Maryland law may prohibit John Hancock Life Insurance Co. from raising rates on its existing long-term care insurance policies in the state by 40%.
Beth Sammis
Beth Sammis, Maryland’s acting insurance commissioner, said her staff has received the rate request and the Maryland Insurance Administration’s actuaries are reviewing the rate increase request from the insurer.
However, Maryland law sets the maximum annual rate increase for long-term care insurance policies at 15%.
“We have never approved a rate increase of more than 15%,” said Beth Sammis, acting Maryland insurance commissioner, while speaking to members of the Baltimore chapter of the National Association of Insurance and Financial Advisors (NAIFA).
In September, the Massachusetts-based insurer began telling its distributors that it intended to seek 40% rate increases for its in-force long-term care insurance policies in all states and that it would suspend sales of group long-term care products while reviewing market conditions. The company cited unfavorable claims patterns for the moves, which were followed in November by MetLife’s decision to exit the long-term care insurance marketplace completely in 2011.
With investment income suffering at the hands of a sluggish economy, long-term care insurance premiums appear not to be providing enough money to support the claims made against policies, something many in the industry have predicted for some time.
Sammis did not indicate when the MIA’s review of the John Hancock request would be completed, nor did she indicate how many John Hancock long-term care insurance policies are in-force in Maryland.
John Hancock officials did not respond to a phone request for comment.
Md. rate cap may cut John Hancock’s 40% long-term care rate increase via IFAwebnews .