---
kind: "section"
citation: "45 C.F.R. § 158.230"
title: "45"
number: "158.230"
heading: "Credibility adjustment."
url: "https://uscodex.org/cfr/45/158.230"
---

# §158.230. Credibility adjustment.

- (a) **General rule.** An issuer may add to the MLR calculated under [§ 158.221(a)](/cfr/45/158.221.md?p=a) of this subpart the credibility adjustment specified by [§ 158.232](/cfr/45/158.232.md) of this section, if such MLR is based on partially credible experience as defined in [paragraph (c)(2)](#c-2) of this section. An issuer may not apply the credibility adjustment if the issuer's experience is fully credible, as defined in [paragraph (c)(1)](#c-1) of this section, or non-credible, as defined in [paragraph (c)(3)](#c-3) of this section.
- (b) **Life-years.** The credibility of an issuer's experience is based upon the number of life-years covered by the issuer. Life-years means the total number of months of coverage for enrollees whose premiums and claims experience is included in the report to the Secretary required by [§ 158.110](/cfr/45/158.110.md) of this part, divided by 12.
- (c) **Credible experience.**
  - (1) An MLR calculated under [§ 158.221(a) through (c)](/cfr/45/158.221.md?p=a..c) of this subpart is fully credible if it is based on the experience of 75,000 or more life-years.
  - (2) An MLR calculated under [§ 158.221(a) through (c)](/cfr/45/158.221.md?p=a..c) of this subpart is partially credible if it is based on the experience of at least 1,000 life-years and fewer than 75,000 life-years.
  - (3) An MLR calculated under [§ 158.221(a) through (c)](/cfr/45/158.221.md?p=a..c) of this subpart is non-credible if it is based on the experience of less than 1,000 life-years.
- (d) If an issuer's MLR is non-credible, it is presumed to meet or exceed the minimum percentage required by [§ 158.210](/cfr/45/158.210.md) or [§ 158.211](/cfr/45/158.211.md) of this subpart.

## Notes

### Authority

Authority: 42 U.S.C. 300gg-18.

### Source

Source: 75 FR 74921, Dec. 1, 2010, unless otherwise noted.