Texas Tells LTCI Issuers to Write Better Rate Hike Letters

Officials also list some of the laws that apply when insurers ask for LTCI rate increases.

"You must explain why a rate adjustment was necessary, and the increase must be certified by an actuary credentialed by both the Society of Actuaries and  the American Academy of Actuaries," officials write. "The explanation of the increase should not be false or misleading."

Officials note that the Texas insurance commissioner can reject an increase that conflicts with Texas laws or statutes or appears to be unnecessary.

Consumer groups once argued that the issuer of an LTCI policy should never increase rates, because most of the policyholders would be retirees.

Since about 2000, many issuers have applied for large increases. The issuers have argued that they need the increases because policyholders have been somewhat more likely to file claims than expected; policyholders have been much more likely to keep their policies in force than expected; and investment earnings on bonds have been much lower the LTCI issuers had expected.

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