Circular 11/09 (October 2009) Review of open policy years & 2010 policy year general increase
- Supplementary premium for 2008 policy year levied at 20 per cent of mutual premium as estimated.
- Five per cent general increase in premium rating of all Members required for 2010 plus any increase in the cost of the International Group reinsurance premium for 2010 for the mutual Members.
TO THE MEMBERS
REVIEW OF OPEN POLICY YEARS & 2010 POLICY YEAR GENERAL INCREASE
At its meeting on 26th October 2009, the Board reviewed the financial position of the Club, the performance of the open and closed policy years, the estimate for the 2008 supplementary premium and the premium levels for 2010.
A detailed explanation of the financial background to the Board’s decisions as set out below can be found in the October 2009 Review which accompanies this circular. Both these documents are published electronically in the “Club Circulars” section on the homepage of www.ukpandi.com.
2007 policy year
A supplementary premium set at 25 per cent of mutual premium was debited in November 2008 and payable in June 2009. No further supplementary premium is anticipated. The release call remains at 10 per cent of mutual premium.
2008 policy year
In October 2008 Members were warned to estimate for a 20 per cent supplementary premium on the 2008 policy year. The Board decided at their meeting on the 26th October to maintain the original estimate and to levy the supplementary premium at 20 per cent of mutual premium. It will be debited immediately and payable in March 2010 with the first instalment of the mutual premium. The release call is set at 30 per cent of mutual premium (being the supplementary premium plus 10%) plus any outstanding instalments of mutual premium.
2009 policy year
There is no supplementary premium estimated for the 2009 policy year. The release call is set at 25 per cent plus any outstanding instalments of mutual premium.
2010 policy year - General increase
The decisions on supplementary premium above should ensure that the Club moves forward without significant burden from past years. However, the Board recognises it is imperative that the mutual premium level in 2010 is set with minimal reliance on investment income.
The Board has concluded that the premium rating of all Members (mutual and fixed premium) shall be increased by 5 per cent, plus any increase in the cost of the International Group reinsurance premium for 2010 for the mutual Members.
The release call is set at 25 per cent of mutual premium plus any outstanding instalments of mutual premium. As normal, mutual premium for 2010 will be payable in four instalments.
The Board determined that standard deductibles levels should keep pace with claims inflation, although a majority of Members have individually tailored deductible levels which have been increasing in recent years. The Board accordingly decided that a minimum standard deductible should apply of $5,000 any
claim, per event
THOMAS MILLER (BERMUDA) LTD.
- Members requiring further information should contact their usual underwriting contact at the Club.