What could tempt insurers back into the U.S. long-term care insurance (LTCI) market?
Nothing whatsoever, ever, according to some insurance company executives.
Others say a variety of regulatory changes — including a move to let issuers tie in-force premiums to an interest rate index — could make their companies more interested in returning to the LTCI market.
Marc Cohen, chief research and development officer, at LifePlans, made that argument recently at a hearing on the LTCI market organized by the Senior Issues Task Force, an arm of the National Association of Insurance Commissioners (NAIC).
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The task force convened the hearing at the NAIC’s fall meeting in Washington.
State regulators have been looking at the market because of increases in rates for in-force and new coverage, and reports of carriers dropping out of the market.
Cohen based a portion of his presentation on the results of a survey of executives at 26 insurers that have left the U.S. LTCI market.
The study was funded in part by an arm of the U.S. Department of Health and Human Services (HHS). The Society of Actuaries also helped LifePlans with the survey.
LifePlans found that 69 percent of the LTCI market dropouts cited product performance as the main reason their companies left the market. “Concern about ability to get rate increases if necessary” ranked second as a reason for leaving the market, with 62 percent of the participants giving that as a reason to stop selling LTCI coverage, according to a written version of Cohen’s presentation posted on the Senior Issues Task Force section of the NAIC’s site.
When asked how likely the companies were to return to the LTCI market, “very low” or “not going to happen” accounted for 76 percent of the responses, Cohen said.
About 20 percent said there was a high or medium chance their companies could return to the LTCI market.