Updates to the Long-Term Care Insurance NAIC Model Act and Model Regulation

As part of its effort to revamp and modernize the Model Laws, the NAIC is updating the Long-Term Care Insurance Model Act, Model 640-1, and the Long-Term Care Insurance Model Regulation, Model 641-1 (combined, the Models). The current versions of the Models were finalized in 2017, and all states have adopted the current Models or similar legislation.

The NAIC has welcomed input throughout the process and has received it from industry groups including the Center for Economic Justice, the American Council of Life Insurers (ACLI), the Interstate Insurance Compact (Compact) and the California Health Advocates. There has been broad agreement between the ACLI, consumer advocates, the regulators and others providing input regarding some areas of update, but there remain other areas of disagreement.

Areas of agreement include allowing for implementation of policyholder-friendly programs, certainty on rates, and making the long-term care insurance market more affordable to the middle market purchasers. As of January 2020, approximately 7.5 million Americans maintained some form of long-term care insurance. Given that there are over 54 million Americans over the age of 65, a goal remains to make this insurance more accessible to the general public to assist people in preparing for the future.

Areas where there remains a difference of opinion in updating the Models include issues related to complexity of the products (and how to make them simpler and more marketable) and how rates and benefits should be structured.

The NAIC Long-Term Care Actuarial (B) Working Group continues to work diligently at updating the Models. Long-term care insurance, as with all insurance, is highly regulated and a challenging, complex space. Those involved should be mindful of continued efforts to rework these Models, as it will in turn lead to updates in state legislation.