January 6, 2009: Pennsylvania Insurance Commissioner Joel Ario announced today that the Commonwealth Court approved his petition for an Order of Rehabilitation for Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co.
The order places the company under the statutory control of the Pennsylvania Insurance Department. It also grants the commissioner direct authority to preserve the company's assets and oversee its current financial situation and operations, while continuing to pay policyholder claims.
"It is the Insurance Department's responsibility to take action when a company is in financially hazardous condition," Ario said. "Placing Penn Treaty into rehabilitation will make certain that long-term care policyholder claims are paid, helping to ensure continuity of care for a community in need. "We gave Penn Treaty time to find a buyer and infuse new capital. To date, the company has been unable to raise enough capital, so we must protect the company's assets and put policyholder protections into place. I want to assure policyholders that their policies remain in effect during this rehabilitation and that their premiums should continue to be paid in order for coverage to remain in place."
This rehabilitation is the first receivership action the department has taken in more than four years. Penn Treaty, headquartered in Allentown, provides long-term care insurance to more than 126,000 policyholders. Together, Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co., write long-term care insurance in all 50 states and the District of Columbia.
The Insurance Department will perform an independent, comprehensive evaluation of the company's finances. Based upon this review and analysis, the department then will determine the viability of a rehabilitation plan. Any plan will give payment priority to policyholder claims.
Policyholders and other interested parties will receive further information about the rehabilitation in the future. In the interim, policyholders with questions on claims or non-claim matters may use the following toll-free number: 800-362-0700, ext. 3190.
Media interested in discussing consumer protections for those purchasing long-term care insurance, can contact Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance. Call 818-597-3227 or E-mail: Jesse Slome
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My wife and I purchased LTC insurance from Penn Treaty in 1999 when it was rated A by AM Best. In 2002, my wife was diagnosed with Alzhiemer's. We have been receiving up to 40 hours per week of home caregiver benefits since 2003. The disease has progressed these past seven years to the point where my wife is ready to be placed in a memory unit where monthly costs averages exceed $5500 a month. Home care is becoming very difficult to manage and I fear for her health and safety. Because of the confusion and uncertainties of Penn Treaty's situation, it is impossible to make rational decisions on a plan for her care without knowing the amount of benefits I will or will not receive. No one is able to give definitive information necessary for making specific plans for her placement. Most of the advice I have been able to get from Penn Treaty and the NC Insurance Guaranty Association has been cordial but non-specific - they say just to keep paying my premiums and making claims.
ReplyDeleteBeing a 24/7 spousal caregiver has been a test of every fiber of my being these past seven years and this recent confusing situation with Penn Treaty has made it a lot more difficult.
Is there anywhere I can turn for straight answers to my specific questions. Three such questions include:
1. Can I assure a nursing home that I will receive the benefits agreed to in the Penn Treaty Policy Statement for the duration of my wife's life, and when will I be able to present this information to a nursing home for their application process?
2. If the NC Guarantee Association has to cover the benefits (which have a $300,000 lifetime limit.), to what extent will they abide by the existing Penn Treaty Policy Agreement and when will I be able to present this information to a nursing home for their application process.
3. What will happen to my personal policy if Penn Treaty Defaults. (I understand that to purchase LTC at my age of 70, it will cost a minimum of 5 times what I am currently paying. )
Thanks in advance for any information you may be able to share with me.
Sincerely,
Allen J. Barwick
4509 Waterbury Road
Raleigh, NC 27604
919-872-7592