Eric Cioppa (Photo: NAIC) Eric Cioppa (Photo: NAIC)

The National Association of Insurance Commissioners (NAIC) has started a new effort to establish national standards for reviewing and approving long-term care insurance (LTCI) rate increase requests.

The NAIC’s members agreed Tuesday, at a meeting in Orlando, Florida, to create a Long-Term Care Insurance (EX) Task Force.

(Related: NAIC Developing Executive-Level Committee to Harmonize LTCI Rates)

The task force will be part of the NAIC’s executive committee.

The New Task Force

The charge of the task force will be to develop “a consistent national approach for reviewing long-term care insurance rates that result in actuarially appropriate increases being granted by the states in a timely manner, and eliminates cross-state rate subsidization,” according to a copy of the group’s proposed charge included in a meeting materials packet.

The task force is also supposed to “identify options to provide consumers choice regarding modifications to long-term care insurance (LTCI) contract benefits where policies are no longer affordable due to rate increases,” according to the task force charge.

Scott White, the Virginia insurance commissioner, will be the task force chairman, and Michael Conway, the Colorado commissioner, will be the vice chair.

The task force expects to hold an in-person meeting June 3, in Kansas City, Missouri, at the NAIC’s NAIC Insurance Summit.

The task force is supposed to prepare a proposal for the NAIC’s executive committee by Nov. 14, 2020, when the NAIC is set to start its 2020 fall national meeting in Indianapolis.

Unless the NAIC decides to extend the life of the new LTCI (EX) Task Force, the new task force will shut down Jan. 31, 2021.

The NAIC LTCI Family Tree

The new, executive committee task force is supposed to work with another panel with a similar name: the Long-Term Care Insurance (B/E) Task Force.

The LTCI (B/E) Task Force operates under the oversight of  the NAIC’s Health Insurance and Managed Care (B) Committee and the NAIC’s Financial Condition (E) Committee.

The LTCI (EX) Task Force will report to the LTCI (B/E) Task Force, to help coordinate both teams activities, according to the charge for the new task force.

Why?

Eric Cioppa — the Maine insurance superintendent and the NAIC president — said in remarks at the NAIC’s meeting in Orlando that a basic concern of the NAIC is ensuring that policyholders receive policy benefits.

“Long-term care insurance is no different,” Cioppa said, according to a version of his remarks provided by the NAIC. “The market dynamics of longer lifespans, increasing cost of care, and underpriced legacy policies have been an ongoing challenge to market stability.”

Challenges

The NAIC is a group for insurance regulators. It has no direct ability to set national insurance laws or regulations.

States often start with NAIC models when developing their own laws and regulations, but they face no obligation to do so.

Congress can impose national insurance laws, but it generally avoids doing so, and intense conflicts between centrist, liberal and conservative groups in Washington could keep Congress from taking action on the LTCI rate review issue.

Regulators in California and some other states have been more resistant to LTCI rate increase requests than regulators in some states, and it’s not clear how easily the new NAIC task force will be able to overcome that resistance.

Resources

Links to information about the new task force are available here, under the Meetings Materials tab.

— Read Regulators May Form a Multi-State LTCI Rate Review Systemon ThinkAdvisor.

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