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Regulatory team posts LTCI actuarial guideline draft

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State insurance regulators want feedback on their efforts to create financial analysis guidelines for actuaries who are looking at blocks of long-term care insurance policies.

The Long-Term Care Valuation Subgroup has posted a new guideline draft on the web.

The subgroup is part of the National Association of Insurance Commissioners, a Kansas City, Missouri-based group for state insurance regulators. The subgroup hopes to set standards actuaries can use when they’re deciding whether the assets backing a collection of stand-alone long-term care insurance policies are adequate.

Comments on the new draft are due March 22.

Related: Small blocks of long-term care insurance may get own rules 

In the 1990s, many insurers were writing LTCI coverage. Now, only a few are still writing policies. The number of policies still in force at the insurers that got out of the market years ago is shrinking. For the valuation subgroup, one question has been how to handle testing for small blocks of in-force business.

In the new draft, the authors say the standard asset testing rules would apply only to insurers with at least 10,000 in-force LTCI lives as of the valuation date.

“All long-term care insurance contracts, whether directly written or assumed through reinsurance, are included,” according to the draft text. “Accelerated death benefit products or other combination products where the substantial risk of the product is associated with life insurance or an annuity are not subject to this guideline.”


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