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NAIC Health Panel OKs LTCI Model Revision

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Members of the Health Insurance and Managed Care Committee — a top-level committee at the National Association of Insurance Commissioners (NAIC) — are trying to do something about the recent wave of increases in long-term care insurance (LTCI) prices.

The committee agreed at the NAIC’s spring meeting in New Orleans to have the Senior Issues Task Force revise the Long-Term Care Insurance Model Act in light of concerns about pricing, rate stability and consumer disclosures, according to meeting documents posted by the committee.

The vote tally was not immediately available.

The NAIC, Kansas City, originally adopted the model act in 1986.

John Rink of Nebraska has been working on melding LTCI pricing and rate stability proposals offered by Wisconsin regulators, the NAIC’s Health Actuarial Task Force, and the Interstate Insurance Product Regulation Commission. Rink said he might have a draft ready for review in a few weeks, officials say.

The current model law and model regulation require an LTCI carrier to set rates on a product high enough for the rates to be sustainable even if experience is somewhat worse than expected, or “marginally adverse.”

Regulators have been talking at the NAIC about requiring that insurers make sure prices leave enough flexibility that experience can be substantially worse than expected, such as 20% worse, before insurers would have to raise rates to keep LTCI products from losing money.

Another NAIC panel, the Long-Term Care Task Force, recently shut down.

The Senior Issues Task Force has inherited a consumer disclosure project from the other task force, responsibility for updating an LTCI guide aimed at LTCI shoppers, and discussions about topics such as how carriers are handling closed blocks of LTCI business, officials say.