States Continue Push-Back on LTCi Rate Increases

Citing its own state loss ratio as “not contributing to any problems with nationwide experience”, the Connecticut Insurance Department has rejected efforts by MetLife to increase premiums on 5,800 Connecticut in force long-term care insurance (LTCi) policies by about 58 %.  MetLife, sold the LTCI policies in Connecticut from 1999 to 2012. 

Metropolitan Life was also unsuccessful in getting Connecticut regulators to let it increase rates on two other blocks of business in 2010.  A company spokesperson said that the company will continue to appeal the decision of the Connecticut Insurance Department and will pursue an equitable and statistically justifiable rate increase.

MetLife left the long-term care market altogether in 2012.

Connecticut is not the only state to apply push-back on carrier requests for premium increases on in force policies.  Among several others, Arizona and Wyoming recently trimmed John Hancock’s LTCi rate increase from 60% to 25% on in force policies in those states, basing the reduction on policy design.  Those policies with uncapped benefits (lifetime payout and benefit increase riders) were allowed the highest percentage of increase, while those without those design features received the lower percentage of increase.

Typically, states reject any premium increases on policy holders age 80 and over regardless of whether the carrier is losing money on a block of business that includes that age group.