Long-term care feasibility study participation ‘not what we hoped for’

Participation by carriers in a long-term care insurance feasibility study is “not what we hoped for,” said Kate Eubank of the Society of Actuaries Research Institute.

Eubank, the SOA’s senior experience studies actuary, gave an update on the study to the National Association of Insurance Commissioners’ Health Actuarial (B) Task Force at the NAIC Fall Meeting.

The most recent SOA study on LTCi was released in 2020 using data requested in 2018, said Dale Hall, SOA managing director of research, who asked regulators to encourage carrier participation in a new study.

Eubank said a survey to gauge company participation and funding interest went out in late September. Nine companies, representing 46% of the long-term care insurance market share, agreed to participate. That compares with 18 companies covering 80% of the market by premium that participated in the most recent study.

Seven companies agreed to fund the study by purchasing the data, which would cover between 35% and 42% of the funding target, Eubank said.

“We are cautiously optimistic we will do a study,” Hall said. “We still have a desire to do this next LTC industry study, since it has been a little bit of time since the last study was compiled.”

In addition to conducting the LTCi feasibility study, the SOA Research Institute sent out a survey to individual disability insurance companies to gauge interest in participating in and funding a study on IDI.

Eubank said that the SOA’s IDI experience committee believes regulators may want to consider developing new IDI incidence and termination valuation tables. Recent disability incidence rates are about 40% lower than the SOA’s Individual Disability Income Valuation Table standard, and statutory active life reserves – for claims that have not yet been incurred – are greater than warranted by experience. Meanwhile, recent termination disability termination rates are about 50% lower than the IDIVT standard, and statutory disabled life reserves – for claims that have been incurred – are lower than warranted by experience.

Updated experience data is needed for the study, Eubank said, but she said SOA Research Institute believes the industry will not adequately support the study via participation and funding. A survey went out to companies in October to determine interest in supporting the study.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.