State of Connecticut

I. Statement of Objectives

The State of Connecticut, acting through the Office of the State Comptroller (OSC), is seeking the services of an insurer with the capital strength, expertise, and capability to administer and insure its group life insurance benefits program for employees and retirees.

II. Background Information

The State Comptroller is empowered by Connecticut General Statutes, Section 5-257 to arrange and procure a group life insurance benefits program for employees and retirees. Section 5-257 is the authority under which group life insurance benefits are extended to the work force. A copy of Section 5-257 is attached hereto as "Exhibit A".

There were approximately 57,000 people insured under the present contract during the fiscal year ended June 30, 1996. The premiums for that year were approximately $10.7 million.

OSC currently employs three full-time staff members who perform the administrative functions of the group life insurance program. These functions include record-keeping, processing premium payments, and obtaining necessary documentation for claim submission.

The record-keeping responsibilities involve the maintenance of all records for employees and retirees currently and previously enrolled in the program; this includes information regarding name, address, social security number, beneficiary, and amount of insurance coverage. Records are maintained in a computerized data base.
OSC staff is responsible for the processing of group life insurance premium payments for the state, employee, and retiree shares.
All claims are initially processed through the OSC; staff is responsible for obtaining the necessary documentation for all claims before their submission to the insurer for payment.

III. Current Plan Design

"Exhibit B", which is a Summary Plan Description, sets forth the group life insurance benefits provided by OSC. Briefly, the benefits and employer/employee/retiree contributions are as follows:

  1. Basic Life Insurance - This term life insurance benefit is provided to all eligible active and retired employees. These benefits are funded by the following premiums expressed as the cost of $1,000.00 of insurance per month:
Active Employee Benefit Retire Benefit
Employee/Retiree $.433 0
State $.097 $.53
Combined Premium $.53 $.53

Upon attaining eligibility, employees are offered the basic coverage on a guaranteed issue basis; no medical underwriting is conducted and no physical examinations are performed.

  1. Supplemental Life Insurance - This benefit is elective and fully-paid for by the employees who opt for the coverage; supplemental life insurance is available to managerial employees and the employees of certain bargaining units. The monthly premium for $1,000.00 of insurance is $.55. Supplemental coverage is offered to eligible employees on the same terms and conditions as basic life insurance.
  2. Premium Waiver for Employees who Became Disabled Prior to January 1, 1984 - These benefits are fully-funded. The present insurer will hold a reserve which has been deemed adequate to provide for these benefits. Currently, OSC makes no payments for these benefits.
  3. Employee Contribution Waiver for Employees who Became Disabled on and After January 1, 1984 - The insurer determines eligibility for this benefit on a case-by-case basis. OSC pays the monthly premium of $.53 per $1,000 of insurance for all disabled employees covered under this program.
  4. Conversion to Individual Life Insurance on Termination of Employment - OSC pays $100 for each conversion to cover administrative cost and the excess of the actual cost of benefits paid over the premiums paid. The individual pays the premium required by the insurer.

IV. Transition Period

OSC's current group policy will terminate on June 30, 1997. OSC will have a cancellation accounting on August 30, 1997 and a final accounting on June 30, 1998. OSC will continue to remit premiums through June 30, 1997 to the current insurer which will, correspondingly, continue to pay eligible benefit applications for death claims incurred through June 30, 1997. OSC will commence remitting premiums on July 1, 1997 to the successor carrier which will, correspondingly, assume responsibility to pay eligible benefit applications for death claims incurred on and after July 1, 1997 with the exception of the following:

A closed block of insureds, all of whom became disabled prior to January 1, 1984; this group is covered by a Premium Waiver Reserve Fund which will remain in the possession of the current insurer for the purpose of paying all death benefit claims. (See Section III, 3 of this RFP.)

V. OSC's Objectives for the Financial Administration of the Group Life Insurance Program

In order for the earlier-stated, overall objective of this RFP to be achieved, OSC has identified three separate components which must be satisfied, as follows:

1. Stabilize OSC's long term unit funding rates at or close to their current level.

To satisfy this component of the overall objective, OSC is seeking a contract duration of six years, from July 1, 1997 to June 30, 2003, renewable for subsequent six year periods upon mutual agreement of the parties.

The contract's unit funding rates, expressed as the monthly cost of $1,000.00 of insurance, will be:

  1. Fully-underwritten for successive two-year periods commencing with the biennial period from July 1, 1997 to June 30, 1999;
  2. Unified for each biennial period; and
  3. Blended across all programs and groups.

