From the June 2007 issue of Investment Advisor • Subscribe!

ACLI Responds To New York Times On Long-Term Care Insurance

American Council of Life Insurers President and CEO Frank Keating made the following statement in response to the March 26 New York Times article "Aged, Frail and Denied Care by Their Insurers."

"The New York Times article refers to individual long-term care insurance cases that are extremely troubling. Neither our companies nor the regulators who oversee our products will stand for such treatment and indifference if these allegations are true.

"Insurers take their responsibility to policyholders seriously. The benefits policyholders receive -- some $3.3 billion in 2006 -- allow policyholders to make choices regarding their care and maintain their independence, without being a burden on their families. These benefits also help alleviate costs to taxpayers by providing middle-income Americans with an alternative to spending down their assets in order to qualify for Medicaid.

"Statistics show that most policyholders are happy with the services our companies provide. A 1999 LifePlans, Inc., study on long-term care insurance claimants, funded by the U.S. Department of Health and Human Services and the Robert Wood Johnson Foundation, found that the 'overwhelming majority of claimants are satisfied with their policy and with their interaction with the insurance company.'

"About 90 percent of all individuals filing claims had no disagreements with their insurance companies or had a disagreement that was resolved satisfactorily. This study has recently been updated and we look forward to its upcoming release, as we believe the results will be even more positive.

"Even the "Industry Snapshot" featured alongside the New York Times article shows that consumer complaints filed with other major carriers constitute 0.00 - 0.03 percent as a share of total policies.

"Still, even one legitimate complaint is one too many, and when any are received, companies must and do treat them seriously.

"The American Council of Life Insurers, whose member companies account for the vast majority of long-term care coverage in the United States, supports enactment and enforcement of National Association of Insurance Commissioners (NAIC) models like the Unfair Life, Accident and Health Claims Settlement Practices Model Act and Regulation, which provides guidelines for the payment of claims, and the NAIC Long-Term Care Insurance Model Act and Regulation that includes strong consumer protections. In addition, the Long-Term Care Model Regulation requires an annual reporting of denied claims. We encourage the states to monitor these reports and if the reports show unfair trade practices, regulators should take appropriate action. These model acts and regulations provide the muscle that states need to eliminate the concerns identified in the article.

"Long-term care insurance is a crucial component of retirement planning for Americans. With 77 million baby boomers ready to retire, the need for long-term care services will escalate as will the cost of these services. Long-term care insurance is the most effective way for individuals to plan for these future expenses. Long-term care insurance carriers believe in the virtue of their mission and recognize the need to provide good service to current policyholders and to demonstrate the industry's integrity to future policyholders."


The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 373 member companies account for 93 percent of the life insurance industry's total assets in the United States, 91 percent of life insurance premiums and 95 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com .

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