price controls on new traditionally sold ltc products

Apr 17, 2019

  1. kstein
    Offline

    kstein Guru

    Posts:
    793
    Likes Received:
    44
    Any advice on how to answer the following question from a financial advisor? I'm talking with a client about Mutual of Omaha's ltc product in MO.

    One client is 66, the other is 62. Isn't there a new rule like the rate stability act or something like that? I recall seeing a few references to it on prior threads.

    Jim,

    Please determine if any controls are in place to limit the amount a premium can increase. Also, how would benefits be adjusted if premium had price controls.

    Best,
     
    kstein, Apr 17, 2019
    #1
  2. ltcadviser
    Offline

    ltcadviser Guru

    Posts:
    2,017
    Likes Received:
    156
    Scott will help you with this question, or you may visit LTCSHOP.com for rate stability information in Missouri.
     
  3. Mr_Ed
    Offline

    Mr_Ed Guru

    Posts:
    2,084
    Likes Received:
    29
    State:
    New Jersey
    Here ya go:

    Long Term Care Insurance Rate Increases Missouri
     
    Mr_Ed, Apr 17, 2019
    #3
  4. Mr_Ed
    Offline

    Mr_Ed Guru

    Posts:
    2,084
    Likes Received:
    29
    State:
    New Jersey
    Missouri enacted their Rate Stability Regulation on July 1st, 2004.
    All of the policies MofO has sold in Missouri since 7/1/2004 have had ZERO rate increases.
     
    Mr_Ed, Apr 17, 2019
    #4
  5. ltcadviser
    Offline

    ltcadviser Guru

    Posts:
    2,017
    Likes Received:
    156
    Technically correct, however Mutual of Omaha sold policies under its subsidiary United of Omaha and absolutely requested rate increases and got them approved on its United of Omaha policy sold in Missouri in 2006 AFTER Missouri enacted its rate stabilization. Other companies (Mass Mutual, Northwestern Mutual, John Hancock, Met Life, Genworth et al) have also requested rate increases in Missouri on policies sold after 2004. So, let’s not try to act like rate increases will not happen.
     
    Last edited: Apr 17, 2019
  6. Mr_Ed
    Offline

    Mr_Ed Guru

    Posts:
    2,084
    Likes Received:
    29
    State:
    New Jersey

    The United of Omaha rate increase in Missouri has ALREADY BEEN PRICED INTO the current Mutual of Omaha product.
     
    Mr_Ed, Apr 17, 2019
    #6
  7. ltcadviser
    Offline

    ltcadviser Guru

    Posts:
    2,017
    Likes Received:
    156
    Of course you can assume past rate increases have been priced in, however the current Mutual of Omaha policy is a 2013 series, and policies introduced in the last 1-3 years by other companies are priced 75% higher than the 2013 policies. So, be prepared. Buckle up. Hold on tight.
     
  8. Mr_Ed
    Offline

    Mr_Ed Guru

    Posts:
    2,084
    Likes Received:
    29
    State:
    New Jersey
    I don't have to assume anything.
    That's how the statute is written.
    A new policy form can't be approved unless it includes all prior rate increases in the new pricing PLUS an extra pricing cushion of about 10%.
     
    Mr_Ed, Apr 17, 2019
    #8
  9. ltcadviser
    Offline

    ltcadviser Guru

    Posts:
    2,017
    Likes Received:
    156

    Anyway, United of Omaha Insurance Company is a separate entity from Mutual of Omaha Insurance Company. So Mutual of Omaha Insurance Company did not have to do anything with its filing. I assume it priced the product responsibly when it filed in 2013. The market however has moved to higher price points.
     
  10. kstein
    Offline

    kstein Guru

    Posts:
    793
    Likes Received:
    44
    Awesome this is a big help. Thank you for the answers.
     
    kstein, Apr 18, 2019
    #10
Loading...