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March 29, 2013 at 08:03 PM
The Massachusetts Division of Insurance is starting to hold meetings on methods for stabilizing long-term care insurance (LTCI) rates.
The division is holding the meetings to implement a law created by state Senate Bill 2359, a LTCI rate stability bill based on the National Association of Insurance Commissioners’ Long-Term Care Insurance Model Act.
The bill — which was backed by a representative of the Massachusetts Association of Health Underwriters during a hearing that took place i 2011 — replaced a homegrown rate rate review law that required LTCI issuers in the state to try to have a loss ratio of at least 60 percent over the life of a policy.
Insurance division regulators are supposed to develop new rate stabilization methods using strategies described in an actuarial report that the division commissioned in 2009 and input from a working group.
In the 2009 report, consultants from Gorman Actuarial L.L.C. concluded that there is significant variation in how states go about reviewing and trying to stabilize LTCI rates.
About one-quarter of the 30 states studied had formal LTCI rate increase limits, and some states focus on what has happened to date, rather than looking at an insurer’s projections about what seems likely to happen in the future, the consultants said.
