HARRISBURG, Pa., Feb. 25, 2016 /PRNewswire-USNewswire/ -- In the Wolf Administration's continuing effort to protect consumers, Insurance Commissioner Teresa Miller today announced she will hold a public hearing on the rising cost of long-term care insurance, as well as specific rate increase requests being made by insurers operating in Pennsylvania.
Commissioner Miller will also use the hearing to explain to consumers the Insurance Department's process in reviewing and approving long-term care insurance rate requests. The hearing will be held Thursday, March 10th, from 9 to 11:30 a.m., in Room 105 of the Rachel Carson Office Building, 400 Market Street, Harrisburg,
"Long-term care insurance premiums have been rising rapidly in recent years, creating financial hardship for many consumers," Commissioner Miller said. "Consumer impact is always a top priority when I review any rate requests that come before the department, and I believe it is important as part of Gov. Wolf's government transparency initiative that insurers publicly explain why they are asking for large increases."
The hearing will focus on several rate increase requests now before the Insurance Department. These include proposals from Genworth Life Insurance Company, requesting rate increases from 33 to 130 percent, depending on the policy; Unum Life Insurance Company of America, requesting rate increases from 63 to 94 percent; John Hancock Life Insurance Company, requesting rate increases from 14 to 88 percent; and Metropolitan Life Insurance Company, requesting rate increases from 43 to 60 percent.
Commissioner Miller said representatives from the Insurance Department's Bureau of Life, Accident, and Health Insurance, who review and recommend rate approvals to her, will explain briefly the process they use to examine company rate requests. Insurance company officials will then explain their reasons for recent large rate hike requests.
Commissioner Miller will also listen to comments from consumers at the hearing and at several locations throughout Pennsylvania. A list of these sites, which are still being finalized, is on the Insurance Department website, www.insurance.pa.gov. Anyone wanting to testify at any of these sites or in Harrisburg should register at firstname.lastname@example.org.
While consumer impact is a top priority for the Insurance Department when reviewing rate requests, the department must also consider a company's financial condition, and make sure it has the ability to pay its claims, which is a vital protection for policyholders.
While the hearing will focus specifically on the current rate requests from four companies, Commissioner Miller noted that the issue of rapidly rising long-term care premiums, and the financial health of insurers which provide this coverage, goes beyond these companies. She noted this is also not a problem unique to Pennsylvania, but one facing consumers and insurers across the country.
In fact, many insurance companies based their pricing of long term care policies on assumptions which have proven to be wrong. These assumptions include overestimating how many people would stop paying premiums after a period of years and thus drop their coverage, before they actually used it. Companies also estimated more policyholders would die before using their coverage than actually happened, and the cost of skilled nursing care has exceeded insurers' expectations. Also, because of low interest rates, companies have earned less than anticipated on the income generated by long-term care premiums. This interest earned over time is used to make payments when claims are filed.
MEDIA CONTACT: Ron Ruman, Insurance, 717-787-3289
SOURCE Pennsylvania Department of Insurance