Council on Insurance Report
Dr. Larson R. Keso
The AAO Council on Insurance (COI) met in St Louis, June 9, 2007. Mr. Bob Bartee of Affinity Insurance Services, and Mr. Craig Dougherty of New York Life (NYLIC), presented the group Life and Health Plans policy year-end financial reports. The performance of both produced a positive margin. This underwriting margin increased the Dividend on Deposit account to $4,776,805 and the Cost Stabilization Reserve to $3,656,888. The Cost Stabilization Reserve is a fund created by NYLIC and AAO to cover expense charges that exceed premium and thus minimizes increases in premium rates. The Dividend on Deposit account is a fund owned by AAO, but held by NYLIC. This fund is available to assure adequate reserves are available for policy holder benefits.
The AAO major medical plans continue to struggle for reasons well known by all. Both Mr. Bartee and Mr. Dougherty recommended a premium increase. No action was taken by the COI at this time.
The issue of offering maternity benefits in the major medical plan was revisited. The addition of maternity benefits would add a significant increase in premium paid by female members and members spouses. No action was taken by the COI.
The AAO Insurance Company (AAOIC) continues to experience increased participation. The endorsed professional liability plan now insures more than 4,100 members. AAOIC has advised going forward attendance or purchase and completion of a test CD annually will be required for the discount.
Elizabeth Franklin, AAOSI claims manager, reported on the three risk management seminars presented in Seattle. Presented were a new doctor, staff and doctor programs. All were well attended. Participants receive a $50 premium reduction for participation.
The Long Term Care program allows members to shop and compare plans although few actually purchase insurance through AAO. The COI considers this a valuable membership service.
AIS presented a group Personal Excess Liability product for council consideration. The COI voted to forward this proposal to the AAO Board of Trustees recommending approval. An Identify Theft proposal was also considered. Due diligence is underway with a report due in January, 2008. A Medicare Supplement policy was also considered. After deliberation, the COI determined adequate plans are available and will not pursue this product.