By asking the following questions, regulators can learn about the LP LTCI marketplace, helping them to determine if regulation is necessary and to find creative solutions.
1) What limited premium payment periods are intended to be offered with the policy form being submitted for approval?
2) What nonforfeiture features will you offer to limited premium payment period policyholders? Which will be automatically included? Which will be “mandatory offers”? How will you disclose nonforfeiture risks to prospect buyers?
3) Certify that your policies are guaranteed to be “non-can” once they are paid-up, or explain why a policy should be approved whose “vanished” premium may resurrect.
4) What percentage of sales (on both a policy-count basis and a premium basis) do you anticipate will result from limited premium payment period policies? How does this compare to LP LTCI sales on earlier products? Explain any difference.
5) How will your policies be grouped when considering in-force premium revisions?
6) Identify which experience factors (for determining the possible need for in-force premium increases under lifetime premium policies) might reflect experience under limited pay policies and vice versa. Justify your approach.
7) What additional experience factors, if any, are needed to consider rate increases for LP LTCI, as opposed to lifetime premium policies?