Some long-term care insurance (LTCI) issuers are counting on interest rates to bounce up fairly soon, and that assumption could get them into trouble.
Douglas Meyer and other analysts at Fitch Ratings have given that assessment in a new review of LTCI issuer reserving.
Fitch analysts continue to believe that most of the LTCI issuers they rate have their LTCI exposure under control.
Some issuers now seem to be taking a more careful approach when deciding how much money to keep in their LTCI reserves, according to the Fitch analysts.
But interest rates have been falling, and some issuers are still using discount rate assumptions based on the idea that interest rates will go back up to the historic mean, the analysts say.