Conseco Senior Health Insurance Company's Request To Cancel Home Health Care Policies Denied
For Immediate Release
Contact: Bob Lotane
Tallahassee – The Florida Office of Insurance Regulation (Office) has denied an insurer's request to cancel its home health care policies, in addition to its request for a 211.6% rate increase. Conseco Senior Health Insurance Company (Conseco Senior) made the request, which is permitted under Florida law, subject to Office approval. The request was made to stem large losses in this line of business. The Office has ordered the company to continue honoring the policies, along with offering the policyholders, nationwide, a choice of two other policy options.
In signing the order, director of the Florida Office of Insurance Regulation, Kevin McCarty, said, "These policyholders purchased these policies in good faith and have held up their end of the bargain. While I understand the financial strain the company is undergoing, I must balance those concerns with the interests of the Florida policyholders. I believe this is the best solution to achieve that balance." The Office held a public hearing, last month, to allow Conseco Senior to present its request and to allow policyholders to testify.
The options Conseco Senior must offer its policyholders include retaining the current policy with a maximum 50% rate increase the first year and actuarially justified increases the following years. The second option is a replacement policy with reduced benefits and a maximum rate increase of 25% the first year and no more than 15% the following years. Or the policyholders can choose to receive a paid up policy, which would allow them to file future claims, as with the existing policy, up to 100% of the amount of premiums they have already paid since the inception of the policy. The company is also ordered to conduct an outreach program to help policyholders understand their options under the order to manage their home health care needs.
Presently Conseco Senior is paying approximately $1.75 for every dollar it collects in premium; Conseco Senior indicates that figure is expected to rise to $2.71 for every premium dollar by 2008. Conseco, Inc., the parent company, has infused $534 million into Conseco Senior over the last five years. Companies that Conseco, Inc. acquired in 1996 developed the home health care policies, subject to this order.
Anyone with questions or concerns about this matter can contact the Department of Financial Services Division of Consumer Services at 1 (800) 342-2762. Click on the link below to read the attached order.http://www.floir.com/siteDocuments/ConsecoOrder.pdf