l ong-t erm c are i nsura nce s long-term care news

Long-Term Care NewsDecember 2005, Issue No. 16

L O N G - T E R M C A R E I N S U R A N C E S E C T I O N“A KNOWLEDGE COMMUNITY FOR THE SOCIETY OF ACTUARIES”

contents

Author’s Note: We acknowledge use of the WIFM concept as presented in AlanStonewall and Elizabeth Moore’s paper “Improving Pension Funding andDisclosures: What’s in it for Me?” presented at the SOA’s Symposium on the Futureof Pension Plan Funding and Disclosure and to be published in an upcoming SOAmonograph.

Overview

T he Society of Actuaries’ Long-Term Care Insurance (LTCI) Sectionsponsored a multidisciplinary “Think Tank” event in Washington,D.C. on July 27-28, 2005. This event was intended to focus on the most

significant issues and trends that may impact long-term care (LTC) risks, caredelivery and protection in the future. Participants were challenged to thinkstrategically and creatively about how various aspects of the LTC market canbe better managed for the benefit of all stakeholders.

The Section Council was very interested in having a wide variety ofperspectives represented at this Think Tank. The invitation to participate wassent to individuals with backgrounds and experience in underwriting, claims,actuarial, marketing, group, and legislation/regulation as well as CEOs, theacademic/think tank community, health care service providers and consumergroups. Professionals from the private LTC market represented the majority,but not all, of the event participants. (A listing of participants can be found inAppendix A of the full report.)

The report has been prepared for the SOA’s LTCI Section Council and eventparticipants. Over the next few months, the Section Council will be discussingthe “big ideas” that emerged as a result of this event to determine how to movethem forward. As appropriate, sister actuarial organizations, event participantsand others in the industry will be invited to collaborate on the next steps.

Think Tank StructureRisk, Delivery, ProtectionIn considering how the LTC market would evolve over the next five to tenyears, event participants were asked to think about what would change interms of LTC risk, delivery and protection.• Risk was defined as the risk that an individual would require living assis-

tance of some sort. New treatments for disease and changes in morbidity, for example, affect risk.

Results from the SOALong-Term Care Think Tankby Emily Kessler

Results from the SOA Long-Term Care Think Tank

by Emily Kessler ..........................................................1

A Word from the Editor

by Brad S. Linder .........................................................2

Appendix B: Highlights of the Survey Results for the

SOA Long-Term Care Think Tank...............................7

Upcoming Events: The 6th Annual Intercompany

LTCI Conference! ........................................................8

continued on page 3

2 • Long-Term Care News • December 2005

Long-Term Care NewsIssue Number 16 • December 2005

Published by the Long-Term Care InsuranceSection Council of the Society of Actuaries

475 N. Martingale Road, Suite 600Schaumburg, Ill 60173-2226

Phone: 847-706-3500 Fax: 847-706-3599

Web: www.soa.org

This newsletter is free to section members. To jointhe section, SOA members and non-memberscan locate a membership form on the LTCI Webpage at www.soaltci.org. Back issues of sectionnewsletters have been placed in the SOAlibrary and on the SOA Web site (www.soa.org).

2005-2006 SECTION LEADERSHIPTyree (Ty) S. Wooldridge, ChairpersonDawn E. Helwig, Vice-ChairpersonMalcolm Chueng, SecretaryJohn Wilkin, TreasurerTimothy Edwin Hale, Basic Education CoordinatorJohn Wilkin, Research CoordinatorBob Yee, Networking Tracks CoordinatorDan Cathcart, Professional Community CoordinatorDawn E. Helwig, Communications CoordinatorJake Lucas, Newsletter Coordinator

Brad S. Linder, Newsletter EditorGenRe | Life Health695 East Main Street • P.O. Box 300Stamford, Conn. 06904-0300Phone: (203) 352-3129Fax: (203) 328-5886E-mail: [email protected]

Jake Lucas, Co-editorPenn Treaty Network America146 Lakeview Drive • Suite 203Gibbsboro, N.J. 08026PHONE: 856-566-1002FAX: 856-566-5165E-MAIL: [email protected]

Joe Adduci, DTP CoordinatorE-MAIL: [email protected]: 847-706-3548FAX: 847-706-3599

Clay Baznik, Director of PublicationsE-MAIL: [email protected]

O’Shea Gamble, Project Support SpecialistE-MAIL: [email protected]

Facts and opinions contained herein are the soleresponsibility of the persons expressing them andshould not be attributed to the Society ofActuaries, its committees, the Long-Term CareInsurance Section or the employers of theauthors. We will promptly correct errors broughtto our attention.

