Update on MIA LTC Workgroup
Public LTC Briefing Scheduled for March 6, 2017
Press Release: Long-Term Care Insurance Workgroup Wraps Up Preliminary Study
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Proposed Effective Date: This rate increase will apply to policies on their anniversary date following a 60-day policyholder notification period. (All 4 Filings).
Q: What factors do insurance companies consider to determine the premium rates?A: When insurance companies initially develop rates for long-term care insurance premiums, the main actuarial assumptions taken into account include lapse assumptions, mortality assumptions, morbidity assumptions and interest rate assumptions. Additionally, an insurance company may offer you discounts when you are initially purchasing a long-term care insurance policy, for being a very healthy applicant (i.e. passing more rigorous underwriting criteria), being married, or living with someone. Finally, long-term care insurance is generally offered on an issue-age basis, meaning the younger you are when you buy the policy, , the lower the insurance premium.
Q: Is there a maximum allowed annual premium increase for my long-term care insurance?A: Yes. COMAR 31.14.01.04(A)(5) provides that except under certain exceptional circumstances, a long-term care insurer cannot raise your premium by more than 15% in a 12-month period. Furthermore, COMAR 31.14.02.06(B)(2)(d) states that, except under limited circumstances, your renewal premium rate cannot be greater than new business premium rates, except for differences attributable to benefits.
Q: Do I have any options other than accepting the premium rate increase?A: Yes. If you would not like to accept the full premium rate increase, COMAR 31.14.01.36 requires every long-term care insurance policy and certificate to include a provision allowing the policyholder to reduce coverage and lower the policy premium in at least one of the following ways:
Additionally, a long-term care insurer may voluntarily offer you other ways to reduce the impact of a premium rate increase by including options in the policy to lower the inflation protection rate, or by providing an option to reduce the inflation protection from compound to simple inflation. Before you make any decision involving reduction of benefits, you should understand the long term impact of doing so.
Q: What does the MIA do when it receives a request from an insurance company to change its long-term care insurance premium rates?
Insurance Laws addressing Long-Term Care Insurance •Insurance Article, Title 18 Long-Term Care Insurance, Annotated Code of Maryland •Health-General Article, Title 15, Subtitle 4. Qualified State Long-Term Care Insurance Partnership, Annotated Code of MarylandInsurance Regulations addressing Long-Term Care Insurance •COMAR 31.14: Long-Term Care •Draft Proposed Regulations
Proposed Regulations addressing Long-Term Care Insurance
DATE: Monday, November 7, 2016 11 a.m.-12 p.m.CALL IN NUMBER: (866) 247-6034CONFERENCE CODE: 1573490062TOPIC: Ways to establish more transparency for LTC consumers during the rate review process.AGENDA•Should the MIA post a company's actuarial memorandum and a summary document to its website upon a rate increase request? The MIA will discuss the merits of doing so and the potential format for such documents based upon Pennsylvania's model. A draft will be circulated and posted.•LTC Rate Request Hearings•Producer Notification of Rate Filings
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