Rate request - 66.2 percent increase
Decision - Disapproved as submitted - reduced to 40%
On October 11, 2012, Genworth Life Insurance requested a 66.2 percent increase on three of its policy forms (7030, 7032, 7033), which were sold from 1998 to 2003. They are no longer being marketed. There are approximately 4,961 policies in force in Connecticut. The last approved rate increase for these plans was 18 percent in 2011.
The company requested a rate increase of 78% on policies with a lifetime benefit, and 63% 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 rate, the average yearly premium in Connecticut, for the lifetime benefit, would rise from $3,047 to $5,424 or approximately $200 more per month and the average yearly premium for the non-lifetime benefit would rise from $2,428 to $3,958 or approximately $130 more per month.
After an actuarial review, the Department determined that the average rate increase request of 66.2% 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 $100, saving policyholders $100 per month, for the lifetime benefit period. The new rate for all other benefit periods will save policyholders $50 a month when compared to the requested rate.
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.