Long-Term Care (EX) Task Force
Long-Term Care (EX) Task Force Page
Executive (EX) Committee Task Forces and Working Groups Summary Report
Winter 2009 Meeting Summaries Index

The Long-Term Care (EX) Task Force met Dec. 6, 2009. During this meeting, the Task Force: 

• Reviewed its charges and discussed the development of a work plan. 

• Reviewed rate stabilization and corresponding consumer protections adopted by the NAIC in 2000. As a result of problems in the marketplace in the 1990s, the NAIC developed rate stabilization provisions that were adopted in 2000 as part of the Long-Term Care model law and regulation. The Life and Health Actuarial Task Force worked on one track to develop the revisions to deal with rate increases, and the Senior Issues (B) Task Force worked on another track to address consumer disclosures. The rate stabilization provisions eliminated the loss ratio requirements at the time, but encouraged companies to price the product more appropriately at the outset by imposing an 85% loss ratio requirement and other disincentives for companies that had to subsequently request a rate increase. In conjunction with these requirements, new consumer disclosure requirements included a 10-year rate history, and consumers must check off that they understand that their rate may go up.  

• Discussed analysis of the NAIC Long-Term Care experience report to identify closed blocks of business. Texas analyzed information provided in the experience report for 2008 and made the assumption that blocks of business that did not add any covered lives throughout the year should be considered a closed block and examined closely, including those that may not have requested a rate increase. There was discussion about the need for more information about the characteristics of closed blocks of business. There was also discussion about a pending state survey by the Accident and Health Working Group of the Life and Health Actuarial Task Force regarding closed blocks. 

• Discussed pricing risk factors, including expenses, mortality, morbidity, lapse and investment. 

• Discussed the need to coordinate and interact with other related groups such as the IIPRC, the Accident and Health Working Group, the Senior Issues (B) Task Force, and other groups within the NAIC.