Wednesday, June 15, 2022
1:00-2:00 PM Eastern Time
Building a Consistent National Approach for Reviewing
Long-Term Care Insurance (LTCI) Premium Rates
Speakers:
Fred Andersen & Ray Nelson
ABOUT THE TOPIC:
Recognizing the pricing challenges that the current LTCI environment poses, both to consumers and for the state-based system of insurance regulation, the National Association of Insurance Commissioners (NAIC) formed a Long-Term Care Insurance (EX) Task Force. The mission of this Task Force is to: 1) develop and implement a coordinated national approach for reviewing LTCI rate increases; 2) monitor and evaluate the rate review process; 3) evaluate and recommend options to help consumers manage the impact of rate increases; and 4) monitor work performed by other NAIC groups to review the financial solvency of long term care (LTC) insurers.
The goal of developing a consistent national approach for reviewing current LTCI rates is expected to result in actuarially appropriate increases being granted by the states in a timely manner and the elimination of cross-state rate subsidization. To work towards these goals, the Task Force developed a multi-state actuarial (MSA) LTCI rate review process (MSA Review). This framework aims to create a voluntary and efficient MSA Review that produces reliable and nationally consistent rate recommendations that state insurance regulators and insurers can depend upon. The MSA Review has been designed to leverage the limited LTCI actuarial expertise among state insurance departments by combining that expertise into a single review process and producing an MSA Advisory Report for the benefit and use of all state insurance departments.
The goal of this framework is to create a process that will not only encourage insurers to submit their LTCI rate increase filings for multi-state review, but also to provide insurance departments with confidence in the MSA Review so they will voluntarily utilize the MSA Rate Review Team’s recommendations when conducting their own state level reviews of in force LTCI rate increase filings. The presenters will discuss the formation of the Task Force, its accomplishments to date, and next steps to foster as much consistency as possible across states in their approaches to LTCI rate increases.
About the Speakers:
Fred Andersen serves as Chief Life Actuary of the Minnesota Department of Commerce. Besides reviewing financial models related to the reserves and capital of Minnesota’s life insurers, he leads activities in innovation, consumer protection, and market efficiency at the National Association of Insurance Commissioners in areas involving long-term care insurance, indexed life & annuity products, variable annuities, and experience data reporting. Before joining the Department in June 2014, he served as Assistant Chief Life Actuary for the Insurance Division of the New York Department of Financial Services.
Ray Nelson is Senior Vice President, Actuarial Services of TriPlus Services, Inc. Ray leads the team which provides comprehensive actuarial consulting services to various LTC clients including rate increase activities, modeling and projections, valuation, reporting, experience analysis, pricing and product management. He also provides actuarial consulting services to AHIP on various Health and LTC initiatives. Ray has more than 30 years of experience in LTCI, having previously worked at Bankers Life & Casualty Company, where he was responsible for pricing, product development, and product line management of the company’s LTCI offerings for 19 years. Ray is a member of both the Society of Actuaries and the American Academy of Actuaries.
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