Feeder Associations of Alberta: Livestock Indemnity Trust

The purpose of the Indemnity Trust is to put in place a safety net that reduces the extreme financial hardship for an individual feeder or Feeder Association that might result from animal deaths.

The money, less an administration charge, is placed into a Trust account at the Provincial Associations bank. The only withdrawals are to member Feeder Associations to cover either claims submitted, or to rebate back any surplus. The only revenue is from premiums
sent in by member Feeder Associations.

Plans

Plans C and D have existed for several years. Plans A and B are new plans offered to Associations. Associations may participate in either
the New Plans A and B or the Existing Plans C and/or D. That is Plans A and B cannot be used in conjunction with Plans C and D.

Plan Qualifications

Plan A (New) - Members will pay premiums based on the history of losses of their own Association. This Plan covers all calves born in
the current year, purchased under the Feeder Association Program and may also include at the members option other cattle purchased
under the Program.

Plan B (New) - Members will pay premiums based on the history of losses of cattle in their Association on this plan. This Plan covers all
cattle, not born in the current year, at time of purchases under the Feeder Association Program. Supervisors must approve assignment
of cattle to Plan B. Plan B is an option for Associations on Plan A.

Plans C and D

All Cattle qualifying as Feeder animal purchases under Feeder Association regulations.

Total Limits of Liability

The limit of liability will be the aggregate amount of the “Livestock Indemnity Trust” pro-rated against all claims.

Repayment of Loss

Indemnity from the “Livestock Indemnity Trust” will be paid: Plan C at 95% of Average Purchase Price, all other plans:.

At the average purchase price of any one animal within one month of receipt of claim.
A lesser amount if the “Indemnity Trust Account” has been exhausted.

Period of Indemnity

Coverage not to exceed 365 days from the authorization of purchase by the Association Supervisor, or for the duration of the contract.

Premium

Plan A - Premium is the individual claims ratio plus a charge for administration. The individual claims ratio (%) is based on Associations claims received as a (%) of purchases made within this Plan over the past five years. To start, a claims ratio will be calculated from Plan C data. If no data is available, the starting claims ratio will be 0.93% and adjusted annually as new data is accumulated.

Plan B - Premium is the individual claims ratio plus a charge for administration. The individual claims ratio (%) is based on Associations claims received as a (%) of purchases made within this Plan over the past five years. To start the claims ratio will be calculated from Plan C data and set at 50% of Plan A ratio plus a charge for administration. Plan B premiums to be calculated totally on Plan B performance after five years participation.

Plan C - To be calculated at 1% of the full purchase price of the total animals insured hereunder.

Plan D - To be calculated at 0.4% of the full purchase price of the total animals insured hereunder.

Deductible

Plan A and B - A one-time deductible of 2% of the purchase price to be taken off the initial claims of any group of cattle.

Plan C - A one-time deductible of 2% of the purchase price to be taken off the initial claims of any group of cattle.

Plan D - A one-time deductible of 5% of purchase price to be taken off the initial claims of any group of cattle.

Risk Adjustment

A continuous record of premiums and claims for the assured shall be kept, and from this their risk ratio shall be calculated from a rolling average of the last (5) years of active participation.

Plans A and B: Premiums will be adjusted yearly based upon the ratio as calculated on five year rolling average basis.

Plan C and D:

Those Associations with a risk ratio of 1.1 or over shall have the deductible under Part 1 and Part 11increased by 1%.
Those Associations with a risk ratio of 1.3 or over shall in addition to (a) above, have the value of the animal reduced from 100% of the purchase price to 80%.

The Supervisor of each individual Association must be notified immediately of the death of any Association animal. All animals covered must carry the Association brand. The Supervisor of each Association shall inspect all dead animals unless a custom feedlot operator submits a signed statement, or a veterinarian sends a signed statement.

Any Feeder Association member may lose two animals within a 10 day period without showing any record of veterinary care. However, claims for the third and subsequent animals must be accompanied by either a signed veterinarian’s certificate, stating the treatments and dates, or an autopsy report from a veterinarian.

Questions regarding operation of the Livestock Indemnity Trust should be directed to the General Manager of the Feeder Associations of Alberta Limited

For more information about the content of this document, contact Dace Cochlan.
This document is maintained by Karen Hladych.
This information published to the web on June 25, 2007.
Last Reviewed/Revised on May 5, 2017.