Copyright © 2005 Society of Actuaries.All rights reserved.Printed in the United States of America.

W hat happens when you gather agroup of intelligent, informed andintuitive professionals in one place

and ask them about the future of long-term care?Well, the results of that gathering have beensummarized as our lead article. The “Think Tank”Meeting was the name of the gathering. It was heldin picturesque Washington, D.C. Grab yourpopcorn and a refreshment because you’ll be certainto hear a lot more as a result of this “hot” summermeeting! Not to spoil the story line, but the stars from this motionpicture story are almost ready to involve us.

I understand that the full report will, of course, contain all of theappendices. Plans are to make the full report available through theSociety of Actuaries’ Web site. Many thanks must go to Kara Clark andEmily Kessler for all their efforts.

What happens when you gather a very large group of intelligent,informed and intuitive professionals who happen to be especially will-ing to share their own expertise? Well, you have the AnnualIntercompany LTCI Conference! It looks like this 6th annual confer-ence will be another program packed with great sessions. VinceBodnar was the coordinating author for the article on the upcoming6th LTCI Conference events. Many thanks go to Vince and the TrackChairpersons for writing the descriptions. Look for the programbrochures to arrive in your mailbox very soon! What a wonderfulconference to look forward to. ¯

A Word From the EditorNew Changes on the Horizonby Brad S. Linder

LTC Newsletter Publication Schedule

EditorBrad Linder

Publication Month Articles Due

March 2006 January 1, 2006

August 2006 June 1, 2006

• Delivery (or delivery of care). If assis-tance is needed, how will that living assistance be provided? Care could be provided by family members, friends or paid providers. It could be provided at home, at a hospital, in an institution (e.g., continuing care communities, assisted living facility) or through another venue.

• Protection is defined as any of the private or public options available to individu-als to protect themselves against LTC risks. This protection could be provided in two ways. First, it could minimize need for care in the first place (e.g., vaccinations for Alzheimer’s Disease). Second, it could finance care if care is needed (e.g., Medicaid, LTCI, reverse mortgages).

Only when we understand how thesethree aspects are evolving can we under-stand where the market is headed.

SurveyThe “risk/delivery/protection” frameworkwas first presented to participants in asurvey that participants took prior to attend-ing the seminar. That survey was designedto get participant opinions on how thesystem might evolve over the next five to tenyears. The results of the survey determinedwhat issues were further explored in theThink Tank.

The survey asked questions regardingapproximately 50 specific trends. Thetrends were loosely grouped in broad cate-gories of economic/regulatory changes,medical care/ delivery, consumers andinsurers. For each trend, participants wereasked: “What is your perception of the like-lihood of significant activity or changeover the next five to ten years in each ofthese issues or trends?” Secondly, partici-pants were asked: “Assuming this activityor change in a particular area were to occurover the next five to ten years, please indi-cate the most relevant level of impact foreach of these issues and trends as theypertain to risk, delivery and protection.”

A more detailed discussion and completeset of the survey responses is included inAppendix B of the full report. Highlights of

the survey results appear at the end of thisarticle.

Key Drivers for the SystemIn discussing the survey results, Think Tankparticipants came to a consensus as to sixsignificant issues or trends that are drivingchanges in the LTC system. Participantsused the survey results, their interpretationof and reaction to those results, as well asother knowledge to develop the issues onwhich to focus the rest of the Think Tankdiscussion. The six trends that were focusedon, and some topics that fall under thosetrends, are:• Public Funding

- Medicaid Funding Crisis- Medicare Reimbursement Policy- Public Values/Expectations- Intergenerational Wealth Transfer

• Changes in How/Where Care Delivered- Tight Labor Market

• (Likely) Morbidity Improvement- Changes in Alzheimer’s Disease

• Demographic Age Wave• Availability of Capital

- Global Perspective• Underwriting/Anti-selection

These six trends became the focus of thediscussion as participants first furtherfleshed out the issues and their implicationsand then worked out alternatives for poten-tial solutions.

