Hancock Closer To The Door

[Arthur Rudnick]

It was just announced that John Hancock has decided to discontinue their employer group sales as of 12/31/11​

John Hancock Financial Services
[FONT=Arial,Arial][FONT=Arial,Arial]Long-Term Care Insurance P.O. Box 111 Boston, MA 02117 [/FONT][/FONT]
Marianne Harrison [FONT=Arial,Arial][FONT=Arial,Arial]President [/FONT][/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]October 20, 2011[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]
Important Announcement Regarding John Hancock's Group
Long-Term Care Insurance Plan[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]Last year, we notified you and your client(s) of our decision to suspend sales to new employer groups, with the intention of continuing routine ongoing enrollments. We felt that was the most prudent action we could take at the time, as we evaluated our product pricing and design in light of the economic environment. ​

Unfortunately, we now find it necessary to discontinue all enrollment activity under our existing group policies, effective January 1, 2012. This difficult decision is the direct result of the historically low interest rate environment that is expected to continue for an extended period of time.

John Hancock had hoped that the business environment would stabilize or improve since our announcement of last year. However, prolonged low interest rates recently became a certainty, with the government signaling in September its commitment to keep rates low for the next two years. Our products assume a certain level of investment returns, which are influenced by the interest rate environment. When actual returns are significantly lower than what was assumed in our pricing, the business being sold in these circumstances is not economically viable.

We will continue to process enrollment applications received by December 31, 2011, but will not be able to process applications received after that date. We will communicate with any applicants who submit an application after this deadline. This cessation of enrollment activity is a global action that applies not only to group policies that will receive an in-force premium rate increase, but also to policies that are not subject to an in-force rate increase.[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]We plan to notify your clients on October 27, 2011 with a letter similar to this one. You will be copied on your client(s)' notification(s). [/FONT][/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial]​

We understand that this decision may be disruptive to their 2012 benefit plans, especially in cases where employee benefit materials may have been finalized and distributed to employees. We sincerely apologize for this inconvenience. To assist client(s) who may wish to proactively reach out to their employees to communicate this decision, we are developing a sample employee notice and an FAQ. Copies of these materials will be provided to you next week as part of our overall communication to clients, as well as a sample of the notice that will be included in enrollment kits and posted on client websites (if applicable), beginning November 1st.
[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial]Once again, we apologize for having to take this action at this time, and for the short notice provided. We want you to know that providing products and services for the group long-term care insurance market remains our long-term goal. In that respect, we have been working to develop innovative, new products for the group market that will not be as sensitive to fluctuations in the economy. This will take time, but we will keep you apprised of our progress. In the meantime, please be assured that your clients' existing insureds will continue to receive ongoing service throughout the life of their coverage. ​

We appreciate your understanding. [/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana][/FONT][/FONT]

 

[HealthGuy]

Figures...who cares.

 

[Mr_Ed]

It was just announced that John Hancock has decided to discontinue their employer group sales as of 12/31/11​

John Hancock Financial Services
[FONT=Arial,Arial][FONT=Arial,Arial]Long-Term Care Insurance P.O. Box 111 Boston, MA 02117 [/FONT][/FONT]
Marianne Harrison [FONT=Arial,Arial][FONT=Arial,Arial]President [/FONT][/FONT]

[FONT=Arial,Arial][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]October 20, 2011[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]
Important Announcement Regarding John Hancock's Group
Long-Term Care Insurance Plan[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]Last year, we notified you and your client(s) of our decision to suspend sales to new employer groups, with the intention of continuing routine ongoing enrollments. We felt that was the most prudent action we could take at the time, as we evaluated our product pricing and design in light of the economic environment. ​

Unfortunately, we now find it necessary to discontinue all enrollment activity under our existing group policies, effective January 1, 2012. This difficult decision is the direct result of the historically low interest rate environment that is expected to continue for an extended period of time.

