Bulletin No February 23, Broadway, Suite 900 Oakland, CA Fax

Transcription

1 WCIRB Bulletin Bulletin No February 23, Broadway, Suite 900 Oakland, CA Fax Notice of the 2017 Meeting of the WCIRB Membership The Workers Compensation Insurance Rating Bureau of California s (WCIRB) Annual Meeting of its Membership will be held at 8:30 AM on Thursday, March 23, 2017 at the WCIRB s office located at 1221 Broadway, Suite 900 in Oakland, California. Notice of the Annual Meeting is being provided in accordance with Article XI of the WCIRB Constitution and Articles III and IV of the WCIRB Bylaws. Article V of the WCIRB Bylaws requires that at least one-third of the Regular Members be in attendance at the Annual Meeting in order to transact business. A list of WCIRB Regular Members is attached as a reference. Members are strongly encouraged to make every effort to arrange for a qualified representative to attend this meeting. If it is not practical for a representative to be present, Members are requested to grant a proxy to another Member who is attending. To confirm attendance, or to designate a proxy, all Members should complete and return the Attendance or Proxy Form that the WCIRB has provided to each Member. For further information, please contact Tara Widmer at or communications@wcirb.com. Meeting Agenda I. Welcome and Comments from Bill Mudge, WCIRB President II. Election of Committee Members The terms of the following Governing Committee members are expiring. Their successors are to be elected for three-year terms running from the 2017 Annual Meeting to the 2020 Annual Meeting. Governing Committee Pacific Compensation Insurance Company Travelers Property Casualty Company of America The terms of the following Classification and Rating Committee members are expiring. Their successors are to be elected for three-year terms running from the 2017 Annual Meeting to the 2020 Annual Meeting. Classification and Rating Committee Republic Indemnity Company of America Insurance Company of the West The Report of the Nominating Committee which includes the Committee s recommendations for filling the above vacancies is attached (Attachment 1). III. Amendments to the WCIRB Constitution and Bylaws The WCIRB is proposing amendments to its Constitution for approval by the WCIRB Membership (Attachment 2) Workers Compensation Insurance Rating Bureau of California. All Rights Reserved. See for more information.

2 Bulletin No February 23, 2017 The proposed changes document the organization, powers and duties of the WCIRB s Nominating Committee, which is the only WCIRB standing committee not currently accounted for in the Constitution. The proposed changes were submitted to the California Department of Insurance for review and CDI staff indicated they had no concerns about the revisions. The WCIRB s Governing Committee approved these changes at the December 7, 2016 meeting. WCIRB staff will be available at the Annual Meeting to address any questions the Membership may have about the proposed changes Workers Compensation Insurance Rating Bureau of California. All Rights Reserved.

3 Bulletin No February 23, 2017 WCIRB Regular Members by Group Alaska National Insurance Company Alleghany Group Pacific Compensation Insurance Company Allianz Insurance Group Allianz Global Risks US Insurance Company American Automobile Insurance Company American Insurance Company (The) Associated Indemnity Corporation Fireman s Fund Insurance Company National Surety Corporation Allstate Insurance Group Allstate Indemnity Company Allstate Insurance Company Allstate Northbrook Indemnity Company American Assets Group Explorer Insurance Company Insurance Company of the West American Contractors Insurance Group ACIG Insurance Company American Financial Group Great American Alliance Insurance Company Great American Assurance Company Great American Insurance Company Great American Insurance Company of New York National Interstate Insurance Company Republic Indemnity Company of America Republic Indemnity Company of California Triumphe Casualty Company Vanliner Insurance Company American International Group AIU Insurance Company American Home Assurance Company Commerce and Industry Insurance Company Granite State Insurance Company Insurance Company of the State of Pennsylvania (The) National Union Fire Insurance Company of Pittsburgh, PA New Hampshire Insurance Company Amerisafe Group American Interstate Insurance Company Amerisure Company Group Amerisure Mutual Insurance Company AmTrust NGH Group CorePointe Insurance Company Republic Underwriters Insurance Company Security National Insurance Company Sequoia Insurance Company Southern Insurance Company Springfield Insurance Company Technology Insurance Company, Inc. Wesco Insurance Company Arch Insurance Group Arch Insurance Company Argonaut Group Argonaut Insurance Company Argonaut-Midwest Insurance Company Argonaut-Southwest Insurance Company Armco Insurance Inc Group Northwestern National Insurance Company of Milwaukee, Wisconsin Arrowpoint Capital Group Arrowood Indemnity Company Baldwin & Lyons Group Protective Insurance Company Benchmark Insurance Company Berkshire Hathaway Group AmGUARD Insurance Company Berkshire Hathaway Homestate Insurance Company California Insurance Company Commercial Casualty Insurance Company Continental Indemnity Company Cypress Insurance Company EastGUARD Insurance Company General Reinsurance Corporation National Liability & Fire Insurance Company NorGUARD Insurance Company Oak River Insurance Company Redwood Fire and Casualty Insurance Company Blue Cross Blue Shield of Michigan Group Accident Fund Insurance Company of America CompWest Insurance Company United Wisconsin Insurance Company Brotherhood Mutual Insurance Company California Casualty Management Group California Casualty & Fire Insurance Company California Casualty Compensation Insurance Company California Casualty General Insurance Company of Oregon California Casualty Indemnity Exchange (The) California Casualty Insurance Company Care West Insurance Company Cherokee Insurance Company Chubb Limited Group ACE American Insurance Company ACE Fire Underwriters Insurance Company ACE Property and Casualty Insurance Company Bankers Standard Insurance Company Century Indemnity Company Chubb Indemnity Insurance Company Chubb National Insurance Company Federal Insurance Company Great Northern Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Pacific Indemnity Company Vigilant Insurance Company Westchester Fire Insurance Company Church Mutual Group Church Mutual Insurance Company Cincinnati Financial Group Cincinnati Insurance Company (The) CNA Insurance Group American Casualty Company of Reading, Pennsylvania Continental Casualty Company Continental Insurance Company (The) National Fire Insurance Company of Hartford Transportation Insurance Company Valley Forge Insurance Company Constitution Insurance Company Coverys Group Preferred Professional Insurance Company CUNA Mutual Group CUMIS Insurance Society, Inc Workers Compensation Insurance Rating Bureau of California. All Rights Reserved.

