The American General Life Companies group says it will stop selling the American General LTC product.
The group will stop accepting applications for the American General LTC policy — policy form number 08000 — Aug. 1, the group says in a notice posted by several long-term care insurance (LTCI) distributors.
American General Life, Houston, is a unit of American International Group Inc. (AIG), New York (NYSE:AIG).
Representatives from AIG were not available to comment on the LTCI product discontinuation notice.
American General Life says it will continue to support in-force policies.
“The closure of this product for new sales in no way diminishes our commitment to service and complete support for in-force policy owners,” the company says in the discontinuation notice. “Unfortunately, market conditions have impacted the economic feasibility of this product line. American General is focused on maintaining the financial security of the organization while offering the right products to meet our customers’ needs.”
The company will continue to sell and support an accident expense policy and a critical illness policy, the company says.
Many companies have responded to the recent drop in interest earnings on bond investment portfolios, new data on LTCI claims experience, and bond and securities analyst skepticism about LTCI products by dropping or narrowing LTCI product lines.
A unit of Prudential Financial Inc., Newark, N.J. (NYSE:PRU), announced earlier this week that it will discontinue the sale of new group LTCI policies. The company said earlier that it would drop sales of new individual LTCI products.
Genworth Financial Inc., Richmond, Va. (NYSE:GNW), said earlier this month that it wants to stay in the LTCI market but is realigning producer compensation and product prices and features in response to business conditions, and Transamerica Long Term Care, Hurst, Texas, a unit of AEGON N.V., The Hague, Netherlands (NYSE:AEG), recently notified producers that it was increasing the cost of new coverage and adjusting its product features.
In December 2011, Genworth posted an LTCI sales table based on data that Broker World obtained through a voluntary industry survey. Genworth indicated that American General Life may have had only about 69 covered LTCI lives in 2010.
The American Association of Long-Term Care Insurance, Westlake Village, Calif., does not include American General Life in its 2012 list of the 40 biggest U.S. LTCI insurers.