The Alaska Division of Insurance recently ordered long-term care insurers to suspend enforcement of family member exclusions until December 15, 2020, or until such time that Governor Mike Dunleavy determines that the declared public health disaster emergency resulting from COVID-19 no longer exists. See Order R20-10 (November 16, 2020). In the Order, the Division expresses its determination that insureds be able to access their benefits notwithstanding family member policy exclusions due to the increased risk of exposure attendant to home health care providers traveling between households. The Division has extended similar orders during the pandemic, so this Order may be extended beyond December 15. Although the industry has become accustomed to COVID-19-related accommodations pursuant to orders from state regulators, the Division’s decision to suspend family member exclusions is a first during the COVID-19 pandemic and may present administrative and compliance challenges.
Author: Editorial Board
SHIP Rehabilitation Plan Amended
Senior Health Insurance Company of Pennsylvania (“SHIP”) was placed in rehabilitation in Pennsylvania in January. As required by the Order of Rehabilitation, the Rehabilitator filed a Proposed Plan of Rehabilitation (the “Plan”) in April.1 Several interested parties, including three state insurance regulators, intervened in the rehabilitation proceedings in the Commonwealth Court of Pennsylvania (the “Court”). Other interested parties filed formal comments with the Court, generally expressing concerns about or opposition to the Plan. On October 21, the Rehabilitator filed an Amended Plan of Rehabilitation (the “Amended Plan”). When filing the Amended Plan, the Rehabilitator stated that it “addresses most or all of the material and substantial concerns raised in response to the initial Proposed Plan.”
The core of the Plan is charging policyholders the “If Knew Premium” for the benefits under their policies. The If Knew Premium is the rate that, if charged since inception, would have produced the greater of the initial target loss ratio or the minimum loss ratio applicable to the policy form. Policyholders would be offered options to increase premiums or reduce benefits so that they are paying the If Knew Premium for the benefits provided. Many objections to the Plan asserted that the Rehabilitator does not have the authority to implement rate increases without seeking approval from state insurance regulators. Under the Plan as originally filed, no such approval was contemplated.