John Hancock had hoped that the business environment would stabilize or improve since our announcement of last year. However, prolonged low interest rates recently became a certainty, with the government signaling in September its commitment to keep rates low for the next two years. Our products assume a certain level of investment returns, which are influenced by the interest rate environment. When actual returns are significantly lower than what was assumed in our pricing, the business being sold in these circumstances is not economically viable.

We will continue to process enrollment applications received by December 31, 2011, but will not be able to process applications received after that date. We will communicate with any applicants who submit an application after this deadline. This cessation of enrollment activity is a global action that applies not only to group policies that will receive an in-force premium rate increase, but also to policies that are not subject to an in-force rate increase.[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]We plan to notify your clients on October 27, 2011 with a letter similar to this one. You will be copied on your client(s)' notification(s). [/FONT][/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial]​

We understand that this decision may be disruptive to their 2012 benefit plans, especially in cases where employee benefit materials may have been finalized and distributed to employees. We sincerely apologize for this inconvenience. To assist client(s) who may wish to proactively reach out to their employees to communicate this decision, we are developing a sample employee notice and an FAQ. Copies of these materials will be provided to you next week as part of our overall communication to clients, as well as a sample of the notice that will be included in enrollment kits and posted on client websites (if applicable), beginning November 1st.
[/FONT][/FONT][FONT=Arial,Arial][/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial]Once again, we apologize for having to take this action at this time, and for the short notice provided. We want you to know that providing products and services for the group long-term care insurance market remains our long-term goal. In that respect, we have been working to develop innovative, new products for the group market that will not be as sensitive to fluctuations in the economy. This will take time, but we will keep you apprised of our progress. In the meantime, please be assured that your clients' existing insureds will continue to receive ongoing service throughout the life of their coverage. ​

We appreciate your understanding. [/FONT][/FONT][FONT=Verdana,Verdana][/FONT]

great opportunity for multi life ltci sales.... not to mention the trickle down for individual sales.

 

[Arthur Rudnick]

great opportunity for multi life ltci sales.... not to mention the trickle
down for individual sales.

In spite of your thoughts, there's no way to spin this into a positive. This announcement is a MAJOR red flag. Hancock has been a huge player in the industry for 30 years.

MetLife, who in 2010 was the #3 producer of LTCi in the market is no more. This market is obviously not viable enough for a major corporation to make money.

Genworth will own 50%+ of the entire market. It is not a healthy situation for any business to have a 50% market share.

Genworth has their new product, PCFlex rolling out in NY in a couple of weeks. NYS Partnership rates are up 16%. PCFlex, on average is up 19% over PC & CS. Policies with unlimited benefits will be up 25%.

Pru just announced new rates on LTC3.
+ 14%-63% on5% cmp, no max (averaging +40%)
+ 14%-34% on 5% cmp, 2 x max (averaging +22%
+ 5%-27% for 5% Simple (averaging +16%)

Transamerica is rolling out TransCare2 in a couple of weeks. I haven't seen the new rates for NY yet but I'm told it's up 20%-25% over TransCare.

Where is this going? This is not 1995 where we could sell a policy with $100/day in benefits. In NY, with costs what they are, a benefit of $250-$300 is only "adequate".

This product is being priced out of reach to the very people it was designed for. It is very quickly becoming unaffordable for the middle & upper middle class. That 50 year old, with 2 kids & a mortgage has a lot of other priorities to worry about. That's assuming that today, they even have a job.

Yup, you can spin this any way you want, but this is just another piece of news that our industry can do without.

 

[Mr_Ed]

In spite of your thoughts, there's no way to spin this into a positive. This announcement is a MAJOR red flag. Hancock has been a huge player in the industry for 30 years. They were the #2 seller of the product and they are just about history. Mark my words, they will not be around by the end of 2012.

MetLife, who in 2010 was the #3 producer of LTCi in the market is no more. This market is obviously not viable enough for a major corporation to make money.

