Premiums and Cost Sharing
SCIC sets premium rates to recover losses (claims paid) over the long-term and to maintain a sustainable program by paying off program debt and building a reasonable reserve. The methodology used by SCIC to calculate premium rates and yields must be certified by an actuary and approved by Agriculture and Agri-Food Canada every five years.
Premium dollars are not used to pay for program administration. The full cost of program administration is cost-shared by the federal and provincial governments. Premium rates are updated annually on a crop and risk-zone basis. Risk zone rates are based on the claim payment history specific to each crop and risk zone. There is a one-year lag in the information used. The premium rate itself is only one factor in the dollar-per-acre premium to the customer. The dollar-per-acre premium is calculated using a combination of the premium rate, the risk zone long-term average yield, the selected coverage level (50, 60, 70, 80 per cent), the insured price and the customer’s experience discount or surcharge.
Premium is only charged on the actual acres seeded and selected to insure. You may endorse all crops and if you do not grow them, premium is not charged.