Texas Publicizes State LTC Rate Spiral Rules

"These new rules will require companies to be more forthcoming about the possibility of future rate increases," Montemayor says

The Texas department has posted the new rules, which are authorized by a law based on Texas House Bill 2482, on the Web at http://www.tdi.state.tx.us/commish/ltc2.html

Under the rules, insurance companies selling long-term care policies must give the Texas department actuarial memos or certifications assuring officials that the proposed rates will cover anticipated costs under "moderately adverse experience."

Insurers must give LTC insurance applicants:

• The premium rate or rate schedules applicable to the applicant.
• A 10-year history of premium rate increases on the applicable policy or similar policies in Texas or any other state.
• Notice that the policy may be subject to rate increases in the future.
• An explanation of the consumer's options in the event of a future premium increase.

The Texas department says it could ban an insurance company from selling long-term care insurance in Texas for up to five years if the company habitually files inadequate initial premium rates.