Unum Life Insurance Company – Individual (1992-2003)
Rate request: 7.5% average increase (0.0% - 19.2% range)
On September 10, 2020 Unum Life Insurance Company requested an average increase of 7.5 percent on a block of business of individual long-term policies which were sold from 1992 to 2003. The range of increase is 0% to 19.2%.
These are no longer being marketed. There are about 1520 policies in force 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.
After Actuarial Review, the Department approved the 19.2% increase on policies with compound uncapped inflation on December 1, 2020. Both the nationwide and Connecticut specific experience has been worse than anticipated historically and the projected lifetime loss ratios are well over the 60% statutory minimum.
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. The new rates will take effect 60 days after the company has notified its policyholders.
Find the filing documents here at Long-Term Care Insurance Rate Filing