Brighthouse Life Insurance Company (Individual-CT Partnership: 1994-1996)
Rate request: 21 percent increase
Decision: Approved October 25, 2018
On September 12, 2018, Brighthouse Life Insurance Company requested an increase of 21 percent for a small book of business individual long-term care plans offered through the state of Connecticut’s Partnership program. The plans were marketed from 1994 to 1996 and are no longer being offered. There are 55 policies currently in effect in Connecticut.
The company said the rate increase is needed because the benefit costs have exceeded original expectations. Brighthouse says it needs “significant rate relief” because it has been paying benefit costs longer than expected and there are more policies in effect that what the company had anticipated.
Unlike medical health insurance with premiums set to cover expenses incurred only during the upcoming policy year, long term care premiums are set to cover expenses that are not expected to occur until a distant date, sometimes 20 years in the future.
After an actuarial review, the Department determined that experience on this block of business continues to deteriorate, even after the implementation of a 25 percent rate increase in 2016. Additionally, the statutory 60 percent loss ratio requirement has also been met on these policies, meaning the company is spending at least 60 cents of every premium dollar on benefit costs. As a result, the Department approved the rate request on October 25, 2018.
The company said it would offer its policyholders benefit options in order to mitigate the impact of a rate increase. Under Connecticut law, increases of 20 percent or more must be phased in over three years.