Nonprofit Insurance Trust. Workers Compensation Pool Bylaws

Transcription

1 Nonprofit Insurance Trust Workers Compensation Pool Bylaws Preamble: The Minnesota employers which previously met all membership qualifications and were admitted to this Pool, and the Minnesota employers who may hereafter apply, qualify for and be granted admission to this Pool, are members of Nonprofit Insurance Trust, a Minnesota nonprofit corporation ( NIT ). For purposes of this Pool and other pools, NIT and its members are political subdivisions under Minnesota Statutes section , Subd. 2. The said Minnesota employers have become members of NIT for the purpose of participating in this Pool pursuant to Minnesota Statutes section and other applicable laws. Name and Effective Date ARTICLE 1 The full name of this Pool shall be: Nonprofit Insurance Trust Workers Compensation Pool. The Pool provides comprehensive Minnesota workers compensation coverage for prior periods for members of that Fund, which was a group self-insured workers compensation program pursuant to Minnesota Statutes section , Minnesota Statutes Chapter 79A, and Minnesota Rules Chapter Purpose ARTICLE II The purpose of this Pool is to establish and operate a workers' compensation selfinsurance pool pursuant to applicable Minnesota statutes and NIT s bylaws. The further purpose of the Pool is to assist member nonprofit organizations to operate their programs in a manner which focuses on safety for staff and clients. It is the conviction of Pool members that operating in this manner will enable member agencies to invest less in insurance costs and more in programs and services. Definitions ARTICLE III 1. Manual Premium: "Manual Premium" shall mean a sum no less than the total exposure Base defined in the Workers' Compensation Insurers Rating Association's manual of Rules and Classifications multiplied by pure premium rates as approved for use by the Minnesota Commissioner of Commerce and further multiplied by an amount to be determined on an annual basis by the Board of Directors to insure the financial stability of the Pool. 1

2 2. Modified Premium: "Modified Premium" shall mean the total Manual Premiums above modified by an experience rating formula determined by the Minnesota Workers' Compensation Insurance Association. 3. Net Deposit Premium: "Net Deposit Premium" shall mean Modified Premium adjusted for any credits or debits which may be applied, before the payroll audit to verify payroll information provided by the member. 4. Annual Premium: "Annual Premium" shall mean the audited premium paid by a member after payroll audit for participation during a single fund year. 5. Pool Year: "Pool Year shall mean a calendar year from January 1 through December Pool Surplus: "Pool Surplus" shall mean the excess of all Pool monies over (a) the amount necessary to fulfill all Pool obligations for all Pool Years that the Pool has been in operation and (b) the amount that the Board determines to distribute and pay over to NIT for NIT programs. 7. Assessment: "Assessment" shall mean those funds charged to members of record for a Pool Year to which a deficit is attributable. 8. Credit: "Credit" shall mean the discounts determined by the Board of Directors based on a member s loss experience. 9. Debit: "Debit" shall mean the surcharges determined by the Board of Directors based on a member s loss experience. 10. Audited Premium: Premium based on payroll that has been verified by audit. Membership ARTICLE IV 1. Qualifications: Each member must (a) be a Minnesota employer that is incorporated as a Minnesota nonprofit corporation under Minnesota Statutes Chapter 317A and exempt from federal income tax because described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, (b) otherwise meet all requirements for membership in NIT per NIT s articles of incorporation and bylaws, (c) be in sound financial condition, and (d) be approved for membership in the Pool by the Board of Directors in the sole and absolute discretion of that Board of Directors. An applicant for membership shall submit a written application, consent to a safety inspection, and provide workers' compensation loss history consisting of information regarding its workers' compensation premium and losses for a period up to five years for review by the Pool Administrator. Admission to membership shall consist of a review of information required by the Board of Directors including, but not limited to, loss history data, 2

