Prudential Group will discontinue sales of new group long-term care insurance policies effective Aug. 1, 2012, except in Indiana, Iowa, Kansas, Louisiana and South Dakota, where it will continue for a period as required by state law. In March, the carrier announced that it would discontinue the sale of individual LTC products to focus solely on its group line.
The decision is based on the continuing effects of low-interest rates and Prudential’s desire to achieve appropriate returns, enhance its long-term risk profile and maintain sustainable profitable growth, in its core group life and disability lines of business, the company said.
Prudential will also notify clients of its intent to continue to accept group long-term care enrollments until June 30, 2013.
The terms and conditions of coverage provided under existing group long-term care insurance certificates will not change. This coverage is guaranteed renewable, and as long as premiums are paid on time and benefits are not exhausted, coverage will remain in place – although premiums may change on a class basis, subject to regulatory review.
With other leading insurance carriers leaving the group LTC market, there has been speculation about whether a death rattle is now sounding for this product line. Aetna, MetLife and Unum are among those that have backed away from this area – with most stopping or suspending new business writing (see related story).
Chris McMahon is a senior editor with Insurance Networking News, a SourceMedia publication. Additional reporting provided by Editorial Staff.
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