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    CA - Rider VPI Actuarial Memo Rider 01032014

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    Kejixu
    Veterinary Pet Insurance Company is filing rates and rules for a new Pet Wellness Coverage rider to provide reimbursement for preventative and routine veterinary care. The rider is available to pets enrolled in various VPI base plans and provides three benefit options with monthly premiums ranging from $14-29. An actuary certifies that the benefits are reasonable in relation to the proposed premiums which were set based on historical utilization data and expenses including commissions, general expenses, premium tax, and target margins.

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    CA - Rider VPI Actuarial Memo Rider 01032014

    Uploaded by

    Kejixu
    49 views2 pages
    Veterinary Pet Insurance Company is filing rates and rules for a new Pet Wellness Coverage rider to provide reimbursement for preventative and routine veterinary care. The rider is available to pets enrolled in various VPI base plans and provides three benefit options with monthly premiums ranging from $14-29. An actuary certifies that the benefits are reasonable in relation to the proposed premiums which were set based on historical utilization data and expenses including commissions, general expenses, premium tax, and target margins.

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    Veterinary Pet Insurance Company is filing rates and rules for a new Pet Wellness Coverage rider to provide reimbursement for preventative and routine veterinary care. The rider is available to pets enrolled in various VPI base plans and provides three benefit options with monthly premiums ranging from $14-29. An actuary certifies that the benefits are reasonable in relation to the proposed premiums which were set based on historical utilization data and expenses including commissions, general expenses, premium tax, and target margins.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    49 views2 pages

    CA - Rider VPI Actuarial Memo Rider 01032014

    Uploaded by

    Kejixu
    Veterinary Pet Insurance Company is filing rates and rules for a new Pet Wellness Coverage rider to provide reimbursement for preventative and routine veterinary care. The rider is available to pets enrolled in various VPI base plans and provides three benefit options with monthly premiums ranging from $14-29. An actuary certifies that the benefits are reasonable in relation to the proposed premiums which were set based on historical utilization data and expenses including commissions, general expenses, premium tax, and target margins.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    VETERINARY PET INSURANCE COMPANY

    VPI Pet Wellness Coverage


    Filing Memorandum
    Form #s VS-281-CA and VS-282-CA

    1. Scope and Purpose

    Veterinary Pet Insurance Company (“VPI) is filing rates and rules for Pet Wellness Coverage Rider. This is
    a new product submission. This coverage is offered as a rider to the VPI base pet product. We request an
    effective date for all riders on the later of April 1, 2014 or the date of approval in this state.

    2. Benefit Description

    This rider provides reimbursement of veterinary medical expenses to pet owners of dogs and cats for
    preventative and routine care services. This plan will pay for the eligible expenses incurred up to the maximum
    benefit schedule allowances as stated on the VPI Pet Wellness Benefit Schedule on forms VS-281-CA and VS-282-
    CA.

    3. Eligibility

    This rider is only offered to animals enrolled in VPI pet base plans: Major Medical Plan, Medical Plan, Injury
    Plan, Feline Select Plan, Standard Plan, and Superior Plan.

    4. Ineligibility

    • For riders attached to the Injury Plan: Canines and felines under age 8 weeks old at the time of
    policy issuance.
    • For riders attached to all other medical plans: Canines and felines under age 8 weeks old or 10
    years at the time of policy issuance.

    5. Premium Rates

    Rates vary by benefit options. Details of the benefits can be found in the policy form. Rates do not vary
    based on any other factors such as pet age/breed or geographic area. Rates were established based on
    historical utilization data and current benefit amounts for each covered service. Rates have been rounded
    to the nearest $.25.

    VPI Pet Wellness Basic Plan - $14.00 per month


    VPI Pet Wellness Plus Plan - $18.00 per month
    VPI Pet Wellness Max Plan - $29.00 per month

    Premium rates for Group and Affiliate channels will be discounted by 5% due to lower marketing and/or
    underwriting expenses.

    1/3/14 Page | 1
    6. Expenses

    The expenses are comprised of the following component parts:

    Basic Plan Plus Plan Max Plan

    Commission/Brokerage 2.00% 2.00% 2.00%


    General Expenses 29.80% 23.60% 14.60%
    Premium Tax 2.35% 2.35% 2.35%

    Profit and Contingency Margin 6.15% 6.15% 6.15%


    Expected Loss Ratio 59.70% 65.90% 74.90%

    General expenses vary by plan as they are partially comprised of fixed costs per policy and therefore will be
    a higher percentage of premiums for lower cost plans.

    7. CERTIFICATION

    The purpose of this filing is to demonstrate that this rate filing meets the requirements under this state. This
    filing is not intended to be used for other purposes.

    I, Jennifer R. Dix, am a consulting actuary for Veterinary Pet Insurance Company. I am a Fellow of the
    Society of Actuaries and a Member of the American Academy of Actuaries.

    This memorandum has been prepared to accompany the filing of the above policy rider with state insurance
    departments. This memorandum is not intended for any other purpose.

    I certify, to the best of my knowledge and judgment, based on the above analysis and description of the
    methodology of how premiums will be calculated, that the benefits provided by the policy are reasonable in
    relation to the proposed premium.

    ______________________________
    Jennifer R. Dix, FSA, MAAA
    Actuarial Management Strategies, LLC
    January 3, 2014

    1/3/14 Page | 2

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