3 financial data, and the impact a proposed new member will have on the Pool. After a positive review and approval by the Board, membership shall commence on a date mutually acceptable to the Pool and the new member. Membership in this Pool shall not be effective until Net Deposit Premiums have been paid in accordance with the provisions of Article VIII. The Board of Directors may impose a further qualification that each Pool member must select and pay the Premium for one, two or more, up to all, of the available lines or types of Pool Coverage and any other type of coverage offered or sponsored by NIT in order to participate in the Pool and any Pool coverage, at all. 2. Rights of Members: No member shall have any right, title, or interest whatsoever, either legal or equitable, in the assets of the Pool except at such time as a dividend or distribution of surplus has been declared and then only to the extent of any dividend or distribution of surplus so declared. Each member for a specified Pool year shall have the right, along with other members of the Pool having a common interest, to obtain workers' compensation coverage as required by Minnesota Statutes via participation in the Pool, and upon payment of the Premium and compliance with these bylaws and other rules, policies and procedures of NIT as to the Pool. Each member of the Pool is also a member of NIT. As a member of NIT, the Pool member has rights and obligations under and pursuant to NIT s bylaws, and must meet all requirements of those bylaws, but no rights under or pursuant to these Pool bylaws except only as expressly stated above. 3. Member Obligations. Obligations and liabilities of a member under these bylaws, including but not limited to those provided in Articles VII (as to additional premium determined by payroll audit), IX (deficits) and X (penalties and additional compensation) shall survive the member s withdrawal or expulsion from, or other termination or cessation of membership, and shall continue as obligations and liabilities of the former member. The term member shall include a former member, in bylaw provisions that pertain to such obligations and liabilities. 4. Member Representatives. At any meeting of members, former members shall not be entitled to attend, and an active member shall be represented only by an employee or director of the member; provided, however, no member may be represented by a person who is an insurance broker or agent, or a principal, an employee or a family member of an insurance broker or agent, or other person who the Board of Directors or the Pool Administrator determines to have a conflict of interest with NIT. The Board and the Pool Administrator reserve the right to exclude anyone other than authorized member representatives, for the orderly conduct of meetings and to preserve the business expectations of the Pool. 3

4 ARTICLE V Board of Directors 1. Powers and Duties of the Board of Directors: The affairs of the Pool shall be directed by the Board of Directors of NIT, as from time to time constituted pursuant to the articles of incorporation and bylaws of NIT. The Board of Directors of NIT may, pursuant to NIT s bylaws and applicable law, delegate authority to a committee. Each reference in these Pool bylaws to the Board of Directors or the Board is to the NIT Board of Directors, and to the extent that authority has been delegated to a committee of the NIT Board of Directors, then such references in these Pool bylaws shall be to the committee of NIT s Board of Directors to which pertinent authority has been delegated. The Board shall have all of the powers, authority, duties, and responsibilities: (a) that are necessary for general supervision and operation of the Pool and are in accordance with these Pool bylaws and NIT s bylaws and applicable law, (b) that are by any bylaw expressly or implicitly provided to or imposed on the Board or any other person (so the Board has the power and authority of the Fiscal Agent, Licensed Service Company and Administrator, if any of them fails to act), or (c) that the Board has with respect to any unrestricted properties and assets of NIT, and with respect to any programs, activities, interests or rights of NIT. Without in any way limiting the foregoing, the Board, at its sole discretion: A. May appoint, or terminate the appointment of a Fiscal Agent who shall serve for such period and shall be delegated such powers and duties as may be set forth in an agreement signed by NIT on behalf of the Pool and the Fiscal Agent. B. May appoint, or terminate the appointment of a Licensed Service Company who shall serve for such a period and shall be delegated such powers and duties as may be set forth in an agreement signed by NIT on behalf of the Pool and the Licensed Service Company. C. May appoint, or terminate the appointment of a Pool Administrator who shall serve for such a period and shall be delegated such powers and duties as may be set forth in an agreement signed by NIT on behalf of the Pool and the Pool Administrator. D. Shall carry out those duties imposed upon them by these bylaws and NIT s bylaws except to the extent that such duties are delegated to the Fiscal Agent, Licensed Service Company, and Pool Administrator as set forth above. E. Shall approve all contracts, which contracts must be in conformance with the laws of the State of Minnesota. F. Shall be responsible for compliance with the Minnesota Workers' Compensation law and any applicable rules and regulations of the State of Minnesota. 4

