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Regulation and Compliance > State Regulation

LTC Consumer Advocate Questioned

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To The Editor:

Re: “Market Changes Pushing Update Of LTC Model Act,” NU, March 24.

I would like to respond to Bonnie Burns, a National Association of Insurance Commissioners funded consumer advocate, on her comments concerning regulations for the LTC Model Act.

She states that when consumers go to their LTC counselors, there is not much uniformity, and what companies and agents are allowed to do varies from state to state.
If she is talking about uniformity in products approved for sale, she is mistaken, as all LTC products have to offer essentially the same package of “core benefits,” as spelled out in current regulations. However, if she is talking about “optional benefits,” there are a lot of variances between products.

All agents are licensed by each state for L/A&H, and we all are governed by the similar regulations of each states insurance department. Can we wrap a LTC policy inside a “Mutual Fund?” No! It appears we agents are all governed uniformly, so what “variances” is she speaking of?

Burns seems to put little credence in the LTC Designation programs being offered today, as she mentions “the ability of a producer to self-certify and assume the role of LTC specialist,” bothers her.

Let me ask Ms. Burns, have you reviewed the curricula from the educational facilities that offer the LTC designations of CSA, LTCIS/CSS, CLTC, just to name a few? She goes on to state, “Most states dont require LTC training, and when they do, there are so many different programs.”
Most states dont require special training to market annuities either, and they have a great deal to do with a persons wealth preservation, just as LTC does. Why shouldnt there be numerous training programs for LTC? Every agent who decides to market LTC does not have the same knowledge level, from the “basics” about Medicare/Medicaid, trusts, gifting, underwriting criteria, etc.
Most of the designation/training programs offered today take these factors into account, necessitating programs for the “novice” to the “advanced” LTC marketer.

Mandated training programs will not rid the market of those who are not “high caliber,” as Ms. Burns implies. Those agents who are not “high caliber” quickly fade away when they see that LTC is not a “one call/which plan do you want” kind of market.
As far as companies wanting to circumvent the current regs of 12 months coverage minimum for products advertised/marketed as LTC, why on earth would they want to offer a shorter-duration benefit, as Ms. Burns states. Virtually all of the major companies in the LTC market dont even market a product with only a 12-month benefit period.

Ms. Burns expressed a concern that consumers have a concern about preserving their insurability, and an option to guarantee insurability could be a valuable part of a companys LTC offering. Insurability is preserved when the consumer is accepted after the underwriting process, forever, unless they elect to increase benefits in the future, at which time they would have to meet health underwriting criteria all over again! Most companies offer an optional feature, the guaranteed increase option (GIO), which allows the consumer to increase their benefit amount periodically, with no health questions asked for up to a number of years in the future! Guaranteed insurability is already incorporated in the marketplace!

May I simply suggest that Bonnie Burns complete more research in the LTC products that are currently being marketed, as well as the LTC designation programs, before proposing all of these regulations to be incorporated into the LTC Model Act? Lets make sure the NAIC is getting their moneys worth!

Dwight R. Hyde, RHU, LTCIS, LUTCF

Hyde & Associates Inc.
Oklahoma City, Okla

Reproduced from National Underwriter Edition, April 21, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.