Genworth has been selling the Choice Partnership LTC in CA since
1994. They are scheduled to introduce the Privileged Choice Flex (PCF) in
31 one states on April 15th. California regulators have not yet approved
Genworths new product. In order to halt a prolonged "fire sale"
Genworth announced (March 7th) they will temporarily suspend individual policy
sales (March 21) in CA until the approval of Privileged Choice Flex.
I anticipate the PCF to be an un-bundled LTC product at a
perhaps 30% or higher premium. This is do to: 1. Lower than anticipated
Lapse Rate (from 6% to about 1%) 2. Low interest earnings on invested assets.
3. Overly optimistic underwriting assumptions.
Genworth has already let us know that they are moving towards: 1.
Ending Preferred ratings (10 to 20% savings) 2. Reducing spousal discounts
(from 40 to 20%) 3. Eliminating the sale of Lifetime benefits. 4. Moving
from unisex to sex distinct rates. This means men's premium will go
down and women's premiums will increase.
Genworth remains the largest underwriter of LTCi in the US. As noted by LifeHealthPRO - Feb 6, 2013 : Genworth reported a $8 million net income in the last quarter.
Their gross benefit ratio increased to 126.4 % from 114.1%.
Loss ratio increased to 76.2 % from 67.1% (The have the reserves to pay
future claims)
This is what I wrote March 5 Th on the CA Partnership LinkedIn
regarding the Genworth CA Partnership
"... Remember the positives:
1. Protection from unreasonable rate increases.
( a. DoI & DHCS can't approve any rate increases greater that 40% over a three
year period. (requires two separate actuarial audits)
b. Total approved rate increases must be spread equally over three-years.
c. All Partnerhip policies must be kept in a unique risk pool.
d. requires 85% loss ratio on premium increases) (AB 999)
2. Independent Care Management
3. Asset protection from Medi-Cal and Estate Recovery credit.
4. Monthly reimbursement for Home and Community Care.
5. Protection from unintended Lapses.
6. Pre-Health Underwriting."
Talking about the evolution of the
CA Partnership
"... Regulations need to be reviewed and
modified. #1 being modification of the required 5% Compound
inflation. (Good for 1994-not for 2013). #2. SB 483 (2008)
regulations need to be implemented. #3. More Insurance Companies
need to admitted to the Partnership. (Note: Any positive
changes in CPR regulations must be offered to existing policy holders)
The California's DUI and DHCS have been extremely slow in approving Genworth's Privileged Choice Flex. Other insurance companies have also complained about the delays in the approval period. It seems until the State streamlines the system and puts more manpower on problem we will continue to go from crises to crises as companies struggle to provide meaningful long-term care protection.
No comments:
Post a Comment