Governing Articles: Article II

Governing Articles: Article II 4.08.1: Membership Each insurance company authorized to write workers compensation and employers liability insurance in Mississippi shall be a Member of and a participant in the Pool, shall participate in the Plan, and shall be bound by these Articles as a condition of its authority to transact workers compensation and employers liability insurance in Mississippi. Miss. Code Ann. §71-3-111 (Rev. 2011) 4.08.2: Termination of Membership A Member’s membership in the Pool shall be terminated upon the occurrence of one or more of the following events: A. withdrawal or non-renewal of the Member’s license to write workers compensation insurance in Mississippi; B. revocation of the Member’s license to write workers compensation insurance in Mississippi by the Commissioner; or C. adjudication of insolvency of the Member. Any provision herein to the contrary notwithstanding, a Member shall be deemed to be a member of the Pool for any policy year corresponding to a calendar year during which such Member has positive net workers compensation premiums written in Mississippi as reported in its Annual Statement to the Mississippi Department of Insurance. Miss. Code Ann. §71-3-111 (Rev. 2011) 4.08.3: Members’ Obligation A. Each member shall: 1. designate and provide to the Pool Administrator the name and address of an official of the Member’s organization with authority to represent the Member in its dealings with the Pool and to whom all correspondence from the Pool shall be sent; 2. report to the Pool Administrator, in the form and manner prescribed by the Pool Administrator, the workers compensation premiums written by such Member during each calendar year; 3. provide to the Pool Administrator such other information as the Pool Administrator may require to administer the affairs of the Pool and to determine the Member’s share of the Pool’s surplus or deficit or the Member’s ability to meet its obligations to the Pool; 4. promptly pay, when ordered by the Pool Administrator and approved by the Commissioner, all assessments; and 5. comply with such operational or administrative procedures as the Commissioner, or the Pool Administrator with the approval of the Commissioner, may prescribe. B. If the Pool Administrator determines that a Member has not cooperated to the extent necessary to make the determinations required hereunder, the Pool Administrator shall have the authority to ensure the Member’s ability to meet its obligations to the Pool by, without limitation: 1. ordering that any distribution or refund due the Member be paid into escrow or trust with the Pool Administrator to secure the Member’s obligations; 2. ordering that any distribution or refund due the Member be paid in trust with a third party to secure the Member’s obligations; or 3. ordering that the Member obtain a letter of credit or such other form of security and in such amount approved by the Pool Administrator to secure the Member’s obligations. Compliance with any such order within the time specified therein shall be an obligation of the Member to which the order is directed and shall be enforced by the Commissioner. Miss. Code Ann. §71-3-111 (Rev. 2011) 4.08.4: Obligations After Termination Any Member whose membership in the Pool is terminated shall nevertheless continue to be governed by all Pool and Plan rules for all policy years for which the Member was a participant in the Pool. The Pool Administrator shall, as soon as reasonably practical following a Member’s termination, estimate the balance of the Members account in the Pool based on information then available. At the discretion of the Pool Administrator, the Member’s account shall be settled either by payment in full of the estimated amount due to or from the Member or by periodic distributions and /or assessments at the time and in the manner applicable to other Pool Members for the policy years for which the Member was a participant. No payment to or from the terminated Member of the estimated balance of such Member’s account shall in any way effect the Pool Administrator’s right to make additional assessments against the terminated Member and/or demand reimbursement of amounts previously distributed to the terminated Member based on subsequent developments for the policy years for which the Member was a participant in the Pool. Miss. Code Ann. §71-3-111 (Rev. 2011) 4.08.5: Insolvency A. A Member’s participation in the Pool shall be deemed terminated in the event a Member becomes insolvent. As used herein, “insolvent” means being the subject of receivership, conservatorship, rehabilitation, liquidation, or similar proceedings, whether voluntary or involuntary, in any jurisdiction. B. If, at the time of a Member’s insolvency, the insolvent Member’s account in the Pool reflects a net balance due to the Pool and the liquidator or receiver of the insolvent Member does not have sufficient funds available to make a final adjustment of the account, the insolvent Member’s share of undistributed surpluses and/or uncollected deficits for each policy year for which the insolvent Member was a participant in the Pool shall be reallocated to the remaining Members as if the insolvent Member had not been a participant in the Pool for such policy years. C. In the event a Servicing Carrier becomes insolvent, the Pool Administrator shall have the option to: 1. pay to the receiver, conservator, rehabilitator, liquidator or other appropriate representative of the insolvent Servicing Carrier the losses and expenses for which the Pool is liable under the Reinsurance Agreement(s); or: 2. subject to the approval of the receiver, conservator, rehabilitator, liquidator or other representative, and subject to the approval of any court having jurisdiction over the proceedings, assume the policy obligations of the insolvent Servicing Carrier for policies written pursuant to the Plan and reinsured by the Pool. If the latter option is exercised, the Pool Administrator shall make arrangements to have all policies that have been assigned to and are being serviced by the insolvent Servicing Carrier reassigned to another Servicing Carrier for servicing. The successor Servicing Carrier shall assume all the duties and obligations of the insolvent Servicing Carrier and shall be entitled to the reinsurance provided by the Pool. Payment made on account of such policies, including expenses for the servicing thereof, shall be reimbursed by the Pool and apportioned to the policy years for which such policies were originally issued. 3. All amounts due to an insolvent Servicing Carrier from the Pool as a result of the reinsurance provided to such Servicing Carrier and all amounts due from an insolvent Servicing Carrier as a member shall be merged into one account and deemed mutual debits and credits which the Pool may offset. 4. The Pool shall have all the rights allowed by law against the estate or funds of an insolvent Member for recovery of amounts which have been absorbed by the other. Members of the Pool as herein provided. The Pool Administrator may assert and enforce such rights on behalf of the Pool. 5. Anything in this Article to the contrary notwithstanding, the Commissioner may, in the event such action is in his judgment feasible and desirable, and in a manner equitable to all Members, elect not to terminate the participation of an insolvent Member and permit such Member to continue its participation in the Pool upon such conditions as he may prescribe and subject in all respects to these Articles and the rules and procedures applicable to the Pool and the Plan.