NAIC Apr 2019 Minutes

Reading these minutes can be disconcerting if you have a “legacy” LTC 1.0 product which I am sure you have if you are on this blog. “Legacy” has a bad ring to it, like “forgotten”, “inferior, old generation product”. In Information Technology, companies will often communicate to their customer base that as of a certain date, no longer will the company provide customer support to one of their legacy products. Any of you running Windows 3.0/2000/XP? Will we see that day here? — a concern for those who expect to hold their policy to some distant future time.

Section 3. Ouch!

Sample: “Mr. Slape noted that with respect to the pricing issue, the environment for getting rate increases is one where there is a lot of inconsistencies among the states. He stated the timing of getting rate increases is also having an impact on solvency because delaying rate increases is a negative to solvency.”

Interesting to find out : What is CT Consumer’s grade relative to Consumer’s grade in other states on the issue of rate increases? Is CT, for example, protecting solvency while another state is more concerned about protecting Consumer’s at the risk of solvency? That’s a weird question, huh?

More: “Mr. Slape also addressed the concern that exists when the consumers may not be given the choice to make their own decision, given all states have limits on what can be collected under guaranty fund coverage if an LTCI insurer goes insolvent. He stated that Texas has seen companies requesting too little of rate increases, even though the actuarial justified data suggests otherwise. He noted the importance for companies to request the right rate; otherwise, the industry is potentially misleading consumers regarding what the true cost of the policy may be currently and in the future”.

Questions: Do Consumers have the Information to make their own decision? Is vital Information being withheld (deliberately or not)?

Even bigger question: Are Consumers aware that this question of “solvency” is even being bandied about? Is that considered Vital Information that Consumers should be aware of? More about Vital Info later in a separate post as it relates to a current action v. G.E. / Genworth (that I refer to as “Claim 3”).

Not to ignore Section 4. our CT DOI rep: “Mr. Lombardo indicated that the Subgroup had discussed at length the potential cross-state policyholder inequity/cross subsidization of LTC rates. He noted that there is a growing concern on behalf of those states that traditionally have approved requested rate increases that an inequity is created between their consumers and consumers in the states that have either not approved rate increases or have approved significantly lower rate increases”. Only comment here: Refer back to Interesting to Find Out.

Author: Samuel Cuscovitch

Research scientist / strategist.

%d bloggers like this: