Wisconsin Proposes LTC Insurance Guaranty Account to Protect Policyholders

Wisconsin Assembly Bill 699 aims to establish a dedicated long-term care (LTC) insurance guaranty account within the state's existing insurance security fund to enhance policyholder protection in the event of insurer insolvency. This specialized LTC account would be funded through assessments on life and disability insurers operating in Wisconsin, apportioned based on each carrier's market share and previous year's premiums. The legislation distinctly categorizes insurers by their premium sources, differentiating between life insurers and disability insurers to determine assessment responsibilities. To mitigate the financial impact on insurers, the bill introduces tax credits equivalent to 20% of the LTC-related assessments, applicable to various state taxes and fees; notably, these credits are refundable exclusively for disability insurers. The bill reflects responsiveness to demographic trends increasing demand for LTC services, emphasizing the importance of a sustainable solvency safety net for policyholders. The legislative proposal is part of a broader legislative review that also addresses workers' compensation regulations, indicating a focus on insurance market stability in Wisconsin. Current market data shows the LTC insurance sector in Wisconsin is dominated by a few major companies, with CNA Insurance holding a majority share, followed by State Farm and American Family Insurance, highlighting the significance of targeted regulatory protections in a concentrated market.