The Illinois Department of Insurance wants to see if a new law could help control the wave of increases in long-term care insurance.
The Illinois department has worked with a state lawmaker, state Rep. Robyn Gabel, D-Evanston, to introduce a bill, House Bill 2333, that would impose a 15 percent per year limit on LTCI premium rate increases.
The consumers who bought the policies thought the policies were level-premium policies with rates that would not increase because of the policyholder’s age or changes in health situation, according to Illinois department officials.
Many LTCI carriers have argued that they need to raise rates because claims have been much higher than they expected and interest rates on the assets backing the policies have been much lower than expected.
In recent years, some carriers have increased LTCI rates as much as 200 percent, officials said.
Andrew Boron, the Illinois insurance director, said in a statement that regulators in his state now have no discretion to limit premium increases if the rate filing meets the state’s standards.
The proposal would apply to “all existing and future long term care premiums, regardless of age or benefit configuration,” Boron said.
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