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New LTCI tables seek government work

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State insurance regulators are thinking about whether insurers should use a new, eagerly awaited batch of long-term care insurance (LTCI) experience data in official reserve calculations.

Members of the Health Actuarial Task Force, part of the National Association of Insurance Commissioners (NAIC), have been talking about the future use of the LTCI data during conference calls organized by the task force and its subgroups.

A team at the Society of Actuaries (SOA) spent years gathering and organizing data for the Long-Term Care Experience Basic Tables project. The tables show what happened inside the participating insurers’ U.S. LTCI operations from 2000 through 2011. The participating insurers account for about 70 percent of the U.S. LTCI market, according to project managers.

See also: Actuaries show how LTCI really works

Insurers, regulators and others have said that a lack of good, current experience data has contributed to the problems insurers have had with setting stable LTCI prices.

Some insurance industry actuaries have been asking regulators to do more to verify the new SOA data before building it into official reserve valuation tables, according to summaries of Health Actuarial Task Force conference calls included in a packet the task force put together for the NAIC’s summer meeting.

The LTCI project team should see how splitting active LTCI sellers from the other LTCI coverage issuers affects the tables, industry actuaries said.

Industry actuaries would also like to see regulators get similar data from the LTCI issuers that did not participate in the SOA project, to see how non-participant experience compares with participant experience.

The task force included a large number of charts based on the SOA LTCI tables in the meeting packet.

One claim incidence chart shows, for example, that people under age 55 accounted for 8 percent of the participating LTCI insurers’ covered lives during the 2000-2011 study period and 0.4 percent of their claims. People ages 85 and older accounted for 5.4 percent of the insurers’ covered lives during that period and 33 percent of their claims.

The insurers received about 0.6 LTCI claims per 1,000 LTCI insureds for the insureds under age 55, and about 70 LTCI claims per 1,000 LTCI insureds for the insureds ages 85 and older.

The task force meeting packet also includes a presentation on an LTCI policy termination study SOA members created along with actuaries from LIMRA.

See also: SOA and LIMRA announce research partnership

One chart in the SOA-LIMRA policy termination presentation shows that married people were about 50 percent more likely to let LTCI polices lapse voluntarily than single people were.

Lapse rates were also much higher for policyholders under age 50, and for policyholders ages 80 and older, than for policyholders ages 50 to 79.