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Regulator Sees COVID-19 Hurting Long-Term Care Insurance Issuers

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The COVID-19 pandemic seems likely to have a mixed, but mostly bad, effect on blocks of long-term care insurance (LTCI), according to a Minnesota insurance regulator.

The regulator, Fred Andersen, talked about the effects of COVID-19 on LTCI issuers Nov. 2, during a virtual meeting of the Long-Term Care Actuarial Working Group.


  • The website of the NAIC’s Health Actuarial Task Force is available here.
  • An article about the latest White House Coronavirus Task Force weekly report is available here.

The working group is part of the Health Actuarial Task Force at the National Association of Insurance Commissioners (NAIC). The task force included draft minutes from the meeting in a document packet for a conference call held Nov. 19.

Insurers are saying that the pandemic caused a temporary drop in the number of new LTCI claims, due to people’s reluctance to go into long-term care facilities or to let paid home care workers into their homes, Andersen said, according to the draft minutes.

Since then claim incidence has returned to more typical levels, .Andersen said.

The pandemic has increased claimant mortality somewhat, but insurers expect the increase in mortality to end soon, he added.

The economic shock caused by the pandemic has lowered interest rates on bonds, which means LTCI issuers will be getting lower yields than previously assumed on newly invested money for the foreseeable future, Andersen said.

Insurance regulators and actuaries use the term “morbidity” to refer to the risk that people with health-related insurance will be sick enough to use their insurance.

The California Department of Insurance has developed an LTCI morbidity reporting template. Increased use of that reporting template could help state insurance regulators learn more about trends in LTCI morbidity, Andersen said.

— Read Can We Tolerate Millions of Elderly People Living in Cars?on ThinkAdvisor.

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