IAC increases premium rates
posted 02/12/09
MISSA and the Association of Retired Persons in the Marshall Islands are covered entities under the Group Insurance Policy with the Individual Assurance Company (IAC). The policy was issued in April 2005 and represented by the Office of the RMI Public Service Commission (as the Policyholder) and also included RMI Government employees and other government agencies like MIMRA, MWSC, NCT, Ports Authority and KalGov.
Initially, under the retiree group insurance policy, the designated beneficiary(ies) who is(are) usually the immediate family of an enrolled member who had died, is entitled to receive $5,000. The monthly premium was $30.33.
Under the same group policy, MISSA employees were covered with Term Life Insurance equivalent to three times the annual salary of the enrollee at a bi-weekly premium of $0.37 per $1,000 of coverage.
In 2007, IAC claimed that claims paid to deceased retirees have far exceeded the amount of premiums being received. Thus, IAC was forced to decrease the benefit to $4,000 with the same monthly premium of $30.33. There were no changes in the MISSA employee policy.
(Picture) More than 200 retirees enrolled in the group insurance plan in April 2005.
In mid-2008, IAC met again with PSC officials to discuss further changes in the policy. IAC claimed that due to increased losses, it was necessary to increase the premium rates to sustain the program for the entire group. Subsequently, PSC agreed to increase the bi-weekly premium for employees from $0.37 to $0.49 per $1,000 of coverage. Likewise, the retiree premium was also increased from $30.33 to $35.75 bi-weekly. The increases became effective starting October 1, 2008.
MISSA and the retirees were not advised of the IAC visit, so the two parties were not able to attend the discussion between PSC and IAC. As it will take sometime for MISSA to advise all enrolled retirees of the increase, IAC agreed to extend the deadline for the rate increase (in retiree premium) to no later than April 1, 2009.