CID: Long-Term Care Rate Filing - Transamerica Life Insurance Company (Individual - 6,100 Policies)

Long-Term Care Rate Filing - Transamerica Life Insurance Company (Individual - 6,100 Policies)

Rate request: 30 percent increase

Decision: Approved on September 15, 2017

On May 10, 2017, the Transamerica Life Insurance Company filed for a 30 percent rate increase on several of its individual long-term care policies, which are no longer being marketed in the state. There are approximately 6,100 of these policies currently in force in Connecticut.

The company says it is seeking the increase because actual claims costs far exceeded projected costs that were calculated when the product was originally priced.

Unlike medical health insurance with premiums set to cover expenses incurred only during the upcoming policy year, long term care premiums are set to cover expenses that are not expected to occur until a distant date, sometimes 20 years in the future.

After an actuarial review, the Department determined that this block of business in Connecticut is performing much worse than expected and that company has already met the statutory 60 percent minimum loss ratio. That means the company has to spend at least 60 cents of every premium dollar on benefits, and is in fact, spending almost 65 cents per premium dollar. As a result, the Department approved the rate increase on September 15, 2017.

Under Connecticut law, long-term care rate increases of 20 percent or higher must be phased in over three years or more. The company said policyholders will be given the option to offset the increase and lower their premium by reducing their current benefits.


Find the filing documents here at Long-Term Care Insurance Rate Filing

Content Last Modified on 9/18/2017 3:22:07 PM