Some state insurance regulators are talking about the idea of offering quicker long-term care insurance (LTCI) rate increase reviews to insurers that promise not to file any additional rate increases for five years.
The National Association of Insurance Commissioners (NAIC) could include the “optional rate increase review” proposal in a guidance manual for the NAIC’s LTCI model regulation.
The optional rate increase review proposal came up last week at a meeting of the Long-Term Care Actuarial Working Group. The working group is convened at the NAIC’s summer meeting in Louisville, Ky.
In one version of the proposal, drafters acknowledge that, “It has been difficult for insurance companies to anticipate all of the trends that affect the claims incidence and severity of these products.”
Drafters say a state insurance commissioner could let an issuer of LTCI policies written in the past, under old rules and old, mistaken assumptions, have an expedited rate review. The issuer could use the fast-track process if it agreed to share the cost of experience deviations from the expected with the policyholder; send the policyholder a clear, detailed notification letter; refrain from filing for additional increases for at least five years; and refrain from filing for any additional increases unless experience is at least 15 percent worse than now expected.