4 Bulletin No February 23, 2017 Dentists Insurance Company (The) Electric Insurance Group Electric Insurance Company EMC Insurance Company Group Employers Mutual Casualty Company Employers Holdings Group Employers Assurance Company Employers Compensation Insurance Company Employers Preferred Insurance Company Endurance Group Endurance Assurance Corporation Enstar Group SeaBright Insurance Company StarStone National Insurance Company Sussex Insurance Company Everest Reinsurance Holdings Group Everest National Insurance Company Fairfax Financial Group Crum & Forster Indemnity Company North River Insurance Company (The) United States Fire Insurance Company Zenith Insurance Company ZNAT Insurance Company Farmers Insurance Group Civic Property and Casualty Company Exact Property and Casualty Company Farmers Insurance Exchange Foremost Insurance Company Grand Rapids, Michigan Foremost Property and Casualty Insurance Company Foremost Signature Insurance Company Mid-Century Insurance Company Neighborhood Spirit Property and Casualty Company Truck Insurance Exchange GuideOne Insurance Group GuideOne Mutual Insurance Company Hannover Group HDI Global Insurance Company Hanover Insurance Group Allmerica Financial Benefit Insurance Company Citizens Insurance Company of America Hanover American Insurance Company (The) Hanover Insurance Company (The) Massachusetts Bay Insurance Company NOVA Casualty Company Hartford Fire & Casualty Group Hartford Accident and Indemnity Company Hartford Casualty Insurance Company Hartford Fire Insurance Company Hartford Insurance Company of the Midwest Hartford Underwriters Insurance Company Property and Casualty Insurance Company of Hartford Sentinel Insurance Company, Ltd. Trumbull Insurance Company Twin City Fire Insurance Company Houston International Insurance Group Imperium Insurance Company IAT Reinsurance Company Group Harco National Insurance Company Transguard Insurance Company of America, Inc Liberty Mutual Group American Economy Insurance Company American States Insurance Company American States Insurance Company of Texas Employers Insurance Company of Wausau First Liberty Insurance Corporation (The) First National Insurance Company of America General Insurance Company of America Golden Eagle Insurance Corporation Liberty Insurance Corporation Liberty Mutual Fire Insurance Company Liberty Mutual Insurance Company Liberty Northwest Insurance Corporation LM Insurance Corporation Netherlands Insurance Company (The) Ohio Security Insurance Company Peerless Indemnity Insurance Company Peerless Insurance Company SAFECO Insurance Company of America SAFECO Insurance Company of Illinois Wausau Business Insurance Company Wausau Underwriters Insurance Company West American Insurance Company Maine Employers Mutual Insurance Group MEMIC Indemnity Company Markel Corporation Group Markel Insurance Company Meadowbrook Insurance Group ProCentury Insurance Company Star Insurance Company Williamsburg National Insurance Company Metropolitan Group MetLife Insurance Company USA Motorists Mutual Group Motorists Commercial Mutual Insurance Company MS & AD Insurance Group Mitsui Sumitomo Insurance Company of America Mitsui Sumitomo Insurance USA Inc. Munich RE Group American Alternative Insurance Corporation American Family Home Insurance Company dba AFH Insurance Company Munich Reinsurance America, Inc. National American Insurance Company Nationwide Corporation Group Farmland Mutual Insurance Company National Casualty Company Nationwide Agribusiness Insurance Company Nationwide Mutual Insurance Company Old Republic Group Great West Casualty Company Manufacturers Alliance Insurance Company Old Republic General Insurance Corporation Old Republic Insurance Company Pennsylvania Manufacturers Association Insurance Company Pennsylvania Manufacturers Indemnity Company Petroleum Casualty Company Pharmacists Mutual Group Pharmacists Mutual Insurance Company ProSight Grp New York Marine and General Insurance Company Public Service Group Public Service Insurance Company dba PSM Insurance Company Workers Compensation Insurance Rating Bureau of California. All Rights Reserved.

