each year from 1988 through 1991, the federal minimum loss ratio
standard for Medigap insurance was 75 percent for policies sold to
groups and 60 percent for policies sold to individuals.\3 These loss
ratio standards are the subject of this report. 


--------------------
\1 Medigap insurance is designed specifically to pay deductibles or
coinsurance for Medicare beneficiaries.  Our previous reports were
Medigap Insurance:  Better Consumer Protection Should Result From
1990 Changes to Baucus Amendment (GAO/HRD-91-49, Mar.  5, 1991) and
Medigap Insurance:  Insurers Whose Loss Ratios Did Not Meet Federal
Minimum Standards in 1988-89 (GAO/HRD-92-54, Feb.  28, 1992). 

\2 Public Law 101-508, section 4355(a)(5)(A), Nov.  5, 1990. 

\3 As discussed in this report, section 4355(a) in OBRA 1990 set the
minimum loss ratio standard for individual policies at 65 percent for
policies sold or issued after November 5, 1991. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

From 1988 through 1991, the overall Medigap market grew by more than
50 percent; premiums rose from about $7 billion to $11 billion.  In
the first half of the 1988-91 period, Medigap insurers' loss ratios
declined for both individual and group policies.  Beginning in 1990,
loss ratios increased, and the 1991 aggregate loss ratios were
approximately at their 1988 levels--80 percent for policies sold to
individuals and 90 percent for group policies.  The loss ratios for
individual policies represent a sharp improvement from the early
1980s when the federal minimum standards became effective and
aggregate loss ratios were around 60 percent. 

The premiums associated with companies whose aggregate loss ratios
did not meet the federal minimum standards declined from $388 million
in 1988 to $206 million in 1991.  While this decline indicates that
insurers' compliance with the loss ratio standards improved during
the 4-year period, some companies did not meet the minimum loss ratio
standards in every state in which they did business.  The premiums
collected by these companies steadily declined during the period,
from $126 million in 1988 to $35 million in 1991. 


   BACKGROUND
------------------------------------------------------------ Letter :2

In 1980, the Congress enacted the Social Security Disability
Amendments of 1980,\4 which added section 1882 to the Social Security
Act.  This section, called the Baucus amendment,\5 established
federal minimum standards for marketing and selling Medigap
insurance.  The amendment essentially adopted as federal requirements
the standards in a model regulation approved by the National
Association of Insurance Commissioners (NAIC).\6 The amendment also
required that Medigap policies be expected to have loss ratios of at
least 75 percent for group policies and at least 60 percent for
individual policies.  If an insurer demonstrated that a policy could
be expected to meet the standard, the insurer had complied with the
requirement regardless of whether its actual loss ratio ever met the
standard. 

Since 1980, two relevant legislative changes have directly affected
the sale and regulation of Medigap insurance.  The Medicare
Catastrophic Coverage Act of 1988\7 required states to collect actual
Medigap loss ratio data from insurers as a condition for approval of
state regulatory programs.  Although the Congress repealed the
Medicare Catastrophic Coverage Act in 1989, it did not repeal the
requirement that states collect actual loss ratio data.  OBRA 1990
(1) raised the minimum loss ratio standard for individual policies to
65 percent for policies sold or issued after November 5, 1991; (2)
required companies to report loss ratio data by policy form,
beginning with reports covering 1991 experience; (3) required
insurers whose policy loss ratios do not meet the applicable standard
to give policyholders, beginning in 1994, a refund or credit toward
future premiums so that the policy's recomputed loss ratio, including
the refund or credit, would meet the minimum standards; and (4)
provided for NAIC to develop standards for simplifying and
standardizing Medigap policies. 

In July 1991, NAIC revised its standard model act and regulation,
which included the requirements in OBRA 1990.  The new model
regulation described 10 standardized Medigap policies, which are the
only ones that can be sold in most states.\8 These changes should
enhance compliance with loss ratio standards, facilitate consumer
understanding of policies, make comparison shopping easier, and
eliminate misleading or confusing provisions.  Under OBRA 1990, the
states were effectively given until July 1992 to adopt NAIC's revised
model act and regulation or face the prospect of federal regulation
of Medigap insurance in their jurisdiction.  All states except
American Samoa and Guam have approved laws and regulations covering
standardized Medigap plans.\9

When interpreting loss ratios, two important factors to consider are
policy maturity and credibility.  Policy maturity refers to the
length of time a policy has been in force.  Relatively low loss
ratios may result during the first few years that policies are in
force because (1) claims related to preexisting conditions might not
be covered during the first 6 months and (2) new policyholders may be
fairly healthy and file relatively few claims.  As a policy matures,
its loss ratio should present a better indication of long-term policy
performance.  Before OBRA 1990, the NAIC loss ratio regulation
applied the minimum standards to policies that had been in force for
3 years or more.\10 OBRA 1990 provided for policies sold or issued
after November 5, 1991, to meet the standards after they have been in
force for 2 years. 

Credibility is also an important consideration when interpreting loss
ratios.  The standard we used, on the basis of the opinion of a state
actuary who studied this issue for NAIC, is that a loss ratio is
credible if it is based on a number of policyholders sufficient to
generate at least $150,000 in annual premiums in a state. 


--------------------
\4 Public Law 96-265, section 507(a), June 9, 1980. 

\5 Senator Max Baucus of Montana was the amendment's chief sponsor in
the Senate. 

\6 NAIC consists of the heads of the insurance departments of the 50
states, the District of Columbia, and four U.S.  territories.  NAIC
encourages uniformity and cooperation in insurance regulation among
the states and territories.  Among its activities to promote these
goals, NAIC promulgates model insurance laws and regulations for
state consideration and adoption. 

\7 Public Law 100-360, section 221(b), July 1, 1988. 

\8 "States" in this report includes the 50 states, the District of
Columbia, and the four U.S.  territories. 

\9 Forty-four states, the District of Columbia, Puerto Rico, and the
Virgin Islands approved the 10 standardized plans.  Pennsylvania and
Vermont approved 7; Delaware approved 6; and Minnesota,
Massachusetts, and Wisconsin had alternative simplification programs
in effect when OBRA 1990 was enacted and have waivers from this
requirement. 

\10 For policies that had been in force less than 3 years, the
company had to demonstrate that the policy's expected loss ratio in
the third and later policy years would meet the applicable standard. 


   MOST MEDIGAP BUSINESS IS WITH
   POLICIES WHOSE LOSS RATIOS MET
   MINIMUM STANDARDS
------------------------------------------------------------ Letter :3

From 1988 through 1991, the nationwide Medigap market in terms of
premiums collected grew by 50 percent, from $7.3 billion in earned
premiums to almost $11 billion by 1991 (in this report all dollars
are reported in current dollars).  For mature policies with credible
experience, earned premiums increased more than 90 percent, from $3.7
billion in 1988 to $7.1 billion in 1991 (see fig.  1). 

   Figure 1:  Overall Medigap
   Premiums Including Policies
   With Mature and Credible
   Experience, 1988-91

   (See figure in printed
   edition.)

The remainder of this report discusses only those policies with
mature and credible experience. 

From 1988 through 1989, Medigap insurers' aggregate\11 loss ratios
declined for both individual and group policies; that is, insurers
returned a smaller percentage of premium dollars to policyholders in
1989 than in 1988.  In 1990 and 1991, loss ratios gradually increased
for both individual and group policies and for 1991 were
approximately at their 1988 levels (see fig.  2 and app.  I for
details). 

   Figure 2:  Medigap Insurers'
   Aggregate Loss Ratios on Mature
   and Credible Experience,
   1988-91

   (See figure in printed
   edition.)

During the 1988-91 period, Medigap insurers' performance generally
improved.  More companies met the minimum loss ratio standards in
1991 than in 1988, and an increased portion of all companies' earned
premiums met the standards (see table 1). 



                                     Table 1
                     
                       Percentage of Medigap Insurers Whose
                      Aggregate Loss Ratios Met the Minimum
                       Standards and Their Earned Premiums,
                                     1988-91



                                   Aggregate                          Percentage
                                 loss ratios                  Amount    of total
                                 met minimum                     (in      earned
Year                     Total     standards  Percentage   millions)    premiums
----------------------  ------  ------------  ----------  ----------  ----------
1988                       190            84         44%      $3,309         90%
1989                       208           117          56       3,899          83
1990                       217           143          66       5,902          94
1991                       216           154          71       6,873          97
--------------------------------------------------------------------------------

--------------------
\11 Aggregate loss ratios are the sum of benefits paid under all
outstanding policies divided by the sum of premiums.  A company could
have loss ratios on some policies below the standards and yet have an
aggregate loss ratio above the standards. 