StakeholdersOnce we had identified what was drivingthe system, we could then talk about thesystem’s stakeholders. Broadly, we decidedto categorize stakeholders as:• Consumers. Consumers include patients

(those currently receiving care) and insureds (those who have purchased protection but are not yet receiving care).

• Financiers, or more simply, those paying for care. This includes a wide range of people including consumers and their families, insurers and taxpayers/ government (both federal and state).

December 2005 • Long-Term Care News • 3

Results from the SOA Long-Term Care Think Tank • from page 1

continued on page 4

• Caregivers, which includes both familial and nonfamilial caregivers. While famil-ial and nonfamilial caregivers are included in the same category, it was acknowledged throughout the Think Tank that the needs of these groups are often different.

• Society, which we represented by the taxpayers and government (both federal and state.

• State regulators who regulate insurance products.

Different individuals could play severalstakeholder roles, such as consumer,taxpayer, caregiver and financier.Individuals can also play different roles atdifferent points in their lives.

WIFMsTo be able to talk about stakeholders, andhow they react to each other and to changesin the system, we used the concept of“WIFMs,” or “What’s in it for Me?” Eachstakeholder has wants, needs or desires fromany LTC system. Any change in the systemhas to be viewed through the lens of eachstakeholder’s needs and desires. For short-hand, the participants in the Think Tankused “WIFMs” as a way of discussing thoseneeds and desires.

When changing any system, it’s impor-tant to understand the WIFMs of thestakeholders. Any changes made to thesystem should satisfy as many of the WIFMsof the major stakeholder groups as possible,or should at least not violate the most signif-icant ones. Often WIFMs will becontradictory both between stakeholdersgroups and within individuals who havemultiple stakeholder roles (e.g., the individ-ual acting as both patient and taxpayer).

Consider improvements to the Medicaidsystem. Taxpayers won’t like any improve-ments that increase taxes. But, caregivers,both familial and nonfamilial, may like theimproved level of protection available. So,these groups have different views ofimprovements to Medicaid. Moreover, anyindividual is likely to play several roles inthe system: consumer, taxpayer, caregiver,and financier—either simultaneously or atdifferent stages of life. So, any individual

may have very different views of thechanges to the Medicaid system, for exam-ple, depending on whether he is lookingthrough his taxpayer lens or his lens as aconsumer of LTC services.

In order to understand the various frame-works stakeholders will use to evaluatemarket changes, participants in the ThinkTank outlined the major WIFMs for differentstakeholder groups. The summary of stake-holder WIFMs is found in Appendix C of thefull report.

Big Ideas Participants spent the afternoon of the firstday working with the trends and stake-holder WIFMs to determine possibledirections for the LTC system. Each tablewas assigned one of the six macro trendsdescribed above and was asked to discussthe effects of each trend with respect to allaspects of the LTC market. Participantswere asked to consider how this trendwould affect risk, delivery and protection.Finally, they were to keep in mind thedifferent stakeholders and their WIFMs. Adetailed summary of these discussions isfound in Appendix D of the full report.These discussions were to flesh out theissues raised by the trends, and how theseissues might affect stakeholders. Oncethose issues are known, we can move tofind possible solutions.

Based on their discussion of the previousafternoon, participants returned the nextmorning to develop concrete solutionproposals. Participants split into five tables;each table brainstormed various ideas forpossible development. The brainstormingexercise was intended to be “blue sky;”current regulations, market barriers, etcetera, were ignored. A complete list of thebrainstormed ideas is found in Appendix Eof the full report.

Once each table identified its two or threefavorite ideas, they developed these andtested them against stakeholder WIFMs. Also,tables identified potential stumbling blocks tothe realization of each particular idea. Eachtable presented its ideas, and all participantsthen voted for their favorite idea. All ideasthat were presented are summarized inAppendix F of the full report.



The value of thehouse isexcluded fromMedicaid, butMedicaid has,technically, the right torecapture thehome valueonce the estateis settled.