5 Bulletin No February 23, 2017 QBE Insurance Group General Casualty Company of Wisconsin North Pointe Insurance Company Praetorian Insurance Company QBE Insurance Corporation Regent Insurance Company Stonington Insurance Company Unigard Indemnity Company Unigard Insurance Company RLI Insurance Group RLI Insurance Company Samsung Fire & Marine Insurance Co., Ltd. (United States Branch) Sentry Insurance Group Florists Mutual Insurance Company Middlesex Insurance Company Sentry Casualty Company Sentry Insurance a Mutual Company Sentry Select Insurance Company Sompo Japan Nipponkoa Holdings Inc Grp Sompo Japan Fire & Marine Insurance Company of America Sompo Japan Insurance Company of America Starr Group Starr Indemnity & Liability Company State Compensation Insurance Fund State Farm Group State Farm Fire and Casualty Company State National Group State National Insurance Company, Inc. Swiss Re Group North American Specialty Insurance Company Westport Insurance Corporation Tokio Marine Holdings Inc Group Safety National Casualty Corporation TNUS Insurance Company Tokio Marine America Insurance Company Trans Pacific Insurance Company Travelers Group Discover Property & Casualty Insurance Company Farmington Casualty Company Fidelity and Guaranty Insurance Company Fidelity and Guaranty Insurance Underwriters, Inc. Select Insurance Company St. Paul Fire and Marine Insurance Company St. Paul Guardian Insurance Company St. Paul Mercury Insurance Company St. Paul Protective Insurance Company Standard Fire Insurance Company (The) Travelers Casualty and Surety Company Travelers Casualty and Surety Company of America Travelers Casualty Company (The) Travelers Casualty Company of Connecticut Travelers Casualty Insurance Company of America Travelers Commercial Insurance Company Travelers Indemnity Company (The) Travelers Indemnity Company of Connecticut (The) Travelers Property Casualty Company of America United States Fidelity and Guaranty Company Trebuchet Insurance Group Bedivere Insurance Company Employers Fire Insurance Company (The) Lamorak Insurance Company Utica Group Graphic Arts Mutual Insurance Company Utica Mutual Insurance Company Warranty Group Virginia Surety Company, Inc. White Mountains Group Atlantic Specialty Insurance Company OBI National Insurance Company Workers Comp of Utah Group Advantage Workers Compensation Insurance Company WR Berkley Corporation Group Berkley National Insurance Company Berkley Regional Insurance Company Great Divide Insurance Company Midwest Employers Casualty Company Preferred Employers Insurance Company StarNet Insurance Company Tri-State Insurance Company of Minnesota XL America Group Greenwich Insurance Company XL Insurance America, Inc. XL Specialty Insurance Company Zurich Insurance Group American Guarantee and Liability Insurance Company American Zurich Insurance Company Fidelity and Deposit Company of Maryland Universal Underwriters Insurance Company Zurich American Insurance Company Zurich American Insurance Company of Illinois Workers Compensation Insurance Rating Bureau of California. All Rights Reserved.

6 Attachment 1 Report of WCIRB Nominating Committee February 23, Broadway, Suite 900 Oakland, CA Fax wcirb@wcirb.com In WCIRB Bulletin dated November 30, 2016, nominations for private insurer representatives on the Governing Committee and the Classification and Rating Committee were solicited on behalf of the Nominating Committee. There are two positions to be filled on the Governing Committee and two positions to be filled on the Classification and Rating Committee at the 2017 Annual Meeting. Article V of the WCIRB Constitution provides for these Committee members to serve three-year terms. After careful deliberation, the Nominating Committee recommends that the following private insurance company members be elected to serve for three-year terms until the Annual Meeting in 2020: Governing Committee Everest National Insurance Company Travelers Property Casualty Company of America Classification and Rating Committee Republic Indemnity Company of America Zenith Insurance Company The Nominating Committee believes that these nominees are the best choices to represent the private insurer members on these Committees and that the composition of the Committees is harmonious with the principles of Nominating Committee s rules and procedures. Subject to the election of these nominees by the Membership at the 2017 Annual Meeting, the insurer members of the 2017 Committees will be as follows: Governing Committee Everest National Insurance Company Hartford Accident and Indemnity Company Liberty Mutual Insurance Company Oak River Insurance Company Preferred Employers Insurance Company Travelers Property Casualty Company of America State Compensation Insurance Fund Zenith Insurance Company Classification and Rating Committee National Union Fire Insurance Co. of Pittsburgh PA Pacific Compensation Insurance Company Republic Indemnity Company of America Security National Insurance Company State Compensation Insurance Fund Travelers Indemnity Company Zenith Insurance Company The Nominating Committee thanks all members who submitted recommendations. A designee of the Nominating Committee will be available to discuss this Report with interested members between 8:00 AM and 8:30 AM, Thursday, March 23, 2017, at the same location as the Annual Meeting, which will be held in the WCIRB office located at 1221 Broadway, Suite 900, Oakland, CA The Annual Meeting will begin promptly at 8:30 AM Workers Compensation Insurance Rating Bureau of California. All Rights Reserved. See for more information.

