A North Dakota district court judge has blocked a long-term care insurance rate increase from a financially troubled carrier placed under Pennsylvania regulator’s control in 2021, ruling the company violated state insurance laws by attempting to bypass required approvals.
The North Dakota Insurance Department said the insurer sought to implement premium hikes and benefit reductions without the commissioner’s approval, as required by state law.
The ruling prevents immediate changes that would have affected 317 policyholders. Among them, 77 would have seen annual premiums rise from $2,432 to $4,036, according to the department.
On March 10, the judge granted summary judgment in favor of North Dakota Insurance Commissioner Jon Godfread, who challenged the increase in a legal dispute dating back to 2022. Godfread had sued then-Pennsylvania Insurance Commissioner Jessica Altman, who was later on succeeded by Mike Humphreys. A temporary pause had been placed on the rate hikes in 2023 while the case was under review.
“This ruling upholds North Dakota’s right to protect and preserve its laws, regardless of who is violating them,” Godfread said in a statement. “My priority is to protect North Dakota consumers, and when a company is attempting to subvert our laws and undercut the state-based system of insurance regulation that has existed for the past 150 years, I have a duty to stop it.”
Pennsylvania’s insurance commissioner has 60 days to appeal the decision to the North Dakota Supreme Court.
Senior Health Insurance Co. was placed into rehabilitation in 2020 after its risk-based capital report triggered regulatory intervention. A court-approved rehabilitation plan in 2021 required policyholders to make choices regarding premium adjustments or benefit reductions.
The company was established to manage a closed block of long-term care policies previously overseen by Conseco Inc. It ceased issuing new policies in at least 2003, according to its website.
Attempts to obtain comment from the Pennsylvania Department of Insurance were unsuccessful.
