The National
Association of Insurance Commissioners creates model laws for states to pass.
A National
Association of Insurance Commissioners' task force will collect data from
several insurers over the coming weeks as part of its effort to establish a
uniform long-term care rate review process.
The Long‐Term Care Insurance Task Force is
charged with developing a "consistent national
approach for reviewing long‐term care insurance rates that results in actuarially appropriate increases being granted by the states in a timely manner and eliminates cross‐state rate subsidization."
approach for reviewing long‐term care insurance rates that results in actuarially appropriate increases being granted by the states in a timely manner and eliminates cross‐state rate subsidization."
As part of that
effort, the NAIC is spending $110,000 to contract with a consultant to collect
the data from 19 insurers operating in states that include Texas, Virginia,
Nebraska, Utah and Minnesota.
Comments are being
accepted on the data-collection proposal until Jan. 28 and can be sent via
email to to jwoody@naic.org.
The NAIC developed
a request for proposals for the data collection in November and sent it to 12
firms, the association said. A firm is expected to be selected in mid-February,
the NAIC said.
"The selected
firm will be asked to review, analyze, and offer suggested improvements to the
draft data call and instructions developed by the regulators," the fiscal impact statement for the contract
reads. "The consulting firm will then conduct the data call and
accumulate, analyze, and describe to the NAIC Members the current level of rate
inequity among states’ policyholders."
Actuarial
Miss
A popular product
in the 1990s, LTCi was badly underpriced. Many insurers sought, and continue to
seek, significant rate hikes to stabilize their books.
For example, Blue
Cross Blue Shield of Florida policyholders were notified last winter that
annual premiums for their coverage will increase by an average of 94 percent
through 2021.
The company
originally requested a 280 percent hike but state regulators refused to grant
that, telling the company the request was not "adequately demonstrated to
be reasonable in relation to the benefits provided," according to a
consent order by the state Office of Insurance Regulation.
While many insurers
got out of the LTCi business, others are back as the baby boomer population
ages and long-term care hedging demand remains strong.
The NAIC established the task force one year ago
to tackle the pricing issue.
The uniform rate
hike proposal is relatively simple: streamline the LTCi rate review process so
multiple state insurance departments are not duplicating the same work, while
insurers are not answering the same questions over and over. Time and money
would be saved and a uniformity would emerge over time.
NAIC developed a
similar uniform process for market conduct and other financial examinations.
A second part of
the task force's charge is to "identify options to provide consumers
choice regarding modifications to long-term care insurance contract benefits
where policies are no longer affordable due to rate increases."
The task force is
to deliver a proposal to the Executive Committee by the 2020 Fall National
Meeting. Unless otherwise extended or modified by the Executive Committee,
the task force and its charges will expire Jan. 31, 2021.
InsuranceNewsNet
Senior Editor John Hilton has covered business and other beats in more than 20
years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow
him on Twitter @INNJohnH.
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