2. Section 57.2 is amended by revising paragraph (k) to read as follows:
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(k) Net premiums written —(1) In general. The term net premiums written means premiums written, adjusted as provided in paragraph (k)(2) of this section.
(2) Adjustments. Net premiums written include adjustments to account for:
(i) Assumption reinsurance, but not indemnity reinsurance. Net premiums written include reinsurance premiums written, reduced by reinsurance ceded, and reduced by ceding commissions with respect to the data year. Net premiums written do not include premiums written for indemnity reinsurance and are not reduced by indemnity reinsurance ceded because indemnity reinsurance within the meaning of paragraph (h)(5)(i) of this section is not health insurance under paragraph (h)(1) of this section. However, in the case of assumption reinsurance within the meaning of paragraph (h)(5)(ii) of this section, net premiums written include premiums written for assumption reinsurance, reduced by assumption reinsurance premiums ceded.
(ii) Medical loss ratio (MLR) rebates. Net premiums written are reduced by MLR rebates with respect to the data year. For this purpose, MLR rebates are computed on an accrual basis.
(iii) Premium adjustments related to retrospectively rated contracts. Net premiums written include retrospectively rated contract receipts and are reduced by retrospectively rated contract payments with respect to the data year. For this purpose, net premium adjustments related to retrospectively rated contracts are computed on an accrual basis.
(iv) Amounts related to the risk adjustment program under section 1343 of the ACA. Net premiums written include risk adjustment payments (within the meaning of 42 U.S.C. 18063(b)) received with respect to the data year and are reduced by risk adjustment charges (within the meaning of 42 U.S.C. 18063(a)) paid with respect to the data year. For this purpose, risk adjustment payments and risk adjustment charges are computed on an accrual basis.
(v) Additional adjustments published in the Internal Revenue Bulletin. The IRS may provide rules in guidance published in the Internal Revenue Bulletin (see § 601.601(d)(2) of this chapter) for additional adjustments against premiums written in determining net premiums written.