The article is here.
Snippets:
" Conseco Inc. officials have said the transfer of many of the insurers' long-term care policies to a new state-supervised nonprofit trust, Senior Health Insurance Co. of Pennsylvania, allows it to concentrate on its core businesses. The policies were a drag on the company's earnings because they were underpriced and required continuing capital infusions to meet the long-term needs of policyholders."
and
"Frank Darras, an Ontario, Calif., attorney who represents policy owners in disputes with insurers, calls the Conseco spinoff "unfounded, unfair and unprecedented. This company took the premiums and promised them independent living in their golden years, and they have kicked them to the curb. The trust can't survive. It is on the ventilator right now."
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- We've exchanged ideas before about the immaturity of this business/product line. It won't be surprising if other companies decide that at least some of their LTC policies are no longer profitable and dump them on the state insurance pools. Holders of those policies will face increase premiums or reduced benefits.
- It does make it hard to know what to do. In our case, we can't afford to self-insure for all LTC eventualities, but buying insurance and then having the company change the rules 20, 30 or 40 years down the line doesn't sound appealing, either.
- The article gives some tips on how a propsective policyholder can investigate the financial soundness of an insurance company. But really, can the average Joe or Jane make sense of the finacial statements of these firms? And is their condition today any real reflection of whether they'll still be managed responsibly for the next four decades?
Luckily, a similar thing could NEVER happen to annuities or other insurance company promises
. . .
Snippets:
" Conseco Inc. officials have said the transfer of many of the insurers' long-term care policies to a new state-supervised nonprofit trust, Senior Health Insurance Co. of Pennsylvania, allows it to concentrate on its core businesses. The policies were a drag on the company's earnings because they were underpriced and required continuing capital infusions to meet the long-term needs of policyholders."
and
"Frank Darras, an Ontario, Calif., attorney who represents policy owners in disputes with insurers, calls the Conseco spinoff "unfounded, unfair and unprecedented. This company took the premiums and promised them independent living in their golden years, and they have kicked them to the curb. The trust can't survive. It is on the ventilator right now."
****************************************************
- We've exchanged ideas before about the immaturity of this business/product line. It won't be surprising if other companies decide that at least some of their LTC policies are no longer profitable and dump them on the state insurance pools. Holders of those policies will face increase premiums or reduced benefits.
- It does make it hard to know what to do. In our case, we can't afford to self-insure for all LTC eventualities, but buying insurance and then having the company change the rules 20, 30 or 40 years down the line doesn't sound appealing, either.
- The article gives some tips on how a propsective policyholder can investigate the financial soundness of an insurance company. But really, can the average Joe or Jane make sense of the finacial statements of these firms? And is their condition today any real reflection of whether they'll still be managed responsibly for the next four decades?
Luckily, a similar thing could NEVER happen to annuities or other insurance company promises
. . .
