John Hancock Financial said it plans to re-enter the individual long-term care insurance market in California with two new policies, starting Feb. 27.

Both policies will provide comprehensive coverage for long-term care services provided in all settings — such as the home, an assisted-living facility, an adult day care center or a nursing home, as well as care giving and care planning support.

The company exited California in June 2010, a spokeswoman for John Hancock said in an email. She did not immediately respond to the questions on why the Boston-based subsidiary of Canada'sManulife Financial Corp. (NYSE: MFC) exited or why it has returned to the LTC market in California.

John Hancock said its California "partnership" policy allows individuals who have exhausted the benefits to protect some of their assets from the spend-down requirements of Medi-Cal. Medi-Cal is California'sMedicaid health care program that pays for medical care for low-income adults and children, and is supported by federal and state taxes.

A feature of another type of policy, a nonpartnership policy, is its Consumer Price Index compound inflation option. This type of inflation, which lessens the cost of the premium compared with that associated with a traditional compound inflation option, links annual benefit increases to the changes in the CPI.

"Both policies provide robust coverage but each has different features that might fit better with consumers' varied situations," said Marianne Harrison, president of John Hancock's long-term care insurance business, in a statement.

According to BestLink, John Hancock continues to be a market leader in long-term care sales in both the retail and group lines of business.

However, given the still-evolving state of the LTC market, limited industry claims development trends to date, and long-tail nature of the product, Manulife became exposed to longer-term underwriting risks, which was evident in 2010 when Manulife had to strengthen reserves and report high charges on changes in actuarial methods and assumptions. However, Manulife is increasing rates on new and existing contracts to enhance profitability going forward, according to BestLink.

On Feb. 2, the U.S. House of Representatives passed legislation that effectively kills the Community Living Assistance Services and Supports program, or CLASS Act, whose implementation had been suspended since October. The CLASS Act, which was created under the Patient Protection and Affordable Care Act, was designed to set up a voluntary, government-run long-term care program. The program had drawn fire from critics and supporters of PPACA who have said the CLASS Act was unworkable as written (Best's News Service, Feb. 2, 2011).

John Hancock Life Insurance Company USA and John Hancock Life & Health Insurance Co. each currently have a Best's Financial Strength Rating of A+ (Superior).

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)