CID: Long-Term Care Rate Filing - Principal Life Insurance Company (Group)

Long-Term Care Rate Filing - Principal Life Insurance Company (Group)



Rate request: 103 percent increase

Decision: Disapproved, limited to 15% increase on February 16, 2018.

On November 7, 2017, Principal Life Insurance Co. requested an average increase of 103 percent for its group long-term care plans. The plans were first issued from 1990 to 1995 but are no longer being marketed. There are under 10 policies in effect in Connecticut.

The company said it sought the increase because the claims costs have greatly exceeded what was anticipated when the product was originally priced and emerging experience continues to deteriorate.

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 the company’s costs to pay benefits for its Connecticut policyholders will likely exceed the statutory loss ratio minimum of 60 percent over the life of the policy. That means the company would spend about 82 cents of every premium dollar on benefits, instead of the statutory minimum of 60 cents for every premium dollar. However, the block of business in Connecticut is a small sampling and not as credible as the national experience, which is performing somewhat better than expected. As a result, the Department disapproved the initial rate increase but did allow a 15 percent increase on February 16, 2018.

The company said it would offer its policyholders benefit options in order to mitigate the impact of a rate increase.


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


Content Last Modified on 2/16/2018 3:52:53 PM