Some regulators want insurers to have a long-term care insurance (LTCI) loss ratio of 100 percent before they raise LTCI rates.
The American Council of Life Insurers (ACLI) and America’s Health Insurance Plans (AHIP) have teamed up to fight the proposal.
The Senior Issues Task Force, part of the National Association of Insurance Commissioners, released a draft of proposed changes to the NAIC’s Long-Term Care Insurance Model Regulation in November.
Members of another part of the NAIC, the Health Actuarial Task Force, later came up with the idea of adding teeth to the model by requiring an insurer to be spending all of its LTCI premiums on claims before it can increase the cost of the coverage.
The minimum loss ratio in the draft released in November was 85 percent.
William Weller, an AHIP consultant, and Steve Clayburn, an ACLI representative, say in a letter to the Senior Issues Task Force that the 100 percent minimum loss ratio proposal was a surprise.
A Health Actuarial Task Force subgroup adopted the proposal without providing much, if any, evidence that the 100 percent minimum is justified, the insurer reps write.
The proposal is based on faulty assumptions, such as the idea that insurers will get permission to implement all of the LTCI rate increases they seek, the reps add.
The proposal “would be punitive to companies that are committed to remaining in the LTC market,” the reps say.