Rate request - 233.7 percent increase
Decision - Disapproved
On September 7, 2012, Continental General Insurance Company requested a 233.7 percent increase on policy form 420. They are no longer being marketed. There are approximately 82 policies in force in Connecticut. The last approved rate increase for this form was 10% in 2010.
While the company is requesting a rate increase of 233.7% on the base policy and 212.8% on the inflation guard rider, they are willing to accept a 25% increase on the base policy and a 50% increase on the inflation guard rider. A rate increase is necessary at this time because Company experience on its Long Term Care Insurance business indicates that the premium rates for these policy forms are inadequate. Premium rate increases that help to remediate poorly performing blocks of business and limit any future losses are important to maintaining the Company's ability to meet policyholder obligations and pay future claims.
The projected lifetime loss ratio for the base policy forms and the non-ROP riders, assuming approval of the proposed rate increases nationwide, is 98.5%.
As a result, the average yearly premium in Connecticut, for the policies without the inflation guard, would rise from $2,864 to $3,580 or approximately $60 more per month and the average yearly premium for the policies with the inflation guard rider would rise from $1,772 to $2,621 or approximately $70 more per month. This assumes a 25% increase for the base policy and a 50% increase for the inflation guard rider.
On November 2, 2012, the Department disapproved the rate increase request. The actuarial analysis indicated that Connecticut experience was better than expected from inception-to-date and was not contributing to the worse than expected nationwide experience. The Department concluded that the current approved rates are neither excessive, inadequate, nor unfairly discriminatory.