Robert Oakes is making the case that one relatively low-cost, low-stress cure for what ails the long-term care insurance (LTCI) community could be a wave of system upgrades.
Some say that, to a man with a hammer, everything looks like a nail.
Oakes has a hammer: He is chief executive officer of InsPro Technologies, an insurance software and administrative services company.
InsPro already administers or helps other plan administrators administer about 975,000 U.S. LTCI policies, or about 10 percent of the policies that are now in force.
Oakes makes what sounds like a credible case that, if carriers with old LTCI administration systems don’t get a hammer to nail down LTCI claims problems from InsPro, they should get the hammer somewhere.
The American Association for Long-Term Care Insurance (AALTCI) reported in a summary of results from an industry survey that the 10 participating carriers paid $6.6 billion to a total of about 200,000 policyholders in 2011.
But U.S. insurers first began selling large numbers of LTCI policies in the 1980s, and holders of even some of the policies sold in those early days are just starting to have a need to file claims, Oakes said.
Many of the policies sold in the early 1980s and the 1990s offered generous benefits, based on the idea that the issuer could earn high returns on relatively safe investments in government and corporate bonds, Oakes said.
Insurers put in tighter benefits limits after 2000, and eventually began pulling back from selling new policies.
But “we don’t really see shrinkage in the current number of insureds,” Oakes said.