The Connecticut Insurance Department is continuing to take a tough approach to reviewing applications for premium increases for in-force long-term care insurance (LTCI) policies.
The department has rejected an application for an average increase of 45 percent for group LTCI policies issued by UNUM Life Insurance Company of America.
UNUM Life, a unit of Unum Group Corp. (NYSE:UNM), stopped writing group LTCI policies in 2012, but it still has 2,217 group LTCI policyholders in Connecticut.
In February, Connecticut rejected a rate increase application that Unum filed for a block of LTCI policies written by another unit, Provident Life & Accident Insurance Company.
Connecticut regulators have rejected several other insurers’ LTCI rate increase applications in the past few years based on the argument that, although studies showed claims might be high over the lifetime of the policies, the actual cost of LTCI claims in Connecticut had been low.
Connecticut claim costs for the policies in the UNUM Life group LTCI block have been about 123 percent higher than Unum had expected, according to Paul Lombardo, a Connecticut Insurance Department actuary.
Experience “is projected to result in lifetime loss ratios that not only exceed the minimum 65 percent but could potentially exceed 100 percent,” Lombardo writes in an explanation of the decision the reject the rate increase application.