Wednesday, April 13, 2016

No. 155: Genworth's Long-Term Care Insurance—Correction of an Error in the Preceding Post

On April 7, 2016, I posted No. 154 entitled "Genworth's Long-Term Care Insurance and the Company's Destacking Plan." When I sent the item to Genworth that day, President and Chief Executive Officer Thomas J. McInerney brought an error to my attention.

In the section entitled "The Reinsurance Repatriation," I mentioned Brookfield Life and Annuity Insurance Company (BLAIC), Genworth's primary Bermuda domiciled captive reinsurance subsidiary. I said that half the long-term care insurance business of Genworth Life Insurance Company (GLIC) has been ceded to BLAIC, and I said incorrectly that the reinsurance involves $1 billion of reserve liabilities. The correct figure is $10 billion.

I took the incorrect figure from Schedule S, Part 3, Section 1, on page 43.2 of GLIC's 2015 statutory financial statement. The correct figure is in Schedule S, Part 4, on page 45. Also, a discussion of the matter is in the "Notes to the Financial Statements" on pages 19.31 and 19.32. The discussion says that the $10 billion of reserve liabilities ceded to BLAIC relate to long-term care insurance, and that the $1 billion figure relates to fixed deferred annuities.

I regret the error. So that readers can see the statement pages to which I refer in this correction, I am making available a complimentary four-page PDF containing pages 19.31, 19.32, 43.2, and 45 of GLIC's 2015 statutory statement. Email and ask for the four pages from GLIC's 2015 statutory statement.