7 Workers Compensation Insurance Rating Bureau of California Organized September 22, 1915 CONSTITUTION Adopted September 22, 1915 Revised March 19XX, BYLAWS Adopted December 14, 1951 Revised March 19XX,

8 Under penalty of perjury, I certify that the instrument to which this statement is appended is a true copy of the presently amended and official Constitution and Bylaws of Workers Compensation Insurance Rating Bureau of California, the original of which is in the custody of the WCIRB. William J. Mudge President Workers Compensation Insurance Rating Bureau of California Oakland, California State of California County of Alameda On, before me,, Notary Public, personally appeared William J. Mudge, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal.

9 Workers Compensation Insurance Rating Bureau of California Organized September 22, 1915 CONSTITUTION Adopted September 22, 1915 Revised March 19XX,

10 ARTICLE I NAME The name of this organization is Workers Compensation Insurance Rating Bureau of California. The organization is an unincorporated nonprofit association. Hereafter it is referred to variously as WCIRB and as Association. ARTICLE II PURPOSES The WCIRB is organized to pursue some or all of the following purposes: 1. To cooperate with the Insurance Commissioner of the State of California and perform all lawful functions of a rating organization under the California Insurance Code consistent with maintaining the confidentiality of proprietary and competitively sensitive information provided to the WCIRB, as permitted by law, including but not limited to: a. Providing reliable statistics and rating information; in respect to workers compensation insurance and employers liability insurance; b. Collecting and tabulating information and statistics to make classifications of risks and pure premium rates relating to workers compensation insurance to be submitted to the Insurance Commissioner; c. Formulating rules and regulations in connection with the administration of classifications and rating systems for presentation to the Insurance Commissioner; d. Inspecting risks for classification purposes; e. Examining policies, daily reports, endorsements, or other evidence of insurance for various purposes, including but not limited to ascertaining whether they comply with the regulations of the Insurance Commissioner governing the underwriting of workers compensation insurance and to make reasonable rules governing their submission. f. Performing test audits of insureds payrolls and insurer audits of such payrolls to check the accuracy and reliability; g. Exchanging information and experience data with rating organizations, advisory organizations, and insurers in California and other states; h. Forming or establishing lawful relationships with any lawfully authorized ratemaking or advisory organization; i. Gathering, compiling, and reporting to the Commissioner, if designated as the statistical agent, experience of all insurers; and j. Performing all acts necessary, incidental, or convenient to carry out the purposes of a rating organization. 2. To perform all lawful functions of an advisory organization under the California Insurance Code consistent with maintaining the confidentiality of proprietary and competitively sensitive information provided to the WCIRB, as permitted by law, including but not limited to: a. Collecting, tabulating, or providing data; 1

11 b. Providing products and services; c. Entering into lawful business arrangements; and d. Performing all acts necessary, incidental, or convenient to carry out the purposes of an advisory organization. ARTICLE III MEMBERSHIP Every insurer authorized to transact California workers compensation insurance and employers liability insurance incidental thereto and written in connection therewith is eligible for membership in the WCIRB. An insurer obtains membership by compliance with the requirements set forth in the Bylaws, particularly in Article II. 1. A regular member is an eligible insurer with direct written premium at the advisory pure premium rate level of at least $500,000 in the latest available calendar year. 2. An associate member is an eligible insurer with direct written premium at the advisory pure premium rate level of less than $500,000 in the latest available calendar year. Any associate member, regardless of the amount of its direct written premium at the advisory pure premium rate level, may become a regular member by paying the regular member annual membership fee set forth in Article IV. 3. The members shall hold an annual meeting as provided in the Bylaws of the WCIRB. 4 Regular members in attendance shall be entitled to vote at annual meetings and special meetings of the WCIRB; attendance means: (a) the physical presence of a member by its own authorized company-representative or by proxy given through any means approved in advance by the WCIRB that is reasonably calculated to allow the member to vote without being physically present by giving instructions to any person who is present at the meeting to vote as directed by the member; or (b) participation in a meeting telephonically, electronically or by any other means approved in advance by the WCIRB that is reasonably calculated to enable meeting attendees who are not physically present to participate in the consideration, deliberation and determination of issues properly presented at such meeting. All regular members are entitled to hold office upon its committees. Associate members are not entitled to vote, hold office or serve as members of committees. 5. All members shall pay all proper charges levied against them and shall execute authorizations and other documents, and provide to the WCIRB periodically, at times and in forms prescribed, statistical and other data as may be required by the WCIRB to effectuate some or all of the WCIRB s purposes. 6. A member may resign from the WCIRB to become effective in no less than ninety days following the filing with the WCIRB of written notice of resignation. A member who violates, or fails to conform to, the requirements of this Constitution or these Bylaws or such reasonable rules as the WCIRB shall have adopted for the regulation of its members and the conduct of its business may, after timely notice of charges (no less than two weeks) and a hearing before the Governing Committee at which the member shall have been afforded an opportunity to be heard, be expelled by the Governing Committee from membership, if this be lawful, or disciplined in other lawful measure or way. Expulsion shall require the affirmative vote of no less than six insurer members of the Governing Committee. 2

