Non-profit Ins Companies and AM Best Ratings

[sjbutton]

An agent selling MedAmerica said that the B++ rating for MedAmerica was due to their being non-profit.
I understand their umbrella company, Lifetime Healthcare is non-profit, but I see shareholder equity.
1. Is MedAmerica non-profit?
2. Is there a top rating from AMBest given for non-profits that is a different scale because they are non-profits?
3. Why would a company not seek a rating from Moody's? MedAmerica is B++ from AM Best and A- stable with S&P. I wonder if it is worth the extra premium to buy a competing policy from a company (John Hancock) with an AA- very strong from S&P and A+ M Best

 

[Arthur Rudnick]

MedAmerica has been selling LTCi since 1987. Keep in mind that unlike other carriers, their only product is LTCi. If you have a chance, take a look at the Annual Report.

There is no way that you can compare a Hancock policy with Simplicity. Simplicity is an excellent cash-benefit policy and IMO, Hancock is at best, an average, reimbursement policy.

Yes, their parent company is a non-profit and therefore does not have shareholders to satisfy. That's the reason for their B++ rating.

Prior to the crash in 2008, when just about every carrier was downgraded, MedAmerica was rated an A- with AMBest.

Forget ratings for a moment, look at a company's Reserves. MedAmerica has more than adequate Reserves for future claims. Their policy, IMO is by far the best on the market.

 

[csalter]

Yes, their policy is good and I strongly considered considered them, but they do request some hefty increases from the states. That is why I personally did not go with them.

 

[sjbutton]

What do you mean, " they request from heavy increases from the states?"

 

[csalter]

What do you mean, " they request from heavy increases from the states?"

They ask to increase premiums on their lcti policies. Insurance companies have to make requests from the states Department of Insurance.

 

[Arthur Rudnick]

In NY, MedAmerica has had 1 rate increase on exiting policyholders. That was in 2011 and it was 15%.

I believe that every company (other than the 2 Mutuals) have had multiple rate increases, some as high as 90%.

Rate increases on exisiting LTC policies are now part of the landscape, and IMO, will continue to be.

 

[csalter]

I did not see anything on New York, but that is what New York may have approved. I just looked at the rate history for MedAmerica again. I noticed that they were for the most part requesting 39% increases across the country. Many countries approved them for the full 39%, but there were others that did not approve them to increase the policies by that much.

I will say that most of the policies that were being requested to have an increase were 10 years old or older. I do see that MedAmerica has come back to ask certain states again within 2 years for a rate increase. I am going to just assume, since I am too lazy to check back again, it is for different policies that they are requesting the increase.

 

[Arthur Rudnick]

originally posted by csalter

I will say that most of the policies that were being requested to have an increase were 10 years old or older. I do see that MedAmerica has come back to ask certain states again within 2 years for a rate increase

MedAmerica, just like every company over the last 10 years, may have introduced 10-15 different policy series in that time. It may even be 10-15 different policies in any given state. I do not believe (I may be wrong) they have requested more than one rate increase on any particular policy series. Chances are the increases that you're looking at are for different policy series.

It's unfair to single out any particular company for rate increases, when just about every carrier over the past 10 years has been guilty of the same thing.

Now, if you want to talk about companies such as Penn-Treaty, Bankers, or Conseco, that's an entirely different story.

More importantly, how's the baby bump doing?

 

[GDIAgency]

Being a non profit insurer has nothing to do with their best rating...

So the agent / broker that said that either doesn't understand insurance and ratings, or is lying... either way tell the client they can't afford to deal with and uneducated, or a dishonest broker....

Lastly why would anyone insure with a B rated carrier unless there was no other option? I know I wouldn't want my personal or business insurance with a B rated carrier if I could have it with an A+ IV rated carrier....

 

[csalter]

originally posted by csalter



MedAmerica, just like every company over the last 10 years, may have introduced 10-15 different policy series in that time. It may even be 10-15 different policies in any given state. I do not believe (I may be wrong) they have requested more than one rate increase on any particular policy series. Chances are the increases that you're looking at are for different policy series.

It's unfair to single out any particular company for rate increases, when just about every carrier over the past 10 years has been guilty of the same thing.

Now, if you want to talk about companies such as Penn-Treaty, Bankers, or Conseco, that's an entirely different story.

More importantly, how's the baby bump doing?

I am not faulting them for rate increases. I guess it's just seems to me that requesting 39% increases seems high. I compare this to what I saw with Genworth who only requested as much as 18% from the states and many of their policies were older than MedAmerica.

I will admit that there are some companies that I have seen requesting crazier increases like John Hancock who requested from some states increases of 60 and 70 per cent. That's absolutely absurd to me. One can expect increases but they should be reasonable.

The baby is coming along well. She is apparently very, very active. Due date is April and I am lamenting losing my freedom. I will be a busy OLD man with lots of company during my retirement years.