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Life Health > Long-Term Care Planning

Regulators End Effort to Develop Long-Term Care Hybrid Rules

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The National Association of Insurance Commissioners has stopped trying to develop new regulations for new types of long-term care benefits products, such as those that combine long-term care benefits with life insurance.

Members of the NAIC’s Senior Issues Task Force have voted to shut down an arm — the Long-Term Care Insurance Model Update Subgroup — because the last chair quit in December 2021, finding a new chair has been difficult, and only one person has asked about the subgroup since the last chair left.

David Torian, the task force counsel, suggested that the lack of interest might be a sign that insurers and other parties are happy with the regulations now in place, according to draft meeting minutes included in a task force meeting packet.

Bonnie Burns, a California health advocate who helps represent consumers in NAIC proceedings, said she believes that new types of LTC products, such as life-LTC hybrids, are often more complicated than consumers and agents realize.

Consumers might have a poor understanding of how investment-linked policy benefits are likely to change over time, and they might not know how little inflation protection they have, Burns wrote in a comment letter.

What It Means

Advisors may want to watch closely to see if clients with life-LTC hybrids, short-term care insurance or other new types of LTC benefits products are getting the same kinds of disclosures and consumer protections that clients with traditional long-term care insurance policies get.

The Mechanics

The NAIC is a Kansas City, Missouri-based group for state insurance regulators. It cannot set states’ insurance laws and regulations, but state officials often start with NAIC models when developing local insurance rules.

The Senior Issues Task Force described the subgroup shutdown in a document packet for this week’s NAIC national meeting in Tampa, Florida.

(Image: iStock)


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