Hundreds of long-term care insurance policyholders packed a virtual public forum of the Bureau of Insurance today to speak out against one company's request for premium hikes of up to 178%.
Genworth Life Insurance Co. says the increases are on par with those in other states. But policyholders accuse Genworth of mismanagement and of padding executives' pockets at the expense of its customers, and they say they were promised that their premiums and coverage would remain stable.
Carroll Harper says the company made misguided assumptions about the number and amount of claims it would receive.
"Sadly they got it wrong, very wrong. And now we are faced with increases on the backs of Maine seniors forced to make unpleasant decisions about their long-term care policies," he says.
Other customers, including Linda Sawers, worry that Genworth doesn't have the means to cover future claims, especially in the face of lawsuits brought against the company by customers alleging fraud.
"I'm concerned about your financial solvency and that these rate increases are to … take care of that," she says.
Genworth Senior Vice President of Long Term Care Jamala Arland says the company has paid out $22 billion in long-term care claims to date, with $2 billion last year alone. Arland says Genworth is committed to paying all eligible claims, and actuarially justified premium rate increases are an important component to our ability to do so over the life of these policies. She adds the company is willing to work with customers to refine their policies based on their needs and budget.
"While rate actions are an essential part of the management of Genworth's long-term care block, we continue to offer new initiatives that will have a beneficial impact on customers and on the company's claims paying ability," she says.
The Bureau of Insurance will review the rate hikes over several months and use third-party actuarial data to help it decide whether to approve the increases. Insurance officials say customers will receive notices of any approved rate increases, along with options for alternatives, next summer.
