Regulators across 40 states approved 254 rate filings seeking premium increases during Q2by Jason Woleben, for S&P Global Intelligence.
Regulators continue to grant rate hikes for insurers’ legacy blocks of long-term care business, though in some instances the increases are significantly below what are actuarially justified. In total, regulators across 40 states approved 254 rate filings seeking premiums increases during the second quarter, according to information collected by S&P Global Market Intelligence.
Genworth Financial Inc. received 23 approvals that in aggregate could potentially boost its annual premiums by more than $35 million on select long long-term care policies. The higher annual premiums will affect almost 23,000 policyholders spread over 12 states. Genworth received the two most-impactful rate-hike approvals in the quarter, with regulators in Colorado signing off on increases that may raise premiums by a combined $21.1 million.
The larger of the two increases, which could lead to $13.9 million in additional premiums, applies to policy series collectively known as Choice I, which were issued in Colorado from January 2001 through July 2005. This filing represented the third increase Colorado regulators have approved on the policy series since 2012.
Genworth seeking to increase rates over multiple years
According to a document contained within the filing, the company plans to collectively pursue rate increases of 410% for lifetime benefits and 279% for limited benefits policies. Genworth is seeking to increase rates over multiple years, having started filing for new rates in 2017 and scheduling two additional filings for 2020 and 2023.
- Regulators across 40 states approved 254 rate filings seeking premiums increases during the second quarter.
- Genworth Financial Inc. received 23 approvals that in aggregate could potentially boost its annual premiums by more than $35 million on select long long-term care policies.
- State Farm Mutual Automobile Insurance Co. could potentially receive $10.3 million of additional annual premium from its cumulative approvals.
The insurer noted it would be willing to forgo its multiyear rate action plan if Colorado’s state regulator would accept a one-time increase of 289% on lifetime benefit policies and a hike of 184% on policies with limited benefits. Such a move would represent the actuarial equivalent of the multiyear plan, in addition to the balance of a 2012 increase request that the company was not allowed to implement.
In lieu of the proposed increase, regulators granted a one-time increase of 161.6% on lifetime benefit policies and 107.2% for limited benefits, with a three-year phase-in period of 41.4% and 30.5%, respectively.
State Farm Mutual Automobile Insurance Co. could potentially receive $10.3 million of additional annual premium from its cumulative approvals. The most-significant approval occurred in Texas; a rate hike there could lead to an additional $7.1 in premiums. On average, policyholders can expect to see their premiums increase by 134.7%, which will be implemented over a five-year period.
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