On April 4, 2022 Unum Life Insurance Company requested a level increase of 36.4 percent on a block of business of group long-term policies which were sold from 1989 to 2002. While no longer being marketed, new policies can be added within existing groups.

There are about 1659 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. The requested increase reflects the actuarial equivalence of the outstanding rate increase request after the Department’s 2019 approval.

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.

Upon Actuarial review, the Department disapproved the requested additional rate increase on June 22, 2022. Unum requested what they thought remained unapproved from their 2019 Filing. The 36.4% was determined, by UNUM, as the remaining shortfall from the requested but not received amount of 47% in the 2019 filing. Most of the shortfall is driven by the implementation of a smaller increase than the Department approved in 2019. Unum implemented a 35% increase but only on a subset of the policyholders. The Department will allow UNUM to implement the approved-but-not implemented 35% increase on the remaining applicable policies going forward. Pursuant to Connecticut General Statute 38a-501(b)(2)(A), this implementation must be spread over a minimum of three years. The periodic increase is 11.7% per year for three years.

Based on what the Department approved in 2019, the Connecticut rate level is not deficient relative to the nationwide level and the Department determined no additional increases were justified.

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