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Life Health > Long-Term Care Planning

Regulators Form Long-Term Care Insurer Solvency Team

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State insurance regulators are ramping up efforts to tackle the problems in the long-term care insurance market and related markets.

The National Association of Insurance Commissioners has set up a Joint Long Term Care Insurance Task Force.

The NAIC’s Health Insurance Committee will run the committee together with the NAIC’s Financial Condition Committee.

— (Related on ThinkAdvisor: State Regulators Meet as Individual Health Gasps for Life)

Members of the NAIC’s executive committee and its plenary approved the decision to set up the task force Tuesday, in Denver, at a session at the NAIC’s spring meeting. The NAIC has posted information about the task force in a meeting document packet. 

State governments oversee most regulation of insurance in the United States. The NAIC is a Kansas City, Missouri-based group for state insurance regulators. The plenary is a body that includes all voting members of the NAIC.

Issuers of traditional long-term care insurance have been struggling with the effects of low interest rates, policyholder behavior forecasting problems and tough state restrictions on rate increases in recent years. Some insurers have tried to get around those problems by focusing on the sale of new types of problems, such as policies that pay for home care or nursing home care for periods of less than a year, or for life insurance policies and annuity contracts that offer benefits that can be used to pay for long-term care.

Many different teams at the NAIC have been working on LTCI issues in recent years. The new task force will bring the people who work on product design and marketing rules together with the people who keep tabs on the issuers’ finances.

The new task force will be in charge of coming up with its own list of charges, or goals.

The task force will start by looking into matters such as LTCI issuer solvency, state LTCI rate regulation procedures, regulation of short-term care insurance policies, and efforts to update the rules for the guaranty funds that protect policyholders against LTCI issuer defaults.

The task force could eventually affect agents and advisors in some of the following ways:

  • By shaping what kinds of products people can buy to pay for post-acute care.

  • By changing how often and how much the prices of those products change.

  • By affecting what happens to the clients when issuers become insolvent.

— Read Insurance Regulators May Update Annuity Sales Model Amid DOL Fiduciary Rule Uncertainty on ThinkAdvisor.


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