   MEDIGAP INSURERS WHOSE LOSS
   RATIOS DID NOT MEET MINIMUM
   STANDARDS
------------------------------------------------------------ Letter :4

While insurers' performance generally improved, several insurers'
loss ratios did not meet the minimum standards.  For some of these
insurers, this poor performance was a long-running problem from 1988
through 1991. 

Premiums collected for policies whose loss ratios did not meet the
minimum standards in one or more states declined from $388 million in
1988 to $206 million in 1991.  While there was a downward trend over
the 4 years, 1989 was an unusual year, as shown in figure 3. 

   Figure 3:  Premiums for
   Insurers Whose Loss Ratios on
   Medigap Policies With Mature
   and Credible Experience Were
   Below Federal Minimum
   Standards, 1988-91

   (See figure in printed
   edition.)

Note:  Companies may sell both individual and group insurance and may
have failed to meet the minimum standards in 1 or more years.  The
unduplicated count of companies is 106 for 1988, 91 for 1989, 74 for
1990, and 62 for 1991.  For the 4 years, it is 163. 

The Prudential Insurance Company of America was the largest
contributor to the more than doubling of premiums for policies not
meeting loss ratio standards from 1988 to 1989.  Prudential's group
policies failed to meet the standard in 30 states in 1989, up from 6
states in 1988.  A company official attributed this to the company's
overestimating claims when premium rates were set for 1989.  He said
that estimating claims was complicated by changes in 1989 coverage
required by the Medicare Catastrophic Coverage Act and the company's
decision to change from nationally uniform premiums to regional
premiums for the group policy sold through the American Association
of Retired Persons. 

From 1988 through 1991, certain insurers' loss ratios were below the
federal minimum standards in every state in which the company did
business.  The premiums collected by these companies declined from
$126 million in 1988 to $35 million in 1991 (see fig.  4).  (See app. 
II for a list of insurers who sold individual policies and app.  III
for a list of insurers who sold group policies.)

   Figure 4:  Premiums for
   Insurers Whose Loss Ratios on
   Their Entire Medigap Business
   With Mature and Credible
   Experience Were Below Minimum
   Standards, 1988-91

   (See figure in printed
   edition.)

Note:  Companies may sell both individual and group insurance and may
have failed to meet the minimum standards in 1 or more years.  The
unduplicated count of companies is 59 for 1988, 46 for 1989, 31 for
1990, and 18 for 1991.  For the 4 years, it is 104. 

We identified three companies whose loss ratios for their entire
mature and credible Medigap business were below federal minimum
standards throughout 1988-91.  The National Security Life and
Accident Insurance Company collected about $5 million in premiums for
its individual policies for the 4-year period.  The other two
companies (Blue Cross and Blue Shield of Oregon and Memphis Hospital
and Surgical Association) sold group policies and collected about $4
million. 


   LOSS RATIO DATA WILL BE
   REPORTED BY POLICY FORM FOR
   1991 AND LATER YEARS
------------------------------------------------------------ Letter :5

As required by OBRA 1990, beginning with reports for 1991, insurers
began to report loss ratio information by policy form rather than by
reporting aggregate experience.  This type of reporting is more
useful to consumers than aggregate experience reporting because it is
based on the policy form, which is what consumers purchase.  OBRA
1990 also required states to maintain loss ratio data covering the
most recent 3 years' experience for policies sold in the state and to
make such information available to interested persons. 

The 1991 policy loss ratios show that 145 individual policies\12 sold
in 45 states did not meet the minimum loss ratio standard, and the
insurers collected about $196 million in premiums\13 on these
policies.  Also, 37 group policies sold in 36 states did not meet the
minimum loss ratio standard, and these insurers collected about $124
million in premiums.  Appendixes IV and V identify the policies with
mature and credible 1991 Medigap loss ratio experience that did not
meet the applicable standard along with their premiums, claims, and
loss ratios.  Appendix IV lists individual policies, and appendix V
lists group policies. 


--------------------
\12 The actual number of policies (both individual and group) is
greater because some companies combined data for similar policies on
a single experience exhibit. 

\13 Premium values reported on a policy form basis (both individual
and group) cannot be compared directly with the aggregate 1991 data
included in earlier sections of this report.  Data from 1988-90 were
reported on an aggregate basis, and we aggregated the policy form
data from 1991 to make it comparable to 1988-90 data.  In this
section, we summarize performance on a policy form basis; aggregate
summaries tend to overstate the amount of compliance because policies
whose loss ratios are above the standard offset policies whose loss
ratios are below the standard. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :6

Our objectives were to (1) identify Medigap insurers' loss ratio
performance during 1990 and 1991 and (2) analyze and compare 1990 and
1991 loss ratio performance with previously reported 1988 and 1989
loss ratio data to identify trends in company performance.  Loss
ratios reflect the relationship between premiums charged and benefits
paid\14 under a Medigap policy.  We developed the information in this
report from computer databases we obtained from NAIC.  NAIC created
the databases from insurance companies' annual Medigap insurance
experience exhibits.  We verified the accuracy of NAIC's databases
through separate random samples of each year's loss ratio experience
exhibit for individual states submitted by the insurance companies. 
Our verification showed that NAIC accurately transferred loss ratio
data from these exhibits to its computer files. 

In our data verification, we identified minor data entry errors that
did not affect our analysis because the errors dealt with immature
business, that is, Medigap policies with less than 3 years'
experience.  NAIC corrected all discrepancies. 

We did not check the accuracy of the individual reports submitted by
approximately 350 companies reporting Medigap loss ratio information. 
Nor did NAIC verify the accuracy of the companies' experience
exhibits. 

This review was conducted from October 1992 to August 1993 and,
except as noted above, in accordance with generally accepted
government auditing standards. 


--------------------
\14 In this report, the term "premium" means earned premium, which is
the amount of total premiums collected applicable to the calendar
year for which a loss ratio is computed.  For example, if a
policyholder paid an annual premium on June 1, only 7 months of that
premium would be earned premium in that calendar year's loss ratio
computation.  Earned premiums include premiums due but uncollected in
the current period.  Also, benefits are "incurred claims," which is
the amount of claims actually paid plus a reserve for claims incurred
but not yet reported or paid. 


---------------------------------------------------------- Letter :6.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 7 days after its issue date.  At that time, we will send copies
to the Secretary of Health and Human Services, the governors of the
states,\15 other interested parties, and make copies available to
others upon request. 

If you have any questions about this report, please call me at (202)
512-7119.  Other major contributors to this report are listed in
appendix VI. 

Sincerely yours,

Sarah F.  Jaggar
Director, Health Financing
 and Policy Issues


--------------------
\15 OBRA 1990 requires us to audit compliance with the Medigap loss
ratio requirements at least once every 3 years and to report the
results to the Secretary and the states involved. 


THE MEDIGAP MARKET, 1988-91
=========================================================== Appendix I

                              (Dollars in millions)




                            Loss            Loss            Loss            Loss
                    Premiu  rati            rati            rati            rati
Type of coverage        ms     o  Premiums     o  Premiums     o  Premiums     o
------------------  ------  ----  --------  ----  --------  ----  --------  ----
Overall market statistics
--------------------------------------------------------------------------------
Individual               $  79.4   $ 5,543  76.3   $ 7,164  78.7   $ 7,465  80.4
                     5,158
Group                2,118  95.2     2,581  80.0     2,847  87.6     3,518  89.8
================================================================================
Total                    $         $ 8,124         $10,011         $10,983
                     7,276

Mature and credible policies\a
--------------------------------------------------------------------------------
Individual               $  85.6   $ 3,060  81.8   $ 4,323  84.0   $ 4,571  85.9
                     2,631
Group                1,066  95.7     1,644  82.4     1,924  90.8     2,508  93.4
================================================================================
Total                    $         $ 4,704         $ 6,247         $ 7,079
                     3,697
--------------------------------------------------------------------------------
\a A mature policy is at least 3 years old.  Credible premium
experience is when at least $150,000 is collected annually on a
policy within a state. 


INDIVIDUAL MEDIGAP INSURERS WITH
MATURE AND CREDIBLE AGGREGATE LOSS
RATIO EXPERIENCE BELOW THE MINIMUM
STANDARD FOR 1 OR MORE YEARS
DURING 1988-91
========================================================== Appendix II

                                                                (Dollars in thousands)



                                                                                             Number                        Number
                                                               Number                            of                            of
                             Number of                             of                        states                        states
                                states                         states                         where                         where
                                 where    Number                where    Number            policies    Number            policies    Number
                              policies        of             policies        of                were        of                were        of
Company name                 were sold    states  Premiums  were sold    states  Premimus      sold    states  Premiums      sold    states  Premiums
------------------  ------------------  --------  --------  ---------  --------  --------  --------  --------  --------  --------  --------  --------
All experience below standard for 4 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
National Security                    1         1    $1,654          1         1    $1,205         1         1    $1,240         1         1    $1,006
 Life & Accident
 Ins. Co.

