Premium Rates for Insurable Crops and Livestock Regulations
made under Section 6 of the
Crop and Livestock Insurance Act
R.S.N.S. 1989, c. 113
O.I.C. 2005-86 (effective February 1, 2005), N.S. Reg. 26/2005
amended to O.I.C. 2021-15 (effective January 26, 2021), N.S. Reg. 13/2021
Table of Contents
Please note: this table of contents is provided for convenience of reference and does not form part of the regulations.
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Citation
Interpretation
Base premium rate calculation
Base premium rate review
Methodologies developed and certified by actuary
Methodologies must include
Premium loads
Premium discounts and surcharges for insurable crops
Premium discounts and surcharges for dairy livestock
Publication of base premium rates
Citation
1 These regulations may be cited as the Premium Rates for Insurable Crops and Livestock
Regulations.
Interpretation
2 In these regulations,
(a) “actuary” means a fellow of the Canadian Institute of Actuaries;
(b) “base premium rate” means the rate calculated for an insurable crop and
livestock that is the premium rate that applies before any discount or surcharge
is applied;
(c) “methodology” means a methodology for determining a base premium rate;
(d) “premium load” means an amount factored into the calculation of a base
premium rate for a specific purpose as described in Section 7;
(e) “self-sustainability” means the ability of the crop and livestock insurance
program to remain financially sustained over the long term.
Base premium rate calculation
3 The Commission must determine base premium rates based on methodologies that have
been certified by an actuary.
Base premium rate review
4 The Commission must review and approve the base premium rate for each insurable crop
and livestock annually.
Methodologies developed and certified by actuary
5 (1) A methodology must be signed by an actuary to certify that the methodology is
actuarially sound.
(2) A methodology developed and certified under this Section must be re-certified by an
actuary at least once every 5 years.
Methodologies must include
6 A methodology must include all of the following considerations:
(a) the previous loss history of an insurance plan;
(b) adjustments to data used in the methodology based on insurance program
changes over time;
(c) technological factors that may, in the opinion of an actuary, influence the
expected losses under an insurance plan in the future;
(d) premium loads in accordance with Section 7; and
(e) any other considerations that may, in the opinion of an actuary, influence the
self-sustainability of the crop and livestock insurance program in the Province.
Premium loads
7 Amounts for all the following may be included as premium loads when calculating a base
premium rate:
(a) amounts to cover the cost of uncertainty or agronomic concerns as determined
using a method developed by an actuary;
(b) amounts to cover the cost of compensating for an increase or reduction in the
revenue from premiums that is caused by a premium discount and surcharge
system;
(c) an amount to ensure the self-sustainability of the crop and livestock insurance
program in the Province based on a signed opinion of an actuary;
(d) any other amounts that, in the opinion of an actuary, are considered necessary
for the calculation of actuarially sound base premium rates.
Premium discounts and surcharges for insurable crops
8 (1) A base premium rate for insurable crops may be adjusted by giving an insured
person a discount when indemnity is less than total premiums paid under a plan or
adding a surcharge when indemnity exceeds total premiums paid under a plan in
accordance with this Section.
(2) The base premium rate must be adjusted by a factor approved by the Commission in
consultation with an actuary.
(3) The maximum discount is 50% of the base premium rate and the maximum
surcharge is 100% of the base premium rate.
(4) The minimum annual premium payable by an insured person for each insured crop
in a crop year is $50.00, except when a minimum annual premium is set out in a
plan, then the amount prescribed in the plan applies.
Premium discounts and surcharges for dairy livestock
9 (1) A base premium rate for dairy livestock may be adjusted by giving an insured person
a discount when indemnity is less than total premiums paid under the plan in
accordance with this Section.
(2) Subject to subsections (3) and (4), adjustments for discounts and surcharges must be
calculated using the following formula:
(LR-1) x (n÷(3+n))
in which
“LR” (loss ratio) = total indemnity divided by total premiums, and
“n” = the number of years an insured person is in the plan.
(3) The maximum discount is 70% of the base premium rate.
(4) The minimum annual premium payable by an insured person for dairy livestock in
an insurance year is $25.00, except when a minimum annual premium is set out in
the plan, then the amount prescribed in the plan applies.
Publication of base premium rates
10 The Commission must publish base premium rates annually.
The
following regulations are not yet in force and are not included in the current
consolidation: