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Texas To Review LTC Rates

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Texas insurance regulators are working out rules to require long term care carriers to get the state insurance commissioner’s approval for rates on policies sold in the state.

Gov. Rick Perry, R, has signed a bill, C.S.S.B. 963, that mandates that LTC insurance rate increases be submitted to the commissioner and allows the commissioner to reject rate requests that are not actuarially justified.

The new statute requires insurers whose rate increases are approved to give policy holders at least 45 days’ notice before effecting an increase and to offer policyholders an alternative, such as a policy with reduced benefits.

The legislation takes effect Sept. 1.

In an analysis, state Sen. Rodney Ellis, D-Houston, the bill’s author, maintains that some Texas consumers have paid higher rates for LTC insurance to make up for lower rates the carriers have earned in states that denied or reduced requested rate increases.

“To collect the amount of premium it believes necessary, the carrier will file for rate increases in other states that do not regulate rates to make up for the inadequate rates charged in the rate-regulated states,” Ellis writes in the analysis.

C.S.S.B. 963 was adopted in response to complaints from consumers about rising LTC rates, according to Texas Department of Insurance spokesman John Greeley.

“Increases in premiums have been among the top issues of the department for the past couple of years,” Greeley says.

Greeley estimates completing the process for approving rate increase requests would take up to 90 days, adding that “we will move as rapidly as we can.”


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