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NAIC Prepares to Collect State-by-State LTCI Rate Data

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State insurance regulators are getting ready to collect data that could shape a dispute over how some states handle requests for long-term care insurance (LTCI) rate increase requests.

The National Association of Insurance Commissioners (NAIC) says it plans to pay a contractor $110,000 to collect detailed, state-by-state LTCI rate information.

(Related: NAIC Seeks Actuarial Services for LTCI Rate Project)

The contractor will begin developing the LTCI rate “data call,” or questionnaire, in February, according to a data call project impact statement posted on the NAIC’s website.


  • A link to the LTCI rate data call fiscal impact statement is available here.

The contractor will complete gathering data by June, and report on the results in August, in Minneapolis, at the NAIC’s summer meeting, according to the impact statement.

The NAIC is putting the impact statement through a public comment period that ends Jan. 28.

The NAIC is a Kansas City, Missouri-based group for state insurance regulators. It cannot normally change state laws or regulations itself, but states often start with NAIC models when developing their insurance laws and regulations.

NAIC members will vote on the $110,000 LTCI data call project in February, at the 2020 Commissioners Conference, according to the NAIC.

The History

Insurers made a big push to sell stand-alone LTCI policies in the 1990s and early 2000s.

Most of the LTCI issuers now say they made many mistakes when the created and priced the policies. They say they made inaccurate assumptions about how likely policyholders would be to drop policies; what percentage of the insureds would use their benefits; and how long the insureds who used the benefits would stay on claim.

LTCI issuers use earnings on investments to support the products, and they are also suffering from the effects of low interest rates on their bond portfolios.

Even LTCI issuers that once scoffed at the possibility of their LTCI premiums have been asking state insurance regulators for big rate increases. In some cases, insurers have asked for increases over 100%. In other cases, insurers have asked for increases under 50% but said that their LTCI losses could justify requests for increases of 300% or more.

The State LTCI Rate Review Approach Conflict

LTCI issuers have said that regulators in California. New York state and some other states have been much less likely than regulators in most other states to approve the full LTCI premium increases that the issuers have requested.

Regulators in states like California have argued that they’re rightly using their statutory authority to protect older policyholders, who may be living on fixed incomes, from big rate increases imposed by giant companies that, in many cases, are reporting overall strong profits.

Regulators in other states say that the states that are failing to approve adequate LTCI premium hikes are pushing LTCI issuers to compensate, by asking for even bigger premium increases in other states.

“The proposed call will be used to gather information on the existence and degree of cross-state subsidization of different approaches when considering rate increases in each state,” according to the announcement about the NAIC’s LTCI data call fiscal impact statement.

— Read Here’s What You Could Do to Learn LTCI Issuer Secrets, on ThinkAdvisor.

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