SUBJECT/RECOMMENDATION:
Title
Approve a two-year renewal of the city paid life insurance benefit with the current carrier (Unum) at an increase of 74.8% ($103,927) over the current budgeted cost and authorize the appropriate officials to execute same. (consent)
Body
SUMMARY:
The City currently provides life insurance coverage to employees: The coverage limits are:
CWA: One and one-half times annual salary up to a maximum of $50,000.
FOP and IAFF: $2500.
SAMP: $2500 plus one time annual salary (Voluntary benefit that is employee paid up to 5 time's annual salary).
The loss ratio on the basic life coverage was 215% with 12 claims for active employees and 41 retiree claims. A breakdown by insurance class is:
Base life
Paid Premium - $309,177
Paid Claims - $678,485 (11 claims)
Incurred Claims - $734,307 (Includes waiver clms and reserves)
Average claim - $61,680
Voluntary Life
Paid Premium - $163,371
Paid Claims - $150,000 (1 claim)
Incurred Claims - $249,037 (Includes waiver claims and reserves)
Average claim - $150,000
Retiree Life
Paid Premium - $47,753
Paid Claims - $41,036
The City Benefit consultant went to market to 15+ carriers and received only one response (Voya) insurance. The current carrier matched the Voya bid.
USE OF RESERVE FUNDS:
Funding for this contract will be provided by a 1st quarter budget amendment allocating Central Insurance Fund reserves in the amount of $103,927. The Central Insurance currently has an estimated $8.3 million in available reserves.