All experience below standard for 3 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Old Surety Life                      1         1       253          1         1       172         1         0         0         1         1     1,321
 Ins. Co.
Southwest Service                    1         1     1,764          1         1       956         1         1     1,266         1         0         0
 Life Ins. Co.
Great Republic                       1         1     1,539          1         1     1,258         1         1     1,058
 Ins. Co.
Time Ins. Co.                        1         1       271          1         1       306         1         1       286         1         0         0

All experience below standard for 2 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Cincinnati                           1         1       278                                                                      1         1       799
 Equitable Ins.
 Co.
American Patriot                     1         1     1,201          1         1     2,181         1         0         0         1         0         0
 Health Ins. Co.
 of NY
American Standard                    1         1     1,593          1         1     1,411         1         0         0         1         0         0
 Life & Accident
 Ins. Co.
Golden State                         2         2       769          2         2     1,085         1         0         0         1         0         0
 Mutual Life Ins.
 Co.

All experience below standard for 1 or more years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Anthem Life Ins.                                                                                                                1         1       685
 Co.
United Farm Bureau                                                                                1         0         0         1         1       339
 Family Life Ins.
 Co.
Aetna Life Ins &                                                                                 11         4       729         1         1       176
 Annuity Co.
American Life &                                                                                   1         1     9,034         1         0         0
 Accident Ins. Co.
Rural Security                                                                                    1         1     1,505         1         0         0
 Life Ins. Co.
Columbia Health                                                                                   1         1     1,048         1         0         0
 Service
Appalachian Life                                                                                  1         1       527         1         0         0
 Ins. Co.
Shelter Life Ins.                                                                                 1         1       397         1         0         0
 Co.
Security Trust                                                                                    1         1       197
 Life Ins. Co.
Atlas Life Ins.                                                                                   1         1       177
 Co.
World Life &                         2         1       378          2         2     3,159         2         1       387
 Health (L & H)
 Ins. Co. of PA
Security General                     6         4     1,008          5         5       941         3         2       311
 Life Ins. Co.
American                                                            2         2       870         1         0         0         1         0         0
 Progressive L & H
 Ins. Co. of NY
Great Fidelity                       3         2      $642          2         2      $742         3         1      $254         3         1      $500
 Life Ins. Co.
Farm & Home Life                     1         0         0          2         2       703
 Ins. Co.
American Exchange                    1         0         0          1         1       647         1         0         0         1         0         0
 Life Ins. Co.
Independent Life &                                                  1         1       507         1         1     1,132         1         0         0
 Accident Ins. Co.
First United                                                        1         1       463         1         0         0         1         0         0
 American Life
 Ins. Co.
American Family                                                     2         2       455         3         0         0         4         0         0
 Mutual Ins. Co.
Lutheran                             1         0         0          1         1       453         1         0         0         4         1       151
 Brotherhood
Associated Mutual                                                   1         1       279         1         1       332         1         0         0
 Hospital Service
 of MI
Sentry Ins. A                        4         1       165          1         1       235
 Mutual Co.
North American                                                      1         1       165         2         1       183         1         1       245
 Ins. Co.
Southland Life                                                      1         1       162         1         0         0         2         1       262
 Ins. Co.
Harvest Life Ins.                    7         7     5,611          3         2       566         3         1       304         3         0         0
 Co.
Liberty National                     6         6     4,669          6         0         0
 Life Ins. Co.
American Community                   1         1     4,310                                        2         0         0         2         0         0
 Mutual Ins. Co.
Presidential Life                    1         1     3,084
 Ins. Co.
Guarantee Trust                      6         6     2,705          6         6     2,031         9         5     1,186        14         0         0
 Life Ins. Co.
American Republic                    5         5     2,256          8         5     2,605        11         2       632        16         1       199
 Ins. Co.
General Life &                       1         1     2,021          1         0         0
 Accident Ins. Co.
South Atlantic                       1         1     1,340
 Life Ins. Co.
Pekin Life Ins.                      1         1     1,272          1         0         0         1         0         0         1         0         0
 Co.
Investors Heritage                   1         1     1,067
 Life Ins. Co.
Eastern Ins. Co.                     1         1       984
United Teacher                       1         1       929          1         0         0         2         0         0         3         0         0
 Associates Ins.
 Co.
American Travelers                   1         1       782          2         0         0         3         0         0         5         1       334
 Life Ins. Co.
Pilgrim Life Ins.                    1         1       757                                                                      1         0         0
 Co.
Jefferson Life                       1         1       737          1         0         0         1         0         0         1         0         0
 Ins. Co.
Academy Life Ins.                    1         1       711          1         0         0         1         0         0         1         0         0
 Co.
Benefit Trust Life                   2         2      $549          3         3      $747         3         1      $170         3         1      $180
 Ins. Co.
American Sun Life                    1         1       461
 Ins. Co.
Peoples Life Ins.                    1         1       394          1         0         0         1         0         0         1         0         0
 Co. of SC
Combined                             1         1       343          1         0         0         1         0         0         1         0         0
 Underwriters Life
 Ins. Co.
National Benefit                     1         1       311          1         0         0
 Life Ins. Co.
United Security                      1         1       194                                        1         0         0         1         0         0
 Assurance Co. of
 PA
CareAmerica Life                     1         1       187          1         0         0         1         1       255         1         0         0
 Ins. Co.
Vulcan Life Ins.                     1         1       177
 Co.
United Family Life                   1         1       175          1         1       236         1         0         0         3         1       374
 Ins. Co.
Legal Security                       1         1       160
 Life Ins. Co.
American Teachers                    1         1       152
 Life Ins. Co.
First Continental                    1         1       151
 Life & Accident
 Ins. Co.
National Health                      1         1       150
 Ins. Co.

