Genworth Financial Inc. (NYSE:GNW) will temporarily suspend individual long-term care insurance (LTCI) policy sales in a major market, California, starting March 21, the company said today.
The individual LTCI products Genworth has been selling in California, the California Choice and Choice Partnership products, accounted for 12 percent of Genworth's 2012 LTCI sales, the company said.
The Genworth LTCI operation is descended from a San Rafael, Calif.-based Fireman's Fund unit that started selling LTCI policies in California in 1974.
Pat Kelleher, president of Genworth's Genworth Life Insurance Company unit, said in a statement that the company is working to get California regulator approval of a new individual LTCI product, the Privileged Choice Flex policy.
The Privileged Choice Flex policy is set to go on sale in 31 states April 15, the company said.
In the past few years, Genworth has said that it has had to withdraw from some LTCI market segments and raise LTCI product prices because of a combination of the effects of overly optimistic initial underwriting assumptions and low interest earnings on invested assets.
Today, Genworth is investing in developing "smart, sustainable products built for the future," Kelleher said in the statement.
The company believes suspending the sale of the existing California LTCI products while waiting for the new product line to come out "is appropriate in light of the return profiles on both the California Choice and Choice Partnership products," Kelleher said. "It is important that the products we offer are priced to balance the needs of our consumers with our desire to achieve long-term profitability."
Genworth hopes to resume LTCI sales in California in the near future, Kelleher said.
The suspension of individual LTCI sales in California will have no effect on in-force LTCI policies or policyholders, Kelleher said.