12 An insurer whose membership in the WCIRB terminates for any cause shall nevertheless (a) report to the WCIRB such statistics and other data as the WCIRB may require on its policies that became effective or were in force during its membership; (b) remain liable for fees, charges, and assessments incurred during its membership; (c) lose forthwith all rights in or to any asset of the WCIRB. 7. A member who violates, or gives reasonable cause for belief that it has violated, the provisions of Article 2 or 3, Chapter 3, Part 3, Division 2, of the Insurance Code may, after a hearing before the Governing Committee at which it shall have been afforded opportunity to be heard, be reported by the Governing Committee to the Insurance Commissioner with the request that the Commissioner proceed in accordance with the appropriate provisions of the Insurance Code. ARTICLE IV MEMBERSHIP FEES AND ASSESSMENTS 1. Each regular member shall pay an annual membership fee of $1,500 upon becoming a member of the WCIRB and shall pay a like amount annually thereafter. 2. Each associate member shall pay an annual membership fee of $500 upon becoming an associate member of the WCIRB and shall pay a like amount annually so long as the member remains an associate member as provided in Article III. 3. No member shall be entitled to any refund on any portion of its membership fee by reason of its withdrawal from or termination of WCIRB membership. 4. The expenses of the WCIRB not covered by membership fees shall be met by assessments and by charges for services, subscriptions and fines which shall be levied or established by the insurer members of the Governing Committee. 5. The total amount retained of all funds received through assessments for any one year shall be only sufficient to meet the expenses of the WCIRB for that year, but assessments for funds for a reasonable advance period may be made, to be followed by an adjustment after the close of each calendar year in accordance with such plans as may be adopted by the insurer members of the Governing Committee. 6. Assessments shall be levied at such times as may be designated by the insurer members of the Governing Committee. 7. The insurer members of the Governing Committee shall determine the rules for providing such assessments as may be required. Assessments shall be reasonable and as nearly in proportion to direct written premium at the advisory pure premium rate level as possible. 1. Governing Committee ARTICLE V ORGANIZATION There shall be a Governing Committee composed of twelve members: eight insurer members and four public members. a. The eight insurer members shall be composed of State Compensation Insurance Fund, which shall be a permanent member of the Committee, and seven other insurers. Each insurer member is entitled to one vote on all issues properly brought before the Committee. 3

13 b. Two of the four public members shall represent organized labor and two shall represent insured employers. Each public member is entitled to one vote on all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules, and policy and endorsement forms which are properly brought before the Governing Committee. The public members are not entitled to vote on any other issues. c. Elected insurer members of the Governing Committee shall serve three year terms staggered such that two or three members shall be elected at each annual meeting of the WCIRB. d. At each annual meeting of the WCIRB, the Insurance Commissioner shall appoint one representative of organized labor and one representative of insured employers as members of the Governing Committee to serve until the second annual meeting following their appointment. e. The Committee shall elect its Chair from its insurer membership. 2. Audit Committee There shall be an Audit Committee composed of at least three and no more than six insurer members appointed by the insurer members of the Governing Committee. a. The Committee shall elect its Chair from its membership. 3. Classification and Rating Committee There shall be a Classification and Rating Committee composed of seven insurer members. The Committee shall be organized as follows: a. State Compensation Insurance Fund shall be a permanent member of the Committee. b. Elected insurer members of the Classification and Rating Committee shall serve three year terms staggered such that two members shall be elected at each annual meeting of the WCIRB. c. The President of the WCIRB shall act as Chair of the Classification and Rating Committee without the right to vote. 4. Nominating Committee There shall be a Nominating Committee composed of five insurer members. a. Two members of the Nominating Committee shall be appointed by the insurer members of the Governing Committee from among the Governing Committee s insurer members. b. Three members of the Nominating Committee shall be selected from among the WCIRB s insurer membership by the two members of the Governing Committee serving on the Nominating Committee. c. The members of the Committee shall serve a one-year term commencing on a date prior to September 30 of each year. d. No more than three Nominating Committee members may be reappointed to succeed themselves if other members are readily available and willing to serve. e. The Nominating Committee shall elect its Chair from its membership. 4

