Governing Articles: Article V

Governing Articles: Article V 4.11.1: Fiscal Year The Fiscal year of the Pool shall be the calendar year unless otherwise established by the Commissioner. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.2: Funds of the Pool Funds held by the Pool, including funds remitted by Servicing Carriers in accordance with the Reinsurance Agreements, and funds withheld pursuant to Article II, shall be kept on deposit in such banks, trust companies, or other depositories as may from time to time be designated and prescribed by the Commissioner. The Pool Administrator shall invest Pool funds only in investments of a type and quality as will qualify as fully admitted assets under the rules of the National Association of Insurance commissioners. Disbursements from Pool funds shall be made by the Pool Administrator only as authorized by the Commissioner. The Pool Administrator shall keep accurate records to identify all deposits, withdrawals, and investment of Pool funds, which records shall be available for review by the Commissioner and Chairman of the Advisory Board at any time. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.3: Investment Income Except for earning on funds held pursuant to Article II, income earned on funds of the Pool shall be held by the Pool Administrator in the same manner as premiums remitted by Servicing Carriers under the Reinsurance Agreements and shall be included in the determination of the Pool’s operating results in accordance with the terms provided herein. Income earned on funds held pursuant to Article II shall accrue to the Member providing the security required. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.4: Expenses of Administration Expenses incurred by the Commissioner, or by the Pool Administrator at the direction of the Commissioner, in the administration of the affairs of the Pool shall be a proper charge against the Pool. A record shall be kept of all such expenses, and the amount thereof shall be included in financial statements to Members along with other transactions of the Pool. Such expenses may be paid out of funds held by the Pool or may be assessed against the Members. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.5: Examinations and Reserves The Commissioner shall review loss payments and reserves for outstanding claims as reported to the Pool Administrator by the Servicing Carriers for the purpose of determining the underwriting results from policies issued pursuant to the Plan. The Commissioner may establish, in his sole discretion, additional reserves as he may deem necessary to adequately reflect such underwriting results. There shall be an annual independent actuarial evaluation of the Pool’s reserves for unpaid losses. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.6: Transactions, Accounts, and Financial Statements Separate accounts shall be maintained by the Pool Administrator covering transactions for each policy year based on the information provided by Servicing Carriers pursuant to the Reinsurance Agreements. The operating deficit or surplus of a policy year shall be the net of premiums earned and losses and expenses incurred with respect to policies issued during the calendar year corresponding to the policy year, reduced by administrative and other expenses paid and accrued during the calendar year corresponding to the policy year and increased by investment income attributed to the policy year. Investment income on funds of the Pool, except funds held pursuant to Article II, shall be apportioned among policy years based on the relationship which a given policy year’s funds available for investment bears to all policy years’ funds available for investment. The Pool Administrator shall prepare and deliver to each Member an annual report of each policy year’s transactions during the preceding calendar year and the Member’s proportion of each policy year’s deficit or surplus from operations. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.7: Allocation of Operating Results The operating deficit or surplus for each policy year shall be allocated to Members in proportion to their net workers compensation premium writings in Mississippi during the calendar year corresponding to the policy as reported by Members in their Annual Statements to the Mississippi Department of Insurance for such calendar year. Members which voluntarily write workers compensation insurance policies which would otherwise have been renewed through the Plan shall be allowed a deduction from the amount of net workers compensation premiums written in Mississippi as reported in their Annual Statement, subject to rules prescribed by the Pool Administrator and approved by the Commissioner. In no event shall the amount of the deduction allowed hereunder during any calendar year exceed the amount of net workers compensation premiums written in Mississippi during the same calendar year. To the extent that an allocation required hereunder must be made prior to the availability of the report of actual net workers compensation premiums for the calendar year to which such allocation applies, the net workers compensation premiums for the preceding calendar year shall serve as the temporary basis for such allocation. Allocations so made shall be adjusted to reflect actual net workers compensation premiums written when actual amounts are available. Iffor any reason the foregoing basis should prove inappropriate in a given case, the Pool Administrator shall make an equitable adjustment in the basis for allocation. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.8: Distributions, Assessments and Refunds The Pool Administrator shall establish and maintain a separate account for each Member in which the Member’s share of each policy year’s operating deficit or surplus shall be recorded. At the end of each calendar year, the Pool Administrator shall examine the operating results of each policy year and the condition of each account to determine if a distribution or assessment is appropriate. The determination of the Pool Administrator shall be reviewed by the Advisory Board which shall concur or make its own determination. The Commissioner shall review the determination of the Pool Administrator and the Advisory Board, if different, and make the final determination of the amount and timing of any distribution or assessment. The Pool shall always maintain funds adequate to meet its cash flow obligations. Projections of anticipated cash requirements shall be made to assure the adequacy of funds held by the Pool. Interim assessments may be levied by the Commissioner at any time that he, in his sole discretion, deems an assessment necessary to meet the obligations of the Pool. Any assets remaining on hand in the Pool on the date of final termination, as specified by the Commissioner, after payment or appropriate reserves of any and all outstanding expenses and claims, shall be remitted to the general fund of the State of Mississippi. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.9: Borrowing Authority The Pool may borrow money to effect the purposes of these Articles. No loans shall be contracted on behalf of the Pool and no evidences of indebtedness shall be issued in its name unless authorized by the Commissioner. Source: Miss. Code Ann. §71-3-111 (Rev. 2011) 4.11.10: Reports to the Commissioner On or before June 30th of each calendar year, the Pool Administrator shall file with the Commissioner a report of the Pool’s financial condition at the end of the immediately preceding calendar year and the results of Pool operations for such immediately preceding calendar year. The report shall include information regarding the condition of Members’ accounts, the make-up and character of the Pool’s investment portfolio, and accident year development of the Pool’s losses. The Commissioner may require such other information as he deems necessary to the proper administration of the Pool. The accounts of the Pool and the Pool Administrator’s reports to the Commissioner shall be annually audited on a statutory accounting basis by an independent certified public accounting firm.