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Long-Term Care Insurance Stays Near Top of State Worry List

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State insurance regulators are worrying about the effects of the COVID-19 pandemic on all lines of insurance, and on their own operations.

Regulators are also thinking hard about issues such as racism, artificial intelligence, and floods, fires and hurricanes.

And, with all of that going on, they’re still worried enough about the stability of long-term care insurance (LTCI) to make LTCI a top priority.

Ray Farmer, the South Carolina insurance director and president of the National Association of Insurance Commissioners (NAIC), talked about LTCI Monday, during the opening session for the NAIC’s virtual summer 2020 national meeting.


  • A link to a video recording of Farmer’s remarks, and a written version, are available here.
  • An earlier article about NAIC’s long-term care insurance is available here.

The NAIC was supposed to be holding an in-person meeting Minneapolis.

The NAIC shifted the meeting to a web-only format because of COVID-19 social distancing concerns.

Farmer talked first about racial equality.

“Over the past few months, we’ve seen the deaths of Ahmaud Arbery, Breonna Taylor and George Floyd and felt the pain the country is feeling over the loss of their lives,” Farmer said “Also, we’re saddened by the profound recent loss of two icons of the civil rights movement, Congressman John Lewis and the Rev. C.T. Vivian.”

The NAIC understands the need to address discrimination and its impact on insurance products and to promote diversity in the insurance sector, Farmer said.

The NAIC is recruiting for a diversity officer, and it has formed a Diversity, Equity and Inclusion Council to demonstrate an organizational commitment to diversity, Farmer said.

The NAIC’s executive committee has also formed a special committee devoted to race and insurance, Farmer said.

“The committee has the engagement of the vast majority of members, and their passion for this issue is undeniable,” Farmer said. “I know my colleagues have been moved by other members’ personal stories and struggles with discrimination and prejudice.”

The new committee is supposed to provide recommendations for steps insurance regulators and the insurance industry by the end of the year, Farmer said.

The NAIC has also developed guiding principles for regulation of artificial intelligence, to try to keep artificial intelligence from being a vehicle for proxy discrimination, Farmer said.

Farmer also talked about state insurance regulators’ efforts to respond to COVID-19, and to work Congress to get the National Flood Insurance Program reauthorized.

Then Farmer talked about long-term care insurance.

The LTCI issue remains a high priority, “even in the midst of COVID-19 and the quest for social justice,” Farmer said.

“Long-term care insurance provides one of the most significant examples of tension between solvency, regulation and consumer protection,” Farmer said. “Elderly consumers are experiencing significant premium increases because carriers believe they are necessary to maintain reserves.”

Farmer gave the work of the NAIC’s Long-Term Care Insurance Task Force on states’ approaches for reviewing LTCI rate increase requests as one example of the NAIC’s LTCI efforts.

He also cited the work of the Reduced Benefit Option Subgroup. The subgroup recently completed a document that describes the kinds of benefits cut options that issuers offer LTCI policyholders in exchange for holding the policyholders’ premiums steady.

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