By Allison Bell | January 11, 2019 at 02:03 PM
If state insurance regulators started rejecting too many long-term care insurance (LTCI) rate increase requests, that could cause serious reserving problems for some U.S. LTCI issuers, according to a new report from S&P Global Ratings.
Deep Banerjee and other analysts at S&P Global Ratings have included data on LTCI issuers’ rate increase revenue forecasts in a new look at the assumptions the issuers have used to set their reserves.
(Related: Fitch Wants Insurers to Post More LTCI Performance Data)
Eight insurers with large blocks of LTCI policies on their books have assumed, when they set their LTCI reserves, that they will get permission from state insurance regulators to implement future LTCI premium increases with a total value of about $12 billion, according to S&P analyst figures.
The projected premium revenue from the “unapproved rate increases” amounts to about 11% of those eight carriers’ $108 billion in LTCI reserves.
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