In order for any submission made in response to this RFP to be considered, rates for the period from July 1, 1997 to June 30, 1999 may not exceed $.53 per month for $1,000.00 of insurance coverage across all programs and groups.

2. To introduce a method of reporting which makes it possible for OSC's managers of the program to understand the financial results and their impact on state budgeting without becoming experts on the technical complexities of the group life insurance.

Although OSC is soliciting fully-underwritten rates through this RFP, its managers remain interested in the financial performance of the group life insurance program. To satisfy this component of the overall objective, the carrier selected will be required to supply OSC, no later than October 1 of each year, with an annual financial report which complies with the format utilized in "Exhibit C" and, at a minimum, discloses the applicable data elements contained therein.

In order for any submission made in response to this RFP to be considered, the insurer must affirmatively represent that it will supply OSC, no later than October 1 of each year, with an annual financial report which complies with the format utilized in "Exhibit C" and, at a minimum, discloses the applicable data elements contained therein.

3. To contain the insurer's expense charges from year to year as a function of services rendered.

For the fiscal year ending June 30, 1996, the present insurer's expense charges (including but not limited to administration, risk, and profit) were approximately 2.6% of annual premiums. To satisfy this component of the overall objective, OSC has identified this percentage to be the maximum for such services.

In order for any submission made in response to the RFP to be considered, expense charges (including but not limited to administration, risk, and profit) may not exceed 2.6% of annual premiums.

VI. Proposal Submission Requirements

1. The insurer must submit an original plus ten (10) copies of a written proposal in loose-leaf binders to:

Retirement and Benefit Services Division
Office of the State Comptroller
55 Elm Street, Third Floor
Hartford, Connecticut 06106
Attention: Steven Weinberger, Division Director

2. Insurers with questions regarding this RFP should submit them in writing to Mr. Weinberger at the address set forth above no later than 4:30 p.m. on Friday, April 4, 1997. Answers to such questions will be transmitted from Monday, April 7 to Friday, April 11, 1997. No phone calls will be accepted relative to this RFP.

3. Proposals must be received on or before 4:30 p.m., Friday, April 18, 1997.

4. Each proposal must include the following:

  1. "Exhibit A" - Connecticut General Statutes, Section 5-257.
  2. "Exhibit B" - Group Life Insurance Summary Plan Description.
  3. "Exhibit D" - Analysis of Group Life Insurance Program from Fiscal Year 1992 through Fiscal Year 1996, prepared by Aetna in the format reflected in "Exhibit C".
  4. "Exhibit E" - Census of covered lives under the Group Life Insurance Program; data are contained on the enclosed diskettes.

Please remember that, in order for any submission made in response to this RFP to be considered, rates for the period from July 1, 1997 to June 30, 1999 may not exceed $.53 per month for $1,000.00 of insurance coverage across all programs and groups.

  1. The insurer's success in implementing an affirmative action plan;
  2. The insurer's success in developing an apprenticeship program complying with Section 46a-68-1 to 46a-68-17 of the Connecticut General Statutes, inclusive;
  3. The insurer's promise to develop and implement a successful affirmative action plan;
  4. The insurer's submission of EEO-1 data indicating that the composition of its work force is at or near parity when compared to the racial and sexual composition of the work force in the relevant labor market area; and
  5. The insurer's promise to set aside a portion of the contract for legitimate small contractors and minority business enterprises, where applicable. (See Section 32-9e of the Connecticut General Statutes.)
    A "Notification to Contractors" form is attached, to be read, signed, and returned by the insurer. ("Attachment I")

    Also attached is a Contract Compliance Requirements reporting form, which the contractor must complete sign, and return; such form will be sent by OSC to the Commission on Human Rights and Opportunities (CHRO). ("Attachment II")


Request for Proposals and Response Phase

March 21, 1997 Release of RFP by OSC
April 4, 1997 Questions due at OSC
April 7-11, 1997 OSC answers questions received
April 18, 1997 Proposals due at OSC

Review and Selection Schedule

April 21-25, 1997 Reading and Scoring or Proposals by Screening Committee
April 28-May 2, 1997 Finalist Interviews1
May 2, 1997 Insurer Selection2


1 Finalist will be expected to make a presentation, followed by a question and answer period, to the State Comptroller and certain members of her staff at OSC Offices in Hartford, Connecticut. The number of finalists to be selected for interviews has yet to be determined; however, the expectation is that this number will not exceed three.

2 Selection of the insurer is expressly conditioned upon a site visit by up to three OSC representatives, to be conducted at a mutually agreeable date and time. All expenses incurred by OSC in making the site visit shall be borne exclusively by the insurer and treated as a cost of responding to this RFP.

