In May, the National Association of Insurance Commissioners (NAIC) members put the Long-Term Care Insurance Multistate Actuarial Review Framework adoption to a vote. This framework enables participating states to utilize the program to get help analyzing rate increase applications through a team of experienced LTCI actuaries. Each state will receive an analysis based on the LTCI rate review strategies, according to the increased application and set of recommendations, according to Minnesota and Texas-based regulators. Although LTCI issuers will still be required to file rate increase applications, and insurers will have to seek approval, each state will speed up the application review process. This means we will see an increase in consistency across the board regarding final results. As many states move toward adopting the framework approach, the actual introduction of said framework could cause a plethora of increases to the new LTCI rate. Framework states emphasize keeping LTCI issuers solvent, whereas the new framework could cause additional battles to rate increase principles. Regulators in other states have been discussing whether policies issued by multiline insurers should be responsible for poor pricing decisions and bad policy design. As a result, financial and retirement advisors should plan to see an increase in clients demanding an explanation as policy premiums experience a 100% increase and more. In the past, insurers would view long-term care insurance as more of a money maker by providing nursing home care and more critical services. However, we are currently witnessing a change in the world of insurance as a whole. While LTCI issuers took to investing premium payments into instruments similar to high-grade bonds, the interest rates fell dramatically and failed to recover. More policyholders were also holding onto their policy than ever expected rather than utilizing the benefits.
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