Two of the five favorite ideas involvedrepackaging or rebranding existingMedicare/Medicaid benefits. The otherideas were more long term in nature. Thefive ideas that got the most votes were:• Reform Medicaid to Take out the “Loan”

on Home Value (29 votes)• Short-Term Product with Government

Catastrophic Insurance (26 votes)• Repackage Medicare/Medicaid Benefits

as “Medicare Part E” (18 votes)• Tax Incentives for LTC Insurance

(15 votes)• LTC Financing Reform/National LTC

Initiative (15 votes)

A. Reform Medicaid to Eliminate the Government’s Role as HomeValue LenderThis proposal focuses on changing a currentMedicaid practice. The value of the house isexcluded from Medicaid assets when deter-mining eligibility for Medicaid, butMedicaid has, technically, the right to recap-ture the home value once the estate issettled. This can be well after the LTC recipi-ent has died, if there is a surviving spouse ordisabled adult children. This proposal is toeliminate the government’s role of providinginterest-free loans by establishing a privateand/or government loan system to capturehouse value, similar to Fannie Mae. Thisprivate system would loan money on thehouse and the LTC consumer would be ableto elect how to spend that money on care.When determining pure eligibility forMedicaid, the house would not be anexempt asset, although the value of thehouse would be considered net of anyoutstanding loans. The effect would be thesame, but the government would not be thelender.

More details on a similar concept arefound in Appendix G of the full report.

B. Short-Term Product withGovernment Catastrophic InsuranceIn this proposal, individuals would berequired to privately purchase LTCI (oranother product) to cover a short-termperiod of need, with a taxpayer-financedprogram providing coverage beyond theshort-term period. The group proposed a

three-year period, but this detail would needto be worked out. Key features of theproposal are as follows:• Each individual would be required to

carry short-term LTC coverage, much as states have been moving to require auto insurance or banks to require fire insur-ance on mortgaged properties.

• While the short-term coverage would be mandatory, the government (taxpayers) would pay for short-term coverage for those of low means. In this case, housing value would be counted in the means testing.

• Insurers and others would offer prod-ucts to cover the three-year period. By limiting the coverage period, other possibilities for coverage could open, including reverse mortgages and bonds. Reverse mortgages might be limited to those 55 and older. Bonds could be provided by a Fannie-Mae type organization.

• The government program would cover LTC needs beyond the three-year period. This program would be universal (not means-tested). In this way, the govern-ment is assuming catastrophic losses, with “catastrophic” being defined as the term of coverage.


Results from the SOA Long-Term Care Think Tank

continued on page 6

When testing the stakeholder WIFMs for thisproposal, the team felt that stakeholders wouldreact in the following manner:• Consumers would have a mixed reaction to

the proposal.• Society would also have a mixed reaction;

there is a great deal of political risk in this proposal.

• Nonfamilial caregivers would see the proposal as positive.

• Familial caregivers would have a positive reaction to the program.

• Third-party payers such as insurers would have a mixed reaction (probably similar to their reaction to Medigap/Medicare).

• Regulators would have a mixed reaction.• Capital markets would have a positive

reaction.

C. Medicare Part ESome parts of LTCI are provided throughMedicare, but most are provided throughMedicaid. Medicaid has the stigma of being awelfare program, while Medicare is seen asuniversal medical coverage, with no attachedstigma. Medicare and Medicaid interact with eachother in a complicated and difficult to understandmanner. This proposal would pull all LTC benefitstogether and put them under the Medicareumbrella (“Medicare Part E”). Existing benefitswould be repackaged and rebranded to increaseunderstanding with minimal additional cost.Medicare Part E coverage would be mandatory

(similar to hospital insurance). Medicare Part Esupplemental plans could be offered by the insur-ance industry similar to traditional Medigap plans.These would be voluntary plans on the part ofparticipants.

D. Tax Incentives for LTC InsuranceDifferent variations of this idea were discussed.This included above-the-line tax deductions and401(k)-style plans to pay for LTC. Additional vari-ations were for using IRC Section 125 to permitpretax savings for LTC or to purchase LTCI. Oneidea was that the tax incentives might vary basedon the benefit design and the amount financed(more incentive for funding more care).

