FLTCIP Experience Fund
The FLTCIP experience fund is a separate account, held by John Hancock Life & Health Insurance Company (John Hancock), that is used to administer FLTCIP assets. The experience fund receives all of the premiums collected from FLTCIP enrollees and the fund's investment earnings. The experience fund belongs solely to the FLTCIP. The FLTCIP is sponsored and regulated by the U.S. Office of Personnel Management (OPM) and insured by John Hancock under a group long term care insurance policy. The money in the experience fund can only be used to pay claims and cover expenses and fees for the FLTCIP. If the FLTCIP ever changes its insurer, then the fund will move to the new insurer.
John Hancock invests the fund's assets according to an investment strategy approved and monitored by OPM. Any fund gains from investment returns that generate net income beyond target levels or claims payments and expenses that fall below projected levels are retained by the experience fund, not John Hancock.
Monitoring and Analysis
The experience fund is monitored by John Hancock and OPM who review current and projected claims and expenses, along with future premiums and investment income, to make projections about the experience fund over the course of time.
In formulating its projections, John Hancock reviews all relevant experience, including the FLTCIP's accumulated claims experience, John Hancock's individual and group long term care insurance (LTCI) claims experience, and general LTCI industry claims experience.