Some experience below standard in 1988-91:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Mutual of Omaha                     48        14    12,442         48        19    26,564        47        26    60,658        46        20    30,843
 Ins. Co.
United American                     20         9    30,276         41        26    70,092        41         9    24,254        41         9    20,309
 Ins. Co.
Union Fidelity                      34        13    13,835         35        23    22,845        35        16    15,992        35        20    17,474
 Life Ins. Co. of
 Trevose
Bankers Life &                      44        26    74,539         44        33   102,257        45         9     8,535        46         6    11,398
 Casualty Co.
National Home Life                  25         4     3,081         28         1       544        32         7     6,443        34         9     8,436
 Assurance Co.
National Financial                   2         1     2,604          2         0         0        15         0         0        18         6     5,189
 Ins. Co.
Statesman National                                                  9         4     3,401         9         3       898         9         7     5,007
 Life Ins. Co.
Central States H &                  10         7     5,963         12         6     2,751        14         1       155        20         6     4,570
 L Co. of Omaha
New York Life Ins.                                                 29        13     3,187        27         5     1,506        29        12     3,808
 Co.
Pyramid Life Ins.                   20        10     8,235         18        12     5,786        17         6     3,408        17         6     3,047
 Co.
American Family                                                                                  11         2       387        20         4     2,475
 Life Assurance
 Co. of Columbus,
 GA
Union Bankers Ins.                   2         0         0         12         5     1,096        22         8     3,507        24         4     2,033
 Co.
Bankers Fidelity                     7         2     6,278          7         3     7,112         8         3     4,962         7         3     1,476
 Life Ins. Co.
World Ins. Co.                       9         0        $0          9         2    $1,167        10         4    $1,876         8         2    $1,391
Gulf Life Ins. Co.                   5         0         0          6         5     3,140         6         3     1,396        11         2     1,144
American Integrity                   8         4     1,571         10         4     2,223        12         5     1,390        12         4     1,137
 Ins. Co.
Colonial Penn                        1         0         0         21         7     3,204        20         0         0        19         3     1,011
 Franklin Ins. Co.
Combined Ins. Co.                                                                                                               5         3       646
 of America
American Ins. Co.                    2         1       589          2         0         0         2         0         0         2         1       576
 of TX
Associated Doctors                  10         3     2,101         10         8     6,250        10         3     1,744        11         1       554
 H & L Ins. Co.
Georgia L & H Ins.                   4         2     1,052          3         0         0         3         0         0         5         1       445
 Co.
Globe Life &                        14         6     3,617         27         9     6,489        26         7     3,478        25         2       372
 Accident Ins. Co.
Equitable Life &                                                                                 15         0         0        15         1       352
 Casualty Ins. Co.
National                            13         6     1,752         15         8     3,577        15         6     1,465        13         2       345
 Foundation Life
 Ins. Co.
Physicians Mutual                   16         7     4,593         25         5     4,738        31         0         0        33         1       334
 Ins. Co.
Mutual Protective                    5         4     1,041          5         2       375         5         0         0        10         1       310
 Ins. Co.
Continental                          3         0         0          4         1       188         4         0         0         6         1       278
 General Ins. Co.
Atlantic American                   12         1     1,892         12         2     1,959        11         7     6,150        11         1       228
 Life Ins. Co.
Federated                                                                                         5         3       624         2         1       224
 Investors Life
 Ins. Co./
 American Combined
 Life Ins. Co.\b
American National                    3         1       195          3         1       564         3         0         0         3         1       190
 Ins. Co.
Life Ins. Co. of                                                                                  7         0         0         9         1       180
 GA
Continental                                                        10         2     1,488        14         2     1,455        13         1       169
 Casualty Co.
American General                    18         3     1,217         19         6     4,321        19        12    16,234        19         0         0
 Life & Accident
 Ins. Co.
Reserve National                     7         5     1,942         11         9     3,296        10         6     2,649        15         0         0
 Ins. Co.
Federal Home Life                   13        11    25,756         11         7     4,961        11         2     1,602        11         0         0
 Ins. Co.
National States                                                                                  14         4     1,384        12         0         0
 Ins. Co.
Principal Mutual                                                                                  2         1     1,318
 Life Ins. Co.
Pioneer Life Ins.                    9         5     4,944         10         7     5,552        28         2     1,106        31         0         0
 Co. of IL
Life & Casualty                      6         1       710          6         4     1,577         6         3     1,049
 Ins. Co. of TN
Guardian Life Ins.                                                                                3         1       203
 Co. of America
Mid South Ins. Co.                   2         1       169          2         0         0         2         1       162
Reserve Life Ins.                   14         5    $2,888         16         6    $3,310
 Co.
National Casualty                   13         7     1,748         10         7     1,947         7         0        $0         5         0        $0
 Co.
Medico Life Ins.                     3         1       167          3         2       761         4         0         0         4         0         0
 Co.
Acceleration Life                    2         0         0          2         1       440         1         0         0         1         0         0
 Ins. Co.
United Founders                                                     2         1       389
 Life Ins. Co.
Golden Rule Ins.                     5         0         0          5         2       340        12         0         0        16         0         0
 Co.
Kanawha Ins. Co.                     2         0         0          2         1       286         2         0         0         2         0         0
Old American Ins.                    7         1       150          4         1       281         3         0         0         3         0         0
 Co.
Nationwide Life                      5         4     1,227          3         1       217         4         0         0         5         0         0
 Ins. Co.
Old Southern Life                    3         1       329          3         1       204         4         0         0
 Ins. Co.
Legacy Life Ins.                     7         4     3,226
 Co.
Mountain States                      3         1     1,263          1         0         0
 Life Ins. Co. of
 America
Hill Country Life                    2         1       534                                                                      1         0         0
 Ins. Co.
Standard Life &                     13         1       372         19         0         0        22         0         0        24         0         0
 Accident Ins. Co.
Bankers Multiple                     3         2       339          1         0         0         1         0         0         1         0         0
 Line Ins. Co.
State Farm Mutual                   32         2       326         35         0         0        38         0         0        39         0         0
 Automobile Ins.
 Co.
U.S. Guardian                        2         1       174          1         0         0
 Health Ins. Co.
Lincoln Life &                       2         1       171          1         0         0
 Casualty Co.
=====================================================================================================================================================
Totals                                            $271,462                       $333,426                      $198,596                      $132,518
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a In calendar year 1991, companies were required to report loss
ratio information by policy form.  For our analyses we aggregated the
1991 premiums and claims to make the loss ratio information
consistent with data reported in calendar years 1988 through 1990. 
As a result, the information in appendix IV, which includes loss
ratios by policy form for calendar year 1991, cannot be directly
compared with information in this appendix. 

\b Name changed in 1991. 

Shading shows that the company either did not do business or had no
mature and credible business. 


GROUP MEDIGAP INSURERS WITH MATURE
AND CREDIBLE AGGREGATE LOSS RATIO
EXPERIENCE BELOW THE MINIMUM
STANDARD FOR 1 OR MORE YEARS
DURING 1988-91
========================================================= Appendix III

                                                                (Dollars in thousands)



                                                                                             Number                        Number
                                                               Number                            of                            of
                             Number of                             of                        states                        states
                                states                         states                         where                         where
                                 where    Number                where    Number            policies    Number            policies    Number
                              policies        of             policies        of                were        of                were        of
Company name                 were sold    states  Premiums  were sold    states  Premiums      sold    states  Premiums      sold    states  Premiums
------------------  ------------------  --------  --------  ---------  --------  --------  --------  --------  --------  --------  --------  --------
All experience below standard for 4 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Blue Cross & Blue                    1         1      $481          1         1      $505         1         1      $606         1         1    $1,124
 Shield of OR
Memphis Hospital                     1         1       301          1         1       195         1         1       220         1         1       307
 Service &
 Surgical Assn.

All experience below standard for 3 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Life Investors                                                      5         5       961         8         8     1,950         8         8     1,983
 Ins. Co. of
 America
King County                                                         1         1     1,885         1         1     1,415         1         1     1,637
 Medical Blue
 Shield
Continental                          3         3       685          2         2       467         2         0         0         1         1     1,043
 Casualty Co.
New Mexico Blue                      1         1     1,053          1         1       723                                       1         1       623
 Cross & Blue
 Shield
Blue Cross & Blue                    1         1     3,245          1         1     3,156         1         1     3,363         1         0         0
 Shield of MN
Blue Cross & Blue                    1         1     2,195          1         1     1,927         1         1     1,620         1         0         0
 Shield United of
 WI
Ins. Co. of North                    1         1       817          1         1       764         3         3     1,143
 America
American General                     1         1     2,031          1         1     1,250         1         1       906
 Group Ins. Co./
 Anthem Life Ins.
 Co.\b
National Casualty                    2         2       986          3         3     1,032         1         1       186         1         0         0
 Co.

All experience below standard for 2 years:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Calfarm Life Ins.                    1         1     3,440          1         1     3,735         1         0         0         1         0         0
 Co.
Continental                          2         2       708          3         3       981
 American Life
 Ins. Co.
Life Ins. Co. of                     2         2     1,616          1         1       170
 North America
Harvest Life Ins.                    5         5     3,511          1         1       242         1         0         0         1         0         0
 Co.
Blue Cross & Blue                    1         1    13,901          1         1    15,192
 Shield of KY

All experience below standard for 1 year:
-----------------------------------------------------------------------------------------------------------------------------------------------------
North American                       5         4     5,146          4         3    13,656         4         1    13,870         2         2    16,782
 Life & Casualty
Mountain State                                                                                    1         0         0         1         1     2,986
 Blue Cross & Blue
 Shield
Blue Cross & Blue                                                                                 1         0         0         1         1     2,566
 Shield of ND
Blue Cross & Blue                                                                                                               1         1      $925
 Shield Plan of NV
Klamath Medical                                                                                                                 1         1       208
 Service Bureau
Blue Cross & Blue                                                                                 1         1   $30,321         1         0         0
 Shield of CT
Guarantee Trust                                                                                   1         1    16,894
 Life Ins. Co.
Associated                                                                                        1         1     6,608         1         0         0
 Hospital Service
 of ME
Community Mutual                                                                                  1         1     2,948
 Ins. Co.
Preferred Life                                                                                    1         1     1,055         1         0         0
 Ins. Co. of NY
Blue Cross & Blue                                                                                 1         1       511
 Shield of MT
Blue Cross of ID                                                                                  1         1       308
 Health Service
Acceleration Life                                                                                 1         1       169
 Ins. Co.
Blue Cross & Blue                                                   1         1   $30,083         1         0         0
 Shield of AL
Blue Cross of                                                       1         1    10,945         1         0         0         1         0         0
 Western NY
Blue Cross & Blue                                                   1         1     4,031         1         0         0         1         0         0
 Shield of NH
Blue Cross & Blue                                                   1         1     1,518         1         0         0         1         0         0
 Shield of MS
Blue Cross & Blue                                                   1         1       869
 Shield of MD
Blue Cross & Blue                                                   1         1       200
 Shield of Kansas
 City
Provident Life &                    12        12   $14,279         19         0         0        28        23    10,851        20         9     3,506
 Accident Ins. Co.
Blue Shield of IA                    1         1    13,440
Group Health                         1         1    13,012
 Service of OK
Corporate Life                       1         1     2,229
 Ins. Co.
Provident Life &                     1         1       995          1         0         0         1         0         0         1         0         0
 Casualty Ins. Co.
Federal Life Ins.                    1         1       518
 Co.
Principal Mutual                     2         2       333         13        12    32,369        14        13    36,137        16        14    34,022
 Life Ins. Co.
United Security                      1         1       287                                                                      1         0         0
 Assurance Co. of
 PA
Providers Fidelity                   1         1      $165
 Life Ins. Co.

