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Following is a Letter to the Editor of the National Underwriter in response to Samuel X. Kaplan's article "Policyholder In The Driver's Seat"óDecember 14, 1998: 

National UnderwriteróJanuary 4, 1999 

Responsible LTC Companies Are Putting the Client First


Samuel Kaplan, in the Dec. 14, 1998 issue of National Underwriter, shares some creative ideas for long term care insurance product design. Mr. Kaplan suggests we "look at the real needs of LTC policyholders and their families, not the needs of the insurer, and find ways to shape benefits to meet these requirements." 

While I commend Mr. Kaplan for his dedication to policyholder needs, thinking about the policyholder without ensuring the long-term viability of the company simply is not in the best interest of the consumer. 

Responsible companies offering the liberal benefits suggested by Mr. Kaplan would have to charge significantly higher premiums to ensure the viability of the company. But the product then becomes unaffordable and undesirable in the eyes of a prospective policyholder. Irresponsible companies, on the other hand, would price the product competitively (perhaps to gain market share), then likely impose significant and regular rate increases on the policyholders as claim experience develops. 

All of us in the industry, including insurers, marketers and agents, should be striving to ensure that all long term care insurers can meet their long-term obligations without unduly burdening policyholders with premium increases. 

There are many responsible companies today that design flexible products that meet the changing needs of policyholders and their families. Not only are these products well received in the marketplace, but the majority are backed by responsible companies willing and ready to take the risks associated with the products. If responsible companies aren't offering the more liberal benefits suggested by Mr. Kaplan, perhaps it's because they are putting the client first. 

Vice President and Actuary
Fortis Long Term Care
Milwaukee, Wis.

Samuel X. Kaplan's response

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