At its 2014 Summer Meeting yesterday, the NAIC adopted amendments to its model regulation concerning Long Term Care Insurance to increase the amount of actuarial analysis to support rate filings and rate increases for such policies. The expanded requirements for the actuarial certification and a supporting memorandum signed by a member of the American Academy of Actuaries include requirements of discussion of margin for foreseeable adverse experience and the calculation of reserves to be held.
As this article discusses, long term care insurance has been and will increasingly be an area for litigation and regulatory scrutiny. Increasing numbers of seniors and rate increases which often greatly exceeded consumers’ expectations have prompted this new look by regulators. It is hoped that additional input from actuaries may improve the quality of long term projections of what rates may be needed.