Bay State officials questioned the insurer’s customer communications and analysis of premium needs.
Genworth Financial has asked the Massachusetts Supreme Judicial Court to overturn a ruling on long-term care insurance rates.
State hearing officials recently upheld the denial of Genworth’s request for a 161.6% increase for its LTCI Choice 2 and Choice 2.1 policies.
Officials objected to what Genworth told policyholders about the rates and how it calculated the need for the increase.
A Genworth representative said the Massachusetts rulings have limited rate increases for LTCI policies within the state to 40%, compared to a national average of 202%.
“Massachusetts policyholders are unequally paying far less for the same coverage than policyholders in other states,” the representative said.
The history: Genworth sold LTCI policies from 2004 to 2012.
Three years ago, policies covering 10,899 people were still in effect, according to Jean Farrington and Matthew Taylor, the Massachusetts officials who presided over the appeal hearing.
Like other LTCI issuers, Genworth faces the effects of inaccurate assumptions about the performance of LTCI policies. The terms of the policy gave him the legal right to increase premiums.
In 2018, Genworth requested a 92% rate increase. Officials allowed the company to introduce a gradual 40% increase.
In 2021, Genworth asked for the 161.6% increase. A rate reviewer denied the request.
The hearing panel’s decision: Acting Massachusetts Insurance Commissioner Rachel Davison and rate hearing officials criticized Genworth’s call for an increase large enough to keep its LTCI policies in place until 2081.
“Genworth proposes to increase rates substantially and over a significant period of time using projections that may not be valid in the future because its actual experience during that period may vary considerably,” hearing officials said. “Genworth further refuses to agree to reduce rates in the future if those projections do not reflect actual circumstances, stating that it has no legal requirement to do so.”
Hearing officers also reviewed pamphlets Genworth sent to LTCI policyholders.
“Only in 2015, three years after the Products were no longer sold in Massachusetts, did Genworth’s Important Information statement warn policyholders that premiums could increase, and more than once during their lifetimes,” officials said. the audience. “Even then, he did not offer any advice on the possible timing or magnitude of the increases.”
Genworth’s take: The Genworth representative said Massachusetts residents own a large portion of Choice 2 and Choice 2.1 policies in force.
“Unfortunately, Massachusetts is far behind virtually every state in approval rates for cumulative rate increases,” the representative said. “The rate increases and associated benefit reductions are important to Genworth’s ability to pay future claims.”
Credit: Katarzyna Bialasiewicz/iStock
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