The American Association for Long-Term Care Insurance today started its 17th annual Long-Term Care Awareness Month campaign by trying to get the attention of agents, brokers, consumers, employers, insurers, policymakers, and anyone else who will listen about the critical importance of planning for long-term care (LTC) needs.
Scott Harrison, the executive director of an unrelated insurance industry group, the Affordable Life Insurance Alliance (ALIA), said one of his favorite aspects of the new U.S. Treasury Department review of federal insurance regulation is the emphasis on LTC finance reform.
Members of ALIA, a group that helped make principles-based reserving in the life and annuity sector a reality, do not have much involvement in long-term care insurance these days, but Harrison said thinking about the topic is critical for society as a whole.
“You have a huge public funding crisis that’s just on the horizon,” Harrison said in an interview.
Two years ago, Harrison said, policymakers talked about that issue as an abstract, intellectual concept.
“Now,” he said, “it’s become much more personal.”
Harrison said he was happy to see that kind of awareness spreading into the top levels of the Treasury Department, to the point that the department proposed creating a federal LTC task force, in the new regulatory review report.
“People are beginning to realize how serious these problems are,” Harrison said.
ALIA has declared victory on the principle-based reserving issue and is shifting toward working on other issues that may help life and annuity issuers operate faster and more efficiently, without hurting solvency or consumer safety.
Here’s a look at three other things Harrison likes about the Treasury regulatory review report, now that he’s started digesting it.
1. Respect for state insurance regulators.
The regulatory review authors talk about the need for state insurance regulation modernization, but, in general, the report reflects an understanding of what state regulators matter, Harrison said.
“That’s what principles-based reserving was all about,” Harrison said.
2. Respect for insurance companies.
The review “reflects an understanding of the role of private industry in the national economy,” Harrison said.
3. Treasury’s general interest in improving its own rules and processes.
The review authors suggest that the Treasury might try to encourage the U.S. Securities and Exchange Commission to speed up the process of completing rules that would let an insurer offer a streamlined, plain English summary prospectus for a variable annuity.
Harrison said that he would have to see specific ideas and proposals before he would have an opinion about the actual ideas and proposals, but that he definitely likes the idea that Treasury officials are listening to members of the public and considering those sorts of proposals to improve how insurance regulation works.
—Read Americans Worried About Long-Term Care but Have No Plan to Pay For It: Genworth on ThinkAdvisor.