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Regulators support Genworth's LTC rate hikes, CEO says


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Regulators support Genworth's LTC rate hikes, CEO says

President and CEO Thomas McInerney appears optimistic about getting regulatoryapprovals for increases on the company's long-termcare insurance policies, as well as for an unstacking plan that it could submit in the first half of2017.

"Premium rate actions are the single most significantlever we have to improve the performance of our LTC business over time," McInerney said on a call todiscuss earnings.

Genworth'steam is spending a significant amount of time working with stateinsurance departments and others to improve the performance of its older books,according to McInerney.The premium rate increases sought on the older generation policies will help Genworth reduce futurelosses on those policies and move them closer to breakeven on a go forwardbasis, he said.

"We believe this work is having a positive impacttowards regulators' appreciation of the importance of actuarially justifiedrate increases," the CEO said.

In line with its restructuring plan, Genworth is seeking regulatory approval to unstack theorganizational structure and separate Genworth Life & Annuity Insurance Co. and

An analyst asked if Genworth had submitted an unstackingplan to the regulators and what was their view on the process outlined so far.

McInerneysaid the unstacking plan would be submitted in parts and the final filings willbe made sometime in the first half of 2017. Regulators in Bermuda, as well asthose in New York, Delaware, Virginia and North Carolina, have been updated onthe unstacking plan and they "generally support it," he said.

McInerneysaid the company has been very clear with the regulators on the company'sfinancial challenges. He added that regulators understood the fact that theparent had a heavy debt load of $4 billion and it needed dividends from theoperating subsidiaries to service the interest in principal payments.

"Ithink, in the end, the regulators want Genworth to succeed," McInerneysaid. "They want us to remain and leave the private LTC business."

McInerneyalso said the company now expects the sale of its European mortgage insurance business toAmTrust Financial ServicesInc. to close in the second quarter, subject to customaryconditions, including requisite regulatory approvals.