The Connecticut Insurance Department has limited increases on four blocks of long-term care insurance (LTCI) business issued by Genworth Life Insurance Company to 40 percent.
State regulators also have rejected a proposed rate increase that would have affected a fifth block of Genworth Life LTCI business.
Genworth Life, a unit of Genworth Financial Inc. (NYSE:GNW), sold the policies in the blocks subject to the rate increases to about 12,000 Connecticut residents from 1988 through 2005. The company sold the 1,460 policies in the fifth block from 1999 to 2012.
Like many other LTCI issuers, Genworth has argued that it must increase LTCI rates because claims experience has been much worse than it originally expected.
Paul Lombardo, a Connecticut department insurance actuary, concluded that Genworth experience figures support some of the increase requests.
For the Individual LTC 7035 and 7037 forms, for example, “both Connecticut and nationwide experience is much worse than expected, with actual-to-expected ratios of 1.4 in Connecticut and 1.55 nationwide,” Lombardo wrote in a report explaining his determination.
Lombardo rejected the increase requested for the policies issued on the 7040 forms. Those policies have performed better than expected both in Connecticut and in other states, he said.
A Genworth representatives said in a statement that the rate increases approved often vary from state to state.
“With respect to the 40 percent Connecticut approved, we plan to implement the rate increase in accordance with the department’s decision,” the Genworth rep said. “We plan to communicate this increase to our policyholders in the near future, including options they have to modify their benefits to help offset the effect of the rate increase on their premium.”
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