Panel Tables Uniform LTCi Rate Review Idea

By John Hilton InsuranceNewsNet

BOSTON-- A National Association of Insurance Commissioners' task force studying a uniform long-term care insurance rate review proposal met opposition.

The Long-Term Care Insurance Task Force tabled a request to form a subgroup to study the idea after members, industry representatives and consumer groups questioned the idea.

"We think this is a significant misuse of market conduct authority," said Birny Birnbaum, executive director of the Center for Economic Justice. "We don't see where this is needed. Nothing prevents these states from coordinating."

The proposal is relatively simple: streamline the LTCi rate review process so multiple state insurance departments are not duplicating the same work, while insurers are not answering the same questions over and over. Time and money would be saved and a uniformity would emerge over time.

"Long-term care insurance is a complicated product and it is difficult to justify the resources required to develop expertise independently at each state insurance department," the proposal reads. "We believe that it is vital that the regulators seek ways to grant justified long-term care rate increases in a more rational, efficient and uniform way."

A popular product in the 1990s, LTCi was badly underpriced and many insurers sought, and continue to seek, significant rate hikes to stabilize their books.

NAIC developed a similar uniform process for market conduct and other financial examinations.

"As commissioners, none of us likes to approve rate increases," said Dean Cameron, Idaho insurance commissioner. "One of the things we do is look at what other states are doing. It can be confusing."

But Birnbaum, a long-time advocate for consumers, said the rate-review coordination is beyond the purview of the NAIC.

Cameron, co-chair of the task force, said the group will develop a more specific motion on the idea and return to it in a future conference call.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.