Of course LTC insurance is subject to NC laws, but it’s not regulated in the same way as health insurance b/c it is sold across state lines. The NC insurance commissioner can’t do anything about the formation of the trust. If a health insurer tried a similar move our commissioner would be able to act.

The PA Dept of Ins. is facing a very difficult situation with a different insurer that might need to go into conservatorship next month. I think the PA DOI’s conclusion regarding the Conseco policies, is that a well-managed trust now is better than trying to mop up a big mess through conservatorship later.

At least by putting the policies into a trust, the Pennsylvania Insurance Commissioner can do a better job administering the policies, cutting costs, and paying the claims than Conseco Senior Health had been doing.

It is true that the PA DOI had the authority to do this and approved it and they did it for the benefit of all present and future claimants holding the Conseco policies. They did it because Conseco Senior Health was on the road to insolvency.

However, it is NOT true that the policies are not regulated by NC law. Each policy that was purchased by a NC resident is still regulated by the NC insurance regulations. The only difference is that now the policies are being administered by a non-profit trust, run by the PA Insurance Commissioner. Any future premium increases would still need to be approved by the NC DOI.

As with any insurance purchase, it’s very important to check the financial ratings of the LTC insurers you are considering.