The National Association of Insurance Commissioners (NAIC) convened a task force in July, principally to address the future of traditional Long Term Care insurance policies. Traditional policies are those where you pay a premium for a specific benefit and duration, but you build no policy value.
Specifically, the task force is examining legislation similar to the Part V Transfer legislation that has been on the books for many years in the United Kingdom. Similar legislation exists today in Rhode Island.
Part V Transfer is a legal mechanism for insurance companies to move troubled or non profitable business to a new company, to save the insurance company from financial ruin. In insurance terms, this is a legal, structured run off of business. Typically a process used for Casualty & Liability insurance, the NAIC has it’s eye on this type of legislation for Long Term Care.
With this type of perspective from people closer to the issue, you have to wonder if traditional Long Term Care has a future?