Well, here we are, halfway through the year 2020. What a wild and woolly ride it has been, 4 months into this COVID-19 Pandemic.
One thing has been come perfectly clear: being in a LTC facility – whether it be an assisted living facility or skilled nursing facility – seems to be a death sentence according to many articles in recent months.
In today’s agent alert, we will attempt to briefly address some of the facts surrounding this issue of pandemics, long-term care LTC and LTC insurance, including two recent studies addressing the implications of coronavirus and the LTC Insurance market.
We will also update you on the Genworth merger with China Oceanwide as well as inform you about recent surcharges coming to your clients for recent LTC insurance company insolvency, compliments of the Guaranty Fund.
That’s not all! We have news on the pending class action lawsuit settlement action plan regarding Genworth and its implications for you, your clients and your renewals.
Also – some good news – a new player in the California brokerage for LTC insurance and its implications to the market, the opportunity and the new California Partnership.
COVID-19 and LTC insurance
According to Think Advisor’s Allison Bell, LTC Type has a big effect on COVID-19 Infection Rates Provider Survey, “efforts to keep older people in their homes or apartments of their own may be saving many of them from the virus that causes COVID-19.”
Analysts with the National Investment Center for Senior Housing and Care have reported data supporting that finding in a summary of results from a survey of 105 senior housing and care operators. The sample includes 56 assisted living facility managers, 29 nursing home managers, as well as providers of some other types of services.
Assisted living facility managers reported that they had tested 22% of their residents as of May 31st and that just 1.5% had confirmed positive or suspected positive COVID-19 tests. The nursing home managers had tested 34% of their residents and about 6.7% of the residents tested had confirmed or suspected positive tests.
Analysts at the Foundation for Research on Equal Opportunity have estimated that as of June 19, 2020, about 43% of the people who have died from COVID-19 in the United States have been in nursing homes and assisted living facilities.
Many consumers who have private LTC Insurance policies, Short-Term Care Insurance policies or life insurance policies or annuities that provide LTC benefits, try to use these policy benefits to stay at home as long as possible or to live in the least restrictive possible long-term care setting.
The NIC survey results support the possibility that access to private LTC Insurance and long-term care benefits may have shielded some insureds from the COVID-19 outbreak.
Note: Learn more about the implications of the study and other articles regarding the implications of LTC Insurance and COVID-19. Register to attend one of our LTC Insurance or California Partnership, sign up for “Tuesdays with Tom” or join our Silver or Gold LTC CE Clubs today!
Genworth & China Oceanwide
Monday June 29, 2020: Genworth Financial says China Oceanwide Holdings Group Company Limited of Beijing is having trouble nailing down the financing it needs to acquire Genworth.
“Oceanwide has indicated that the financing has been delayed due to the COVID-19 pandemic and uncertain macroeconomic conditions.”
Genworth and China Oceanwide said they will push the deal completion deadline to September 30th from June 30th. This is extension is the 15th two companies have announced.
The new extension calls for China Oceanwide to show Genworth by August 31, 2020 that China Oceanwide has $1 billion in funding from sources in China to pay for the deal and $1 billion in financing from Horry Capital or other sources.
Lu Zhiqiang, Chairman of China Oceanwide said he still committed to the deal. “We have overcome many hurdles during the past three and a half years and the continue to persevere because of the future value of Genworth to our vision of pursuing the significant opportunities for LTC insurance in the US, China and the rest of Asia. We remain committed to securing financing to complete the transaction as soon as possible.”
Genworth Class Action Settlement
Jerome Skochin, et al, vs. Genworth Life Insurance Company
A proposed settlement has been reached between the parties and a website created to describe the class-action and inform settlement class members of the proposed terms and their rights and options.
Genworth denies any wrongdoing or legal liability in the lawsuit. The court has not determined whether Genworth committed any wrongdoing or is liable to the class or any damages. A proposed settlement has been reached between the parties to avoid the uncertainty, expense, risk, and business disruption of continued litigation balanced against the settlement benefits to the proposed settlement class. The court has determined that it will likely be able to approve the proposed settlement as fair and reasonable.
Because the rights of a settlement class members may be affected, it is extremely important that you read the website carefully. This may or can have a significant impact on your renewals, retirement and your client’s well-being.
According to Genworth, the settlement will be impacting Genworth policyholders who purchased policies between 2000 and 2013 nationwide, including Partnership policies in California. The policies to be affected include California policy forms 7035AX and 7035AJ and California Partnership policy forms 7037A and 7037C.
We have had extensive discussions with various stakeholders around the state on the potential implications to California policyholders. We continue to analyze the various options and choices that will be presented to those holding the above policy forms and have created a check list of questions to ask your clients in order to recommend the most viable options for all to your clients.
The final approval hearing will be held on Friday, July 10, 2020 at 10 AM Eastern. We are creating a webinar on the options being presented, what to consider and why. You will be provided with the sample letter as the five options available.
Stay tuned for further announcements and webinar times and dates
Stay updated stay informed and protect your clients and your book of business
… and the hits just keep on coming!
Time Insurance Company enters “Rehabilitation”
On May 18, 2020, the Wisconsin Office of the Commissioner of Insurance (OCI) filed a petition with the Dome County Circuit Court of Madison, Wisconsin to place Time Insurance Company into Rehabilitation. The Court has ordered and granted an order for temporary injunctive relief which prohibits certain actions while the court considers the petition. Check out the attached links:
Maine Bureau of Insurance (MBOI) has concluded that UNUM America’s long-term care statutory reserves are deficient by $2.1 billion as of December 31, 2018. As permitted by MBOI, UNUM America will phase in additional statutory reserves over several years beginning with year-end 2020 and ending with year-end 2026.
The 20/20 phase-in amount is estimated to be between $200 million and $250 million. This will be accomplished by the company actuaries incorporating explicitly agreed-upon margins into best estimate assumptions. The company plans to fund the additional statutory reserves with expected cash flow.
Many of you may remember over 5 years ago Genworth had reposition $1.3 billion from capital and surplus to cover its shortfalls regarding its LTC reserves. GE’s LTC block ballooned to a $16.5 billion liability back in 2018, followed by Prudential Financial’s $1.5 billion charge related to the LTC Insurance portfolio and the 2nd quarter of 2018.
Keep in mind, back in the early days and through the early 2000’s, many insurers didn’t anticipate that’s so many policyholders would faithfully pay their premiums and eventually file claims.
… and now for some good news!
National Guardian Life Insurance Company
NGL has announced its Essential LTC Insurance product is now available in California, effective July 6, 2020.
Essential LTC is a stand-alone traditional type of LTC Insurance product design with consumers in mind, offering key features such as:
- lifetime benefits
- joint policies and premiums
- a shared care benefit amount rider with a third pool of benefits
- comprehensive benefit period options
- 1035 exchange eligibility (7702 b’s)
- riders that feature return of premium and optional policy surrender benefits
- flexible premium payment options such as a single premium or a 10-year premium payment
Visit ngl-essentialltc.com for more info.
We will share two recent studies next time from Genworth and MassMutual regarding the impact of the coronavirus on potential LTC insurance buyers and the results will pleasantly surprise you!
Maintain your LTC Insurance and Partnership certifications and see our new Partnership webinar material and worksheets and hear more about our new LTCCE programs, call Tom at 707-696-0389.