Rate request: 39 percent increase
Decision: Disapproved as submitted, approved 19% increase on January 5, 2015
On September 19, 2014, Genworth Life Insurance requested a rate increase of 39 percent on its Pre-PCS individual long-term care policies with lifetime benefits. These individual policies were sold from 1988 to 1998 and are no longer being marketed. There are approximately 1,100 policies in force in Connecticut.
Genworth is not seeking any rate increase on Pre-PCS policies with non-lifetime or limited benefits.
The company said it needs to raise rates 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 experience on the plans – both in Connecticut and nationwide – is worse than expected, far exceeds the 60 percent minimum loss ratio and that some rate increase was warranted. However, the Department noted that the company did not account for a previously approved increase in 2013 in its calculation. As a result, the Department approved a lower increase request 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.