Genworth Financial Inc. will change long-term care insurance (LTCI) underwriting and agent commission rules July 30, the company says in a copyrighted bulletin sent to LTCI agents.
Genworth, Richmond, Va. (NYSE:GNW), a major LTCI provider, says it will cut first-year gross commissions on new LTCI policy sales by 15% in most states and by 10% in two.
Genworth also is tightening underwriting requirements, the company says. Genworth says, for example, that any applicants with a history of schizophrenia will be considered uninsurable and that those who have received Social Security Disability Insurance benefits within the previous 5 years will be considered uninsurable.
Genworth hopes to increase commissions in about 9 to 12 months, but future adjustments in the commission schedule are subject to change at Genworth's discretion, the company says.
"The need for Long Term Care Insurance has never been stronger, and Genworth is committed to solving for this need," the company says.
Genworth will apply the current compensation rate to applications signed and dated on or before July 29, the company says.
Several LTCI brokers have posted copies of the bulletin on their websites.
Steve Zabel, a senior vice president at Genworth, says in a statement about the bulletin that Genworth is making interim changes as it prepares to release new LTCI products in 2013.
“We are leveraging our extensive experience and making changes to best position Genworth for greater stability and future growth," Zabel says in the statement. "Genworth continues to explore various options to ensure we remain competitive today and into the future. We will continue our focused approach and are developing products with expected 2013 market introductions. The adjustments we recently announced were necessary to address the interest rate environment and the short-term pricing of our product portfolio."
The changes "are designed to help moderate business flow with the implementation of our new long term care insurance products next year,” Zabel says.