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Regulation and Compliance > Federal Regulation

NAIC May Work On LTC Regulations

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NU Online News Service, March 13, 2003, 6:20 p.m. EST — Atlanta

Insurance regulators heard discussions here about the state of the long-term care insurance market at the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo.

Bob Glowacki, chair of the long-term care insurance committee at the American Council of Life Insurers, Washington, pointed out that financial planners, LTC specialists and worksite marketing programs have been reaching younger prospects in the past two years.

Traditionally, the biggest buyers of LTC insurance have been consumers over age 65. But the average age of the customers buying through the planners, LTC specialists and worksite marketers is between 58 and 62, Glowacki said.

Long-term care insurance “is no longer a senior-age product,” Glowacki said.

Glowacki also told regulators that the lapse rate for LTC coverage is only 1.2% per year. “That tells us that older blocks of business are not lapsing,” Glowacki said.

Van Ellet, a senior health policy analyst at AARP, Washington, suggested that the NAIC look at reserving requirements for LTC products.

Having strong regulations in place will be important in the coming years because, “in the next few years, claims will put pressures on the industry that were not there before,” Ellet said.

Having an adequate capital reserve is especially important when insurers sell LTC coverage to younger people, according to Bill Weller, a representative from the American Academy of Actuaries, Washington.

Bonnie Burns, an NAIC-funded consumer advocate and a director of consumer education at California Health Advocates, Scotts Valley, Calif., complained about the uneven level of LTC agent quality.

What companies and agents are allowed to do varies by state, and training standards for agents who specialize in LTC coverage sales also vary widely, Burns said.

The NAIC could help by setting a standard for LTC specialist training, Burns said.