Rate request: 256.2 and 381.2 percent increase
Decision: Disapproved as submitted, 18% increase approved on 12/4/2014
On October 10, 2014, Continental General Insurance Company requested a 256.2 percent rate increase for its individual long-term care base policy forms and riders and a 381.2 percent increase on their Inflation Guard Riders’ Percentage Load. Although the Company requested the full rate increase amounts, the Company was willing to accept an increase of 25 percent on the Base Policy Forms and Riders, along with an increase of 50 percent on the IGR percentage loads at this time.
The company began selling the plans in Connecticut in 1995 but is longer marketing them. Any rate change would affect renewals only. The renewals are guaranteed, meaning the company cannot refuse to renew a policy.
There are 70 policies currently in effect in Connecticut. The company said it sought the increase because the estimate of benefits to be paid out over the lifetime of the plans is much higher than originally projected. In its filing with the Department, Continental state it expects to spend $1.08 on benefits for every $1 of premium it receives.
After an actuarial review, the Department concurred that the performance on both the company’s Connecticut and national block of business is worse than expected but that the initial increase request was excessive. As a result, the Department rejected the increase request as submitted on December 5, 2014 but did approve an 18 percent increase for these plans.
The company is offering policyholders a series of options to mitigate the impact of any potential increase, including lowering lifetime benefits and daily benefits and increasing the elimination period.