Active long-term care policies will not be canceled, except by the policyholder
The Pennsylvania Department of Insurance has filed petitions to seek orders of liquidation for Penn Treaty Network America Insurance and its subsidiary, American Network Insurance.
Joel Ario, Insurance Commissioner, said: “We have been on-site analyzing the organizations’ assets, liabilities, reserves and surpluses since we began our rehabilitation action in January. Our comprehensive, independent evaluation has determined that the companies do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states. In the current circumstances, those rate increases simply would not be fair to policyholders.”
We have instead petitioned for an orderly liquidation of all company assets in which policyholders’ claim payments are our number one priority. Additionally, active long-term care policies will not be canceled, except by the policyholder, so they will be transitioned to the states’ guaranty funds once an order takes effect. Guaranty funds have the right to assess other insurance companies to cover policyholder claims up to coverage limits that vary by state, he added.
However, the petitions are subject to the approval of Commonwealth Court.
Penn Treaty Network America and American Network provide long-term care insurance in all 50 US states and the District of Columbia.