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Commissioner proposes capping long-term care insurance rates

New Hampshire Union Leader

July 30. 2014 7:31PM

In an attempt to stanch steep rate increases facing consumers for long-term care insurance, New Hampshire Insurance Commissioner Roger A. Sevigny proposes placing limits on future price hikes.

Annual premium increases would be capped on a sliding scale with older consumers seeing the lowest hikes under a new rule proposed by the commissioner, the department’s life, accident and health actuary David Sky explained Wednesday.

Under the proposal, rate increases would be capped at 50 percent for those who are 50 years old and younger to 2 percent for those who are 90 years old and older, Sky said.

The proposal received strong opposition from the insurance industry at a public hearing last week, Sky said. Public comment is being accepted through 4 p.m. Friday. See for more information or to post a comment. To date, no public comments have been posted, Sky said.

The rule change needs approval from the joint legislative committee on administrative rules. The proposal likely will go before the committee in the fall, Sky said. All comments will be presented to the committee at that time.

While the state insurance department usually adopts models for regulating rates and establishing rules from the National Association of Insurance Commissioners, Sevigny decided to develop a new rule on his own when the NAIC wasn’t moving forward on this long-term care pricing issue, Sky said.

“I think he just finally said I can’t wait for this committee anymore. I need this rule,” Sky said.

Details on long-term care rate increases seen in New Hampshire during at least the last five years were not immediately available. An insurance department spokesperson said they could not do the necessary research in the less than 12-hour period in which the information was requested.

The American Council of Life Insurers and America’s Health insurance Plans, two national trade associations representing the insurance industry, objected to the proposed rule changes at a July 22 public hearing.

“We strongly oppose the additions,” they wrote in a three-page letter.

“Any limitation on rate increase amounts or percentages based on the attained age of the policyholders is unfair and potentially discriminatory,” they wrote.

Even if the new language applied just to new business, such provisions “would add substantial risk to the LTC insurers, unique to New Hampshire, and would like reduce the availability of LTC coverage to New Hampshire residents,” the letter continued.

Besides proposing a cap on annual premium increases, the amendment also would expand the contingent non-forfeiture benefit to all long-term care policies, regardless of when they were issued. A rule adopted in 2004 limited this benefit to policies issued after 2004.

The contingent non-forfeiture benefit protects policy holders who give up their long-term care policies when premiums exceed a percentage of what they were at the time they were issued, Sky said. The benefit enables policy holders to get coverage equal to how much they paid in premiums to date, he said.

At year’s end 2012, 31,556 New Hampshire residents had long-term care insurance with total earned premiums of $57,985,103, according to the National Association of Insurance Commissioners.

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