Long-Term Care Insurance Policyholders Ask for Relief

A woman testifies as an American Sign Language interpreter interprets her remarks.

The Maryland Insurance Administration attracted just two policyholders today to a public hearing on three long-term care insurance (LTCI) issuers' rate increase requests.

The issuers making the requests were John Hancock Life Insurance Company, Prudential Insurance Company of America and UNUM Life Insurance Company of America.

The Maryland Insurance Administration streamed the hearing live on the web, through its Facebook page.

John Hancock is part of Manulife Financial Corp.; Prudential, part of Prudential Financial Inc.; and UNUM, part of UNUM Group.

Maryland caps LTCI premium increases at 15%.

Maryland regulators held the hearing as LTCI issuers were working to persuade state insurance regulators to adopt more uniform LTCI rate increase request review standards, and as Harry Markopolos, an independent accounting investigator, was clashing with insurance regulators and others over how well LTCI reinsurance business at General Electric Company has informed investors about the adequacy of its LTCI reinsurance reserves.

The company representatives at the hearing were apologetic about the rate increase requests.

"We truly regret having to take rate increase actions," said Marie Roche, an assistant vice president with John Hancock.

John Lemoine, an assistant vice president at Unum, said Unum has absorbed many LTCI-related losses voluntarily. He said the company had added $750 million to LTCI reserves in 2018.

"We're making significant contributions to support this business," Lemoine said.

One of the two policyholders who appeared at the hearing said she has owned her policy since 2002, and that the premiums have increased 197.64% since she purchased the policy.

"When is it going to end?" the policyholder said. "There's a lot I just don't understand."

She said that even the wording of the increase notices is wording. She said she does not know if the company wants to increase her premium by a total of 83%, including some past rate increases, or if it wants to increase her premium by 83% in the future, on top of the effect all of the past increases.

The other policyholder who spoke at the hearing said she had purchased coverage for herself and her husband while she was working as an analyst for the state of Maryland, through the state's voluntary benefits program.

"I'm surprised the room isn't filled with policyholders," the policyholder said.

She noted that Unum executives had said after the second quarter that Unum is in a strong financial position, and that the company had said it was going to increase its dividend and buy back shares of its stock.

"Who are you protecting?" the policyholder asked the insurance regulators in the room. "Are you protecting their policyholders, or are you protecting their shareholders? Consider their customers. Not just their shareholders."