The Executive Committee of the National Association of Insurance Commissioners (NAIC) has approved an effort to have the NAIC Health Insurance and Managed Care Committee develop updates to the NAIC long-term care insurance (LTCI) models.
The approvals could lead to the development of formal proposals for amending the Long-Term Care Insurance Model Act and the Long-Term Care Insurance Model Regulation.
The NAIC’s Health Actuarial Task Force will be in charge of developing the model amendment drafts.
Eric King is the NAIC staff member supporting the project.
The NAIC is a trade group for state insurance regulators. It cannot create state insurance laws or regulations itself, but it can create “models,” or sample laws or regulations, and encourage states to adopt laws or regulations based on the models.
The approval does not necessarily mean that the NAIC will end up updating the models, but it means that the committee can devote time to drafting proposed model 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.