Genworth Financial — a company that helped create the modern long-term care insurance market, then suffered when many of its LTCI assumptions turned out to be wrong — is showing state insurance regulators what it wants its new generation of LTCI policies to look like.
The Richmond, Virginia, company has set up a new company, CareScout Insurance Co., to write the new LTCI coverage.
CareScout filed an illustration once of the new LTCI policies with the Delaware Department of Insurance last week.
The illustration shows that the proposed CareScout Care Assurance policy might offer a typical hypothetical consumer a policy with a $150 daily maximum benefit, a $100,000 lifetime coverage maximum, and a 90-day deductible period. The policy could come with an inflation-protection menu that includes 1%, 3% or 5% compound inflation protection options.
The basic policy would not pay for care received outside the United States or provided by an immediate family member who is not a paid long-term care worker. But the policy would pay an amount equal to 100% of the standard nursing home benefit for assisted living facility care, agency home care or adult day care services, and it would pay 50% of the standard amount for home care from an independent provider.
What it means: The market for stand-alone long-term care insurance may be getting a few steps closer to a comeback.
The history: Genworth was formed through a spinoff of the life, annuity, LTCI and mortgage insurance operations of General Electric's GE Capital affiliate.
The company made overly optimistic assumptions about how LTCI policyholders, the policies and insurance company investments would perform, and it set premiums far too low.
It faced a big gap between resources and benefits obligations, and it stopped selling new LTCI in 2019.
Its Enact affiliate still writes large amounts of mortgage insurance.
The company has been working to close the LTCI benefits obligation gap by getting regulator approvals for waves of big LTCI premium increases.
CareScout: Genworth has been talking about the CareScout, the LTCI revival business, for about a year, and it said in May that it had received LTCI policy approvals from regulators in 23 states.
It has said it will try to ease regulator and consumer concerns about its past by getting support from a strong reinsurer, or insurer for insurance companies.
The Insurance Compact, an organization that helps states share insurance product filing review work, has no filings from CareScout on public display now, but some jurisdictions, including Delaware, Virginia and the District of Columbia, have posted CareScout filings on their sections of the National Association of Insurance Commissioners' System for Electronic Rate and Form Filing database.
CareScout had its first "domicile," or official home, in North Carolina. Its current state of domicile is Virginia.
The North Carolina SERFF section shows, for example, that CareScout recently filed a form that could make the version of the policy it offers in North Carolina compatible with the state's Long-Term Care Insurance Partnership Program.
State partnership programs let consumers who buy private LTCI coverage and exhaust the benefits get access to Medicaid nursing home benefits on favorable terms.
A pricing distribution sheet shown on the District of Columbia's SERFF section shows that CareScout is assuming that the typical issue age for coverage might be about 60 and that more than 85% of the consumers who had a choice between no inflation protection, 1% compound protection and 3% compound protection would choose the 3% protection option.
Similarly, the District of Columbia filing shows that only 5% of consumers who could choose between a 0-day, 90-day and 180-day deductible period would choose to go without coverage for 180 days before collecting benefits. CareScout is assuming that 47.5% of the buyers would choose a 0-day deductible period and 47.5% would choose a 90-day deductible period.
Correction: CareScout's current state of domicile was described incorrectly in an earlier version of this article. The current state of domicile is Virginia.
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