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August 08, 2017 at 07:10 AM
Consultants that specialize in shutting down unwanted insurance operations want to set up a “run-off facility” for issuers of U.S. long-term care insurance business.
Luann Petrellis of PricewaterhouseCoopers and Richard Newton of International Solutions L.L.C. briefed a group of state insurance regulators, at the Long-Term Care Insurance Task Force, on the LTCI run-off facility proposal last month. The consultants said the facility would give insurers a transparent, carefully regulated place to put unwanted blocks of LTCI business.
(Related: Small Blocks of Long-Term Care Insurance May Get Own Rules)
A run-off facility that absorbed blocks from many different issuers could help make the process of administering the blocks more efficient, by having one team oversee many blocks, rather than having each issuer continue to handle its own blocks of business, Petrellis told the task force.
The task force is a joint effort of the Health Insurance and Managed Care Committee and the Financial Committee at the National Association of Insurance Commissioners. The Health Insurance and Managed Care Committee included a summary of the LTCI run-off facility presentation in a packet of materials for the NAIC’s summer meeting.
The committee held a session at the meeting, in Philadelphia, Monday.
Petrellis and Newton said the United Kingdom has used a similar run-off facility system to handle hundreds of insurance business transfers.
