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Home My WebLink About1982-12-07; City Council; Resolution 70781 2 3 4 5 6 7 8 9 IC 11 12 12 14 If 1t 1: 1t l! 2( 2: 2: 2; 21 21 2( 2’ 21 RESOLUTION NO. 7078 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,CALIFORNIA APPROVING MEMORANDUM OF AGREEMENT WITH CROWN LIFE INSURANCE COMPANY FOR EMPLOYEE INSURANCE. WHEREAS, the City Council approved a revised schedule of ienefits for the employee insurance program on July 20, 1982, and WHEREAS, the revised schedule of benefits became effective lugust 1, 1982, and WHEREAS, the City staff and Crown Life Insurance Company have iegotiated an agreement providing for a retrospective premium 3djustment for medical, dental, and vision insurance. NOW, THEREFORE, BE IT RESOLVED by the City Council of the Zity of Carlsbad as follows: 1. That the above information is true and correct. 2. That the Memorandum of Agreement attached hereto as Exhibit I is hereby approved. That the Mayor is authorized and directed to sign the agreement on behalf of the City. PASSED, APPROVED AND ADOPTED at a regular meeting of the City 3. Council of the City of Carlsbad held the 7th day of Decenter I 1982, by the following vote, to wit: AYES : Council Me” Casler, Lewis, Kulchin, Chick and Presmtt NOES: None ABSENT: c. d. e& SLER, Mayor ATTEST : (SEAL) MEMO~ANDUM OF AGREEMENT Retrospective Premium Adjustment G-54018 City of Carlsbad AGREEMENT is m'ade between Crown Life Insurance Company (hereinafter called the Company) and City of Carlsbad (hereinafter called the Policyholder). WHEREAS pursuant to an application made by the Policyholder, the Company issued a policy of group Life and Health Insurance to the Policyholder as Policy No. G-54018 insuring eligible employees of the Policyholder from August 1, 1982, under said policy which continues to be in full force and effect. AND WHEREAS it is ingended to establish a method of premium adjustment under the above.*policy whereby the Company and the Policyholder shall agree to adjust premium depending on the claim and premium experience under the said policy, the method of adjustment to be known as Retrospective Premium Adjustment. AND WHEREAS this method applies to the policy period which is defined as being the period commencing August 1, 1982, and ending July 31, 1983. AND WHEREAS the following shall be considered in the computation: 1. "Premiums1' shall refer to the billed health premiums for the policy period under consideration and shall not include the premiums applicable to the Life and AD&D benefits. 2. llSpecific Stop Loss Charge" shall refer to an amount equal to two point four percent (2.4%) of the premiums. EXHIBIT I 3 -2- 2a. IlAggregate Stop Loss Charge" shall refer to an amount equal to two point two percent (2.2%) of the premiums. 3. "Incurred Claims!! shall refer to the total health cash claims processed at the Company's Home Office during the policy period together with-changes in the reserve for incurred ,but unreported claims but shall exclude any Life and AD&D claims. In addition, health claim amounts in excess of $50,000 per individual processed during the policy period shall be pooled and excluded from the retrospective premium calculation in consideration of the above pooling charge. 4. "Expenses" shall mean the amount of expenses assigned the aforementioned policy in accordance with the Company's standard expense allocation formulas as established from time tq time. the expenses shall be equal to fourteen point five percent (14.5%) of premium. For the policy period commencing August 1, 1982, 5. "Net Cost" shall mean an amount equal to the incurred claims plus expenses plus specific stop loss charge plus aggregate stop loss charge. 6. '?Expected Claims!! shall mean premiums less expenses less specific stop loss charge less aggregate stop loss charge. NOW THEREFORE in consideration of the payment or payments to be made by either party under this agreement, it is hereby agreed that should the expected claims be in excess of the incurred claims for the policy period under co:-;ideration, the Company shall declare such excess amounts as a surplus. The surplus will be refunded in cash. 4 .......... ._ .. .... - ......... .., ........ : ,..-. ........... -3- Furthermore, it is hereby agreed that should the incurred claims exceed the expected claims for the policy period under consideration, then the Company shall declare as a deficit the difference between the incurred claims and the expected claims. Policyholder to the Company, payable within sixty (60) days after receipt of written notification. liable for any one policy period by direct payment for more than sixteen percent (16%) of expected claims. Such deficit shall be recovered by direct payment by the. Under this Agreement, the Policyholder shall not be Interest shall be credited to the surplus or charged against the deficit from the end of the policy period under consideration to the date of the payment made by either party under this agreement. period commencing August 1, 1982, shall be based on the prevailing 90 Day The rate of interest for the policy Treasury Bill rate less one percent (1%). periods may be subje2t to change. Interest rates for subsequent policy This Agreement shall be effective during the policy period unless the policy is terminated prior to the end of the policy period, in which case this Agreement shall be effective to the termination date of the policy. In the event that policy termination occurs prior to the end of the policy period, a];, obligations and calculations under this Agreement shall be applied on a pro rata basis based on the number of months in the policy period during which this Agreement was effective. m The Retrospective Premium Adjustment method may be carried on for subsequent policy periods, in which event this agreement shall automatically idnew unless otherwise cancelled in writing by either party 30 days prior to the beginning of each subsequent policy period. -4- This Agreement will be declared null and void if not signed and returned to the Company by the Policyholder within sixty (60) days of the date of signature by the Company. Signed and Sealed at Toronto, Canada this day of 1982. CROWN LIFE INSURANCE COMPANY K. FRASER TITLE: Assistant Superintendent Group Underwriting. Dept. Signed and Sealed at this day of 1982. CITY OF CARLSBAD TITLE :