Articles: Former Agent Urges Boycott Of CNA For Plan To Leave LTC Market
by Trevor Thomas
A former long term care insurance agent for CNA has called on agents to boycott sales of the company's long term care policies because the company plans to pull out of the market for all life products.
Martin K. Bayne, publisher of an online newsletter on LTC insurance, called the withdrawal a "violation of our trust" that will leave policyholders "orphans" who will not know who their future insurer would be.
Company officials declined to comment specifically on Mr. Bayne's criticism, although a spokesperson denied that any of its policyholders would be abandoned.
Bernard Hengesbaugh, CNA chairman and CEO, announced March 8 that CNA wants to sell its life insurance operations so it can concentrate on business insurance (see NU, Mar. 13).
Two days later, Mr. Bayne, in Clifton Park, N.Y., called for the LTC boycott. "This is the third such announcement in the industry in as many months, beginning with Fortis and The Travelers, and the implications may be ominous for policyholders," he said.
Mr. Bayne, who said he worked as a long term care agent for many years, charged that Mr. Hengesbaugh was showing more concern for the company's shareholders than its policyholders.
"We can't continue to do that in underwriting policies and maintain our credibility" as insurers, he insisted in an interview.
The head of an agency selling CNA products agreed, saying he was "taken aback" by CNA's planned withdrawal.
"We're at an important time in long term care, the beginning stages of its development," said Robert Pearson, head of CareQuest, a general agent headquartered in Madison, Wisc. "The timing couldn't be worse. It gives a message of no commitment from the same companies that brag about commitment and stability. When we talk to consumers, the company we're investing in for their protection has always been important."
Clark Walters, a spokesman for CNA, insisted that the well-being of its customers would be a major consideration when the company sells its life operations.
"We've been providing long term care insurance for 35 years, " he said. "We have a bond and a commitment to our customers, and that's not going to change, should a deal with another insurer be reached. "
Any company that buys CNA's life operations would have to be substantial because of the size of the deal, he argued, and state regulators would also ensure that any buyer would have the resources to back the policies.
