CID: Long-Term Care Rate Filing - Continental Casualty Company (Individual)

Long-Term Care Rate Filing - Continental Casualty Company (Individual)

Rate request: 229.5 percent increase

Decision: Disapproved, limited to a 40 percent increase over 3 years

On March 7, 2017, Continental Casualty Co. requested an increase of 229.5 percent for its individual long-term care policies.

The policies were sold in Connecticut from 1998 to 2003 and are no longer being marketed. There are approximately 900 policies currently in effect in the state.

The company said it sought the increase because the original pricing does not support the higher than projected benefit costs that would be required over the life of these policies. Even with the requested increase, the company noted, its benefit costs would still exceed the minimum 60 percent loss ratio that is required by state law. In fact with the requested increase, the company expects to spend 100 percent of every premium dollar on benefits.

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 the block of business in Connecticut was performing better than expected but nationwide performance has been deteriorating. The Department concurred that without some rate increase the company’s expenses for claims would exceed revenue from premium.

As a result, the Department disapproved the initial increase request, but approved a lower average increase of 40 percent. Under Connecticut law, any increase over 20 percent must be phased in over three years or more to mitigate the impact on policyholders.

The new rates will take effect 60 days after the company notifies customers.


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

Content Last Modified on 4/11/2017 11:16:55 AM