Some experience below standard, 1988-91:
-----------------------------------------------------------------------------------------------------------------------------------------------------
Prudential Ins.                     52         6    12,223         53        30  $327,867        53         2    $2,436        53         4    $3,760
 Co. of America
Monumental General                  15        12     5,208         17        12     5,326        22        14     8,319        23         4     1,154
 Ins. Co./Toyota
 Motor Life Ins.
 Co.\c
USAA Life Ins. Co.                                                                               13         0         0        17         1       616
Hartford Life Ins.                                                                                                             39         1       165
 Co.
Mutual Life Ins.                     5         3     5,218          8         4     5,156         8         3     4,587
 Co. of NY
Hartford Accident                                                  41         8     6,614        38         0         0
 & Indemnity Co.
Colonial Penn                       25        16     7,544
 Franklin Ins. Co.
Nationwide Life                      2         1     1,001          2         0         0         2         0         0         2         0         0
 Ins. Co.
=====================================================================================================================================================
Totals                                            $116,567                       $471,820                      $146,425                       $73,410
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a In calendar year 1991, companies were required to report loss
ratio information by policy form.  For our analyses we aggregated the
1991 premiums and claims to make the loss ratio information
consistent with data reported in calendar years 1988 through 1990. 
As a result, the information in appendix V, which includes loss
ratios by policy form for calendar year 1991, cannot be directly
compared with information in this appendix. 

\b Name changed in 1990. 

\c Name changed in 1991. 

Shading shows that the company either did not do business or had no
mature and credible business. 


MEDIGAP INSURERS WITH MATURE AND
CREDIBLE LOSS RATIO EXPERIENCE ON
INDIVIDUAL POLICIES BELOW THE
MINIMUM STANDARD, 1991
========================================================== Appendix IV

                                                                                                Loss
                                                                                                rati
State             Company name                            Policy number     Premiums    Claims     o
----------------  --------------------------------------  --------------  ----------  --------  ----
AL                Associated Doctors Health & Life (H &   380               $484,065  $273,673  56.5
                  L) Ins. Co.

                  Bankers Life & Casualty Co.             GR-75R             700,779   371,626  53.0

                  Mutual of Omaha Ins. Co.                M2 \a              299,502   172,072  57.5

AR                Mutual of Omaha Ins. Co.                M6 \a              187,873    92,795  49.4

                  Pyramid Life Ins. Co.                   G-10               239,305   132,488  55.4

                                                          H-91               181,081    65,727  36.3

                                                          H-94               223,327   105,031  47.0

                  Statesman National Life Ins. Co.        MED484             185,038    98,520  53.2

                                                          P-193, P-222       324,486    23,376   7.2
                                                          \a

AZ                Mutual of Omaha Ins. Co.                15/16CMO \a        203,719   120,700  59.2

                  Union Fidelity Life Ins. Co. of         1053               261,445   145,028  55.5
                  Trevose

CA                American Integrity Ins. Co.             MS-85              294,930   171,854  58.3

                  Anthem Life Ins. Co.                    40071              684,891   405,202  59.2

                  Blue Cross of CA                        442              1,229,000   734,000  59.7

                  Mutual of Omaha Ins. Co.                M1/M65 \a          447,369   148,497  33.2

                                                          M3/M67,H64 \a      354,926   177,627  50.0

                                                          2CMO \a          1,007,225   415,897  41.3

                                                          50VB/51VB/       1,503,636   806,109  53.6
                                                          52VB \a

                  National Home Life Assurance Co.        GSH-1            1,301,958   618,135  47.5

                  Statesman National Life Ins. Co.        P-305              172,587    93,369  54.1

                  Union Fidelity Life Ins. Co. of         8550               817,208   446,295  54.6
                  Trevose

CO                Mutual of Omaha Ins. Co.                C23M/C24M \a       221,355   113,910  51.5

                                                          M1 \a              159,350    80,264  50.4

                                                          M2 \a              774,432   457,993  59.1

                                                          15/16CMO \a        270,555   124,674  46.1

                                                          50VB/51VB/         240,633   136,832  56.9
                                                          52VB \a

                  Union Fidelity Life Ins. Co. of         1053               174,814    88,559  50.7
                  Trevose

                  United American Ins. Co.                MAXC               404,411   217,296  53.7

DC                National Home Life Assurance Co.        NH1380             150,397    63,650  42.3

FL                American Family Life Assurance Co. of   A-19800            188,028   108,198  57.5
                  Columbus, GA

                  Central States H & L Co. of Omaha       533                236,798   129,774  54.8

                  Life Ins. Co. of GA                     6610               724,915   409,341  56.5

                  Mutual of Omaha Ins. Co.                M1 \a              330,365   167,792  50.8

                                                          M3 \a              203,958   109,913  53.9

GA                Mutual of Omaha Ins. Co.                M1/M7 \a           234,613   116,144  49.5

                                                          M2 \a              585,291   333,798  57.0

                  National Financial Ins. Co.             GL65               309,340   140,546  45.4

                  New York Life Ins. Co.                  8145               267,787   130,462  48.7

                  United American Ins. Co.                MVXC               187,831   107,017  57.0

HI                Bankers Life & Casualty Co.             GR-75R             327,531   136,929  41.8

IA                American Family Life Assurance Co. of   A-19800            248,890   125,048  50.2
                  Columbus, GA

                  Bankers Life & Casualty Co.             GR-75R          13,039,374  7,728,39  59.3
                                                                                             3

                  Mutual of Omaha Ins. Co.                M1 \a              325,129   159,137  48.9

                                                          M3/M51/H64 \a      423,879   224,596  53.0

                                                          15/16CMO \a        290,704   171,741  59.1

                                                          2/3CMO,20/22       189,888    87,909  46.3
                                                          \a

                                                          50VB/51VB/         237,947   103,566  43.5
                                                          52VB \a

                  National Foundation Life Ins. Co.       MS100              150,828    75,146  49.8

                  New York Life Ins. Co.                  8145               413,318   178,471  43.2

                  Physicians Mutual Ins. Co.              P197               473,987   283,080  59.7

                  Union Fidelity Life Ins. Co. of         1053               164,953    62,276  37.8
                  Trevose

                                                          8550               154,599    89,087  57.6

                  United American Ins. Co.                MAXC               583,270   291,106  49.9

                                                          MMS                973,512   527,862  54.2

                  World Ins. Co.                          A2485              165,413    98,120  59.3

ID                Union Bankers Ins. Co.                  86M                273,864   161,659  59.0

                  United American Ins. Co.                MAXC               156,882    84,412  53.8

                                                          MAXC+              239,942   136,887  57.1

IL                Bankers Life & Casualty Co.             CR-93T             464,689   272,503  58.6

                  Central States H & L Co. of Omaha       286                233,923   119,567  51.1

                  Continental Casualty Co.                P1-56566           256,037   142,183  55.5

                  Mutual of Omaha Ins. Co.                M1 \a              657,342   389,005  59.2

                                                          2/3/30/31CMO       746,819   397,150  53.2
                                                          \a

                                                          50VB/51VB/         850,177   487,335  57.3
                                                          52VB \a

                  National Casualty Co.                   4006               188,271    95,769  50.9

                  National Home Life Assurance Co.        GSH-1              535,567   308,727  57.6

                  New York Life Ins. Co.                  8145               491,238   284,456  57.9

                  Union Fidelity Life Ins. Co. of         1053               520,740   307,821  59.1
                  Trevose

                                                          8350               568,095   318,548  56.1

                                                          8550               315,964   184,660  58.4

                  United American Ins. Co.                DMXC-U             569,189   313,209  55.0

                                                          MAXC             4,120,392  2,456,83  59.6
                                                                                             0

                                                          MVXC               205,239   114,884  56.0

IN                Associated Doctors H & L Ins. Co.       350                301,911   176,751  58.5

                                                          380                208,411   113,596  54.5

                  Combined Ins. Co. of America            8081               200,762   118,442  59.0

                  Globe Life & Accident Ins. Co.          MCP-3              217,243   127,375  58.6

                  Great Fidelity Life Ins. Co.            7340 & 6135 \a     373,993   201,788  54.0

                  Mutual of Omaha Ins. Co.                M1 \a              213,356   119,738  56.1

                  National Home Life Assurance Co.        NH1380             997,486   569,524  57.1

                  Union Bankers Ins. Co.                  86M                864,002   489,758  56.7

                  Union Fidelity Life Ins. Co. of         1042               251,478   125,867  50.1
                  Trevose

                                                          1053               437,819   175,049  40.0

                                                          8541               309,408   153,858  49.7

                                                          8550               373,827   222,781  59.6

                  United Farm Bureau Family Life Ins.     1                  338,892   201,666  59.5
                  Co.

