How well do individual state laws protect consumers from premium rate increases on long term care insurance policies?
Not very well at all, according to a 41-page report recently released by the federal Government Accountability Office.
The report looks at rate setting oversight and claims settlement practices in 10 states -- California, Florida, Illinois, Iowa, New York, North Dakota, Pennsylvania, Texas, Washington, and Wisconsin. It finds that as of December 2006, at least 30 percent of policies in force were issued in states that had not adopted the rate-setting standards. Two of the 10 states reviewed had not adopted the standards as of January 2008.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), said the media coverage of these findings, however, doesn't cover the whole picture and lacks context.
"If you thoroughly read the document (few will), much of it is actually positive, explaining how states are gaining a handle on the issue though they acknowledge that it's too soon to determine if the new NAIC regulations will have impact," Slome said.
"What I worry about is the amount of space dedicated to talking about one insurer that sought a 50 percent rate increase," he continued. "The report fails to identify the company or reflect how many people were affected ... was it 10 or 10,000?"
Slome also reminded us of what he calls grossly inaccurate reporting by the New York Times earlier this year, which said that 1 out of 4 LTCI claims are denied. The GAO report, he said, actually contradicts this statistic, showing that most claims are paid, while others are simply not valid claims.
And finally, he said, the GAO report notes that a 55-year-old purchasing a $100 per day, three-year policy would pay $2,200. The AALTCI's 2008 LTCI Price Index, however, found that the identical policy and options would cost $709.
"When problems exist, I believe meaningful information can help smart people make intelligent decisions," said Slome. "This report does little (if anything) to further our effort to help Americans plan for their future without having to deplete already stretched taxpayer-paid programs. Legislators deserved better. So did the American public."
This month, in an effort to provide that meaningful information to help smart people make intelligent decisions, the Agent's Sales Journal reveals the results of the 2008 Long Term Care Insurance Study. It examines, among other things, the challenges faced by LTCI agents -- including rate increases and cost.
The study is accompanied by a Carrier Report Card, in which producers ranked the top LTCI companies in a variety of categories, finally naming the companies that best meet their needs.
And the LTCI Selling Guide offers articles on a variety of topics in order to help you better conduct your practice.
In September, we launch our LTCI microsite, dedicated to bringing you features, news, and resources to help better your business. Featured on the site is an interactive map displaying partnership plan information, training requirements, and more for each individual state. This information will be continually updated to bring you all you need to stay in compliance and continue selling an increasingly popular and necessary product. Visit Agent's Sales Journal LTCI Resources for more information.
Producer's Guide to Prospecting
Our readership studies indicate that prospecting tips are high on the list of information you want to read about. To that end, we offer you our annual Producer's Guide to Prospecting.
Find out how to handle prospects who say they're not interested, master the cold call, generate leads, and more.
And in case you haven't already done so, we've gathered all articles published in our popular Prospecting Corner in 2007 and created a downloadable PDF for you at Agent's Sales Journal Downloads to bring a whole year of expert prospecting advice to your desktop.
As always, we're dedicated to your success. Any suggestions or ideas are welcome -- just send an email to ASJeditor@AgentMediaCorp.com or call 800-933-9449 ext. 226 to share!
Sincerely,
Christina Pellett
Managing Editor
ASJeditor@AgentMediaCorp.com