In terms of WIFMs for stakeholders, moststakeholders would find this positive with thetaxpayer/government/politician stakeholderfinding this negative because of lost tax revenue.Participants in the Think Tank thought this couldbe fixed by considering affordability and flexibil-ity. A revenue source would need to be identifiedand the tax effects would need to have a provenbenefit in a cost/benefit analysis.

E. LTC Financing Reform/National LTC InitiativeThese were two separate proposals that weresimilar.

The first part of LTC financing reform wouldbe to restrict and enforce Medicaid regulations sothat Medicaid only provided coverage for needy.Vouchers to purchase coverage would beprovided to low-income patients. Those whocould not qualify for private insurance wouldhave a risk pool available. Some sort of cata-strophic coverage would be included, possiblywith a means-tested element.

As part of the LTC financing reform, govern-ment/insurer partnerships similar to MedicareAdvantage could be established. These wouldencourage private LTCI coverage and allow theinsurers to leverage branding, credibility andbackstop. Insurers in return would provide prod-ucts for coverage gaps.

The other idea, a national LTC initiative, is apublic/private partnership that offers simplified,standardized plans. Optional benefits would beallowed under this system. The private policypays up-front cost and the taxpayer (government)picks up tail risk. This initiative would notmandate private coverage for the up-front cost. ¯



Emily Kessler,, FSA, EA,

MAAA, is a staff actuary

with the Society of

Actuaries in

Schaumburg, Ill. She

can be reached at

[email protected].


Highlights of survey results are summarized below.

Economic/RegulatoryUnder the economic/regulatory heading, survey respondentsfelt the strongest likelihood of change or activity would berelative to federal policy addressing the Medicaid fundingcrisis. Other “likely” changes (in the minds of the respon-dents) included:• Changes in Medicare reimbursement policy;• Changes in federal tax policy;• Increasing regulatory complexity at the state level;• State regulation on pricing stability;• Emergence of state partnerships.

In almost universal agreement, the one change that respon-dents felt was extremely unlikely was the adoption of auniversal LTC program. This is the only one of the surveyquestions on which there was universal agreement that thiswas an unlikely change.

Changes in Medicare reimbursement policy and theMedicaid system were seen to impact both delivery and protec-tion systems. Other changes, such as changes in federal taxpolicy, increasing regulatory complexity at state level, stateregulations on pricing stability, and the emergence of state part-nerships were seen as mainly affecting protection systems.

Medical Care and DeliverySurvey respondents felt very strongly, and were in strongagreement, that changes in medical care and delivery werehighly likely. Likely changes or areas of activity relative tomedical care and delivery included:• Tight labor market for home health care providers;• Increased ability to identify genetic markers;• Changes in the treatment of Alzheimer’s Disease and

other dementias;• Increasing number of assisted living facilities.

Reponses were mixed as to how the respondents thoughtchanges to medical care and delivery might affect risk, deliv-ery and protection. Not surprisingly, the most likely impactwas seen to be on care delivery. Few changes in medical careand delivery were seen as having an impact on protection.The one area that was seen to have an impact on all threeareas of risk, delivery and protection was changes in treat-ment of Alzheimer’s Disease and other dementias. The onlyother factors affecting risk were big picture changes: morbid-ity improvements and mortality improvements.

ConsumersThe consumer issues most likely to see activity and/or changein the next few years (again, in the eyes of the survey respon-dents) were:

• Demographic age wave (aging of the population);• Need for consumer education;• Ability to access LTC policies through workplace bene-

fit programs (e.g., group LTC, worksite marketing);• Change in generational characteristics of consumers

(attitudinal, risk, etc.).

The demographic age wave was seen to affect all of risk,delivery and protection (with risk being the least affected ofthe three areas). And the ability to access LTC policies throughworkplace benefit programs was seen as impacting protec-tion. But, of the other areas where participants felt change waslikely, there was no agreement whether risk, delivery orprotection mechanisms would be affected.

InsurersWhen considering the insurance market there were not asmany strong trends shown in the survey as to what changesthere would be, or how these would affect the system. Thismay be partly because some respondents may not have had asense of where that market was heading (many more respon-dents declined to answer the survey questions in this section).

