Yeah, yeah. Please don't confuse me with facts Scott.
New Genworth Product Announced
- Thread starter yankee466
- Start date
Yeah, yeah. Please don't confuse me with facts Scott.
.... like I have nothing better to do.
you're an insurance agent.
you must know how to find your state's insurance code on the www dot worldwide net interweb thingy.
look under long term care insurance.
then look under "initial filing requirements" which tells you what's required in order to sell any new policy today.
then look under Premium Rate Schedule Increases which tells you the hoops that have to be jumped through in order to get a rate increase on any policy that is sold today. If you look carefully you'll even find that there's a cap on any rate increase.
- 10,806
In the time it took you to write that you could have posted the answer. But all of us here know how you are Scott... honestly I knew you wouldn't post it, I just wanted you to prove it for me.
Believe it or not, most agents on this forum actually like to help other agents... and others sadly use it to boost their own ego
Cap, no cap. Hoops, no hoops. Bottom line is the rate increase concern is the greatest concern expressed by my clients to me. The rate increases were lousy for our industry.
there needs to be a concerted education effort to agents (and consumers) about the regulations that protect people who buy LTCi today.
----------
Scott who?
I'm Mrs. Ed.
----------
It took me approximiately 90 seconds to google it and find it on SC's website. Here is the first part:
Section 10. Initial Filing Requirements
A. This Section applies to any long term care policy issued in this state on or after six months from the effective date of this Regulation.
B. An insurer shall provide the information listed in this Subsection to the Director thirty (30) days prior to making a long term care insurance form available for sale.
(1) A copy of the disclosure documents required in Section 9 of this Regulation; and
(2) An actuarial certification consisting of at least the following:
(a) A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;
(b) A statement that the policy design and coverage provided have been reviewed and taken into consideration;
(c) A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;
(d) A complete description of the basis for contract reserves that are anticipated to be held under the form, to include:
(i) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;
(ii) A statement that the assumptions used for reserves contain reasonable margins for adverse experience;
(iii) A statement that the net valuation premium for renewal years does not increase (except for attained-age rating where permitted); and
(iv) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur;
(I) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship;
(II) If the gross premiums for certain age groups appear to be inconsistent with this requirement, the Director may request a demonstration under Subsection C based on a standard age distribution; and
(e)(i) A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or
(ii) A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.
C. (1) The Director may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both.
(2) In the event the Director asks for additional information under this provision, the period in Subsection B of this Section does not include the period during which the insurer is preparing the requested information.
HISTORY: Added by State Register Volume 13, Issue No. 6, effective 180 days after June 23, 1989. Amended by State Register Volume 34, Issue No. 5, eff May 28, 2010.
Here is the 2nd part:
Section 20. Premium Rate Schedule Increases
A. This Section shall apply as follows:
(1) Except as provided in Paragraph (2), this Section applies to any long term care policy or certificate issued in this state on or after July 1, 2010.
(2) For certificates issued on or after the effective date of this amended regulation under a group long term care insurance policy as defined in Section 4E(1) of this Regulation, which policy was in force at the time this amended regulation became effective, the provisions of this Section shall apply on the policy anniversary following January 1, 2011.
B. An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the Director at least thirty (30) days prior to the notice to the policyholders and shall include:
(1) Information required under Section 9 of this Regulation;
(2) Certification by a qualified actuary that:
(a) If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated;
(b) The premium rate filing is in compliance with the provisions of this Section;
(3) An actuarial memorandum justifying the rate schedule change request that includes:
(a) Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;
(i) Annual values for the five (5) years preceding and the three (3) years following the valuation date shall be provided separately;
(ii) The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;
(iii) The projections shall demonstrate compliance with Subsection C; and
(iv) For exceptional increases,
(I) The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and
(II) In the event the Director determines as provided in Section 4A(4) of this Regulation that offsets may exist, the insurer shall use appropriate net projected experience;
(b) Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;
(c) Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary;
(d) A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and
(e) In the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer will need to file composite rates reflecting projections of new certificates;
(4) A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the Director; and
(5) Sufficient information for review and approval of the premium rate schedule increase by the Director.
C. All premium rate schedule increases shall be determined in accordance with the following requirements:
(1) Exceptional increases shall provide that seventy percent (70%) of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;
(2) Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:
(a) The accumulated value of the initial earned premium times fifty-eight percent (58%);
(b) Eighty-five percent (85%) of the accumulated value of prior premium rate schedule increases on an earned basis;
(c) The present value of future projected initial earned premiums times fifty-eight percent (58%); and
(d) Eighty-five percent (85%) of the present value of future projected premiums not in Subparagraph (c) on an earned basis;
(3) In the event that a policy form has both exceptional and other increases, the values in Paragraph (2)(b) and (d) will also include seventy percent (70%) for exceptional rate increase amounts; and
(4) All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified in Regulation 69-7. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.
D. For each rate increase that is implemented, the insurer shall file for review and approval by the Director updated projections, as defined in Subsection B(3)(a), annually for the next three (3) years and include a comparison of actual results to projected values. The Director may extend the period to greater than three (3) years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in Subsection K, the projections required by this Subsection shall be provided to the policyholder in lieu of filing with the Director.
