NAIC poised to tackle problem
Long-Term Care (LTC) insurance is another line where premiums don’t reflect the true cost of coverage, but for very different reasons than federal flood insurance. With LTC, the premiums haven’t been able to keep pace with rapidly rising medical costs, coupled with longer life expectancies. Now the National Association of Insurance Commissioners (NAIC) is focusing special resources on a solution.
As we reported from the January insurance summit, the problem is especially poignant here in Florida, as our state has the highest percentage of folks age 65+ in the country. Florida insurance regulators have had to do a balancing act, respecting the need for actuarially-sound rate increases with protecting consumers from upwards of 130% increases.
Respected insurance journalist Liz Festa reports this week that the NAIC is developing a new committee that would tackle the LTC rate conundrum. Rate increases of 200% to 500% or even greater are actuarially justified, according to some companies, yet they struggle with filings. Seniors on fixed incomes struggle to make premium payments. The NAIC committee’s goal would be to establish a uniform standard among states for handling rate increase requests. You can read Liz’s story in ThinkAdvisor.
LMA Newsletter of 3-25-19