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Notice of Quasi-Legislative Hearing 
on Proposed Long-Term Care Insurance Premium Rate Increases in Excess of 15% by American Progressive Life and Health Insurance Co. of New York and Genworth Life Insurance Co.

Before the Maryland Insurance Commissioner

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To: All Insurers that Issue or Deliver Policies of Long-Term Care Insurance in Maryland, Long-Term Care Insurance Producers, Long-Term Care Insurance Policyholders, and Other Interested Parties


Pursuant to Section 2-210(a) of the Insurance Article, Annotated Code of Maryland, and Code of Maryland Regulations (COMAR) 31.02.06, the Maryland Insurance Commissioner (“Commissioner”) will conduct a quasi-legislative hearing on July 24, 2013, commencing at 9:30 A.M., at the Maryland Insurance Administration, Hearing Room, 24th Floor, 200 St. Paul Place, Baltimore, Maryland 21202.  The purpose of the hearing is to gather information to help inform the Commissioner’s determinations regarding premium rate filings submitted by American Progressive Life and Health Insurance Company of New York and Genworth Life Insurance Company (“Insurers”) for certain guaranteed renewable long-term care insurance products.       

Code of Maryland Regulations provides that, as a general rule, an insurer may not charge a renewal premium rate for a long-term care policy which exceeds by more than 15 percent any premium charges for the policy during the preceding 12 months. The regulation contains the following exception, however, to this general rule: “With the approval of the Commissioner, the insurer may charge a renewal premium exceeding a 15 percent increase upon a showing that a larger increase is necessary because of utilization of policy benefits greatly in excess of the expected rate.” COMAR

The Insurers have submitted to the Maryland Insurance Administration (“MIA”) for approval five premium rate filings seeking renewal premium rate increases for guaranteed renewable long-term care insurance products ranging from 35 percent to 98 percent. The Insurers also have submitted data purporting to show that renewal increases greater than 15 percent are necessary because utilization of policy benefits is greatly in excess of the expected rate. Specifically, the filings indicate that utilization of policy benefits as a percentage of the expected utilization rates ranged from 5.3 percent to 180.5 percent.

Issues on which the Commissioner requests testimony include:

(1) The point at which utilization of policy benefits should be considered “greatly in excess of the expected rate” for purposes of determining whether a renewal premium rate of more than 15 percent above premium charges during the preceding 12 months is necessary;
(2) Where utilization of policy benefits has been determined to be “greatly in excess of the expected rate,” the level of renewal premium rate increase above 15 percent that should be approved for any particular rate filing; and

(3) The availability and feasibility of options for mitigating the impact on consumers of any necessary premium rate increase above 15 percent (e.g., an option to reduce or avoid an otherwise necessary premium rate increase by reducing the level of inflation protection otherwise provided under the policy).

Those who wish to testify at the hearing must notify the MIA in writing by July 15, 2013.  Such notice should be directed to:

Maria Fisher
Executive Assistant to the Commissioner
Maryland Insurance Administration
200 St. Paul Place, Suite 2700
Baltimore, Maryland  21202

Any written testimony or exhibits also should be submitted to Ms. Fisher’s attention no later than July 15, 2013.  Individuals who require reasonable accommodations to participate in the hearing should contact Ms. Fisher at 410-468-2013 within seven (7) days prior to the hearing.

Therese M. Goldsmith
Insurance Commissioner
May 9, 2013