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Hawkeye State To Expand LTC Rate Protetion

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The Iowa Insurance Division intends to make long term care insurers that impose big price increases offer relief to more policyholders.

Iowa has been using increase guidelines adopted by the National Association of Insurance Commissioners, Kansas City, Mo., in 2003.

Those guidelines require LTC insurers to offer relief when increasing rates on LTC insurance policies issued on or after Feb. 1, 2003, Iowa Insurance Commissioner Susan Voss writes in a bulletin to insurers selling LTC insurance in Iowa.

Iowa now will be establishing a regulation that will require insurers to offer relief when significantly increasing rates on LTC insurance policies issued before Feb. 1, 2003, Voss writes.

The relief can consist either of a reduction in benefits or a mechanism to supply contingent benefits when a policy lapses, Voss writes.

“All options must be made available to all policyholders who have the same policy form, i.e., within the same block of business,” Voss writes.

A reduced benefit option could come in the form of a decreased daily benefit, a longer waiting period, or a reduced benefit period, Voss writes.

A contingent lapse benefit should create a benefits “bank account” with the insurer equal to the total amount of premium a consumer has paid, Voss writes.

The relief requirements apply to LTC insurance rate increases that meet triggers spelled out in the Iowa Administrative Code.


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