Genworth will own 50%+ of the entire market. It is not a healthy situation for any business to have a 50% market share.

Genworth has their new product, PCFlex rolling out in NY in a couple of weeks. NYS Partnership rates are up 16%. PCFlex, on average is up 19% over PC & CS. Policies with unlimited benefits will be up 25%.

Pru just announced new rates on LTC3.
+ 14%-63% on5% cmp, no max (averaging +40%)
+ 14%-34% on 5% cmp, 2 x max (averaging +22%
+ 5%-27% for 5% Simple (averaging +16%)

Transamerica is rolling out TransCare2 in a couple of weeks. I haven't seen the new rates for NY yet but I'm told it's up 20%-25% over TransCare.

Where is this going? This is not 1995 where we could sell a policy with $100/day in benefits. In NY, with costs what they are, a benefit of $250-$300 is only "adequate".

This product is being priced out of reach to the very people it was designed for. It is very quickly becoming unaffordable for the middle & upper middle class. That 50 year old, with 2 kids & a mortgage has a lot of other priorities to worry about. That's assuming that today, they even have a job.

Yup, you can spin this any way you want, but this is just another piece of news that our industry can do without.

NY is definitely the worst state for LTC insurance. The policies in NY suck compared to the rest of the country. CA is a close 2nd.

Step-rated premiums are one solution to the problem--hopefully NY will allow Transam to include that inflation benefit option in the TC2 policy.

There are rumors that JH is working on a game-changing product. We'll see how that goes.

If all I could do was sell LTCi in NY, I'm sure I'd be as sour as you are about the industry, Arthur.

nadm

 

[Arthur Rudnick]

NY is definitely the worst state for LTC insurance. The policies in NY suck compared to the rest of the country.

The only downside for LTCi in NY is the benefits we have to sell, which of course is higher than anyplace on the planet other than Alaska.

But, NY has the same products as everyone else.
We have Hancock, Pru, Genworth, MedAmerica, Mass Mutual, Guardian, Transamerica, MedAmerica, Mutual of Omaha, State Farm, Northwest Mutual & NYLife.

We also have a Partnership Program that offers 100% asset protection for life.

NY rates are always the highest for every product available, but I'm selling the same Genworth policy in NY that you are in CA, so I'm not sure I'm following you.

 

[Mr_Ed]

The only downside for LTCi in NY is the benefits we have to sell, which of course is higher than anyplace on the planet other than Alaska.

But, NY has the same products as everyone else.
We have Hancock, Pru, Genworth, MedAmerica, Mass Mutual, Guardian, Transamerica, MedAmerica, Mutual of Omaha, State Farm, Northwest Mutual & NYLife.

We also have a Partnership Program that offers 100% asset protection for life.

NY rates are always the highest for every product available, but I'm selling the same Genworth policy in NY that you are in CA, so I'm not sure I'm following you.

thou knoweth not of which thou speaketh.

the products in NY may be the same products but the NY DOI doesn't approve a lot of the more creative benefits/features.

 

[Arthur Rudnick]

thou knoweth not of which thy speaketh

What the Hell are you talking about, you were raised in New Jersey.
Is that how they speak in Jersey City?

 

[Mr_Ed]

What the Hell are you talking about, you were raised in New Jersey.
Is that how they speak in Jersey City?

I was raised in New Joisey, not New Jersey.

New Joisey is a great state to be FROM.

... I wasn't raised in Jersey City, but it is a pretty cool town now. They've renovated it and it looks great. And the Cake Boss is there, too.

 

[yankee466]

I was raised in New Joisey, not New Jersey.

New Joisey is a great state to be FROM.

... I wasn't raised in Jersey City, but it is a pretty cool town now. They've renovated it and it looks great. And the Cake Boss is there, too.

Hey...I was born and raised in Jersey City.....and went to school in Hoboken. Never picked up the accent though.