John Hancock to leave California partnership program
By National Underwriter
By Allison Bell
John Hancock Life Insurance Company said it will be getting out of the California Partnership for Long-Term Care program market Sept. 16.
The company, a unit of Manulife Financial Corp., said it will continue to sell the Custom Care III policy, a non-partnership product, in the state.
John Hancock suspended the sales of individual long-term care insurance (LTCI) in California in June 2010, then returned to the market with the Custom Care III product in February 2012.
Sales of the California partnership program policy have been modest, and "we have found that the strategic direction of our LTC products and markets no longer synchronizes with California partnership regulatory requirements," the company said in a memo to producers.
The company said it appreciates the work of the California partnership program staff and will work with the program and the rest of the insurance industry on matters that are important to the company's policyholders.
The partnership program exit will not have a direct effect on California partnership coverage, but John Hancock can raise premiums on a class basis, subject to regulatory approval, the company said.
Federal law lets states set up partnership programs that coordinate private LTCI benefits with Medicaid benefits.
When buyers of California partnership program LTCI need nursing home care for an extended period, they can protect an amount of assets equal to the amount of private benefits received and still qualify for Medicaid nursing home benefits.
California requires partnership policies to include automatic inflation protection and limits on how often premium increases can occur.
Representatives for John Hancock were not immediately available to comment on the announcement.
Originally published on LifeHealthPro.com