Connecticut insurance regulators are skeptical about long-range long-term care insurance claim projections, but they are open to letting an insurer cite low investment returns as a reason for a rate increase.
The regulators talked about those issues and others in their response to a recent LTCI rate increase survey.
The Long-Term Care Pricing Subgroup, part of the Kansas City, Missouri-based National Association of Insurance Commissioners, organized the survey to see what subgroup members and other interested parties think about LTCI rate increase requests.
LTCI issuers have complained about seeing some states apply much different standards for reviewing increase requests than others.
The Connecticut Insurance Department has rejected or reduced many requests that other states have granted in full. In some cases, Connecticut actuaries have argued that an issuer’s Connecticut claim experience has been better than the national average, and better than originally expected.
The organizers of the new NAIC subgroup survey asked the survey participants how regulators should react when actual LTCI claims experience has been good, but consultants say the experience over a 40-year to 50-year period will be poor.
Connecticut regulators said in their response that reconciling the gap between the actual experience and consultants’ long-term projections may not be possible.
“The carriers themselves are having significant difficulty with accurate projections, especially towards the tail of those projections,” the regulators write, according to a collection of the responses posted on the subgroup’s section of the NAIC website.
But Connecticut regulators replied “yes” in response to a question about whether insurers could mention lower-than-expected investment returns in rate increase requests.