5 G. At least annually, shall review the following items, for the purpose of determining whether the areas of concern are being adequately: a. Licensed Service Company performance b. Loss control and safety engineering c. Investment policies d. Collection of delinquent debts e. Expulsion procedures f. Initial member review g. Pool Administrator Performance h. Fiscal agent performance i. Claims handling and claims reporting 2. Limitation on Liability. These bylaws contemplate that the Board members will take the necessary time to perform their duties, but the day to day activities of the Fund will be carried out by the Fiscal Agent, the Licensed Service Company, and the Pool Administrator. Therefore, a Board member shall not be liable for the negligent acts of the Fiscal Agent, Licensed Service Company, and Pool Administrator unless and to the extent he or she has actual prior knowledge of such negligent acts; provided, however, nothing in this paragraph 5.2 or in any other provision of these bylaws is intended to, or shall, waive or impair the limits on liability of NIT directors under Minnesota Statutes Chapter 317A, or the right of NIT directors (or committee members) to indemnification when and as provided by and pursuant to that Chapter and NIT s bylaws. 3. Indemnification. When and to the extent so determined by the Board, Pool assets shall be applied to obligations of NIT to indemnify directors, officers and employees of NIT, and other persons who NIT will indemnify, in every instance in accordance with NIT s bylaws and applicable law. 4. Audit. The Board shall secure an independent audit of the Pool s financial statements (separately or as part of NIT s financial statements) for every Pool Year. Duties of Contracted Entities: Fiscal Agent: ARTICLE VI The Board may appoint a Fiscal Agent for the Pool. The Fiscal Agent shall not be a member or an employee of a member of this Pool or of NIT, nor an owner, officer, employee or affiliate of the Licensed Service Company. Duties of the Fiscal Agent shall be: 1. To maintain and administer under the direction of the Board the monies of the Pool according to the guidelines provided in the remainder of this Article. 5

6 2. To receive into the Pool, all premiums, assessments and other monies paid to the Pool from whatever source; 3. To invest, consistent with guidelines established by the Board and the obligations of the Pool, all assets of the Pool. 4. The Fiscal Agent shall not commingle any of the assets of the Pool with other, non-pool assets of NIT or of any individual member of the Pool. 5. To make any and all disbursements from the Pool as authorized by the Board. Licensed Service Company Appointment and Duties: The Board may appoint a service company for the Pool (which is licensed in accordance with Minnesota Statute Chapter 60A.23, Subd. 8). Subject to contract as stated below, duties of the Licensed Service Company shall be: 1. To calculate and bill to, collect from each member its annual premium or other monies due to the Pool; 2. To deposit promptly with the Fiscal Agent all monies collected; 3. To provide a comprehensive safety management program for all members which includes training, on site safety inspections and on-going recommendations to members and the Board on minimizing losses to the Pool. The total number of annual loss control visits will be equal to the number of members of NIT. 4. To receive all claims for compensation benefits, make initial determination of compensability and set loss reserves; 5. To pay claims in accordance with MS Chapter 176 or other related expenses of the Pool from Pool assets; 6. To maintain books and records in the office of the Licensed Service Company in the State of Minnesota and file on behalf of the Pool all reports required by the laws and regulations of the State of Minnesota; 7. To comply with applicable laws and regulations of the State of Minnesota as they relate to the licensing and duties of Licensed Service Companies; 8. To provide regular reports of claims and other administrative activity to the Board; and 9. Such other duties as may be specified in the contract between NIT on behalf of the Pool and the Licensed Service Company, which contract also may further define, limit or exclude any of the duties specified above, or elsewhere in these bylaws. 6

