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Regulators consider LTCI lapse benefits

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Insurance regulators are trying to decide when long-term care insurance (LTCI) policyholders should get “contingent benefits” as the result of a policy premium increase.

An LTCI contingent benefit proposal is part of a package of recommendations under discussion by arms of the Health Actuarial Task Force at the National Association of Insurance Commissioners (NAIC).

The task force and its Long-Term Actuarial Working Group are holding a conference call at noon EDT Wednesday to discuss the recommendations.

The contingent benefit proposal would affect what happens when the terms of LTCI policies change so drastically that regulators believe the holders should get some kind of benefits even if the holders decide to let the policies lapse.

Recommendations approved by the NAIC’s Long-Term Care Pricing Subgroup call for holders of any age to get contingent benefits if premiums increase more than 100 percent.  

Other provisions deal with matters such as how much room carriers should make for “moderately adverse” policy performance when setting rates.

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