By Allison Bell
Mutual of Omaha Insurance Company has asked the Connecticut Insurance Department for permission to increase rates
on several long-term care insurance plans by an average of 32.7%, officials say.
The Connecticut department has posted information about the application on its website.
Connecticut regulators rejected an earlier request for a 32.7% increase that Mutual of Omaha filed in September 2011.
Mutual of Omaha began selling LTCI coverage in 1987, and it issued the policies that would be affected by the increases before 2004.
"Recent experience indicates premiums on some of these policies are inadequate to fund future benefits," the company says in a statement about the increase request. "We believe in the value the product offers, and we intend to remain in the market for years to come. Taking this action now will allow us to fulfill our promises to policyholders while addressing future long-term care demands."
LTCI is a relatively new product, and many other LTCI insurers have also raised rates as they have learned more about LTCI claim patterns, the company says.
The increases would affect 337 policies now in-force in Connecticut
. The policies are filed on 6 different policy forms and generate a total of about $809,000 in premiums revenue per year.
Mutual of Omaha has 40,497 LTCI policies written on 8 different forms in force throughout the United States, and those policies generate about $76 million in annualized premium revenue, according to the increase application.
Claims for policyholders with issue ages under 80 have been lower than expected, but claims for policyholders with issue ages 80 to 84 are higher than Mutual of Omaha had priced for, and claims for policyholders with issue ages of 80 to 84 who have had policies in effect for 9 years or longer are 210% of what the company had priced for, the company says in the increase application.
If approved, the new rates would take effect May 1. The increases increases for the affected policies would range from 15% to 45%.
The company says in its statement that policyholders with lifetime benefits can avoid a premium increase by switching to a 5-year benefit period.
Policyholders also could take steps such as increasing the elimination period, decreasing the maximum daily benefit or dropping optional riders, the company says.
Originally published on LifeHealthPro.com