14 4.5. Actuarial Committee There shall be an Actuarial Committee composed of at least seven persons each of whom must be a Fellow of the Casualty Actuarial Society in good standing. The Committee shall be organized as follows: a. State Compensation Insurance Fund shall have a permanent representative designated to serve as a member of the Committee. b. Five or more members of the Committee shall represent other insurers and shall be appointed by the President. c. The Actuary retained by the public members of the Governing Committee shall be a member of the Committee. d. Committee members other than the representative of State Compensation Insurance Fund and the Actuary retained by the public members of the Governing Committee shall serve three year terms upon appointment by the President. e. The Chief Actuary of the WCIRB shall Chair the Actuarial Committee without the right to vote. ARTICLE VI ELECTION OF COMMITTEE MEMBERS AND DESIGNATION OF ALTERNATES 1. Insurers shall elect members of the Governing Committee and Classification and Rating Committee by majority ballot at the annual meeting. The composition of such committees shall conform to the provisions of Sections 1 and 3 of Article V. 2. No less than ten days prior to any annual meeting, the WCIRB shall provide to each member a notice specifying the time and place of a meeting at which members shall be nominated to serve on WCIRB committees. Notice shall be provided by any means, including but not limited to electronic means, reasonably calculated to provide each member with actual notice of the meeting. 3. Each appointed public member of the Governing Committee from time to time may designate in writing to the WCIRB a representative from the same employer organization or affiliated employee union, as the case may be, as an alternate. Such alternate shall be entitled to attend and participate in any meeting of the Governing Committee in the place of and with the same powers as the appointed public member. 4. Each member of the Governing Committee and Classification and Rating Committee shall designate to the WCIRB in writing the persons in its employ who are authorized to represent it on the Governing Committee and the Classification and Rating Committee, respectively, subject to the approval of the President. 5. Except where the Chair is otherwise provided for, each committee of the WCIRB shall elect its Chair from its membership. 5

15 ARTICLE VII POWERS AND DUTIES OF THE GOVERNING COMMITTEE 1. The insurer members of the Governing Committee shall have complete charge and management of the affairs of the WCIRB except on those issues for which public members are entitled to vote. The insurer members of the Governing Committee shall control and supervise the finances of the WCIRB and shall have authority to direct and approve any system of assessments or fees to be levied against members of the WCIRB. The insurer members of the Governing Committee shall appoint a President and fix the President s remuneration and shall appoint such other officers as may be necessary, define their duties, and fix their remuneration. 2. The Governing Committee may appoint, modify, and terminate subcommittees, working groups and special committees to assist in carrying out its functions. 3. If an insurer member of the Governing Committee or the Classification and Rating Committee fails to complete the term for which it has been elected, the vacancy may be filled by majority vote of the remaining insurer members of the Governing Committee. If a public member of the Governing Committee fails to complete the term for which such member has been appointed, the Insurance Commissioner shall appoint a successor. Such election or appointment is for the unexpired term of the replaced member. 4. The Governing Committee has such powers and duties as are expressly conferred on it in this Constitution or Bylaws or as are incidental to the powers expressly granted or necessarily or reasonably implied therefrom. The powers and duties of the Governing Committee are vested in the insurer members of the Governing Committee except on those issues for which the public members are entitled to vote. Actions taken by the insurer members pursuant to the powers and duties vested in them shall be deemed to be actions of the Governing Committee. ARTICLE VIII POWERS AND DUTIES OF THE AUDIT COMMITTEE 1. The Audit Committee shall assist the Governing Committee in fulfilling its responsibility to provide oversight of the WCIRB s activities involving: (1) financial reporting, (2) internal controls for financial reporting and information technology, (3) external auditors (qualifications, independence and performance), and (4) risk assessment and management. 2. The composition, operation, powers and duties of the Audit Committee are set forth in the Audit Committee's charter as approved by the Governing Committee and subject to Governing Committee amendment from time to time. ARTICLE IX POWERS AND DUTIES OF THE CLASSIFICATION AND RATING COMMITTEE 1. The Classification and Rating Committee shall advise the Governing Committee regarding the formulation of rules and regulations in connection with pure premium rates and the administration of classifications and rating systems. It may hear and determine matters involving insurer compliance issues involving WCIRB policies and programs. 2. The Classification and Rating Committee may appoint, modify, and terminate such subcommittees, working groups and special committees as it deems advisable to assist it in carrying out its functions. 6

16 3. It shall be the duty of the subcommittees, working groups and special committees so appointed to advise the Classification and Rating Committee. ARTICLE X POWERS AND DUTIES OF THE NOMINATING COMMITTEE 1. The Nominating Committee shall propose a slate of nominees for insurer vacancies on the Governing Committee and Classification and Rating Committee for consideration by the membership at each annual meeting of the WCIRB. 2. In making nominations for the Governing Committee and Classification and Rating Committee, the Nominating Committee shall, consistent with the Constitution and the overall objective of having committees composed of interested, knowledgeable members, consider the following principles: a. There shall be a breadth of representation from members of various sizes, market shares, types of organizations, marketing methods, and regional and national interests. b. Recommendations shall be solicited from all members for nominees for consideration by the Nominating Committee. c. The member nominated by the Nominating Committee shall furnish a qualified representative committed to serve and prepared to communicate with and represent the membership. d. A nominee for the Governing Committee shall agree to meet with interested members at large for the purpose of obtaining input from them regarding WCIRB matters. e. There shall be no predetermined membership rotation for the Nominating Committee. ARTICLE X ARTICLE XI POWERS AND DUTIES OF THE ACTUARIAL COMMITTEE 1. The Actuarial Committee shall advise the Governing Committee on actuarial and statistical matters pertaining to pure premium rates, rating plans, and related matters. 2. The Actuarial Committee may appoint, modify, and terminate such subcommittees, working groups and special committees as it deems advisable to assist it in carrying out its functions. 3. It shall be the duty of the subcommittees, working groups and special committees so appointed to advise the Actuarial Committee. ARTICLE XI ARTICLE XII PRESIDENT 1. The President shall, under the supervision and direction of the Governing Committee, have control of all WCIRB employees and of all the affairs of the WCIRB not herein delegated to committees. 2. The President shall, subject to the supervision and direction of the Governing Committee, actively cooperate in every way with the Insurance Commissioner in achieving the purposes of the WCIRB as designated in Article II of this Constitution and in assisting its members to comply with the provisions of Articles 2 and 3, Chapter 3, Part 3, of Division 2 of the Insurance Code of the State of California. 7

