By Allison Bell
MedAmerica has asked Connecticut insurance regulators
for permission to increase rates on 124 policies in force in the state an of 37 percent.
MedAmerica, a unit of Excellus, sold the policies in Connecticut from 2004 through 2007 and is no longer marketing plans of that kind in that state.
MedAmerica needs to raise rates on renewals because policyholders have done a better job of keeping the policies than MedAmerica had expected and low interest rates have cut returns on the investments helping to support the business, the company said.
The proposed increase would affect a total of about 19,523 policyholders throughout the country, MedAmerica said.
Like other companies that have proposed similar increases in recent years, the company has said it will mitigate the effects of the increase by giving policyholders the option of reducing benefits rather than paying higher premiums
, the company said.
Although the average increase would be 37 percent, "the rate increase was determined by issue age to better align the rate increase with the adverse experience and to protect older insureds," the company said in its application. "The rate increase varies from 0 percent to 60 percent."
The affected policies generate $312,765 in premiums per year in Connecticut and about $35 million in annualized premium revenue nationwide, according to the filing.
About 43 percent of the policyholders have been paying for coverage annually, 6 percent on a semi-annual basis, 18 percent on a quarterly basis and 32 percent on a monthly basis.
Originally published on LifeHealthPro.com