Brighthouse Long Term Care Insurance: Parts of a Rube Goldberg LTCI Machine

Policyholders buy from Travelers and their interests are hot potatoed to a bunch of players they’ve never heard about or from.

This is part 2 of Well Over the Top (recent filing of Brighthouse) which doesn’t look like it is about Brighthouse at all.

Page 2 of 426 lists various stakeholders.

Milliman, Inc…retained by GNA Corporation to submit…referenced rate filing on behalf of Brighthouse… In preparing this rate filing,…data provided to me by Union Fidelity Life Insurance Company (UFLIC), the retrocessionaire on this business, and Genworth Life Insurance Company (Genworth), a reinsurer of this business…”.

So from this gaggle, who is most on-the-hook? Appears to be UFLIC, but without knowing the full nature of reinsurance agreements, appearances could be deceiving. Having grown up watching too many Twilight Zone episodes & taking them seriously, it reminds me of the episode “The Monsters Are Due on Main Street” where neighbors turn on one another & accuse each other of being an alien.

In this case, however, the entertaining value is lost when you read on and learn (but stay tuned for the Grand Finale):

  • Genworth is currently the administrator on this block of LTC policies;
  • UFLIC is the ultimate risk holder and has been the ultimate risk holder since 2008.

Historians might be interested in:

• These long-term care (LTC) policies were written by Travelers Life Insurance Company through individual agents and producers.
• Travelers entered into an indemnity reinsurance agreement with a GE Capital business that is now Genworth in 2000.
• From July 2000 to July 2008, Genworth reinsured these LTC policies on a 90% indemnity coinsurance basis.
• Genworth retroceded 100% of its risk to UFLIC in 2004.
• Travelers, later renamed to MetLife Insurance Company of Connecticut (MetLife of CT) when it was purchased by MetLife, Inc in 2005, retained 10% of the risk until July 2008.
• In July 2008 Genworth assumed the remaining 10% of the Traveler’s LTC coverage and as a result Genworth retroceded this additional 10% to UFLIC.
• MetLife of CT was renamed into MetLife Insurance Company USA in 2014.
• In 2017, MetLife Insurance Company USA was renamed Brighthouse Life Insurance Company. Policyholders now recognize Brighthouse Life Insurance Company as the insurer.

Page 425, from Brighthouse, lists the responsibilities of the parties.

“Milliman has been retained by GLIC, as administrator, to provide actuarial support for the LTC Rate Filings. GLIC is the reinsurer and administrator of the Brighthouse Life Insurance Company long term care insurance policies…, which are the subject of the LTC Rate Filings, … GLIC has since retroceded the Reinsured Policies to Union Fidelity Life Insurance Company (“UFLIC”), under a Retrocession Agreement dated April 15, 2004.

Page 426, from Genworth, echoes the information above.

Summary: Policyholders buy from Travelers and their interests are hot potatoed to a bunch of players they’ve never heard about or from. What exactly is Brighthouse’s interest in this rate filing? Do they even care (aside from reputational risk)?

How does all this really work in practice if things go South?

Grand Finale:

Who is Union Fidelity Life Insurance Company? This is a trick question. You might confuse with Fidelity Union. UFLIC is a MN-based company who barely registers with anyone. All I can find is “…As a subsidiary of General Electric, Union Fidelity Life Insurance offers both health and life insurance. However, Union Fidelity takes an old fashion approach with its members by doing all work through either phone or in person consultation”. In other words, they don’t want to know. What business doesn’t use email?

Is UFLIC truly reinsuring this LTCI business? Are they truly a sub to GE? Hard to believe and I don’t quite believe it myself, so a question for another day. Until then, if someone can clarify, send me a note (TIA).

Author: Samuel Cuscovitch

Research scientist / strategist.

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