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January 04, 2019 at 06:13 PM
Millions of Americans still have long-term care insurance (LTCI) policies in force, and hundreds of thousands of the LTCI policyholders are eventually going to file claims.
Someone will have to pay the claims.
Peter Goldstein, the chief executive officer of LTCG, has an idea about LTCI claims; Everyone had better recognize that paying benefits according to the terms of the policies will be complicated.
(Related: LTCG to Acquire Munich Re’s Long-Term Care Insurance Arm)
LTCG is a major LTCI policy administrator.
LTCG helps with the administration of about 1.2 million of the long-term care insurance (LTCI) policies still in force.
The company accounts for about 85% of the LTCI policy administration outsourcing market. If an issuer has named some other entity to administer its LTCI policies, chances are high that the administrator is LTCG.
About 40,000 to 45,000 of the 1.2 million policyholders in LTCG’s world are collecting benefits, and the number of policyholders collecting benefits is growing about 10% per year, Goldstein said in a recent interview.
To administer an LTCI policy properly, the administrator will have to capture information about matters such as the original policy provisions, the policyholder’s premium payment history, any rate increases, and any policy provision changes that have occurred over the lifetime of the policy. In many cases, the policy may have been in effect for 20 years. Or for 30 years.
“Lots of times, the data is not in great shape,” Goldstein said. ”When you’re moving the data, getting it right is critical.”
Form Numbers
For LTCG, the number of LTCI forms is another critical concern:.
“There are so many different kinds of products,” Goldstein said.
LTCI policies have changed dramatically over the decades, and issuers have often offered many different coverage options at the same time.
The result, Goldstein said, is that U.S. LTCI issuers have used about 50,000 different policy forms.
Goldstein sees no easy way for states or other entities to make things simpler.
