Provident Life and Accident Insurance Company – Individual (2003-2009)
Rate Request: 124.2 percent average increase
Decision: Under Review
Public comment period will remain open until filing is closed
On December 15, 2020 Provident Life and Accident Insurance Company requested an average increase of 124.2 percent on a block of business of individual long-term policies which were sold from 2003 to 2009. The range of increase is 77.5% to 180.9% and varies by benefit period and inflation type.
These are no longer being marketed. There are about 171 policies impacted in Connecticut.
The company said in its filing that the increase is needed due to lower than expected lapse rates, better than expected mortality, increased claim duration, and the persistent low interest rate environment. The experience on this block of business is worse than anticipated when the product was originally priced.
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.
The company said its policyholders will have options to change or reduce benefits in order to mitigate the impact of an increase. If approved, the new rate would take effect 60 days after the company has notified its policyholders. Connecticut law requires that any increase 20 percent or higher be phased in over three years or more.