MetLife to Halt Sales of New Long-Term Care Insurance, Cites Financial Problems for Industry

MetLife Inc. said it will stop selling new long-term care insurance coverage.

"There have been financial challenges within the long-term care industry as a whole," and not unique to the company, said Karen Eldred, a spokeswoman for MetLife (NYSE: MET).

The company will continue to accept new applications for individual long-term care insurance policies that it receives on or before Dec. 30.

MetLife said it will halt new enrollments into existing group and multilife long-term care insurance plans in 2011. "The timing will vary based on existing contractual obligations," it said.

Eldred said, "there's a number of factors" as to why MetLife is stopping sales, and interest rates are among them.

"We are committed to our current long-term care insureds and will continue to make sure they continue to receive quality service," she said.

Last month, a spokeswoman for Genworth Financial Inc. said the long-term care insurance industry is contending with persistency problems -- one reason why the company was seeking premium increases on some policies (BestWire, <chron>Oct. 25, 2010).

Genworth (NYSE: GNW) said two of its life insurance subsidiaries, Genworth Life and Genworth Life of New York would be seeking an 18% rate increase on two older blocks of comprehensive long-term care insurance policies.

Meanwhile, several Republican Senators are seeking to repeal a little-known provision in the U.S. health care reform law that created a government-run long-term care insurance program. U.S. Sen. Lindsey Graham, R-S.C., introduced legislation to repeal the Community Living Assistance Services and Support Act. The government can start collecting premiums next year (BestWire, Oct. 12, 2010).

Many Americans will need long-term care services at some point in their lives, MetLife said. The company said it's committed to exploring possible solutions, including combining long-term care insurance with other products, which it thinks can address its business goals as well as helping people pay for long-term care services.

"While this is a difficult decision, the financial challenges facing the LTCI industry in the current environment are well known," said Jodi Anatole, vice president, long-term care products for MetLife, in a statement.

On the afternoon of Nov. 11, MetLife's stock was trading at $40.07 a share, down 2.08% from the previous close.

Metropolitan Life Insurance Co. currently has a Best's Financial Strength Rating of A+ (Superior).

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