Some state insurance regulators seem to be getting tired of seeing new long-term care insurance studies that showed the ceators of LTCI products guessed wrong about… everything.
I personally have wondered: How much of the bad assumptions news is really the result of bad assumptions about people’s health and behavior, and how much of the news is a euphemism for, “Interest rates have been slow for forever”?
Traditionally, insurers were supposed to take all of the responsibility for handling interest rate fluctuations. Some states won’t even let LTCI issuers mention the current ultra-low rate environment in requests for rate increases.
On the other hand, maybe that’s like a guy who calls the doctor and mentions that he’s obese, and mentions that he smokes, and mentions that he eats poorly, and forgets to mention the guy smothering him with a plastic bag.
Actuaries’ inaccurate guesses about how long LTCI claimants typically live might look a lot better if interest rates were three percentage points higher.
Meanwhile, a few weeks ago, Steven Mnuchin, the new Treasury secretary, was talking about the possibility of the government issuing bonds with 50-year durations.