John Hancock Assumes Time Insurance's LTCI Business
The shift will affect about 25,000 policyholders.
John Hancock Life Insurance Co. (U.S.A.) is assuming responsibility for a block of about 25,000 long-term care insurance policies originally issued by Time Insurance Co.
A Wisconsin state court declared Time insolvent and put it in rehabilitation in July 2020. John Hancock — a Boston-based arm of Manulife — has been reinsuring and administering the LTCI policies for more than 20 years.
What It Means
Because John Hancock has been administering the LTCI policies for so long, many of your clients who have these policies may already think of their policies as John Hancock policies.
Nathan Houdek, Wisconsin’s insurance commissioner, predicted that the assumption arrangement will have little effect on the Time LTCI policyholders.
But the Time story underscores the point that although a life insurance policy, annuity contract or related product might promise to protect your client from exposure to investment market risk and other forms of risk, the guarantees depend on the strength of the insurer, and of the regulatory agencies, guaranty associations and other entities working to monitor, support and provide guaranty fund protection for those guarantees.
The History
Time Insurance was founded in 1892 and sold annuities, life insurance, disability insurance and supplemental health insurance products, including short-term health insurance, long-term care insurance and Medicare supplement insurance.
Fortis, a Dutch financial services company, bought it in 1978. Fortis arranged for John Hancock to reinsurance Time’s LTCI business in 2000.
Assurant acquired Time in 2004, then put it in runoff in 2015, after the 2007-2009 Great Recession and the rise of the federal Affordable Care Act health insurance regulatory framework hurt the performance of Assurant’s health insurance operations.
Haven Holdings acquired Time in 2018, moved it to Puerto Rico, and made an unsuccessful effort to realign the company’s liabilities.
Time’s headquarters moved back to Wisconsin in May 2020. The state then began putting the company in rehabilitation.
The company had about 200,000 customers of all kinds when it entered rehabilitation.
Assurity Life has already assumed responsibility for Time’s disability insurance policies.
Loyal American Life, which is an arm of Cigna, took over the company’s Medicare supplement policies.
Allstate’s National Health Insurance Co. assumed the life term life and non-Medicare supplemental health insurance policies.
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