During that year, many things are happening and I will list just a few of them so you can get some idea of the difficult issues involved:

1: A few people pay their own bills and don't submit receipts until they return home.

Often, the receipts patients get are not the correct ones and we must then chase the hospitals and doctors for proper detailed receipts. This also creates problems for the plan itself, as many of the discounts we can get from providers are time-sensitive and are lost as a result of this delay. We call these "carry-backs" and, in some years, they have been in excess of $1 million.

2: Once a bill has been paid, it must then be submitted to the Canadian province of residence for payment.

Not all provinces pay quickly and, in some cases, a province will not pay anything if the bill is received more than 90 days after the treatment date. Issue #1, above, also has an impact on these GHIP recoveries which are credited to the final claims paid.

3: In some claims, we have the ability to recover part, or all, of the moneys paid, from third parties.

Any recovery is dependent on first paying the claim, then finding out how much GHIP will pay and, finally, submitting the net bills to the third party for payment. This takes time, especially if lawyers are involved. A serious automobile accident or injuries caused by the third party would be examples of possible recovery from a third party. We call this "subrogation."

4: There are always several claims which are "under review" at the end of the travel season which, in some cases, take months to settle. The larger the claim, the longer it takes, in our experience.

A very small number of people, unfortunately, don't tell the truth on their application, so they can pay a lower price for insurance. When they have a claim, they are usually very slow, and even obstructive, in providing information to us, for obvious reasons. Another delay situation can occur when a person has decided that his or her unstable (according to the policy wordings) pre-existing condition will not cause a claim and, of course, that is exactly what happens.

5: Occasionally, hospitals will take an extended period of time to determine the amount of the actual bill for a patient, or will try to deny our contracted discount.

This can possibly be traced to poor payment patterns for out-of-state, or foreign, patients but may, also, simply be problems with their record-keeping. Some discounts may be substantial and we aggressively pursue these, especially on delayed bills, as they are often inflated.

All of these extended delays in settling medical claims mean that an insurance company effectively has only a poor estimate of what really happened last year. How can you set rates for an early bird program in May? Less than half of the claims have been settled and millions of dollars are still to be paid. Since the claims are mostly in U.S. dollars, the future rate of exchange also becomes a huge factor in determining loss ratios and, therefore, premium rates.

Over several years, our strong partnership with Manulife Financial and the Canadian Snowbird Association have allowed us to accomplish this very difficult task. And every year, more and more snowbirds have taken advantage of our Early Bird Program to help reduce the high cost of travel medical insurance. Premium rates have consistently gone up, due to high medical inflation in the U.S. and, of course, our collapsing Canadian dollar. An Early Bird plan is certainly a better option than an unknown future plan. To protect your Early Bird "investment," we also guarantee that if rates go down, we will send you a cheque for the difference. In the past, Medipac has sent out more than 7,000 cheques to our customers to honour this guarantee.

An early bird plan is rarely available through other companies, and I hope my partial explanation will help you to understand why. We are currently in negotiations to secure this year's program and we hope to announce our plan in late June.