Sony today. Who's next?
Genworth Financial is conducting a review of its long term care insurance claim reserves.
According to the company, many of its investors have asked for additional information about the last in-depth review of the claims reserve, which was conducted in 2012. The company cannot predict how the results of the current review will compare with the results of its review in 2012.
As a result of the 2012 claims review, the company established refinements to its claim reserves to reflect how a claim transitions by diagnosis and care facility, trends in benefit utilization, and refinements to claim terminations. The impact to GAAP claim reserves as a result of the new methodology was an increase to reserves of approximately $166 million as of September 30, 2012. Separately, the company also made changes to claim reserves to appropriately reflect waiver of premium benefit, shared policies where both lives are on claim, reinsurance on incurred but not reported claims, and the valuation interest rate. The impact to GAAP claim reserves as a result of these changes was a decrease to reserves of approximately $165 million as of September 30, 2012. The net impact to GAAP claim reserves as a result of the 2012 claims review was a net increase to reserves of approximately $1 million as of September 30, 2012.
Genworth Financial reported that the primary areas of focus in the current review are: (i) an analysis of potential causes of the meaningful increases in adverse claims experience in the second quarter of 2014 and (ii) an assessment of the assumptions and methodology underlying the associated reserves, including morbidity, mortality, interest rates and claim terminations.
Genworth Financial is an insurance holding company.
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