Continental Casualty Long-Term Care Premium Increases Class Action

Long-term care insurance is costly. Because people usually pay for it for years, or even decades, before they obtain any benefit from it, price increases are a concern. The complaint for this class action alleges that Continental Casualty Company has not kept its promises on “inflation protection” and the limitation of premium increases.

Plaintiff David Sieving purchased a certificate of insurance under a group long-term care policy, with a coverage effective date of July 1, 2003. Continental issued and delivered the policy.

The policy certificate says, “We cannot change the Insured’s premiums because of age or health. We can, however, change the Insured’s premiums based on his or her premium class, but only if We change the premiums for all other Insureds in the same premium class.”

However, a September 1, 2016 letter from Continental informed Sieving that his premium would increase by 95.5% over the following two years. Sieving’s premium, previously $124.48 per month, would increase to $243.36.

This increase was not levied on all members of his premium class. Since Continental offers coverage in different states, it must get authorization from each state for rate increases. States vary in terms of what they were willing to approve. For example, while it requested a 95.5% increase for Connecticut as well, that state approved only a 15% increase.

The complaint claims that, as a result, some insureds are “in effect subsidizing the premiums and risks of other insureds… Further, because insurance regulations generally limit insurers to collecting administrative costs and a reasonable profit, the disparate premium increases introduce a systemic imbalance…”

Sieving had also purchased an expensive rider to protect him from inflation and the rising costs of long-term care. Without it, his initial premiums would have been $50.73. This is 218% of his actual initial premiums of $124.48.

The premium increases were apparently meant to cover rises in the cost of long-term care. The complaint claims that this made Sieving’s “inflation protection” illusory: “Raising premiums to cover the rising costs of long-term care is the exact opposite of inflation protection.” It says that consumers would expect “that by paying more than double for inflation protection in the form of benefit increases, premiums would be expected to remain stable even if the costs of long-term care increased…”

Two classes have been defined for this action.

  • The Nationwide Group Class is all individuals who bought or are insured under a Continental group policy for long-term care coverage delivered in Illinois, whose group policy states, or was marketed with material stating, that premiums will not increase unless they also increase for all other insureds or all other insureds in a premium class, age category, or other specific category.
  • The Inflation Protection Class is all individuals who bought or are insured under a Continental group policy for long-term care coverage delivered in Illinois, whose group policy certificate includes an automatic annual benefit increase.

The counts include breach of contract and fraud, among other things.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Continental Casualty Long-Term Care Premium Increases Complaint

August 31, 2020

Long-term care insurance is costly. Because people usually pay for it for years, or even decades, before they obtain any benefit from it, price increases are a concern. The complaint for this class action alleges that Continental Casualty Company has not kept its promises on “inflation protection” and the limitation of premium increases.

Continental Casualty Long-Term Care Premium Increases Complaint

Case Event History

Continental Casualty Long-Term Care Premium Increases Complaint

August 31, 2020

Long-term care insurance is costly. Because people usually pay for it for years, or even decades, before they obtain any benefit from it, price increases are a concern. The complaint for this class action alleges that Continental Casualty Company has not kept its promises on “inflation protection” and the limitation of premium increases.

Continental Casualty Long-Term Care Premium Increases Complaint
Tags: Insurance, Long Term Care Insurance, Premium Increases, Unfair or Improper Increase in Premiums