Rate request - 47.8 average percent increase
Decision - Disapproved as submitted - reduced to 40%
On October 11, 2012, Genworth Life Insurance requested a 47.8 percent increase on two of its policy forms (7035, 7037), which were sold from 2002 to 2005. They are no longer being marketed. There are approximately 5,067 policies in force in Connecticut. There have been no previously approved rate increases.
The company is requested a rate increase of 60% on policies with a lifetime benefit, and 44% on policies with all other benefit periods. The expected lifetime loss ratios with and without the requested rate increase exceed the minimum loss ratio of 60%.
Under the requested rate, the average yearly premium in Connecticut, for the lifetime benefit, would rise from $2,834 to $4,534 or approximately $140 more per month and the average yearly premium for the non-lifetime benefit would rise from $2,032 to $2,926 or approximately $75 more per month.
After an actuarial review, the Department determined that the average rate increase request of 47.8% was excessive. However, because the actual Connecticut experience was much worse than expected the Department, on January 25, 2013, approved an increase of 40% for both policy forms and all benefit periods.
The new rates will result in an average monthly increase of $94, saving policyholders $50 per month, for the lifetime benefit period.
The company said in an effort to mitigate the impact of any potential increase it will offer its policyholders the option of reducing benefits or maintaining the premium level similar to what they were paying.