Senior panel to consider LTCI model update

In some cases, if an insurer could fully justify a lower margin, and propose acceptable methods for monitoring claims experience, the insurer could have a margin under 10 percent, according to the proposal text.

In a drafting note, drafters say the task force would like help from the American Academy of Actuaries with developing the minimum standards that an insurer could use to justify having the composite margin be less than 10 percent.

If a state adopted the proposed revisions, an insurance commissioner would have to get the actuarial memorandum supporting an insurer’s LTCI prices reviewed either by an insurance department actuary with LTCI pricing experience or by an independent LTCI pricing actuary.

The proposed model LTCI rate increase bulletin would require an insurer that gets its full LTCI rate increase request approved to wait at least two years to implement another increase. 

For an increase, the recommended loss ratio would be 60 percent for the current rate schedule and 80 percent for any individual policy premium increase filed after the effective date of the new regulation. For a group plan premiums increase filed after the regulation took effect, the recommended loss ratio would be 75 percent, according to the proposal text.

See also:

• AAA forms LTCI terminations work group
• NAIC panel adds LTCI, disability charges
• NAIC to develop LTCI rate amendments