Rate request: 27.4 percent overall average increase
Decision: Disapproved as submitted, approved 19% increase January 5, 2015
On September 19, 2014, Genworth Life Insurance requested an overall average increase of 27.4 percent on two of its individual policy forms (7000, 7020), which were sold from 1994 to 2003. They are no longer being marketed. There are approximately 600 policies in force in Connecticut.
When broken out, the range of the requested increases are 44 percent on policies with a lifetime benefit, and 19 percent on policies with all other benefit periods.
The company said it is seeking the increase because the number of people drawing lifetime benefits is significantly higher than what was initially anticipated when the company first priced the product. The costs to maintain those benefits for the lifetime of the plan are also higher than anticipated.
After an actuarial review, the Department determined that this particular block of business has already far exceeded the statutory minimum loss ratio of 60 percent over the life of the policy. In fact, the block of business in Connecticut is operating at a loss ratio of nearly 108 percent, meaning the company is spending more than a $1 on benefits for every $1 of premium paid.
However, the Department also determined that the company did not entirely account for a previously approved increase in 2013 in its calculation. As a result, the Department disapproved the request as submitted but did approve a lower increase of 19 percent on Jan. 5, 2015.
The company will offer its customers several options to change benefits and keep premium costs down near current levels to mitigate the impact of the rate increase.