7 Pool Administrator Appointment and Duties: The Board of Directors shall appoint a Pool Administrator for the Pool. Subject to contract as stated below, duties of the Pool Administrator shall be: 1. To submit for approval all prospective members of the Pool to the Board; 2. To deposit promptly with the Fiscal Agent all monies collected; 3. To examine books and records in the office of the Licensed Service Company in the State of Minnesota and file on behalf of the Pool, all reports required by the laws and regulations of the State of Minnesota; 4. To comply with applicable laws and regulations of the State of Minnesota as they relate to the licensing and duties of Pool Administrator; 5. To provide regular reports of claims and other administrative activity to the Board; and 6. Such other duties as may be specified in the contract between NIT on behalf of the Pool and the Pool Administrator, which contract also may further define, limit or exclude any of the duties specified above, or elsewhere in these bylaws. Premium Payments: ARTICLE VII A Net Deposit Premium (as defined in Article III) shall be paid to the Pool by each active member according to the following: 25% of estimated annual Net Deposit Premium deposited at commencement or renewal date, with 75% premium balance to be paid over the next 8 months, in 8 equal monthly payments. Annual Premium (determined by payroll audit) shall be due & payable within 30 days of billing. Except as provided below, a new member must be admitted for, and commit to pay premium for, a minimum of three consecutive full policy years starting at the inception of that member s effective date of entry into the Pool. A new member s entry into the Pool may become effective at any time during the Pool year. The new member must pay Net Deposit Premium as described in the previous paragraph. Annual audits of each member s actual payroll for the previous year will be performed by the Licensed Service Company. If a determination is made by the Licensed Service Company that there have been historical errors in either the payroll amounts reported or classification of payroll, the Pool will maintain the right to audit the previous three (3) years payroll and classifications to ensure the correct premium has been paid. Changes to 7

8 amounts payable under the foregoing formula may be ordered from time to time by the Board subject to applicable rules and regulations (if any) of the State of Minnesota. In the event a member leaves the Pool or the member s membership in the Pool is terminated with any premiums or penalties due the Pool and the member refuses to pay the amounts due, or if a member or former member does not pay Premium or any other amount due the Pool when required by these bylaws and after demand by NIT, the member or former member will be responsible for any collection expenses incurred by the Pool, including attorney fees. Distribution of Surplus: ARTICLE VIII When, in accordance with applicable laws and regulations (if any) of the State of Minnesota, and consistent with the level of surplus indicated by an actuarial report, a distribution of Pool Surplus is permitted, and after the Board has determined the amount of surplus (which may be all) that will be paid over and thereafter available to NIT for NIT s programs, the Board in its sole and absolute discretion shall determine whether to authorize and declare a distribution of Pool Surplus, and the amount of available Pool Surplus to distribute. Of the Pool Surplus (if any) that the Board declares shall be distributed, the Board shall allocate such Pool Surplus to members by a percentage determined as follows: 1. Each member s Net Deposit Premium for the Pool Year from which the Pool Surplus arose shall be reduced by the member s share of allocated overhead costs for that year and further reduced by the average of losses of the member for the current and two previous years. 2. The remainder, if positive, shall be assigned a percentage factor by dividing it by the sum of the positive remainders of all members. 3. The remainder, if negative shall disqualify that member from any Pool surplus distribution for that year. In addition a member must be a Pool member at the time of a Pool Surplus distribution to receive a Pool Surplus distribution. 4. The percentage factor arrived at in step 2 shall be applied to the total amount declared for distribution to determine each member's share. 5. In the event any member in the Pool is to receive a distribution of Pool Surplus pursuant to this section, the Board shall, in lieu of such distribution of the member, retain all or any portion thereof for satisfaction of any deficit in payment of premiums or assessments required of such member hereunder, and for any other debts or liabilities due the Pool or to any other pool established or sponsored by NIT, or to NIT itself, by such member. 8

