Several events this past week are concerning about the financial viability of Long Term Care Policies.

In South Carolina, rate increases filed with the department of insurance last week requested between 143%-259%. The Director of the insurance department turned down those increases, which leads to the second event. In New York, Genworth (the largest writer in the past few years of LTC) announced, after their rate increases were declined, they are halting all new sales in the state.

Note that existing clients will still be serviced.

I am reminded that in 1988, when I was at John Hancock, they rolled out their LTC Policies with much fanfare, and a wizened old agent in the room asked a brilliant question. “How do they know what the claims will be in the future, they have never done this before. What if they underprice it?”

And the future is now here. Clients look at LTC premiums, rightfully balk, and elect life insurance or annuities with Chronic illness riders to accomplish the same basic thing…

“General Electric Co is setting aside one of the largest amounts ever to cover potential losses on policies that provide long-term care in nursing facilities and patients’ homes. But insurance experts are concerned that may not be enough.

GE shocked investors last year when it took a $6.2 billion after-tax charge and said it planned to set aside $15 billion over seven years to cover claims on some 300,000 long-term care policies written more than a decade ago, when actuaries did not yet know how costly the claims would become.

The costs, which far exceeded GE’s estimates, sent its shares tumbling, spurred an investor lawsuit and prompted the U.S. Securities and Exchange Commission to investigate.

Last week, GE provided new details about its insurance and scheduled a “teach in” for Thursday to give more information.

GE’s new reserves amount to about $55,000 per policy, in line with those of other long-term care insurers, according to an analysis for Reuters by Audit Analytics, an independent research company based in Massachusetts.

“For comparison, Humana Inc has set aside $77,282 per policy, while Unum Group has set aside $10,614, Audit Analytics said.