KS                Mutual of Omaha Ins. Co.                M4/M86,HM17 \a     410,629   191,741  46.7

                                                          50VB/51VB/         202,138   107,117  53.0
                                                          52VB \a

                  United American Ins. Co.                MAXC               645,517   318,045  49.3

                                                          MAXC+              653,791   338,934  51.8

                                                          MMS              1,324,645   736,074  55.6

KY                American Republic Ins. Co.              A-2721             150,285    89,319  59.4

                  Associated Doctors H & L Ins. Co.       380                441,154   235,313  53.3

                  Mutual of Omaha Ins. Co.                M2 \a              554,743   240,487  43.4

                                                          M4,HM17 \a         256,237   152,727  59.6

                  National Financial Ins. Co.             GL65-4             188,433    94,747  50.3

                  Physicians Mutual Ins. Co.              P192               316,421   167,014  52.8

                  Pyramid Life Ins. Co.                   H-94               260,886   134,256  51.5

LA                Atlantic American Life Ins. Co.         MS2083             227,774   136,545  59.9

                  Bankers Life & Casualty Co.             CR-93T             214,249   126,980  59.3

                  Central States H & L Co. of Omaha       286                289,288   163,336  56.5

                  Mutual of Omaha Ins. Co.                2/3CMO,20/22       261,095   141,119  54.0
                                                          \a

                                                          50VB/51VB/         309,074   126,615  41.0
                                                          52VB \a

                  New York Life Ins. Co.                  8145               778,662   379,298  48.7

                  Statesman National Life Ins. Co.        P-376,P-376R       201,218   120,387  59.8
                                                          \a

                                                          P305,P378,P373     165,953    89,779  54.1
                                                          \a

                  United American Ins. Co.                MC7                217,779   129,386  59.4

MA                Blue Cross & Blue Shield of MA          MXLO               555,085   302,426  54.5

                  Mutual of Omaha Ins. Co.                C23M/C24M \a       155,585    92,912  59.7

                                                          M17 \a             168,848    98,815  58.5

                                                          2/3/4/23/          178,768   103,092  57.7
                                                          24CMO \a

                  National Home Life Assurance Co.        NH 910             361,621   180,849  50.0

MD                American Integrity Ins. Co.             MMS-84             158,789    57,662  36.3

                  Bankers Life & Casualty Co.             GR-73S             186,281    86,209  46.3

                  Mutual of Omaha Ins. Co.                2/3/34/35CMO       193,342   110,214  57.0
                                                          \a

                                                          50VB/51VB/         186,317   102,756  55.2
                                                          52VB \a

ME                American Travelers Life Ins. Co.        WLH-54             305,611   174,285  57.0

MI                National Home Life Assurance Co.        NH 910             154,089    86,215  56.0

MN                American Family Life Assurance Co. of   A-19800            679,140   298,317  43.9
                  Columbus, GA

                  Continental General Ins. Co.            316                370,754   209,286  56.4

                  Mutual of Omaha Ins. Co.                M1/M21 \a          159,256    69,694  43.8

                                                          M2/M22/M92 \a    1,162,975   649,610  55.9

                                                          50VB/51VB/         234,674   126,001  53.7
                                                          52VB \a

MO                American National Ins. Co.              GMS-6              189,953    80,211  42.2

                  American Republic Ins. Co.              A-2721             673,045   400,260  59.5

                  Associated Doctors H & L Ins. Co.       380                179,535   104,181  58.0

                  Blue Cross & Blue Shield of MO          MC-1               643,589   355,265  55.2

                                                          UC-24           21,736,241  10,850,8  49.9
                                                                                            66

                  Central States H & L Co. of Omaha       286                425,840   237,052  55.7

                  Mutual of Omaha Ins. Co.                M1/M75 \a          267,634   101,493  37.9

                                                          M2/M76 \a          783,999   404,314  51.6

                                                          M4/M78 \a          618,669   332,387  53.7

                                                          15/16CMO \a        453,036   232,162  51.2

                                                          2/3/4CMO,20/       646,144   317,240  49.1
                                                          22 \a

                                                          50VB/51VB/         596,759   303,650  50.9
                                                          52VB \a

                  Physicians Mutual Ins. Co.              P197               171,050    88,780  51.9

                  Pyramid Life Ins. Co.                   G-10               271,020   144,635  53.4

                  Union Fidelity Life Ins. Co. of         1042               349,839   187,443  53.6
                  Trevose

                                                          1053             1,070,597   534,834  50.0

                                                          8550               258,051   142,249  55.1

                  United American Ins. Co.                MBXC               205,026   115,044  56.1

                  World Ins. Co.                          A2480              852,521   420,644  49.3

                                                          A2485              158,557    52,092  32.9

MS                Associated Doctors H & L Ins. Co.       380                860,692   503,410  58.5

                  Bankers Life & Casualty Co.             CR-93T             164,874    90,245  54.7

                  Gulf Life Ins. Co.                      MED-1              232,356   101,675  43.8

                  New York Life Ins. Co.                  8145               235,015   120,971  51.5

                  Union Fidelity Life Ins. Co. of         1042               233,528   130,314  55.8
                  Trevose

                                                          8550               262,476   148,395  56.5

                  United American Ins. Co.                MAXC+              803,358   397,730  49.5

MT                Equitable Life & Casualty Ins. Co.      700                317,911   177,714  55.9

                  Mutual of Omaha Ins. Co.                M2 \a              157,611    92,446  58.7


                                                          M4,HM25 \a         269,905   128,622  47.7

NC                Bankers Fidelity Life Ins. Co.          MS1083             808,485   460,529  57.0

                  Bankers Life & Casualty Co.             GR-73S             683,621   381,046  55.7

                  Blue Cross & Blue Shield of NC          M145               299,012   135,033  45.2

                                                          M148            13,086,411  7,106,68  54.3
                                                                                             4

                                                          M3                 226,687   118,026  52.1

                  Globe Life & Accident Ins. Co.          MCP-3              392,324   214,256  54.6

                  Mutual of Omaha Ins. Co.                M27 \a             238,213   132,862  55.8

                                                          M28 \a             598,331   324,154  54.2

                                                          M30,HM17\a         184,405    79,173  42.9

                                                          11/12CMO,20/       217,218    92,484  42.6
                                                          22 \a

                                                          50VB/51VB/         634,923   359,385  56.6
                                                          52VB \a

                  National Financial Ins. Co.             GL65               303,333   168,685  55.6

                                                          MG-82              188,345   100,133  53.2

                                                          MS(86)R            392,111   229,432  58.5

                  National Home Life Assurance Co.        NH 910             259,767   147,828  56.9

                                                          NH1380           2,384,109  1,426,46  59.8
                                                                                             8

                  New York Life Ins. Co.                  8145               310,895   179,601  57.8

                  Union Fidelity Life Ins. Co. of         1053             1,062,495   543,004  51.1
                  Trevose

                  United American Ins. Co.                MBXC               181,451   101,867  56.1

                                                          MMS              1,819,947   915,451  50.3

                  United Family Life Ins. Co.             AA31               355,494   182,379  51.3

                  World Ins. Co.                          A2480              424,436   251,876  59.3

ND                Mutual of Omaha Ins. Co.                M2 \a              248,285   117,778  47.4

                  United American Ins. Co.                MAXC               639,383   291,065  45.5

                                                          MAXC+              657,200   378,092  57.5

NE                Bankers Life & Casualty Co.             GR-75R           3,177,743  1,742,60  54.8
                                                                                             3

                  Central States H & L Co. of Omaha       286                583,661   243,575  41.7

                  Continental General Ins. Co.            314                229,683   119,269  51.9

                  Mutual of Omaha Ins. Co.                C23M/C24M \a       204,743   104,680  51.1

                                                          M1 \a              160,609    60,781  37.8

                                                          M2 \a              728,779   371,154  50.9

                                                          M3,H64 \a          230,094    93,159  40.5

                                                          M4,HM17 \a         969,234   558,900  57.7

                                                          15/16CMO \a        210,022    86,714  41.3

                                                          2/3/4/30/          235,259   100,217  42.6
                                                          31CMO \a

                                                          50VB/51VB/         302,380   145,814  48.2
                                                          52VB \a

                  Mutual Protective Ins. Co.              487                185,747    83,883  45.2

