HomeMy WebLinkAbout1987-04-21; City Council; 8975; Crown Life final paymentAB# 897 3”
4-21 -87 MTG.
DEPT. PER
ITEM EXPLANATION
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TITLE: DEPT. HD. e - FINAL PAYMENT TO CROWN LIFE
CITY MGR.
On December 31, 1985, the City of Carlsbad terminated the Crown Life contract
for employee healthflife benefits. The contract included a retrospective
premium provision that stipulated that Crown Life could collect up to 16% of
expected claims during the accounting period if claims experience was adverse.
Claims greatly exceeded premium for the period August 1, 1985 through
December 31, 1985; therefore Crown Life is invoking this provision to reduce the
deficit.
Exhibit 2 summarizes the final accounting.
The remaininq deficit of $88,200.46 will be absorbed by Crown Life.
The data has been analyzed by Charles A. Bachman, an actuary with Towers,
Perrin, Forster & Crosby, the City’s employee benefit consultant. Exhibit 3 is
the letter from TPFC verifying the final accounting.
Payment of the retrospective premium will finalize the termination of the City’s
contract with Crown Life.
continue paying claims, and the final accounting represents the City’s last
financial obligation to Crown.
Crown no longer has any remaining responsibility to
FISCAL IMPACT
The appropriation of $33,243.38 from the contingency fund will reduce the
balance to $213,000.
EXHIBITS
1. Resolution No. 903/ accepting the final accountinq from Crown Life and
appropriating the necessary funds.
2. Crown Life/Final Accounting.
3. Letter from Charles Bachman.