State regulators are talking about just what kind of pain long-term care insurance (LTCI) companies should feel when they increase premiums on in-force policies.
The Senior Issues Task Force at the National Association of Insurance Commissioners (NAIC) has been looking at the allocation of rate increase pain in a draft LTCI rate increase model bulletin.
Regulators could send bulletins based on the model to LTCI carriers in their states. The bulletins would set guidelines for handling rate increases for older LTCI policies.
The task force began asking for comments on the draft in June.
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California Health Advocates and United Policyholders, two consumer groups, blasted LTCI carriers’ rate increases.
“We are appalled by the number and the amount of the rate increases that the industry has sought and imposed on consumers, many of whom are of advanced age and disproportionately impacted by those increases,” the groups said.
Past NAIC LTCI pricing reforms have failed to prevent large rate increases, according to the groups.
In some cases, when regulators review LTCI increase requests, they try to come up with a rate that would leave the company with a claims-to-premiums ratio of about 60 percent.