E. If any premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections, as defined in Subsection B(3)(a), shall be filed for review and approval by the Director every five (5) years following the end of the required period in Subsection D. For group insurance policies that meet the conditions in Subsection K, the projections required by this Subsection shall be provided to the policyholder in lieu of filing with the Director.
F.(1) If the Director has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in Subsection C, the Director may require the insurer to implement any of the following:
(a) Premium rate schedule adjustments; or
(b) Other measures to reduce the difference between the projected and actual experience.
(2) In determining whether the actual experience adequately matches the projected experience, consideration should be given to Subsection B(3)(e), if applicable.
G. If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:
(1) A plan, subject to Director approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the Director may impose the condition in Subsection H of this Section; and
(2) The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to Subsection C had the greater of the original anticipated lifetime loss ratio or fifty-eight percent (58%) been used in the calculations described in Subsection C(2)(a) and (c).
H.(1) For a rate increase filing that meets the following criteria, the Director shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the twelve (12) months following each increase to determine if significant adverse lapsation has occurred or is anticipated:
(a) The rate increase is not the first rate increase requested for the specific policy form or forms;
(b) The rate increase is not an exceptional increase; and
(c) The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.
(2) In the event significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the Director may determine that a rate spiral exists. Following the determination that a rate spiral exists, the Director may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.
(a) The offer shall:
(i) Be subject to the approval of the Director;
(ii) Be based on actuarially sound principles, but not be based on attained age; and
(iii) Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.
(b) The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:
(i) The maximum rate increase determined based on the combined experience; and
(ii) The maximum rate increase determined based only on the experience of the insureds originally issued the form plus ten percent (10%).
I. If the Director determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long term care insurance, the Director may, in addition to the provisions of Subsection H of this Section, prohibit the insurer from either of the following:
(1) Filing and marketing comparable coverage for a period of up to five (5) years; or
(2) Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.
J. Subsections A through I shall not apply to policies for which the long term care benefits provided by the policy are incidental, as defined in Section 4B, if the policy complies with all of the following provisions:
(1) The interest credited internally to determine cash value accumulations, including long term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long term care set forth in the policy;
(2) The portion of the policy that provides insurance benefits other than long term care coverage meets the nonforfeiture requirements as applicable in any of the following:
(a) S.C. Code Section 38-63-510 et seq.;
(b) S.C. Code Section 38-69-210 et seq.; and
(c) Regulation 69-12;
(3) The policy meets the disclosure requirements of S.C. Code Section 38-72-60;
(4) An actuarial memorandum is filed with the insurance department that includes:
(a) A description of the basis on which the long term care rates were determined;
(b) A description of the basis for the reserves;
(c) A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
(d) A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;
(e) A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
(f) The estimated average annual premium per policy and the average issue age;
(g) A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and
(h) A description of the effect of the long term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long term care claim status.
K. Subsections F and H shall not apply to group insurance policies as defined in Section 4E(1) of this Regulation where:
(1) The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or
(2) The policyholder, and not the certificate holders, pays a material portion of the premium, which shall not be less than twenty percent (20%) of the total premium for the group in the calendar year prior to the year a rate increase is filed.
HISTORY: Added by State Register Volume 13, Issue No. 6, effective 180 days after June 23, 1989. Amended by State Register Volume 34, Issue No. 5, eff May 28, 2010.
Last edited:
I have not posted here in a long while. I do read this particular forum since I have long term care insurance. If you may remember, I am not in the insurance industry, but I have an interest in this insurance since I now own it. I am worried about the rate increases as it could affect me. I know that Genworth has requested that it get increases here in California. I know that some have been approved but not the partnership policies.
I would like to thank Mr. Ed for finally posting the premium increase requirement. Now I need someone to translate it for me. Is there a bottom line here? The rate increases scare the average person away. I know that it was a major concern for me, but I felt it was important to have. I am glad I bought when I did but some of the hybrid policies seem like a good deal.
I would like to thank Mr. Ed for finally posting the premium increase requirement. Now I need someone to translate it for me. Is there a bottom line here? The rate increases scare the average person away. I know that it was a major concern for me, but I felt it was important to have. I am glad I bought when I did but some of the hybrid policies seem like a good deal.
- 10,806
Like I told you privately, it was the national uniformity of the regs that is more pertinent to this discussion. Anyone is capable of looking up the code for a single state. But as a whole, this sector of the industry has a major pr problem on a national level.
But in your PM you mentioned that the regs in some of the 40 states that have regs like SCs, date back to 2002. So have those states with regs in place longer seen smaller % increases in premiums?
Those states that implemented the rate increase regulations back in 2002 and 2003 have seen no rate increases (with very few exceptions).
Arthur Rudnick
Guru
- 1,652
previously posted by csalter
It's been a long time csalter, welcome back......
So does everyone else on earth, as well.........
Scott, YOU'VE GOT TO BE KIDDING!