                  National Foundation Life Ins. Co.       MS100              179,331    98,729  55.1

                  National Home Life Assurance Co.        GSH-1              190,608   113,179  59.4

                  New York Life Ins. Co.                  8145               208,047    79,514  38.2

                  Union Fidelity Life Ins. Co. of         1053               212,770    84,116  39.5
                  Trevose

                  United American Ins. Co.                MAXC               308,825   178,082  57.7

                                                          MAXC+              831,226   383,715  46.2

                                                          MMS              1,092,647   616,598  56.4

                  World Ins. Co.                          A2485              235,068   127,820  54.4

NJ                Colonial Penn Franklin Ins. Co.         10-82-460          337,046   196,982  58.4

                  National Home Life Assurance Co.        NH 910             466,818   262,120  56.2

                                                          NH1380           1,137,591   634,745  55.8

                  Union Fidelity Life Ins. Co. of         1042               211,778    91,959  43.4
                  Trevose

                                                          1053               443,386   208,943  47.1

                                                          8550               496,424   241,919  48.7

NM                Bankers Fidelity Life Ins. Co.          MS1083             199,646   116,113  58.2

                  National Home Life Assurance Co.        NH1380             252,680   117,411  46.5

                  Union Fidelity Life Ins. Co. of         1053               153,956    73,759  47.9
                  Trevose

                  United American Ins. Co.                MAXC+              348,977   191,363  54.8

NV                New York Life Ins. Co.                  8145               186,428    95,815  51.4

NY                Aetna Life Insurance & Annuity Co.      24310              175,602    77,166  43.9

                  Colonial Penn Franklin Ins. Co.         10-82-316          274,422   141,628  51.6

                  First United American Life Ins. Co.     NY-MAXC            271,111   136,584  50.4

OH                Acceleration Life Ins. Co.              AMSP-511           444,742   252,559  56.8

                  American Family Life Assurance Co. of   A-19800            190,621   112,801  59.2
                  Columbus, GA

                  Central States H & L Co. of Omaha       286                473,733   242,515  51.2

                  Mutual of Omaha Ins. Co.                15/16CMO \a        396,511   224,174  56.5

                  National Home Life Assurance Co.        NH 910             442,133   237,079  53.6

                  Union Fidelity Life Ins. Co. of         1053             1,087,598   556,180  51.1
                  Trevose

                                                          8550               526,472   305,807  58.1

OK                Globe Life & Accident Ins. Co.          MCP-3              267,287   153,721  57.5

                  Mutual of Omaha Ins. Co.                M2/M112 \a       1,473,297   749,847  50.9

                                                          M4/M114 \a         693,682   353,904  51.0

                                                          50VB/51VB/         192,331    89,885  46.7
                                                          52VB \a

                  New York Life Ins. Co.                  8145               175,818    63,716  36.2

                  Old Surety Life Ins. Co.                MS               1,321,278   758,574  57.4

                  Union Fidelity Life Ins. Co. of         1042               202,263   111,002  54.9
                  Trevose

                  United American Ins. Co.                DMXC-U             169,916    80,910  47.6

                                                          MAXC+              790,530   443,828  56.1

                                                          MMS              1,337,470   726,649  54.3

OR                Mutual of Omaha Ins. Co.                M94 \a             502,470   290,676  57.8

                                                          M96,HM17 \a        279,313   152,179  54.5

                                                          50VB/51VB/         177,141    74,785  42.2
                                                          52VB \a

                  Pyramid Life Ins. Co.                   G-10               177,631   101,089  56.9

                  United American Ins. Co.                MAXC             1,046,848   590,270  56.4

                                                          MAXC+            1,577,046   834,541  52.9

                                                          MMS              1,695,293   958,054  56.5

PA                National Home Life Assurance Co.        NH 910             388,639   231,738  59.6

                                                          NH1190             240,038   130,786  54.5

SC                Independent Life & Accident Ins. Co.    MCS 101            171,313    87,515  51.1

                  Liberty Life Ins. Co.                   892                163,573    95,789  58.6

                  Life Ins. Co. of GA                     6612               251,463   121,100  48.2

                  New York Life Ins. Co.                  8145               160,196    88,156  55.0

SD                Bankers Life & Casualty Co.             GR-75R           1,046,789   614,603  58.7

                  United American Ins. Co.                MAXC               365,240   216,330  59.2

TN                American Family Life Assurance Co. of   A-19800            324,046   181,437  56.0
                  Columbus, GA

                  Continental Life Ins. Co. of Brentwood  SSC85              952,953   567,951  59.6

                  Georgia H & L Ins. Co.                  803                221,520   128,423  58.0

                  Life Ins. Co. of GA                     6612               194,099    80,961  41.7

                  Mutual of Omaha Ins. Co.                M2 \a              544,564   278,759  51.2

                                                          M4,HM30 \a         248,508   132,507  53.3

                                                          2/3/30CMO,20       242,801   139,001  57.2
                                                          \a

                                                          50VB/51VB/         191,319    64,527  33.7
                                                          52VB \a

                  National Home Life Assurance Co.        GSH-1              197,774   103,550  52.4

                  Pyramid Life Ins. Co.                   G-10               356,582   178,481  50.1

                                                          H-94               530,828   239,604  45.1

                  Union Fidelity Life Ins. Co. of         1042               257,410   147,531  57.3
                  Trevose

                                                          1053               588,226   346,047  58.8

TX                American Ins. Co. of TX                 AMS78              575,644   332,397  57.7

                  American Integrity Ins. Co.             MS-7/8 \a          166,860    84,886  50.9

                                                          MS-85              210,784   106,932  50.7

                  American Life & Accident Ins. Co.       A-MAXC+            685,432   379,390  55.4

                                                          AL-02              258,631   151,506  58.6

                                                          AL-100           3,372,259  1,984,10  58.8
                                                                                             1

                                                          S30                164,486    91,795  55.8

                                                          S35              1,053,020   617,973  58.7

                  Central States H & L Co. of Omaha       286                601,746   309,291  51.4

                  Mutual of Omaha Ins. Co.                15/16CMO \a        895,000   492,821  55.1

                                                          2/3CMO,20AGHO      920,878   548,091  59.5
                                                          \a

                                                          50VB/51VB/       1,035,199   489,158  47.3
                                                          52VB \a

                  National Financial Ins. Co.             PMS86              180,616    87,372  48.4

                  National Security Life & Accident Ins.  SC                 394,632   176,316  44.7
                  Co.

                  Statesman National Life Ins. Co.        P-181            1,041,417   548,365  52.7

                                                          P305,P306,P297     854,361   462,204  54.1
                                                          \a

                  Union Bankers Ins. Co.                  76M                398,084   227,499  57.1

                  Union Fidelity Life Ins. Co. of         8350               584,907   343,511  58.7
                  Trevose

UT                Blue Cross & Blue Shield of UT          B883650013007      360,507   200,606  55.6

                                                          B883650013012      347,052   151,277  43.6

                  Mutual of Omaha Ins. Co.                M4,HM17 \a         150,620    85,591  56.8

                  United American Ins. Co.                MAXC+              228,679   103,778  45.4

VA                American Family Life Assurance Co. of   A-19800            336,920   154,074  45.7
                  Columbus, GA

                  Globe Life & Accident Ins. Co.          MCP-3              342,517   200,979  58.7

                                                          MCP-4              168,579    75,367  44.7

                  Gulf Life Ins. Co.                      MED-1              650,606   389,509  59.9

                  Mutual of Omaha Ins. Co.                M3/M71,H64 \a      154,246    78,896  51.1

                                                          M35 \a             288,761   130,657  45.2

                                                          M4/M72 \a          406,911   226,962  55.8

                  National Financial Ins. Co.             GL65-4             184,452    65,316  35.4

                  New York Life Ins. Co.                  8145               237,932   111,002  46.7

                  Pyramid Life Ins. Co.                   G-10               158,414    69,690  44.0

                                                          H-94               158,368    69,398  43.8

                  Union Fidelity Life Ins. Co. of         1042               229,526   105,168  45.8
                  Trevose

                                                          1053               640,848   340,428  53.1

                                                          8550               467,719   277,229  59.3

                  United American Ins. Co.                MAXC+            1,048,058   574,581  54.8

WA                Bankers Fidelity Life Ins. Co.          MS1083             467,429   261,658  56.0

                  Bankers Life & Casualty Co.             GR-75R           3,629,420  2,042,71  56.3
                                                                                             8

                  Central States H & L Co. of Omaha       286                164,348    96,112  58.5

                  National Home Life Assurance Co.        NH1380             437,657   251,641  57.5

                  New York Life Ins. Co.                  8145               291,217   159,895  54.9

