ANALYSIS OF LIFE INSURANCE PROGRAM - STATE OF CONNECTICUT - Exhibit D -Group Life Insurance Benefits for State Employees and Retirees - Request for Proposals (RFP) - March 21, 1997

State of Connecticut

Exhibit D

ANALYSIS OF LIFE INSURANCE PROGRAM - STATE OF CONNECTICUT
The Analysis of Life Insurance Exhibit displays the cumulative program results for the last five policy periods. The results of this review show a surplus of $1,520,279 has developed for the year ending July 1, 1996 bringing the cumulative balance as of July 1, 1996 to $267,923.
1995/1996 1994/1995 1993/1994 1992/1993 1991/1992
Actual Actual Actual Actual Actual
1. Fund Balance Beginning of Year ($1,252,355) ($900,156) ($399,793) ($477,087) $0
2. Revenues
(a) Premiums $10,688,428 $10,398,488 $9,573,312 $8,815,517 $8,885,230
  • Basic Life
$10,337,772 $10,037,397 $9,225,413 $8,536,832 n/a
  • Supplemental Life
$350,656 $361,091 $347,899 $278,685 n/a
(b) State Payments for Expense Charges 0 0 0 0 0
(c) Interest Earned on Premium Waiver Reserve 257,501 226,847 229,325 329,330 381,504
(d) Interest on Cash Flow & Claim Reserve 70,047 83,338 52,900 66,048 79,092
* (e) Interest on Premium Stabilization Reserve 0 0 0 0 0
(f) Total Revenues $11,015,976 $10,708,673 $9,855,537 $9,210,895 $9,345,826
3. Benefits
(a) Paid Life Insurance Claims
  • Basic Life
$8,816,700 $10,252,700 $9,686,300 $8,817,500 $9,885,400
  • Supplemental Life
$215,000 $100,000
(b) Interest Paid to Beneficiaries on Delayed Claims 43,002 36,643 49,783 43,137 67,899
(c) Total Benefits $9,074,702 $10,399,343 $9,736,083 $8,860,637 $ 9,953,299
4. Change in Reserves
(a) Unpaid Claim Reserve $29,715 $126,401 $282,402 $169,341 $11,367
  • Basic Life
$31,176 $75,848
  • Supplemental Life
-$1,461 $50,553
(b) Premium Waiver Reserve (263,220) (83,322) (180,352) (425,646) (195,556)
(c) Premium Stabilization Reserve 0 0 0 0 (422,171)
(d) Total Changes in Reserve ($233,505) $43,079 $102,050 ($256,305) ($606,360)
5. Expense Charges
(a) State Premium Taxes $240,490 $246,756 $239,333 $220,388 $ 222,131
(b1) Conversion Charges - Administration 17,030 15,902 4,752 5,648 6,358
(b2) Conversion Charges - Premium Subsidy 68,120 63,608 19,008 22,592 25,432
(c) Administration, Risk & Profit 277,206 255,463 238,682 225,602 220,817
(d) Direct Charges for Specific Services 1,560 715 0 29,993 1,237
(e) Interest on Deficit 50,094 36,006 15,992 25,047 0
(f) Total Expense Charges $654,500 $618,450 $517,767 $529,270 $475,975
6. Fund Balance End of Year $267,924 ($1,252,355) ($900,156) ($399,794) ($477,088)
RESERVE BALANCES
1995/1996 1994/1995 1993/1994 1992/1993 1991/1992
Projected Actual Actual Actual Actual
1. Unpaid Claim Reserve $1,496,380 $1,466,665 $1,340,264 $1,057,864 $888,523
2. Premium Waiver Reserve 5,679,747 5,942,967 6,026,289 6,206,641 6,632,287
3. Premium Stabilization Reserve 0 0 0 0
4. Total Reserves $7,176,127 $7,409,632 $7,366,553 $7,264,505 $ 7,520,810
COST OF INSURANCES - $1,000/MONTH
1. Cost/$1,000 - Basic Life
(a) Employee Share $0.433 $0.433 $0.433 $0.433 $0.433
(b) State Share - 0.097 0.097 0.067 0.047 0.047
(c) Total 0.530 0.530 0.500 0.480 0.480
0.530 0.530 0.500 0.480 0.480
2. Cost/$1,000 - Supplemental Insurance 0.550 0.550 0.520 0490 0.490


(Employee pay all)

* Please note that Aetna's accounting methods do not consider interest credits as revenue items, but rather as expense credits.
** Aetna's accounting methods do not include conversion charges as expense items but rather a part of incurred claims costs.
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