AC Contract No. 1992-04ITEM NO. [j,,�D- -.;--
Kodiak Island Borough
AGENDA STATEMENT
:Ing of: April 16, 1992
ITEM TITLE: Life insurance bid award to U XM insurance,
AC -04-92 (Administrative Contract Number)
SUMMARY STATEMENT
Recently the Borough had their broker, Sweeney Insurance, solicit
bids for Borough and School District life insurance. By switching
to the UNUM insurance company the Borough will enjoy the benefits
of an A+ ccnpany as rated by AM Best while saving $10,000 per year
in insurance premiums. There will be no change in insurance coverage
or amounts.
FISCAL NOTES
[X] N/A Expenditure Amount
Required .13 cents per 1,000 Budgeted •16 per 1,000
APPROVAL FOR AGENDA:
RECOMMENDED ACTION:
Kodiak Island Borough
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v
M E M O R A N D U M
TO: Kodiak Island Borough Assembly
FROM: Jerome M. Selby, Borough Mayor1\J�i
DATE: April 9, 1992 U/{�
SUBJECT: Life Insurance
In our ongoing efforts to reduce costs while still providing
the best service possible we requested our insurance broker,
Sweeney Insurance, to solicit proposals on life insurance. The
Borough and School District both provide their employees with
$75,000 of life insurance. Our current carrier, Fortis, presently
charges 16 cents per thousand for life insurance coverage.
As you can see on the attached sheet UNUM appears to offer the
best price combined with the least risk. They presently have an AM
Best Rating of A+. By going with Unum the Borough and School
District combined will save approximately $10,000 per year. our
Broker also recommends UNUM as an excellent choice.
I recommend that we award UNUM our life insurance contract
effective May 1, 1992.
i
611 -SWEENEY INSURANCE, INC.
TEL: 907 - 486-3101 R O. BOX 129
FAX: 907-486-5545 508 MARINE WAV
KODIAK, AK 99615
SWEENEY INSURANCE, INC. BROKERAGE SERVICE
SUPPLEMENTAL GROUP LIFE PROPOSAL SUMMARY
KODIAK ISLAND BOROUGH AND SCHOOL DISTRICT
Companies submitting proposals are UNUM, AIG, States West, Standard
and Fortis.
BENEFIT QUOTED IS: $75,000 Base coverage (Life)
+$75,000 Additional if death is accidential (AD&D)
$150,000 Maximum benefit per employee
NUMBER OF EMPLOYEES USED IN QUOTE: 374
QUOTE SUMMARY (RATES ARE PER $1000 OF INSURANCE)
UNUM AIG
STATES
STANDARD
FORTIS*
WEST
Life
.10 .165
.09
.16
.12
AD&D
.03 .031
.04
.03
.02
Total
.13 .196
.13
.19
.14
Monthly Premium
$3647 $5498
$3746
$5330
$3927
AM Best Rating
A+ A
B+
A+
A+
Rate Guarantee
2 Yrs 1 Yr
2 Yrs
2 Yrs
1 Yr
Benefits Reduced To
658@70 658@65
658@65
658@65
678@65
508@75 508@70
508@70
508@70
508@70
RECOMMENDATION: I
would select UNUM
as the carrier for a
number of
reasons: 1) rate,
2) 2 -year rate
guarantee, 3)
financial
-strength.
UNUM is a large and
stable life insurance
company
that has
held the
industry's highest
ratings for many
years.
*Current carrier.