                  Union Fidelity Life Ins. Co. of         1053               166,903    78,597  47.1
                  Trevose

WI                American Family Life Assurance Co. of   A-19700            186,809    86,653  46.4
                  Columbus, GA

                                                          A-19800            639,370   338,905  53.0

                  Central States H & L Co. of Omaha       286              1,899,728  1,105,46  58.2
                                                                                             5

                  Mutual of Omaha Ins. Co.                M40,HM26 \a      1,951,117  1,159,89  59.4
                                                                                             5

                                                          50/51CMO \a        246,761   133,321  54.0

                  North American Ins. Co.                 400                170,616    63,099  37.0

                  United American Ins. Co.                DMXC-U             234,474   132,191  56.4

WV                Mutual of Omaha Ins. Co.                M1/M79 \a          165,663    89,440  54.0

                                                          50VB/51VB/         188,463   109,779  58.2
                                                          52VB \a

                  Union Fidelity Life Ins. Co. of         1053               320,375   166,225  51.9
                  Trevose

WY                Bankers Life & Casualty Co.             GR-75R             464,925   219,913  47.3

                  United American Ins. Co.                MAXC+              310,343   157,476  50.7

====================================================================================================
Totals                                                                    $195,984,1  $105,185
                                                                                  56      ,275
----------------------------------------------------------------------------------------------------
\a Companies included data for similar policies on a single
experience exhibit. 


MEDIGAP INSURERS WITH MATURE AND
CREDIBLE LOSS RATIO EXPERIENCE ON
GROUP POLICIES BELOW THE MINIMUM
STANDARD, 1991
=========================================================== Appendix V

St                                                                            Loss
at                                                                            rati
e   Company name                  Policy number         Premiums      Claims     o
--  ----------------------------  ----------------  ------------  ----------  ----
AL  North American Life &         GSC-1300              $209,187    $110,924  53.0
    Casualty

AZ  Principal Mutual Life Ins.    GC500(D) WITH GC       241,560     134,783  55.8
    Co.

CA  Principal Mutual Life Ins.    GC500(D) WITH GC       243,781     126,361  51.8
    Co.

CO  Life Investors Ins. Co. of    GMS 1,2,3 \a           218,558     102,049  46.7
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC       331,665     212,413  64.0
    Co.

DC  North American Life &         GSC-1012               246,543     128,165  52.0
    Casualty

                                  GSC-1090               150,342      79,182  52.7

                                  GSC-1310             2,671,438   1,656,045  62.0

                                  GSC-1385             7,246,522   4,823,240  66.6

                                  GSC-1395               414,519     280,887  67.8

                                  GSC-1544               586,112     346,662  59.1

    Preferred Life Ins. Co. of    GSC-1310-PL            315,590     184,135  58.3
    NY

DE  Provident Life & Accident     F-63150                326,812     203,801  62.4
    Ins. Co.

GA  Provident Life & Accident     F-65872                278,031     179,095  64.4
    Ins. Co.

HI  Prudential Ins. Co. of        01                     985,962     682,673  69.2
    America

IA  Life Investors Ins. Co. of    GMS 1,2,3 \a           336,538     121,228  36.0
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC    14,020,163   8,852,946  63.1
    Co.

IL  Continental Casualty Co       44017                1,043,320     652,958  62.6

    Life Investors Ins. Co. of    GMS 1,2,3 \a           218,768      77,455  35.4
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC     1,028,204     756,447  73.6
    Co.

IN  Life Investors Ins. Co. of    GMS 1,2,3 \a           244,275     108,787  44.5
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC       605,504     404,019  66.7
    Co.

MA  Blue Cross & Blue Shield of   ME 2                50,933,901  29,022,187  57.0
    MA

                                  ME 4                 2,438,483   1,103,984  45.3

    Provident Life & Accident     F-65872                167,543      79,552  47.5
    Ins. Co.

    Toyota Motor Life Ins. Co.    MSP2000                310,311     231,725  74.7

MD  Toyota Motor Life Ins. Co.    MSP2000                281,468     187,160  66.5

MN  Life Investors Ins. Co. of    GMS 1,2,3 \a           377,045     192,892  51.2
    America

MO  Blue Cross & Blue Shield of   LMC-1                  522,926     347,304  66.4
    MO

                                  UC-24                3,335,484   2,243,323  67.3

    Principal Mutual Life Ins.    GC500(D) WITH GC       757,668     515,643  68.1
    Co.

NC  Provident Life & Accident     F-63150                572,311     316,990  55.4
    Ins. Co.

                                  F-65872                230,249     160,200  69.6

ND  Blue Cross & Blue Shield of   MEDICARE             2,556,918   1,871,787  73.2
    ND                            EXTENDED

    Principal Mutual Life Ins.    GC500(D) WITH GC       253,532     168,196  66.3
    Co.

    Prudential Ins. Co. of        01                   1,535,480     963,734  62.8
    America

NE  Blue Cross & Blue Shield of   9704(I),               193,555      94,588  48.9
    NE                            9710(G)\a

    Life Investors Ins. Co. of    GMS 1,2,3 \a           229,771     104,552  45.5
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC     6,873,824   4,911,736  71.5
    Co.

NJ  Provident Life & Accident     F-65872                450,283     305,559  67.9
    Ins. Co.

NM  New Mexico Blue Cross & Blue  M296                   502,168     169,290  33.7
    Shield

NV  Blue Cross & Blue Shield      82171                  525,444     320,596  61.0
    Plan of NV

                                  82172                  301,027     183,670  61.0

OH  Principal Mutual Life Ins.    GC500(D) WITH GC       583,313     328,192  56.3
    Co.

    Provident Life & Accident     F-63150                343,197     255,296  74.4
    Ins. Co.

OK  Principal Mutual Life Ins.    GC500(D) WITH GC       156,354     116,823  74.7
    Co.

OR  Blue Cross & Blue Shield of   88-MEDSTD-20         1,082,485     706,358  65.3
    OR

    Klamath Medical Service       MS 65                  208,230     141,900  68.1
    Bureau

PA  Provident Life & Accident     F-65872                319,329     203,469  63.7
    Ins. Co.

PR  Prudential Ins. Co. of        01                   1,063,607     672,569  63.2
    America

SC  Provident Life & Accident     F-63150                294,975     187,249  63.5
    Ins. Co.

SD  Life Investors Ins. Co. of    GMS 1,2,3 \a           155,553      57,593  37.0
    America

TN  Memphis Hospital Service &    BCBS-65 CO-051         307,401     159,891  52.0
    Surgical Assn.

    Provident Life & Accident     F-63150                266,513     183,625  68.9
    Ins. Co.

TX  Principal Mutual Life Ins.    GC500(D)TX GC        2,893,543   1,836,155  63.5
    Co.

UT  Blue Cross & Blue Shield of   B883650013007          186,752     115,687  61.9
    UT

    Hartford Life Ins. Co.        SPR-7318               154,420     108,614  70.3

VA  Provident Life & Accident     F-65872                171,487     103,287  60.2
    Ins. Co.

    Toyota Motor Life Ins. Co.    MSP2000                353,893     231,029  65.3

    USAA Life Ins. Co.            AG4001                 616,221     430,468  69.9

VI  Prudential Ins. Co. of        01                     175,394     104,459  59.6
    America

WA  King County Medical Blue      33800                  253,384     188,444  74.4
    Shield

                                  33900                  176,657     131,382  74.4

                                  34000                  403,586     300,151  74.4

                                  34200                  163,003     121,226  74.4

    Principal Mutual Life Ins.    GC500(D) WITH GC       165,908      95,308  57.4
    Co.

    Toyota Motor Life Ins. Co.    MSP2000                208,423     145,837  70.0

WI  Life Investors Ins. Co. of    GMS 1,2,3 \a           202,748     100,727  49.7
    America

    Principal Mutual Life Ins.    GC500(D) WITH GC     5,867,409   4,148,788  70.7
    Co.

WV  Mountain State Blue Cross &   ED214                1,917,393   1,391,861  72.6
    Blue Shield

==================================================================================
To                                                  $124,003,963  $76,285,31
ta                                                                         1
ls
----------------------------------------------------------------------------------
\a Companies included data for similar policies on a single
experience exhibit. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI

HEALTH, EDUCATION, AND HUMAN
SERVICES DIVISION,
WASHINGTON, D.C. 

Thomas G.  Dowdal, Assistant Director, (410) 965-8021
Roger T.  Hultgren, Assignment Manager
Jerry G.  Baugher, Evaluator

PHILADELPHIA REGIONAL OFFICE

Michael J.  Stepek, Regional Management Representative
Michael R.  Piskai, Evaluator-in-Charge
Frank J.  Foley, Computer Specialist

