Long-Term Care Rate Filing - Continental Casualty Company (Individual)
Rate request: 15 percent increase
Decision: - Approved May 18, 2016
Public Comment Period: April 8 to April 28, 2016
On March 24, 2016, Continental Casualty Co. requested an increase of 15 percent for its individual long-term care policies.
The policies were sold in Connecticut from 1988 to 2003 and are no longer being marketed. There are approximately 1,600 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.
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 – both in Connecticut and nationwide. The company is already spending approximately 98 cents of every dollar of premium on benefits, well above the state’s minimum loss ratio of 60 percent or 60 cents per premium dollar. As a result, the Department approved the company’s request on May 18, 2016.
The new rates will be implemented 60 days after the company notifies customers. The company said it would allow policyholders to change their benefits in order mitigate the impact of a higher rate.
Content Last Modified on 5/23/2016 2:19:30 PM