Genworth is suspending new sales of one of its long-term care insurance products in Hawaii next week. New sales in Hawaii of Privileged Choice Flex 2 will be suspended next week as Genworth struggles to return to profitability, the company has announced.
The last day for agents to quote Flex 2 on the Quote It! platform is April 24, the company said in a note to agents.
The last valid application signed date for Flex 2 is April 24 and the last valid home office receipt date for Flex 2 applications is 8 p.m. EST on April 24.
Faxed applications must be sent to either 434-948-5566 or 800-456-8329. Applications may be emailed to EMM-GNWLTCApps@genworth.com, the company said.
“Genworth continuously monitors, examines and manages our business to help ensure we are offering products that are priced to balance consumer needs with our desire to achieve long-term profitability,” the company said in a bulletin to agents March 27.
“Privileged Choice Flex 2, our current offering in Hawaii, is an older generation policy and no longer meets our pricing assumptions,” the company said.
In-force policies are not affected by the move and the suspension of Privileged Choice Flex 2 will have no impact on Genworth's wholesaling support, the company said.
Several Iterations of Flex Choice
Privileged Choice Flex 2, launched in April 2013, was an updated version of the company’s Privileged Choice Flex LTCi product introduced in 2011.
Flex 2 included paramedical exams into the underwriting process. Flex 2 also included underwriting categories, a gender-based pricing structure for people applying individually and several inflation protection options.
Genworth has since updated its Privileged Choice Flex 2 with the introduction of Privileged Choice Flex 3.
The suspension of Privileged Choice Flex 2 is part of Genworth’s broader strategy to remain a player in the U.S. long-term care market where the company retains significant market share.
In the fourth quarter, Genworth announced a net loss of $122 million, compared with a net loss of $292 million in year year-ago period.
For the full year, the company announced a net loss of $277 million compared with a net loss of $615 in 2015.
Last fall, Genworth announced a capital infusion following its sale to the Chinese financial and real estate concern China Oceanwide.
Genworth said the sale is on track to close midyear.
Tough Years for LTCi Carriers
The last few years have been difficult ones for the long-term care market as companies struggle with low interest rates.
Some Wall Street analysts have even questioned whether it is possible for long-term care insurers to remain profitable.
In response to the market challenges, insurers have suspended sales, raised prices on new and in-force policies or pulled out altogether.
Lincoln Financial Group, for example, had previously announced that it would raise prices Monday, pending approvals, on new sales of MoneyGuard II, the company’s popular linked-benefit product.
The average price a couple in their 60s could expect to pay for a new LTCi policy rose 6 percent to 9 percent in 2016 from 2015, according to the 2017 Long-Term Care Insurance Price Index.
LTC insurers paid $8.65 billion in claim benefits in 2016, an increase from $8.15 billion in 2015, the American Association for Long-Term Care Insurance reported.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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