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MetLife unit files for LTCI rate hikes

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Metropolitan Life Insurance Company has filed a collection of four long-term care insurance (LTCI) rate increase applications in Connecticut.

Metropolitan Life (MetLife), a unit of MetLife Inc. (NYSE:MET), told Nutmeg State regulators it wants to raise rates an average of 58 percent on a block of 720 policies sold in the state from 1999 to 2003; a block of 10 policies sold there from 2008 to 2011; a block of  1,828 policies sold there from 2005 to 2012; and a block of 3,200 policies sold there from 2005 to 2012.

MetLife is no longer marketing LTCI coverage.

Connecticut insurance regulators rejected MetLife’s request to increase rates on the 720-policy block and the 1,828-policy block in 2010.

MetLife has not previously asked for rate increases on the other two two blocks, and it has not actually increased rates on any of the fourth blocks, the company said.

When MetLife analyzed its LTCI business, it found that “the past experience and future projections based on current experience assumptions combine to a resulting loss ratio that far exceeds both original pricing expectations and state minimum requirements,” William Bigelow, a MetLife actuary, said in a memorandum prepared for state regulators. 

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The policies involved were marketed by MetLife agents and brokers using a full underwriting process, Bigelow reported.

Policyholders would get a warning of a rate increase 60 days in advance, and they could reduce or change benefits to pay higher premiums, the company said. 

A MetLife representative said the comany regrets the effects of the rate increase on policyholders but believe that changes in actuarial assumptions justify the increase.

“The impact of evolving assumptions on pricing is a challenge the industry is facing overall,” the representative said.

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