LTCi industry experience is the focus of new study

Industry data on long-term care insurance hasn’t been updated since 2006, so three industry organizations are launching a study on the LTCi industry experience.

LIMRA, the Society of Actuaries Research Institute and the National Association of Insurance Commissioners will conduct a comprehensive new study to examine mortality, persistency, claim incidence and claim termination experience for LTCi policies issued from 2000 through 2023. Currently, 13 carriers, representing two-thirds of the stand-alone LTCi market, have agreed to participate in the study. Researchers are looking to recruit another five to seven companies to join the study in the coming months.

This marks the first industry-wide collaboration across companies, trade associations and regulators to provide updated and comprehensive data on LTCi.

Marianne Purushotham, LIMRA corporate vice president for statistical analysis and modeling, told InsuranceNewsNet that the organizations want to look at the experience for LTCi products.

“What kind of claims experience are we having? Who's going on claim with long-term care, who's using their policies? How long are they staying on claim? Are they living longer than expected? Are they holding on to their policies and continuing to pay premiums on these policies? Are we seeing an expected level of lapses or are we seeing better persistency?

“That kind of information is important to understanding the profitability of long-term care insurance.”

LTCi carriers and industry regulators have an interest in having up-to-date information, she said, and that interest in updated information is the primary driver of the study.

The organizers of the study are asking for data to be submitted by the end of September, Purushotham said. That will allow time for the data to be shared with the participating carriers, and conduct preliminary updates for regulators and carriers on the results. Final study results will probably be released in early 2027.

Other LTCi research

Although this is the first industry-wide collaboration to compile LTCi data, related studies have been done previously.

In 2021, LIMRA and the SOA Research Institute partnered to collect and process data to provide industry-wide experience studies. In the past four years, LIMRA and the SOA Research Institute successfully delivered in-depth experience study reports and analytics tools for insurance and annuity products to support both carriers and regulators in providing credible industry benchmarks to ensure adequate pricing and reserving across the industry.

The NAIC has led a sustained national effort to modernize LTCi oversight — working to harmonize rate review practices, protect consumers, and ensure insurer solvency across jurisdictions.

“With more than 11,000 Americans turning 65 each day over the next four years, the demand for long-term care services is likely to surge. Our industry needs to understand how consumers are using LTCI policies to help carriers develop fiscally sustainable products that meet the needs of present and future retirees,” said David Levenson, president and CEO, LIMRA and LOMA. “We are honored to work with SOA and the NAIC to deliver timely, comprehensive LTCI experience data and analysis to the industry so that carriers can profitably compete in the market and regulators can better benchmark companies operating in their states.”

“This project continues our partnership with LIMRA and deepens our relationship with the NAIC,” said R. Dale Hall, FSA, MAAA, CERA, managing director of research at the SOA Research Institute. “We are pleased to continue and expand this effort to ensure our members have the data they need to make informed decisions that will best serve their stakeholders.”

“Nearly 70% of Americans over 65 will need some form of long-term care, according to the Department of Health and Human Services. That’s a staggering number,” said Oklahoma Insurance Commissioner Glen Mulready, who also chairs the NAIC’s Health Insurance and Managed Care Committee. “This joint study from SOA and LIMRA gives regulators the insight we need to better understand the challenges ahead and make sure consumers have access to strong, reliable coverage in a fair and competitive market.”

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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 [email protected].