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Connecticut rejects LTCI rate increase application

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The Connecticut Insurance Department has refused to let Berkshire Life Insurance Company of America increase rates on individual long-term care insurance (LTCI) policies an average of 25 percent.

Department actuaries concluded that the company’s LTCI business has had better claims experience than expected, both in Connecticut and in the country as a whole. In Connecticut, the company has not yet paid any claims. In the country as a whole, the expected loss ratio was 11.72 percent. The actual loss ratio has been just 2.94 percent, officials say.

Berkshire Life is a wholly owned stock subsidiary of the Guardian Life Insurance Company of America.

If regulators had approved the rate increase, it would have affected 101 policies sold in the state from 2005 through 2009. The company has 7,434 individual LTCI policies in-force nationwide.

The Connecticut department has been rejecting and adjusting many LTCI rate increase applications in recent years. The insurers have argued that they need to increase premiums because the insureds are living longer than expected and keeping policies than expected. The LTCI issuers also have been suffering from the effects of low interest rates.

Regulators typically refuse to let insurers use changes in interest rates as a reason for increasing LTCI prices. Regulators in Connecticut have said that, in their state, claims ratios for many blocks of LTCI business continue to be low.