Genworth Financial Inc. says it will temporarily suspend sales of long-term care insurance (LTCI) and immediate annuities through the brokerage general agency (BGA) channel, in all states, starting Monday.
Genworth announced the sales suspension Thursday, in a bulletin.
The Richmond, Virginia-based company is making the move because sales through BGAs, or independent distributors, have already fallen sharply, in part because of the company’s low credit ratings, the company said in a statement.
(Related: Genworth Posts Capitalization Update)
Genworth will continue to sell individual LTCI policies and immediate annuities through association programs, affinity programs and other channels, the company said.
The company will also continue to sell group LTCI, and it will sell group LTCI through the same channels, the company said.
“Our commitment to helping American address the financial challenges of aging remains as strong as ever, and we look forward to bringing new products and services to market that will enable people who need care as they age live their lives as they wish, how and where they prefer to receive that care,” the company said.
Genworth has been struggling for years with the effects of product design problems, pricing problems and low interest rates on the performance of its LTCI business. In February, the company said the risk-based capital ratio at its Genworth Life Insurance Company unit stood at 199% on Dec. 31, 2018, down from 282% at the end of 2017.
China Oceanwide Holdings Group Company Ltd. of Beijing has been trying to acquire Genworth since October 2017. The current deal completion deadline is March 15. The companies have pushed the deal completion deadline back eight times since they first announced the deal.
Genworth will stop accepting new applications Monday for products in its Privileged Choice LTCI policy family, and for the Income Assurance Immediate Need Annuity.
An immediate annuity helps the purchaser convert a lump-sum payment into a steady stream of income payments starting immediately. Many immediate annuities are used to cover long-term care expenses for people who are not eligible for LTCI policies, because those people are already receiving long-term care services.
Genworth said the temporary suspension will not affect renewal commissions for in-force business, pending business or related compensation, in-force policyholder servicing, or in-force policy contractual provisions or benefits, such as conversion rights.
Here are more suspension details:
- Today (March 8) is the last day to submit an electronic application for the affected products.
- Today is the last day to quote individual LTCI and Income Assurance annuity products.
- Monday (March 11) will be the last valid application signed date, and 8 p.m. Monday will be the last valid home office receipt date for applications.
- Genworth is not planning to make allowances for applications that come in after 8 p.m. Monday due to faxing or emailing delays.
- May 31 will be the last day to place pending new business in-force.
— Read China Oceanwide and Genworth Extend Deal Completion Deadline, on ThinkAdvisor.