17 3. The President shall make, and is empowered to change and terminate, appointments to membership on the Actuarial Committee. The President shall be a member ex officio of all committees except the Governing Committee, but on no committee shall the President have the right to vote. The President shall enforce this Constitution, preside at all meetings of the WCIRB, and perform such other duties as may be required by the Governing Committee. 4. The President shall cause to be kept a record of all proceedings of the WCIRB and of all WCIRB committees, shall be responsible for all property of the WCIRB, receive and carefully keep all monies of the WCIRB, disburse the same only for the business of the WCIRB, and account to the insurer members of the Governing Committee for all such disbursements. 5. The President may sign and endorse in the name of and on behalf of the WCIRB in the transaction of its business, but not otherwise, checks, drafts, notes, and bills of exchange subject to such countersignature as the insurer members of the Governing Committee may require. The President may delegate this signing authority to subordinates subject to a protocol approved by the Audit Committee. 6. The President shall submit to the Insurance Commissioner on behalf of the WCIRB all proposed manuals of rules, classifications and pure premium rates; proposed plans for rating risks; and all other information, data, statistics, systems, and information that may be required or permitted by the provisions of Articles 2 and 3 of Chapter 3, Part 3, Division 2, of the Insurance Code. 7. The appointment and tenure of the President are conditioned on the ability of the WCIRB to obtain a policy of fidelity insurance acceptable to the insurer members of the Governing Committee, which will indemnify the WCIRB in such sum as the insurer members of the Governing Committee may determine, against loss through the failure of the President faithfully and honestly to discharge the President s duties and faithfully and honestly to receive, care for, and disburse the funds of the WCIRB. 8. The President shall have the authority to form working groups to advise the WCIRB and its committees. ARTICLE XII ARTICLE XIII INDEMNIFICATION 1. Any person or insurer made or threatened to be made a party to any action, suit, or proceeding, because such person or insurer was a member, or served on a committee or working group, or was an officer or employee of the WCIRB, shall be indemnified against all judgments, fines, amounts paid in settlement, reasonable costs and expenses, including attorney s fees and any other liabilities that may be incurred as a result of such action, suit, or proceeding, except in relation to matters as to which any person or insurer shall be adjudged in such action, suit, or proceeding to be liable by reason of willful misconduct in the performance of such person s or the insurer s duties or obligations to the WCIRB, and, with respect to any criminal action or proceedings, except when such person or insurer had reasonable cause to believe that his, her, or its conduct was unlawful. Such indemnification shall be provided whether or not such person or insurer is a member or is holding office or is employed at the time of such action, suit, or proceeding and whether or not any such liability is incurred prior to the adoption of this Article. Such indemnification shall not be exclusive of other rights such person or insurer may have to pass to the successors, heirs, executors, or administrators of such person or insurer. The termination of any such civil or criminal action, suit, or proceeding by judgment, settlement, conviction, or upon plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such person or insurer was liable by reason of willful misconduct or that he, she, or it had reasonable cause to believe that his, her, or its conduct was unlawful. If any such action, suit, or proceeding is compromised, it must be with the approval of the Governing Committee of the WCIRB. 8

18 2. In each instance in which a question of indemnification arises, entitlement thereto, pursuant to the conditions set forth in Section 1 of this Article, shall be determined by the insurer members of the Governing Committee. Such indemnification as is herein provided shall be apportioned among all members, including any member named in such action, suit, or proceeding. 3. No person or insurer shall be indemnified under this Article for any liability owed to the WCIRB by such person or insurer. ARTICLE XIII ARTICLE XIV AMENDMENTS This Constitution may be altered, amended, repealed or a new Constitution adopted at any regular meeting of the WCIRB, or at any special meeting called for that purpose, by the affirmative votes of threefourths of the members in attendance and voting in accordance with the provisions of Article VI of the Bylaws. The Governing Committee is empowered to propose amendments to this Constitution for acceptance or rejection by vote of the membership of the WCIRB via a ballot presented by any means, including but not limited to electronic means, reasonably calculated to present the proposed amendments. When such an amendment is so proposed, the amendment shall be deemed adopted if three-fourths of the members submit to the WCIRB their respective affirmative vote within twenty days following the provision of such ballots to the members; otherwise, it is rejected. Notwithstanding the foregoing, if, within such twenty day period, ten percent of the members submit to the WCIRB written request for consideration of the proposed amendment at a meeting of the WCIRB, the proposed amendment shall be further considered and voted on at a duly convened meeting of the WCIRB and if three-fourths of the insurer members in attendance and voting are in favor of such amendment, it is adopted; otherwise, it is rejected. 9

