NAIC Membership Adopts Framework to Address Long-Term Care Insurance Rate Approvals
On April 8, during the Spring National Meeting in Kansas City, Missouri, the National Association of Insurance Commissioners’ members accepted the Long-Term Care Insurance (LTCI) Multistate Actuarial (MSA) Review Framework. The MSA Framework provides for a more consistent state-based approach when evaluating LTCI rate increase requests by insurers. Key objectives of the Framework are to educate and advise states on the appropriateness of actuarially based rates for policyholders’ benefits, narrowing rate review practices and reducing inequities among policyholders.
The MSA Framework describes the operational and actuarial details of how an MSA team will conduct a rate filing review and capture its analysis and recommendations in a written rate advisory report. The voluntary MSA review process laid out in the Framework facilitates greater coordination and information sharing, leverages collective LTCI actuarial expertise, and aims to improve the timeliness of rate decisions.
“The Long-Term Care Insurance Task Force has diligently led on its key goal of developing an MSA process to support, assist, and aid insurance departments in this challenging market. It is critical that consumers have long-term care policies that are offered from solvent carriers. I want to especially commend Virginia Commissioner Scott White and Colorado Commissioner Michael Conway for their leadership and thank the many other state insurance regulators that contributed to the MSA Framework,” said NAIC President and Director of the Idaho Department of Insurance Dean L. Cameron.
“The MSA Framework is a monumental step forward for the NAIC, and I anticipate continued improvements in the states’ capabilities and timeliness of rate increase considerations. While much work remains to be done, I am optimistic our state-based solution will further help states balance consumer protections and insurer solvency,” said Virginia Insurance Commissioner Scott White, chair of the Long-Term Care Insurance (EX) Task Force.
The Long-Term Care Insurance (EX) Task Force commenced its work in May 2019. An Ad Hoc Drafting Group, consisting of representatives from Colorado, Connecticut, Minnesota, Nebraska, Texas, Virginia, and Washington, commenced its drafting work in May 2020.
Moving forward, the LTCI Multistate Rate Review Subgroup, chaired by Colorado Insurance Commissioner Michael Conway, will focus on implementing the Framework, which is expected to be fully operational by September 2022. The Subgroup will continue efforts to improve the functionality of the MSA review process through feedback from state insurance departments and insurers in 2022 and beyond.
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About the National Association of Insurance Commissioners
As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.