One insurer with an active long-term care insurance unit and one with a large closed block of long-term care insurance business have given a little information about their operations in recent earnings reports.
CNO Financial Group, a Carmel, Indiana-based company that still writes long-term care insurance through its Bankers Life unit, says long-term care insurance sales fell to $5.2 million in the third quarter, from $6 million in the third quarter of 2015.
Long-term care insurance premium revenue fell to $116 million, from $122 million.
After adjusting for the effects of the low interest rate environment, the ratio of long-term care insurance benefits to revenue stood at 77.7 percent, down from 83.8 percent in the year-earlier quarter.
CNO had tried to reinsure a block of its old long-term care insurance business. The closed-block reinsurance arrangement caught regulators’ attention when the reinsurance provider was caught up in an investigation of an investment services provider of its own. Recapturing the closed long-term care insurance block from the reinsurer led to a $53 million after-tax charge, CNO says.
The charge was about what CNO had expected it would be, the company says.
The company also contributed $200 million to its insurance subsidiaries to compensate for the effects of the recapture.
CNO as a whole is reporting $19 million in net income for the third quarter on $1 billion in revenue, compared with $34 million in net income on $905 million in revenue for the third quarter of 2015.
In other long-term care insurance earnings news, CNA Financial Corp. did not give any specific long-term care insurance numbers. But the Chicago-based company says the closed long-term care insurance block did better than it had expected when it set up a long-term care insurance premium deficiency reserve in 2015. Because the long-term care insurance unit did better than expected, that helped increase companywide operating earnings.
The company as a whole is reporting $343 million in net income on $2.4 billion in revenue, up from $178 million in net income on $2.2 billion in revenue for the third quarter of 2015.
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