CID: Long-Term Care Rate Filing - Transamerica Premier Life Insurance Company (Individual - 4,200 Policies)

Long-Term Care Rate Filing - Transamerica Premier Life Insurance Company (Individual - 4,200 Policies)

Rate request: 151 percent increase

Decision: Disapproved, limited to a 40% increase on September 14, 2017

On May 4, 2017, the Transamerica Premier Life Insurance Company filed for a 151 percent rate increase on its “Legacy” individual long-term care policies. There are approximately 4,200 of these policies currently in force in Connecticut. The company is no longer marketing this product.

The company says it is seeking the increase because actual claims costs far exceeded projected costs that were calculated when the product was originally priced.

Unlike medical health insurance with premiums set to cover expenses incurred only during the upcoming policy year, long term care premiums are set to cover expenses that are not expected to occur until a distant date, sometimes 20 years in the future.

After an actuarial review, the Department determined that this block of business is performing worse than expected. However the company’s spending on benefits is still well below the statutory minimum loss ratio of 60 percent over the life of the plans. That means the company must spend at least 60 cents of every premium dollar on benefits and currently that ratio is about 38 percent. As a result, the Department disapproved the initial rate increase request and limited the increase to 40 percent on September 14, 2017.

Under Connecticut law, long-term care rate increases of 20 percent or higher must be phased in over three years or more. The company said policyholders will be given the option to offset the increase and lower their premium by reducing their current benefits.


Find the filing documents here at Long-Term Care Insurance Rate Filing

Content Last Modified on 9/14/2017 1:08:08 PM