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Life Health > Life Insurance

Carrier applies for LTCI rate hikes

By Allison Bell

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Two units of Unum Group Corp. (NYSE:UNM) are asking Connecticut regulators to approve long-term care insurance premium increases.

Provident Life & Accident Company is asking for an average increase of 65 percent on 260 individual LTCI policies sold from 2003 through 2009, according to a rate filing posted on the Connecticut Department of Insurance website.

The company has 23,366 policies of that kind in force throughout the United States.

The policies are no longer actively marketed, but Provident Life issues some policies through conversion features linked to individual disability insurance policies. 

The policyholders are now paying an average of about $3,100 per year for coverage.

The unit has its domicile in Tennessee. Tennessee has agreed to let the company phase in an 86.1 percent increase over three years.

The overall incidence of morbidity is only 84 percent of what the company had expected, but claim terminations have also been only 84 percent of what the company had expected, and mortality has been just 61 percent of the expected rate.

Even after the proposed rate increase, the projected lifetime loss ratio would be 118 percent, the company said.

The other unit, UNUM Life Insurance Company of America, is seeking an average increase of 45 percent on a block of 2,217 group LTCI policies sold from 1989 through 2004, according to a rate filing.

The company has 560,345 similar policies in force throughout the country, and the policyholders are paying an average of about $760 per year for the coverage.

Employers with in-force group policies can still add employees to their policies.

UNUM Life’s home state, Maine, is letting the company phase in an increase of 72 percent over three years.

For that block, incidence is just 58 percent of what the company had expected, but, because the claim termination rate is just 89 percent of the expected rate, and mortality is just 34 percent of the affected rate, the company expects the lifetime loss ratio to be 93 percent even if it gets the full rate increase requested, the company said.

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