Rate request - 58.2 percent increase
Decision - Disapproved as submitted - reduced to 40%
On October 11, 2012, Genworth Life Insurance requested a 58.2 percent average increase on eight of its Pre-PCS policy forms, which were sold from 1988 to 1998. They are no longer being marketed. There are approximately 1,180 policies in force in Connecticut. The last approved rate increase for these plans was 9 percent in 2008.
The company requested a rate increase of 88% on policies with a lifetime benefit, and 35% on policies with all other benefit periods; although it is important to note that the company could actuarially justify a significantly higher increase based on its assumptions. The expected lifetime loss ratios with and without the requested rate increase exceed the minimum loss ratio of 60%.
Under the requested increase, the average yearly premium in Connecticut, for the lifetime benefit, would rise from $1,585 to $2,980 or approximately $115 more per month and the average yearly premium for the non-lifetime benefit would rise from $1,404 to $1,895 or approximately $40 more per month.
After an actuarial review, the Department determined that the average rate increase request of 58.2% 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 all policy forms and all benefit periods.
The new rates will result in an average monthly increase of $50, saving policyholders $65 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.