Of those respondents who answered these questions, themost likely changes were seen as:• Increased attention to managing claims according to

policy provisions;• Anti-selective knowledge on the part of consumers;• Impact of technology (on sales/marketing, administra-

tion, marketing, etc.);• Need for agent training;• Improved underwriting techniques;• Investment markets/returns.

Not surprisingly, these changes were seen to potentiallycorrelate with changes in protection mechanisms, but as notedearlier, this was the section of the survey where there was theleast agreement and where the fewest responses from surveyrespondents were given. In discussions with the participantsat the Think Tank, improved underwriting techniques and theavailability of capital (a new item), were seen as crucial factorsaffecting the LTC system in the future. Availability of capitalrefers to the willingness of capital markets to fund LTCI (e.g.,buying insurer stock, issuing bonds to cover the liability). Itwas noted that capital availability is difficult for this productpartly because of the nature of the product (long tail on theliability) and also because of general global demands for capi-tal that provide other, more desirable investments. ¯

Appendix B: Highlights of the Survey Results for the SOA Long-Term Care Think Tank

Keynote Speaker

T he Honorable Dorcas Hardy, policychair of the 2005 White HouseConference on Aging, will share some

of the possible solutions that are percolatingthrough the results of that conference, whichadjourns on Dec. 14, 2005. Ms. Hardy bringspolitical acumen and a wealth of experiencein retirement financing and entitlementreform policies.

ActuarialReflecting the increasing maturity of theLTCI industry, the Actuarial Track will pres-ent sessions that challenge and inform boththe experienced and the less experiencedLTCI actuary. Actuaries new to the field willbenefit as they are exposed to higher-levelconcepts and to seasoned LTCI actuaries.Within each session, we will move quicklythrough the fundamentals of an issue, allow-ing more time for advanced material.

The sessions will have a focus on issuesthat actuaries working with maturingblocks of LTCI face today, along with inno-vative approaches and initiatives to addressthe challenges shaping the industry fortomorrow’s growth. The interdisciplinarysessions will focus on the value of collabo-rating with other disciplines and the

potential for actuaries to apply their skillsto assist in solving problems in multipleareas of a company.

ClaimsMeet claim experts from a variety of compa-nies. They will be sharing their experienceand knowledge about process improve-ments within the dynamics of an evolvingcare delivery environment. Innovations intreatment, claims data analysis, and informalcare and their respective effects on best prac-tices will be discussed.

ComplianceBuilding off the “Focus on Solutions” themeof this year’s conference, the ComplianceTrack will offer four sessions. The firstsession, titled “Compliance Solutions,” willhelp compliance professionals answer thequestions: How do you know if yourcompliance efforts are working? What busi-ness solutions exist? How can my companyestablish trust and confidence withconsumers?

The panel discussion will cover the LIMRA“CAP” process (Customer AssuranceProgram) and the IMSA Assessment process(Insurance Marketplace StandardsAssociation). For LTCI companies, CAP offersa simple, cost-effective means of determiningwhether customers really understand whatthey have purchased. IMSA promotes highethical standards in the sale and service ofmany insurance products, including LTCI.The internal assessment process, coupled withan assessment by an independent examiner,helps companies confirm whether they meethigh standards of ethical market conduct. Thediscussion will attempt to bridge these toolswith real-world experience in order to showother companies how such tools can be inte-grated into their organizations.

Keeping up-to-date with legislative andregulatory initiatives at both the federal andstate levels is always important to compli-ance professionals. The Compliance Trackwill host a panel discussion on what ishappening at the NAIC Senior Issues TaskForce related to the Long-Term Care


Upcoming Events: The 6th AnnualIntercompany LTCI Conference!

Insurance Model Act and Regulation, as wellas efforts in Washington to expand LTCIpartnership plans, adopt an above-the-linetax deduction, allow LTCI to be offeredthrough cafeteria plans and FlexibleSpending Accounts (FSAs), and the interestin combination products. Also, the panelwill explore the current state of the InterstateCompact and its effect on the LTCI industry.