9 ARTICLE IX Assessment of Deficit When a deficit for any Pool Year exists, the Board shall determine the Pool Year or Years to which the deficit is attributable, which may be in whole or in part the then-current Pool Year or in whole or in part one or more prior Pool Years, as the Board of Directors in its discretion shall determine). Thereafter the Board may direct such deficit be made up by transfer or by assessment, or by transfer in part and by assessment in part, as follows: 1. A transfer from the Pool Surplus of another Pool Year to the deficit year if in the opinion of the Board such transfer is in the best interests of the Pool. 2. Should assessment of members become necessary, the Pool members and former members will be assessed based on their pro-rata share on the Pool s Net Deposit Premium for each Pool Year to which the deficit is attributable. If a deficit is attributable to more than one Pool Year, the portion of the deficit attributable to each such Pool Year shall be assessed separately against the members and former members of the Pool for that Pool Year, but if the deficit attributable to that Pool Year cannot be recovered in full by such an assessment, the balance of that deficit shall either be attributable to the then-current Pool Year and assessed against then-current Pool members as provided above, or if the Board so determines, allocated among the current and other past Pool Years to which some deficit is attributable, to each such Year in the same proportion as aggregate deficit attributable to such Year bears to aggregate deficit attributed to all such Years or other proportion as the Board of Directors may determine. A former member of the Pool remains liable for assessment of deficits under this Article IX, for so long as deficits may be attributed to a Pool Year during which the former member was an active member of the Pool (or such shorter time, if any, as may be provided by law). The Pool is a contingent creditor of each and every member, until no further deficit or amount pursuant to Article IX of these bylaws may be assessed against the former member. Each member, including a former member that continues to have any actual or potential obligation to the Pool, must give NIT notice as a contingent creditor if the member proposes to liquidate, dissolve or sell all or substantially all of his assets, or in any other circumstance or situation in which notice to creditors is required by applicable law. Penalties ARTICLE X In the event that any penalties or additional compensation pursuant to Minnesota Statutes section , or similar statute, or penalty or damages pursuant to Minnesota Statutes section , or similar statute, or any similar damages are assessed against this Pool, upon determination of the Board such penalty, compensation or damages shall be a debt 9

10 and obligation immediately due and payable to the Pool by the member or former member whose actions gave rise to the assessment of such penalty, compensation or damages, along with interest thereon at the rate of six percent (6%) per annum. The Board, after authorizing payment of such penalty, compensation or damages, shall pursue recovery in full, plus interest, from the member or former member whose actions gave rise to the assessment of such penalty or damages. Expulsion of Members ARTICLE XI The Board may expel a member from the Pool, and thereby terminate the member s worker s compensation coverage by the Pool, for the following reasons: 1. Nonpayment of Premium or Assessments. In the event that payment due to the Pool by any member is not paid when due, a notice of expulsion shall be given to the member after fifteen (15) days of delinquency. If, after fifteen (15) days from the date of notice, all past due amounts are not paid, the member shall be expelled and its membership in the Pool shall terminate. 2. Adverse Loss Experience. If in any two-year period of the Pool a member incurs losses in excess of 80% of its premium for that two-year period, a detailed analysis of that member s losses shall be undertaken by the Board. If, in the opinion of the Board, the analysis indicates a disregard for safe operating procedures by the member, the member may be expelled and its membership in the Pool may be terminated upon thirty (30) days written notice of expulsion. 3. Noncompliance with Safety Recommendations. If, in the opinion of the Board, any member has failed to comply with the safety and loss control recommendations provided by the Licensed Service Company, the member may be expelled and its membership in the Pool may be terminated upon thirty (30) days written notice of expulsion. 4. Other reasons. A member may be expelled and membership in this Pool may be terminated for any of the following reasons: a) Failure to report losses promptly b) Failure to cooperate in an investigation and/or defense of claims or interference with the investigation and/or defense of claims. This can include a member contracting with an outside claim consulting firm. c) Failure to maintain on a continuing basis the membership qualifications outlined in Article IV Paragraph 1 on these bylaws. d) Failure to maintain and follow an approved return to work program. 10