19 Workers Compensation Insurance Rating Bureau of California Organized September 22, 1915 BYLAWS Adopted December 14, 1951 Revised March 19XX,

20 ARTICLE I OFFICES 1. The Workers Compensation Insurance Rating Bureau of California (WCIRB), which is organized to pursue some or all of the purposes detailed in Article II of the WCIRB Constitution, shall maintain its principal office at such place in the State of California as the insurer members of the Governing Committee shall determine. Other offices may be established and maintained when and wherever required. ARTICLE II MEMBERSHIP 1. Any insurer authorized to transact workers' compensation insurance and employers' liability insurance incidental thereto and written in connection therewith may apply for membership in the WCIRB. 2. The applicant shall subscribe to and file with the WCIRB a signed copy of the WCIRB s Constitution and Bylaws and such filing constitutes an acceptance of and confers membership as detailed in Article III of said Constitution. 3. Among other things, members shall agree that communications to members from the WCIRB may be in any form reasonably designed to reach the member, including electronic communications, and that the member is obliged to provide the WCIRB at all times with a current address that will serve to receive such communications. ARTICLE III MEETINGS OF THE WCIRB AND OF ITS COMMITTEES 1. The annual meeting of the WCIRB shall be held each year during the month of March on a date and at a time and place designated by the insurer members of the Governing Committee. In the absence of designation by the insurer members of the Governing Committee of a date, time and place of the annual meeting for any year, it shall be held in a location in California in March at such time and place as may be designated by the President and specified in the notice of the meeting. In the absence of designation by the insurer members of the Governing Committee of a date, time and place of the annual meeting for any year, it shall be held at a location in California on a date in March at such time and place as may be designated by the President and specified in the notice of the meeting. 2. Special meetings of the WCIRB may be called at any time by the President upon the approval of the insurer members of the Governing Committee and shall be held in a location in California at such time and place as may be specified in the notice of the meeting. Special meetings shall be called by the President upon the written request of the insurer members of the Governing Committee or of five regular members of the WCIRB. 3. In the absence or inability of the President to act, the Chair of the Governing Committee or the Chair s designee shall preside at meetings of the WCIRB. 4. Regular meetings of the Governing Committee shall be held at such times and places as the Governing Committee may determine. Regular meetings of all other committees shall be held at such times and places as such committees may determine, unless otherwise prescribed by the creating authority. 1

21 5. Special meetings of the Governing Committee may be called at any time by the Governing Committee or President, and shall be called by the President upon the written request of three members of the Governing Committee. Special meetings of all other committees may be called at any time by the Chair of the committee or the President. 6. The Insurance Commissioner is invited to attend, either personally or by representative, the meetings of the WCIRB and of its committees. 7. Each member shall designate to the WCIRB in writing the persons in its employ who are authorized to represent it at meetings of the WCIRB. 8. Nothing in this section shall be construed to preclude the WCIRB from conducting any meeting telephonically, electronically or by any other means reasonably calculated to enable meeting attendees who are not physically present to participate in the consideration, deliberation and determination of issues properly presented at such meeting. ARTICLE IV NOTICE OF MEETINGS OF THE WCIRB AND OF ITS COMMITTEES 1. Notice of meetings of the WCIRB shall be given to each member by the President or, in case of the President s absence or inability to act, by such person as the insurer members of the Governing Committee shall appoint, by either mailing notice at least ten days before the date of the meeting, or by any other means, including but not limited to electronic means reasonably calculated to provide each member with actual notice of the meeting ten days in advance. Such notice shall in each case state the place, day, hour, and purpose of the meeting and set forth an agenda of the business or matter to be acted upon at the meeting of which notice is given. No business or matter which is not included in said agenda may be acted upon at such meeting unless by unanimous consent of the regular members in attendance and voting. Attendance shall have the same meaning as set forth in Article III of the WCIRB Constitution. 2. Special meetings of the WCIRB shall be called in a manner prescribed in Section 1 of this Article, but may be called no less than three days before the day fixed for such meeting provided the insurer members of the Governing Committee by resolution approves such shortening of time. 3. No notice of any regular meeting of any WCIRB committee shall be required. 4. Notice of any special meeting of any committee shall be given to each committee member in the manner prescribed by Section 1 of this Article no less than two days before the day fixed for such meeting; however, no notice need be given to a member who signs a written waiver of notice. ARTICLE V QUORUMS 1. At all meetings of the WCIRB, one third of the regular members of the WCIRB shall constitute a quorum for the transaction of business. 2. At all meetings of the Governing Committee, six insurer members shall constitute a quorum for the transaction of business. 3. At all meetings of the Classification and Rating Committee, five members shall constitute a quorum for the transaction of business. 4. At all meetings of other WCIRB committees, a majority of the members of such committee shall constitute a quorum. 2