- Thread starter
- #21
Is 13 years a long enough business cycle for you?
“New Insurance Regulation” Protects Consumers from LTC Insurance Rate Increases
- Thread starter Mr_Ed
- Start date
Is 13 years a long enough business cycle for you?
Well, what States moved to rate stabilization standards in 2001?
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This is a statement from Gorman Actuarial in 2009.
The rate stabilization provisions added in CY 2000 to the NAIC Long-Term Care Insurance Model Regulation were designed to assist with alleviating significant rate increases for long-term care insurance. Unfortunately, the provisions do not sufficiently assist with the rate increase requests for the older policies issued prior to CY 2000. Even those who have implemented the rate stabilization provision have indicated that significant rate increase requests are still being submitted for these newer policies. Finally, many states agree that it is too premature to tell if the new regulation will be effective. States do agree, however, that in order to implement the tools of the rate stabilization provisions, states need resources to utilize some of these new functions.
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Here is a link to the document prepared for the State of Massachusetts. Pages 12-14 are helpful.
http://www.mass.gov/ocabr/docs/doi/consumer/healthlists/ltcare-survey.pdf
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Of the four states who have not adopted the rate stabilization provisions in the NAIC model regulation, two indicated that they learned from speaking with other states that have adopted the changes, that while the initial rates were higher, insurance companies still continued to request high rate increases for newer policies. They are not convinced that the CY 2000 rate stabilization provisions will be effective. The other two states indicated that they were not considering adopting the new Model Act.
Table 3 illustrates when states surveyed adopted the rate stabilization provisions. Many states commented that it is too premature to understand the true impact of the rate stabilization provisions in the NAIC regulation. Most states had very little experience with rate increase filings for policies post rate stabilization. One state that adopted the Model Act in CY 2002 had seen about a dozen rate increase filings.
Arthur Rudnick
Guru
- 1,652
originally posted by Mr_Ed
Scott,
Give me a break!
I'm looking at common sense history. You can blow all the smoke that you want to, but history can't be changed.
I've been in the business for almost 20 years and since 2003 there have been multiple, exhorbitant rate increase on exisiting policies.
I'm aware of that, you're aware of that and consumers are aware of that.
How many consumers out there refuse to look into the purchase of a LTC policy because all they read about is how out-of-control the carriers are with their rate increases?
Plain & simple, that's the reality of our business and that's what agents have to deal with every day.
Do you think for a moment that consumers undersatnd or care about the words "Loss Ratios", "Model Acts" or "Rate Stabilization"? Rate increase history is part of a Disclosure Statement that they have to sign. It says that premiums can be raised. It also lists past increases from the company.
Every day consumers read about the risks of rate increases. Every prospect I meet with asks about rate increases. Over the past 10 years, increases on existing policies are common place. I've had to deal with existing policyholders who have had multiple increases of up to 100%.
That my friend is the history I'm referring to. And, if you can convince your prospects that past history is no guarantee of future increases, all the power to you.
If you're convinced that under the new regulations premiums will remain stable and never increase, you're living in your own world.
And, common sense history proves that.
Scott,
Give me a break!
I'm looking at common sense history. You can blow all the smoke that you want to, but history can't be changed.
I've been in the business for almost 20 years and since 2003 there have been multiple, exhorbitant rate increase on exisiting policies.
I'm aware of that, you're aware of that and consumers are aware of that.
How many consumers out there refuse to look into the purchase of a LTC policy because all they read about is how out-of-control the carriers are with their rate increases?
Plain & simple, that's the reality of our business and that's what agents have to deal with every day.
Do you think for a moment that consumers undersatnd or care about the words "Loss Ratios", "Model Acts" or "Rate Stabilization"? Rate increase history is part of a Disclosure Statement that they have to sign. It says that premiums can be raised. It also lists past increases from the company.
Every day consumers read about the risks of rate increases. Every prospect I meet with asks about rate increases. Over the past 10 years, increases on existing policies are common place. I've had to deal with existing policyholders who have had multiple increases of up to 100%.
That my friend is the history I'm referring to. And, if you can convince your prospects that past history is no guarantee of future increases, all the power to you.
If you're convinced that under the new regulations premiums will remain stable and never increase, you're living in your own world.
And, common sense history proves that.
- Thread starter
- #24
I've been sharing the Rate Stability Regulations with consumers on a regular basis for the past six months.
What shocks me the most about this thread is that the consumers I've spoken with quickly grasp and accept the regeulations and they are more accepting of the regulations than the "LTCi specialists".
What shocks me the most about this thread is that the consumers I've spoken with quickly grasp and accept the regeulations and they are more accepting of the regulations than the "LTCi specialists".
I've been sharing the Rate Stability Regulations with consumers on a regular basis for the past six months.
What shocks me the most about this thread is that the consumers I've spoken with quickly grasp and accept the regeulations and they are more accepting of the regulations than the "LTCi specialists".
I am accepting of the regulations. To know whether they are successful or not will take time. We will not know the outcome until the blocks of business have time to cycle through.
- 29,491
That rate history link's really interesting. There aren't many companies left writing LTCi. It shows CNA as actively writing business. I thought they stopped writing LTCi years ago.
- 2,584
The personal worksheets I have seen do not match up with no rate increases on policies issued since these "rate stability regulations" have gone into effect.
It show rate increase on policy series that span years before and after they took effect.
It show rate increase on policy series that span years before and after they took effect.
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- Thread starter
- #28
...therein lies the problem.
the personal worksheets show the rate increases for all states.
CNA still has some active group policies.
Arthur Rudnick
Guru
- 1,652
originally posted by Mr_Ed
I would think that 7-10 years is about right, except for the states that have not signed on to the Rate Stability regulations.
I guess for those states, it will be business as usual.
Does anyone know what states have NOT signed on yet?
I know NY is one of them, which are the other 6-7?
I would think that 7-10 years is about right, except for the states that have not signed on to the Rate Stability regulations.
I guess for those states, it will be business as usual.
Does anyone know what states have NOT signed on yet?
I know NY is one of them, which are the other 6-7?
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