Connecticut Insurance Commissioner Thomas Leonardi has approved a 41% rate increase for 3 blocks of long-term care insurance (LTCI) policies.
Leonardi has given Metropolitan Life Insurance Company, a unit of MetLife Inc., New York (NYSE:MET), permission to apply the increases to a block of LTCI business it administers for Teachers Insurance and Annuity Association (TIAA), New York; a block it administers for a TIAA affiliate, TIAA-CREF Life Insurance Company; and a block of policies it has assumed through reinsurance agreements with TIAA and TIAA-CREF Life.
The policies were sold from 1991 to 2004 through direct-response campaigns, without the help of agents or brokers, but the applicants did go through a medical underwriting process, Jonathan Trend, an actuary at Metropolitan Life, writes in an actuarial memorandum submitted with rate increase application.
In June 2010, there were 626 policyholders and 39,114 nationwide.
Trend told Connecticut officials the TIAA and TIAA-CREF Life LTCI policies suffer from a problem that has plagued many other blocks of LTCI business: The policyholders are much more likely to keep the policies in force than the actuaries had expected, and claims have been somewhat higher than expected.
Metropolitan Life is sensitive to the effect any rate increase has on its customers, a company representative says.