NAIC to develop LTCI rate amendments

The NAIC began requiring model development efforts to go through an Executive Committee approval process in 2007, after some regulators expressed concern that the NAIC was spending time developing models that few states were likely to implement.

The Senior Issues Task Force, a unit of a unit of the health committee, has been especially active in pressing for the NAIC to consider amending the LTCI models.

The NAIC added LTCI rate stability provisions to the models in 2000.

Some observers, including analysts at Fitch Ratings, have suggested that the rate stability models may have contributed to an insurer flight from the LTCI market, by limiting insurers’ ability to adapt to a sharp drop in earnings on investments in bonds or to respond to new information about LTCI claims risk.

Consumer advocates have said that letting insurance companies impose big rate increases on holders of in-force policies violates the trust of consumers who were counting on the policies to help them get through a time when the consumers, and the insurers, knew the consumers were likely to be living on fixed incomes.

See also:

• NAIC panels put LTCI on their agendas
• NAIC Panel Calls for LTCI Model Rate Stability Updates
• Fitch: States Partly to Blame for LTCI Woes