Consumer advocate David Horowitz shares his LTC advice with millions of Costco customers in the March 2015 edition of The Costco Connection.
You can read the complete article on-line by clicking this link:
Genworth is selling one of its life subsidiaries (not LTC company) and the CEO got a big pay cut.
CEO pay tied to performance is a good thing for shareholders & policyholders. It's a sign of honest struggles as he brings a new, deeper understanding of and financial discipline to the LTC business. As I said last fall, part of the financial "loss" - a good 1/2 or more - was attributable to the company putting over a half-billion into policy reserves. Shareholders lost value, but policyholders gained value. The CEO's lower comp now is a result of the decisions made last year, not a sign of more, new problems.
This article notes, and others are highlighting GW's attempt to sell one of its life/annuity companies. That is NOT the LTC business. At this point it appears the company is working to focus on and shore up its biggest business, LTC. The sale of a different life & annuity subsidiary will give the company more money to use to stabilize and improve its core businesses: LTC insurance and private mortgage insurance.
Again, policyholders are secure with very strong reserves. Shareholders are suffering. Importantly-different perspectives.
Many wonder if Genworth will, or should, stop selling LTCI. That won't solve any of their problems. New biz rates are higher, right-er priced for actual historical experience and equal to its peer competitors, if not on the high end of new rates. New sales are not the problem, it's the 35 years of old, under-priced business that continues to challenge as they work to bring those rates up closer to the new, more-experienced, "correct" rates in order to sustainably pay claims.
Another reality: no one is buying LTC blocks of biz, so GW must own what it has and manage it to the best on-going value and protection for policyholders and shareholders. Again, currently, this is an investor/shareholder problem, not a policyholder problem.
LTC policies are guaranteed renewable, the reserves are mandated to meet regulatory minimums to pay claims now and in the future, and the money now in reserve (including the new $500-million+) cannot be taken back out or used for anything other than policyholder claims.
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