Consent Order approving and limiting AF&L Insurance Company rate increases for HHC-4 long-term care policy forms
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A Florida Office of Insurance Regulation consent order approving and limiting rate increases submitted by AF&L Insurance Company for specified long-term care (HHC-4) policy forms and setting conditions for implementation and policyholder options; affects AF&L policyholders in Florida with the identified forms.
The Office approves specified multi-year rate increases for AF&L's HHC-4 long-term care policy forms subject to limitations and conditions.
Rate increases shall be implemented over a period of three years with the first increment beginning at least 45 days after approval and subsequent increments on or after each anniversary, with no more than one increase per policyholder in any 12-month period.
AF&L must offer policyholder options to lower premium costs, including reducing benefit period, increasing elimination period, or accepting a paid-up policy.
The amount of the approved rate increase varies by issue age and policy form, with many entries showing a 26.0% increase for HHC-4 forms and lower increases for higher issue ages.
A rate increase on Non-Inflation Forms HHC-4 of up to 26.0% (with age-specific variations) is approved and must be implemented over three years with constraints on timing.
For policyholders wishing to lower premiums, AF&L must offer options including reduced daily benefit, reduced benefit period, increased elimination period, or a paid-up policy with maximum benefit equal to premiums paid less claims.
AF&L may not implement any further rate increase on the Non-Inflation HHC-4 forms for five years from implementation of this approved increase, unless a new filing is made and any approved increase would not be implemented before the five-year period expires.
Approved Rate Increase Conditions and Age-Based Adjustments
Approved rate increase conditions
Conditions and procedural limits that apply to the Office‑approved rate increases and the options AF&L must offer to affected policyholders:
Rate increase by issue age
Approved rate adjustments by issue age for Non‑Inflation HHC‑4 forms (examples and ranges shown in the Order):
Affected Forms and Approved Increase Summary
| HHC-4 | Long-term care policy form referenced in the order |
| RateIncrease:26.0% | Primary approved rate increase applied to many issue ages |
Implementation Limits and Policyholder Options — Actions Required of Insurer
Implement approved increases in three annual increments; moratorium and timing limits
Rate increases approved by the Order must be implemented over a three-year period, with the first increment imposed beginning at least 45 days after the date of approval and the following two increments imposed on or after each anniversary of the prior year's increase. No policyholder shall receive more than one rate increase within any consecutive 12-month period. Except for the increase approved by this Order, the company shall not implement any further rate increase on the specified block for five years from implementation; the company may file earlier, but any subsequently approved increase may not be implemented prior to expiration of the five-year period.
- Implementation period: 3 years with annual increments
- First increment: at least 45 days after approval
- Subsequent increments: on or after each anniversary of prior increase
- Maximum frequency: one increase per policyholder within any 12-month period
- Five-year moratorium on further increases for the specified block unless a new filing is made (but no implementation before the five-year period expires)
Offer policyholder premium-reduction options (benefit reduction, elimination period, paid‑up)
AF&L must offer policyholders on the Non-Facility Block options to lower premium costs: accept a reduction in the daily benefit, accept a reduction in the benefit period, or accept an increased elimination period; for Inflation Forms policyholders similar options (including accepting a paid-up policy) are required per the Order.
- Reduce the daily benefit provided by the policy
- Reduce the benefit period provided by the policy
- Increase the elimination period (raising initial out-of-pocket before benefits begin)
- For Inflation Forms, accept a paid-up policy option is specified elsewhere in the Order
Terms and Block Definitions
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