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Some State Regulators Frown on Life-Long-Term Care Combo Products

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Some state insurance regulators and consumer group representatives are skeptical of arrangements that combine long-term care insurance with life insurance coverage.

Members of the Health Actuarial Task Force, an arm of the National Association of Insurance Commissioners, talked about their concerns in December, according to draft meeting notes included in a newly posted task force meeting packet.

Insurers and long-term care planners might think of combination products as a helpful way to ease consumer concerns about the idea of paying for coverage that they will never use.

But Paul Lombardo, an insurance department staffer from Connecticut, and Russell Toal, a department staffer from New Mexico, said officials in their states worry about consumer confusion.

One problem is that consumers might not understand that using a combination policy to pay for long-term care will reduce their death benefits, Lombardo said.

Toal said New Mexico regulators believe that combination products “seem to be deliberately designed to confuse consumers and do not provide information disclosures that are easily understood.”

Bonnie Burns, who has an official appointment to represent consumers’ interests in NAIC proceedings, reported that the California Department of Insurance is developing a continuing education course that will address how to explain combination products to consumers.

In Other LTCI News…

Continental General Insurance Company says it’s expanding sales of third-party administrator services for other companies’ life, accident and health products. The Austin, Texas-based company administers a large block of its own LTCI policies, and it has already been operating as a TPA. One of its major TPA service customers is Employers Reassurance Corp., a General Electric affiliate that’s managing a block of more than 300,000 LTCI policies.

Milliman is marketing the Long-Term Care Advanced Risk Analytics, or LARA, LTCI risk tracking system. The system provides a dashboard system that can help insurers see how old their insureds are, how the insureds rate in terms of factors such as general health and support systems, and the probability that each insured will file and LTCI claim.

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