Proposed Recommendation from FACI to FIO from the Availability Subcommittee 

FIO Activities Arising from the Federal Interagency Task Force on Long-Term Care 

Insurance 

September 29, 2020 

Recommendation: FACI recommends the following actions by FIO in response to two 

recommendations in the “Report of the Federal Interagency Task Force on Long-Term Care 

Insurance” (“Report”). Among other things, the Report recommends that 

 FIO coordinate an analysis of the impact of LTC combination products on the market for 

LTCI risk protection;1 and 

 Federal policymakers work with their state counterparts and with private sector stakeholders 

to evaluate and monitor the market for limited LTCI, including potential impacts on the risk 

pool for longer-term products and on Medicaid2 

The recommended actions for FIO are: 

1. Identify key issues / metrics that should be part of market monitoring for these products; 

2. Identify current information about participants, sales, claims and other data relevant to 

inform the key issues in these two product markets; 

3. If needed, propose any additional data collection for states/NAIC or FIO or others to monitor 

these markets: and 

4. Include analysis of these markets in FIO's annual report. 

Discussion 

Background 

In 2019, FACI suggested work streams for the Availability Subcommittee. One of the work 

streams was long-term care insurance (“LTCI”). More specifically, FACI asked the 

subcommittee to review the expected output of the Federal Interagency Task Force on LTCI and 

the output of the NAIC LTCI (EX) Task Force. 

1

 Report at page 5. The Report is available at https://home.treasury.gov/system/files/136/Report-FederalInteragency-Task-Force-Long-Term-Care-Insurance.pdf

2

 Report at page 5. 
 

 

 

                                                            

 

Availability Subcommittee Proposed Recommendation on LTCI for FACI Consideration 

September 29, 2020 

Page 2 

The NAIC LTCI (EX) Task Force met largely in regulator-to-regulator only sessions through 

2019. In mid-2020, the TF created three working groups to examine restructuring options for 

LTCI blocks of business, a national approach to LTCI rate review and guidance for insurers 

offering reduced benefit options in lieu of a full rate increase.3

 FACI will hear an update on the 

NAIC activities at the September 29, 2020 FACI meeting and the subcommittee will continue to 

monitor the LTCI work of the NAIC and offer a recommendation if and when appropriate. 

The Interagency Task Force issued their Report in August 2020. The Report included 8 

recommendations, which are briefly summarized as: 

1. FIO coordinates an analysis of the impact of LTC combination products on the market for 

LTCI protection; 

2. FIO monitors the market for Short Term LTCI; 

3. Congress amends the Internal Revenue Code to permit payment of incidental benefits 

under qualified LTCI policies; 

4. Congress amends the Internal Revenue Code to revise inflation protection to authorize 

Treasury to set inflation protection standards for qualified LTCI policies; 

5. Congress authorizes HHS to amend inflation protection for LTC partnership LTCI policies; 

6. Congress amends or authorizes HHS to amend federal law references to NAIC models; 

7. FIO monitors NAIC action on national approach to LTCI rate reviews; and 

8. Federal agencies work through the Financial Literacy Education Commission to assess and 

improve federal education resources on LTC. 

In reviewing the Report’s recommendations for possible activity by FIO, the subcommittee 

noted that recommendations 3, 4, 5 and 6 are legislative proposals for Congressional action. 

We don't see a significant role for FACI or FIO on these issues, since the recommendations 

are already coming from a number of federal agencies. FIO is part of one of those agencies. 

Item 7 is already part of FIO's Dodd Frank responsibility and FIO is already doing such 

monitoring. We don't see anything new or additional here. 

Item 8 doesn't seem to be FIO‐focused as the FLEC has access to organizations whose focus 

is LTC, LTSS activities or education. 

3

 Information about the work of the LTC (EX) TF can be found here: https://content.naic.org/cmte_ex_ltci_tf.htm 

The three work streams of the TF are described at pages 4-5 of the TF’s August 2020 meeting materials at 

https://content.naic.org/sites/default/files/national_meeting/LTCI%28EX%29TF_080720_materials.pdf 
 

Availability Subcommittee Proposed Recommendation on LTCI for FACI Consideration 

September 29, 2020 

Page 3 

Items 1 and 2 seem like a reasonable focus (beyond general market monitoring) for FIO 

activities. Consequently, our recommendations, set out above, focus on possible FIO activities 

regarding these two Report recommendation. 

While health insurance is outside the scope of FIO's Dodd Frame mandate and authorities, an 

issue of interest to the states is the impact of LTSS demand and availability and take‐up of 

LTCI on state Medicaid budgets. The subcommittee welcomes any guidance from FACI and 

FIO on further work on this topic.