Wall Street takes on long-term care payouts as insurers balk at costs

Some U.S. insurers are turning to Wall Street’s financial wizards for relief from the liabilities of their long-term care (LTC) policies, posing a challenge for regulators worried about how new industry players will tackle the risks involved. These policies help support the provision of care to those unable to handle everyday tasks, such as bathing and cooking, by funding assisted living or nursing home arrangements. Many have become financially toxic for insurers, because of soaring healthcare costs and rising lifespans. A few investment firms are willing to take on these LTC contracts, betting they can invest the premiums from the policies to generate strong enough returns to cover the payouts, and even turn a tidy profit.