Sometimes, “solutions” include a goodhealthy dose of preventive medicine. Withthat thought in mind, the Compliance Trackwill present a Class Action and LitigationExposure Prevention seminar. Attendees canbenefit from “lessons learned” by carrierswho have faced LTCI-related class actionlawsuits. Additionally, our panel of expertswill offer practical advice and tips to helpprevent lawsuits from disrupting yourcompany’s business.

Finally, during the interdisciplinary day ofthe conference, the Compliance Track willtackle the criticism leveled at our industryhead on by bringing together a cross-func-tional panel of experts with a goal of “fixing”what some people think is “broken.” What'sright and what’s wrong with LTCI? Have weovercomplicated the product? Is a simplerproduct design a cure for what ails us? Joinus for a lively discussion.

Field MarketingWhat worked in the mid-’90s doesn’t neces-sarily work now! The 2006 Conference willtake a look at what IS working now inmarketing and how the most successfulproducers in the country make it happen.The latest research will also be explored tounderstand how to better communicate withprospects and clients so that the message isheard and understood. Agent liability issueswill also be explored to head off troublebefore it starts. From the seasoned, creden-tialed professional to those just entering thischallenging specialty, come hear about thesolutions that you can put into practice now.Come meet and exchange ideas with the bestin the business and learn how to be part ofthe solution!

GroupThe 2006 Group Track will have a widerange of topics covered in five separatesessions. Several of these should be of inter-est to both those in group and those inindividual LTCI.

One session will be a discussion by apanel of experts on how group and multi-life products can co-exist. Often in today’smarketplace, true group products find them-selves competing head-to-head withgroup-like products, going by a number ofnames. Our experts will sort out what prod-ucts are out there and suggest how theseproducts can co-exist in ways that makesense for insurers and their customers.

Group LTCI is affected in unique ways bythe ever-changing legislative environment.At the federal level, there are congressionalemployment and retirement proposals, aswell as proposals to expand Medicare. Oneof our Group Track sessions will bring theaudience up-to-date on what is happening,what proposals now on the table could affectgroup LTCI and how group carriers canadapt if they are enacted.

One unique aspect of group insurance isthe opportunity to grow the size of thegroup in the years following issue. Duringthis session, we will examine how to achieveprofitable growth while building a success-ful, long-term relationship with your clients.Real case studies will help demonstratewhat strategies have been successful andhow to avoid failure.

Rate increases on in-force business havebeen made by several individual LTCI carri-ers, but we have seen little or no suchincreases in group LTCI. This interactiveforum will engage the audience in a discus-sion of why this is so. Are there differencesin the group product itself, or in the type ofgroup benefits typically sold that canexplain the lack of increases? Will we beseeing group LTCI rate increases in thefuture?

One reason sometimes offered to explainthe relatively low participation rates seen inthe group LTCI marketplace is that the prod-uct is too complex and does not fully meetthe needs of employers and employees. Inthis session, we will offer suggestions onhow group LTCI products can evolve tobetter meet these needs. Both the panel andthe audience will be challenged to createinnovative new designs for the future.

Home Office MarketingThis year’s sessions focus on the educationand marketing challenges the industry facestoday. As states and the federal government


Sometimes,“solutions”

include a goodhealthy dose of

preventivemedicine.

continued on page 10

contemplate significant changes to Medicaidas the payer of last resort for long-term care,private financing options, including insur-ance, have an even more critical role to play.But the marketing playing field has been achallenging one—with rate increases, indus-try consolidation and consumer resistance toacknowledging or understanding the needfor this product. Some companies are leav-ing the market. For those who remain, howdo they plan to grow and thrive? A CEO-panel discussion examines the majorstrategic marketing decisions companieshave had to make to survive and thrive inthis market.

The session focuses on the “how andwhy” of new product positioning, marketsegment and distribution channels, andexploring the risks and rewards of thosenew initiatives. Also, the Marketing Trackexplores current federal, state and privatesector initiatives to raise consumer aware-ness about the need to plan for long-termcare. Is anything working? What else shouldwe be doing?

We also look at the marketing challengefrom the perspective of both field and homeoffice through a dynamic dialogue exploringwhy sales are down and what can be doneabout it. On the group side, experts identifyand analyze the current “best marketingpractices” for positioning LTCI as anemployee benefit. The Marketing Track will

provide the latest insights into results of theindustry’s 15-year study of buyers, nonbuy-ers and the general population regardingawareness and interest in insurance. Weprovide important updates on research andcreative initiatives to expand and enhancemarketing success for this important prod-uct.

