Basics of Long Term Care Insurance
When selecting an insurance policy, you are also selecting an insurance company and you may wish to know how stable that company is financially.
Many firms rate the financial soundness of insurance companies. Some provide the ratings free while others charge a fee, ranging from a small fee for an online rating to a larger amount for quarterly reports. Each firm has a different rating scale and firms may differ in the conclusions they reach about a specific insurance company. Therefore, you may wish to check with more than one firm before selecting an insurance company. Listed below are some of the firms along with their phone numbers:
- A.M. Best Insurance Review
1-908-439-2200 ext. 5742
- Fitch Ratings
- Moodys Investor's Service
- Standard & Poors
One of the New York State Department of Financial Services's primary functions is overseeing the financial stability of insurance companies. A company's financial stability helps to assure the consumer that the company will be there to pay claims in the future. Few company failures have occurred in the past, and the Department of Financial Services remains confident that the statutory and regulatory framework currently in place will continue to afford the consumer the greatest protection and the least disruption to their coverage. When necessary, the Department of Financial Services will work with an insurer to take all reasonably feasible actions to rehabilitate its financial situation, including supervision of the reinsurance or sale of one or more blocks of business.
To date, New York has not experienced a company's financial failure involving long term care insurance. Several published opinions by the Department of Financial Services's Office of General Counsel have concluded that the Life Insurance Company Guaranty Corporation is applicable to long term care insurance policies issued by life insurance companies authorized to transact accident and health insurance in New York. Under this guaranty fund, life insurance companies that are members meet their obligations to the guaranty fund by offering coverage to those individuals who lose coverage under the insolvent firm. The coverage may or may not be the same as the prior coverage. This fund applies only to life insurance companies.