Maybe you were 1st in your graduating class at M.I.T., and have no problem understanding what you posted, but for the rest of the people on the planet, this entire package of regulations, is undecipherable and means absolutely nothing. It's typical government gibberish
You're far from being a rookie in this business Scott and for you to pawn this off as a reason why rate increases are now regulated and limited seems to be an example of someone drinking too much of the industry's kool aide.
Do you want to talk rules & regulations or do you want to talk reality? The reality is that since 2004 rate increases on both new and existing LTC policies have been numerous and exhorbitant.
There are policyholders that I have who have seen recent rate increases of anywhere from 5% to 100%!
Go read the rules & regulations to my policyholders who just received 80%, 90% & 100% rate increases. I don't think they'll be too impressed with your knowledge of the regulations.
Rate increases on exisiting policies are one of the main reasons that sales of new, individual policies continue to decrease every year. It is the consumer's greatest concern. Every other month there are respected newspapers, magazines and publications that headline rate increases on LTC policies and bash the industry for it.
THAT'S the reality that agents are dealing with today.
And here's some more reality.................
The "new" rules and regulations don't mean a damn thing.
At the end of the day, when an insurer files for an increase request with their state's DOI, 1 of 2 things will happen:
1) The DOI will allow for the increase
2) The DOI will reject the increase.
And, if the increase is rejected the insurer will stop selling product in that state.
I've been in the business for 19 years and in all that time I've never seen a concerted effort by any entity, (whether it be government or carrier) to educate the consumer on anything. Do you honestly believe that education is going to start now just becuse you're calling for it?
It's been a long time csalter, welcome back......
So does everyone else on earth, as well.........
Scott, YOU'VE GOT TO BE KIDDING!
Maybe you were 1st in your graduating class at M.I.T., and have no problem understanding what you posted, but for the rest of the people on the planet, this entire package of regulations, is undecipherable and means absolutely nothing. It's typical government gibberish
You're far from being a rookie in this business Scott and for you to pawn this off as a reason why rate increases are now regulated and limited seems to be an example of someone drinking too much of the industry's kool aide.
Do you want to talk rules & regulations or do you want to talk reality? The reality is that since 2004 rate increases on both new and existing LTC policies have been numerous and exhorbitant.
There are policyholders that I have who have seen recent rate increases of anywhere from 5% to 100%!
Go read the rules & regulations to my policyholders who just received 80%, 90% & 100% rate increases. I don't think they'll be too impressed with your knowledge of the regulations.
Rate increases on exisiting policies are one of the main reasons that sales of new, individual policies continue to decrease every year. It is the consumer's greatest concern. Every other month there are respected newspapers, magazines and publications that headline rate increases on LTC policies and bash the industry for it.
THAT'S the reality that agents are dealing with today.
And here's some more reality.................
The "new" rules and regulations don't mean a damn thing.
At the end of the day, when an insurer files for an increase request with their state's DOI, 1 of 2 things will happen:
1) The DOI will allow for the increase
2) The DOI will reject the increase.
And, if the increase is rejected the insurer will stop selling product in that state.
I've been in the business for 19 years and in all that time I've never seen a concerted effort by any entity, (whether it be government or carrier) to educate the consumer on anything. Do you honestly believe that education is going to start now just becuse you're calling for it?
previously posted by csalter
It's been a long time csalter, welcome back......
So does everyone else on earth, as well.........
Scott, YOU'VE GOT TO BE KIDDING!
Maybe you were 1st in your graduating class at M.I.T., and have no problem understanding what you posted, but for the rest of the people on the planet, this entire package of regulations, is undecipherable and means absolutely nothing. It's typical government gibberish
You're far from being a rookie in this business Scott and for you to pawn this off as a reason why rate increases are now regulated and limited seems to be an example of someone drinking too much of the industry's kool aide.
Do you want to talk rules & regulations or do you want to talk reality? The reality is that since 2004 rate increases on both new and existing LTC policies have been numerous and exhorbitant.
There are policyholders that I have who have seen recent rate increases of anywhere from 5% to 100%!
Go read the rules & regulations to my policyholders who just received 80%, 90% & 100% rate increases. I don't think they'll be too impressed with your knowledge of the regulations.
Rate increases on exisiting policies are one of the main reasons that sales of new, individual policies continue to decrease every year. It is the consumer's greatest concern. Every other month there are respected newspapers, magazines and publications that headline rate increases on LTC policies and bash the industry for it.
THAT'S the reality that agents are dealing with today.
And here's some more reality.................
The "new" rules and regulations don't mean a damn thing.
At the end of the day, when an insurer files for an increase request with their state's DOI, 1 of 2 things will happen:
1) The DOI will allow for the increase
2) The DOI will reject the increase.
And, if the increase is rejected the insurer will stop selling product in that state.
I've been in the business for 19 years and in all that time I've never seen a concerted effort by any entity, (whether it be government or carrier) to educate the consumer on anything. Do you honestly believe that education is going to start now just becuse you're calling for it?
Arthur, please re-read my previous post:
Those states that implemented the rate increase regulations back in 2002 and 2003 have seen no rate increases (with very few exceptions).