VIII. Instructions to Contractors

Conformance - All responses to this RFP must conform to these instructions. Failure to conform may be considered appropriate cause for rejection of the response.

Delivery of Responses - RFP responses must be in sealed envelopes upon which a clear indication has been made of the RFP reference title, as well as the date and time the proposal is due. The name and address of the vendor must appear on the envelope. FAX responses are not acceptable.

Structure of Response - Contractors must structure the responses as outlined in this RFP.

Exclusion of Taxes from Prices - The State of Connecticut is exempt from the payment of excise, transportation, and sales taxes imposed by the Federal Government and the State. Such taxes must be excluded from quoted prices. The insurer selected may, however, be obligated to pay a premium tax on one or more of the state's accounts pursuant to Connecticut General Statutes, Section 12-202.

Signature and Responsible Persons - The proposal must be signed by an authorized official. The proposal must also provide name, title, address, and telephone number for individuals with authority to negotiate and contractually bind the contractor, and for those who may be contacted for the purpose of clarifying the information provided.

Insurers' Conference - There will be no conference.

IX. Terms and Conditions

Any insurer responding to this RFP must be willing to adhere to the following conditions and must so state in its submission:

  1. Acceptance or Rejection by the State - The state reserves the right to accept or reject any or all proposals submitted for consideration. All proposals will be kept sealed and safe until the deadline for submission has passed.
  2. Conformance with Statutes - Any contract awarded as a result of this RFP must be in full conformance with statutory requirements of the State of Connecticut.
  3. Ownership of Proposals - All proposals in response to this RFP are to be the sole property of the State, and subject to the provisions of Section 1-19 of the Connecticut General Statutes (regarding Freedom of Information).
  4. Ownership of Subsequent Products - Any product, whether acceptable or unacceptable, developed under the contract awarded as a result of this RFP is to be the sole property of the State unless stated otherwise in the RFP or contract.
  5. Timing and Sequence - Timing and sequence of events resulting from this RFP will ultimately be determined by the State.
  6. Oral Agreements - Any alleged oral agreement or arrangement made by a contractor with any agency or employee will be superseded by the written agreement.
  7. Amending or Canceling Requests - The State reserves the right to amend or cancel this RFP, prior to the due date and time, if it is in the best interests of the State.
  8. Rejection for Default or Misrepresentation - The State reserves the right to reject the proposal of any contractor which is in default of any prior contract or for misrepresentation.
  9. State's Clerical Errors in Awards - The State reserves the right to correct inaccurate awards resulting from its clerical errors.
  10. Rejection of Qualified Proposals - Proposals are subject to rejection in whole or in part if they limit or modify any of the terms and conditions and/or specifications of the RFP.
  11. Insurer Presentation of Supporting Evidence - An insurer, if requested, must be prepared to present evidence of experience, ability, service facilities, and financial standing necessary to satisfactorily meet the requirements set forth or implied in the proposal.
  12. Changes to Proposal - No additions or changes to the original proposal will be allowed after submittal. While changes are not permitted, clarification at the request of the State may be required at the insurer's expense.
  13. Collusion - By responding, the insurer implicitly states that the proposal is not made in connection with any competing insurer submitting a separate response to the RFP, and is in all respects fair and without collusion or fraud. It is further implied that the insurer did not participate in the RFP development process, had no knowledge of the specific contents of the RFP prior to its issuance, and that no employee of the state participated directly or indirectly in the contractor's proposal preparation.

X. Evaluation of Proposals

Each proposal will be evaluated by a Screening Committee using the criteria set forth below to determine which insurer is most capable of implementing OSC's requirements; as referenced in Section VII of this RFP, the Screening Committee's task is to identify three finalists for consideration by the State Comptroller.

  1. Competitiveness of proposed cost.
  2. Insurer's experience providing group life insurance benefits, including experience providing service to a large public or private employer with a unionized work force of a size comparable to the State of Connecticut.
  3. Insurer's ability to deliver annual reports within the stated time-frame and in the specified format.
  4. Insurer's service and capabilities and associated performance guarantees.
  5. Insurer's capital strength, including its agency ratings for claims-paying and borrowing capacities.
  6. Proposed implementation strategy.
  7. Conformity with specifications contained in this RFP.
  8. Demonstration of commitment to affirmative action by full compliance with the regulations of the Commission on Human Rights and Opportunities.
  9. At the option of the Screening Committee, an oral presentation.

XI. Rights Reserved to OSC

OSC reserves the right to award in part, to reject any and all proposals in whole or in part, to waive technical defects, irregularities and omissions if, in its judgement, the best interests of the State will be served.

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