Long Term Care Certification Practice Test

Which government body must approve rates for long-term care policies?

1. NAIC

2. State insurance department

3. Federal insurance office

4. Department of Health

The correct answer is: NAIC

The correct response is that rates for long-term care policies must be approved by the state insurance department. This department is primarily responsible for regulating insurance practices within a state, including setting standards for premium rates on long-term care insurance policies. Each state has its own insurance department, which ensures that the rates charged by insurers are not discriminatory, unfair, or overly burdensome for consumers. The National Association of Insurance Commissioners (NAIC) plays a supporting role by providing model laws and standards to assist state regulators, but it is not a governing body that directly approves rates. The Federal Insurance Office does not have authority over long-term care insurance rates, as its focus is generally on the stability of the insurance industry as a whole. Additionally, the Department of Health primarily deals with health care policies and regulations rather than specifically overseeing the rates of insurance policies.