ManagementThe recent history of our industry has beenone of carrier exits, declining sales, in-forcerate increases and consumer indifference.And yet for those who see this market as thenext great frontier, income stability and salesgrowth signal that there is momentum andtremendous market potential behind theheadlines. Our Management Track will focuson understanding how this industry ischanging and the opportunists who willshape it into the next decade.

The sessions will be designed to under-stand and honestly face the inside andoutside views of our industry, to detail theissues of public policy, to discuss thecomplexities of managing a companythrough these issues, and to learn howcompanies might need to evolve to besuccessful in the future. Our interdiscipli-nary sessions will be devoted tounderstanding the importance of harnessingthe strengths of every discipline to ensurethe success of the enterprise.

The sessions will be geared to anyonewith a desire to learn more about managingan LTCI company in challenging times andhow solid business leadership can be thedifference between success and trying some-thing else.

OperationsThe Operations Track will deliver foursessions at the SOA conference in Anaheim.We are structuring our sessions to followthe “Solutions” theme of the conferenceand to be specific to LTC insurance, asopposed to general insurance operationsneeds. One session will be on how to makean outsourcing decision and how to makethe outsourcing relationship work well forboth the insurer and the vendor. Anothersession will be on leveraging six sigmaquality methodology and best practice


Upcoming Events: The 6th Annual Intercompany LTCI Conference! • from page 9

development to improve LTC operationalefficiency. Another session will focus onleveraging new and emerging technologyto improve LTC operational efficiency.Finally, the last session will focus on howthe LTC operation will be impacted by theuse of the universal ACORD application.

Policy and ProvidersDelivering insight into what shapes LTCservices and the government policy shiftsthat define its parameters for payment andproviders, this new track hosts sessions thatinvestigate trends in alternatives to institu-tional care; in government funding; and inpolicy changes around the use of homeequity. It also presents a report on theMedicaid Commission’s progress in devel-oping new programs and processes forMedicaid. Also, an update to the ThinkTank, hosted by the LTCI Section of theSociety of Actuaries, will be given.

UnderwritingIn six sessions, Underwriting focuses itsexpertise on technology and communicationsolutions. We will be exploring best practicesfor evaluating current medical tests andoutcomes, the effects of advanced medicaltechnology, the means of gathering the data,and how to provide up-to-date informationfor all levels of underwriting staff. Othersessions will review the give-and-take incommunicating with the field as well as theworkflows necessary for excellence in thefuture.

CEO ForumIn an era of market-pressuring investmentyields, slumping sales, carrier volatility,regulatory reform, price instability,consumer indifference, disappointing expe-rience emergence and uninspiring returns,many companies are thriving in LTCI. Ourpanel will be composed of the CEOs fromsome of the very best of these highlysuccessful organizations who seem to knowsomething that perhaps others have missed.They will spend a couple of hours takingyour questions and sharing with us whythey remain so bullish on this industry.

The intent of the session will be to permitmore questions from the floor than ever

before and to provide a forum for ourpanelists to share their infectious enthusi-asm for both the future of the LTCI industryand their vision for shaping it.

No one whose career is in any way tied tothe success of our industry should miss thissession!

Distributors Roundtable—Relationshipsin the Triad—Recruiting and SellingAn essential element to success in the evolv-ing LTCI marketplace is a betterunderstanding of the relationship amongProducers, MGAs and the Home Offices.Seen from these three perspectives, thissession will deal with more clearly definingwhat expectations should be—and what theindustry’s capabilities really are! The sessionwill also look at the next step: communica-tion. How does the “Chain of Order”communicate? Do we need to “Watch ourTerminology?” Do we really hear what issaid or something different based onpersonal business orientation and life expe-riences? The Sunday session will give the“Triad’s” take on the effect these challengeshave on recruitment and sales. ¯


Upcoming Events: The 6th Annual Intercompany LTCI Conference!

The intent of thesession will be to

permit morequestions from

the floor thanever before...

475 N. Martingale RoadSuite 600

Schaumburg, Illinois60173

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