On February 7, 2023, Knights of Columbus requested a rate increase of 37.0 percent on long-term care policies sold to individuals in Connecticut from 2000 to 2016. These policies are no longer being marketed. There have been no prior rate increases on this block.

There are approximately 420 lives in force in Connecticut.

The company said the rate increase is needed because projected future experience is changed from what was anticipated when the products were priced. Several factors are driving adverse experience. Actual policy termination rates have been lower than originally expected, incurred claim lengths of stay have significantly exceeded those assumed in pricing, claim incidence rates at older ages have been in excess of those expected at the time of original pricing and actual portfolio investment rates have been and are projected to continue to be significantly lower than assumed in pricing.

After Actuarial review, the Department approved the 37.0% rate increase on June 29, 2023.This disposition was consistent with recommendations made by the NAIC Multi-State Actuarial Long-Term Care Rate Review Team, which reviewed this filing in its review program. Historical experience has been better than anticipated historically but will deteriorate over time and will result in lifetime loss ratios significantly above minimums. The company said it will offer its customers several options to change benefits to keep premium at previous levels. In addition, they will be providing a contingent non-forfeiture benefit to all policyholders regardless of whether their policy covers this benefit.

If approved, the new rates will be implemented at least 95 days in advance of their next policy anniversary before implementing the rate increase. Under Connecticut law, long-term care premium increases of 20 percent or more must be phased in over three years or longer. This increase will be implemented over three years with an increase of 11.1%, 11.1% and 11.0% in years 1, 2 and 3 respectively.

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