Changing LTC Products Prompt A Look At Existing Regulations

Other regulators said they could support pooling.

Julia Philips, an actuary with the Minnesota department of commerce, noted, however, that the pooling must not be unduly prescriptive.

But Bill Weller, a health actuary with Omega Squared, Sedona, Ariz., says that if a company has a policy form that is performing well and one that is not, pooling would put policyholders in the first form at a disadvantage.

Annual rate certifications also were discussed. States using this approach require actuaries to certify that the rates applied for a block of business are sufficient to support that business.

The current rate must be certified as adequate or an application of a rate adjustment must be made, according to Dino. In Florida, there is such a requirement, he says, with the idea being to avoid very large increases at a later date.

A certification could be a good regulatory red flag, Philips said.

Regulators said what they found disturbing was that some company actuaries sent in the certification because it was a requirement and did not actually use the filing as an opportunity to assess the adequacy of rates.

If there were variations from state to state on the certification, those differences could be problematic for companies, Weller said.

Reproduced from National Underwriter Life & Health/Financial Services Edition, January 30, 2004. Copyright 2004 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.