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State Regulators May Form LTCI 'Rate Hike v. Reduced Benefits' Panel

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State insurance regulators may look harder at the options long-term care insurance (LTCI) issuers present when giving policyholders a choice between big premium increases or reduced benefits.

The Long-Term Care Insurance Task Force is thinking about setting up an LTCI Reduced Benefit Options Subgroup.

The task force is part of the National Association of Insurance Commissioners (NAIC), which is a Kansas City, Missouri-based group for state insurance regulators.

The new task force subgroup would develop recommendations for the benefits reduction options insurers offer LTCI policyholders who are unable or unwilling to spend more on LTCI premiums, according to a draft proposal posted on the subgroup’s section of the NAIC’s website.


  • Links to documents related to the activities of the NAIC’s Long-Term Care Insurance Task Force are available here.
  • An earlier article about the work of the task force is available here.

The subgroup would have sessions that would be open to the public.

The chair would be Jessica Altman, who is the Pennsylvania insurance commissioner.

The subgroup would try to come up with recommendations by mid-August 2021.

The task force already has a Reduced Benefit Options Workstream. Seventeen states are participating in that workstream.

The reduced benefit options workstreams has posted a draft statement of principles and issues.

One question the panel is asking is whether all LTCI policyholders facing rate increases are being offered a reduced benefit option, and another is whether the reduced benefit options being offered provide reasonable value.

The panel is also asking about the possible effects of reduced benefit option offers on the financial stability of the remaining block of business, and efforts to communicate with the policyholders about the reduced benefit options.

Other Task Force Efforts

The LTCI Task Force has also proposed creating an LTCI Multistate Rate Review Subgroup.

That subgroup would look into ways to speed up LTCI rate increase request reviews, and ways to keep the policyholders in states that grant increases from paying to subsidize the policyholders in states that often reject increases.

Michael Conway, the Colorado insurance commissioner, would chair that subgroup.

Some of that subgroup’s sessions would be open to the public and some would be closed to the public.

A third new subgroup, the LTCI Financial Solvency subgroup, would be chaired by Doug Slape of Texas and Fred Andersen of Minnesota.

That subgroup would look at ways to restructure failed and failing LTCI issuers, and to address concerns that insurance guaranty associations in some states may provide more protection for the policyholders than the guaranty associations in other states provide.

The solvency subgroup’s meetings would be closed to the public.

— Read NAIC Forms Top-Level Long-Term Care Insurance Task Force, on ThinkAdvisor.

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