11 e) Any other regulatory reason permitted by the applicable laws, rules, and regulations of the State of Minnesota, if any. f) Termination of NIT membership, or other reason permitted by NIT s bylaws or applicable rules and regulations of NIT. g) Misrepresentation of any fact regarding claims, loss control and safety activities, financial status of the member or any other fact that would cause underwriting concerns by NIT. h) Actions detrimental to NIT or the Pool or the membership as a whole. Expulsion from and termination of membership in the Pool shall be upon thirty (30) days advance written notice except if and when due to regulatory reason or termination of NIT membership. In the latter instances, applicable law, rule or regulation, or NIT s bylaws, as the case may be, shall govern as to required advance notice and effective date of expulsion and termination of Pool coverage. 5. Appeal. Upon receipt of notice of expulsion for any reason other than nonpayment of premium, the member so notified may appeal the expulsion to the Board by written notice of appeal stating the reasons on which the appellant bases the appeal. However, if expulsion is due to or associated with termination of NIT membership, the right of the member to notice and to be heard shall be as provided in NIT s bylaws and this paragraph 5 shall not apply. Written notice of appeal must be given by the appellant within ten (10) days of the date of notice of expulsion. Notice of appeal will be deemed given when it is in fact delivered to the then-serving Registered Agent of NIT or then-serving Chair of NIT, or three days after it is deposited in the United States mail in an appropriately addressed envelope directed to one of those said persons with sufficient postage. If written notice of appeal is given by mail, the postmark date on the envelope shall be determinative as to whether written notice of appeal was timely mailed, but if there is no postmark date, then the written notice of appeal shall conclusively be presumed to have been mailed on the third business day before its actual receipt by the addressee. Upon receipt of such appeal, the Board shall review the appeal and sustain or revoke its order of expulsion by written notice within thirty (30) days. 6. The Board may, at its option, increase premium charges to consistently unprofitable members in an attempt to avoid expulsion. Withdrawal from Membership ARTICLE XII Members must belong to the Pool for at least three consecutive years from their initial entry. If a member voluntarily terminates its membership, whether by resignation of the member s NIT membership and including a failure by the member to meet required Pool 11

12 membership qualifications or otherwise, the Pool shall assess at least the following penalties: 50% of the premium due from that member for that year if termination occurs within the first year; 25% of the premium due from that member for that year if termination occurs within the second year of membership and 15% of the premium due from that member if termination occurs within the third year. No penalty shall be required if a member's withdrawal is due to a merger with one or more organizations not affiliated with the member prior to the merger, dissolution, or sale of all or substantially all of the assets of the member to one or more buyers not affiliated with the member prior to the sale. Following the completion of three consecutive years of membership in the Pool, withdrawals from the Pool shall be allowed without penalty, provided that thirty (30) days advance written notice is given to the Pool Administrator. Disputes between Members of the Pool ARTICLE XIII Any dispute between members regarding any matter concerning the Pool shall be resolved by the determination of a simple majority from the Board. Subrogation ARTICLE XIV Each member shall assign to the Pool its right of subrogation under Minn. Stat. Chapter in connection with any injury occurring during its period of membership. Amendments to Bylaws ARTICLE XV Amendments to the Bylaws, if necessary, shall be made by a vote of a simple majority of the Board at a meeting held in accordance with NIT s bylaws. Cessation ARTICLE XVI The Pool shall have indefinite and perpetual duration, to cease when and as determined by the Board. If the Pool ceases, surplus (if any) will be paid over to NIT or distributed as provided in Article VIII, and NIT (or its successors or assigns) shall have and may exercise and enforce, the power, authority and right to enforce obligations and liabilities of members that arise under these bylaws in or with respect to periods or acts or omissions prior to the Pool s cessation. Without limiting any other powers and authority of the Board, it shall have the power and authority to cease operations of the Pool, to sell, exchange, transfer or otherwise dispose of any or all or substantially all property and assets of the Pool, to arrange for the assumption by one or more other parties of any or all 12

13 or substantially all liabilities of the Pool, and to wind up the operations and affairs of the Pool. Secretary s Certificate I do hereby certify that I am the duly elected and serving corporate Secretary of Nonprofit Insurance Trust, a Minnesota nonprofit corporation ( NIT ) and that set forth above is a true and correct copy of the Workers Compensation Pool Bylaws (restated) as the same were duly approved by the NIT Board of Directors on March 10, 2015 and that the same have not been revoked, rescinded or modified to the date of this Certificate but remain in full force and effect as of this date. Dated: March 10, 2015 Michael Mills, Secretary, Nonprofit Insurance Trust 13