Alabama Administrative Code › Title 480 - ALABAMA DEPARTMENT OF LABOR › Chapter 480-5-3 - GROUP SELF-INSURANCE › Section 480-5-3-.08 - Operation Of Funds

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Administrator - The Trustees of a Fund shall appoint an Administrator. The
			 Administrator shall perform duties as prescribed by the Trustees. The
			 Administrator may be an employee of the Fund or the Sponsoring Association but
			 shall not be an employee of the Fund's Service Company.
(2) Minimum Annual Contribution - No Fund
			 shall operate unless the sum of its Participants' annual contributions is at
			 least one million dollars ($1,000,000.00).
(3) Excess Insurance - All Funds are required
			 to obtain specific excess insurance. Funds may obtain aggregate excess
			 insurance.
(4) Minimum Claims Fund
			 - No less than seventy-five percent (75%) of the earned and collected
			 contributions shall be set aside each Fund year as a Fund's Claims
			 Fund.
(5) Minimum Surety
			 Requirements - A Fund shall post with the Director minimum surety in any form
			 or amount approved by the Director but in no event less than two hundred
			 thousand dollars ($200,000.00). This surety shall stand in the name of the
			 Director who shall be authorized to sell and/or collect in case of default of
			 the Fund such amount thereof as shall yield sufficient funds to pay outstanding
			 liabilities of the Fund.
(6) Joint
			 and Several Liability - All participants shall sign Participation Agreements
			 providing for joint and several liability for claims against the Fund during
			 the coverage periods of their participation.
(7) Financial Reports -
(a) Each Fund shall maintain its financial
			 records on a current basis. A "current basis" is generally considered as the
			 maintenance of financial records in a manner that would allow the Fund to file
			 accurate quarterly and annual reports as herein required and make any
			 disbursements or file any reports as may be required by the state or federal
			 governments.
(b) Every Fund shall
			 have an annual audit performed by an independent certified public accountant.
			 The certified public accountant shall prepare an annual financial statement
			 based on the audit. The financial statement shall be presented using generally
			 accepted accounting principles (GAAP), statutory accounting principles (SAP) or
			 governmental accounting principles in the case of government funds. The
			 financial statement shall be filed with the Director within six months from the
			 end of the Fund fiscal year unless an extension is granted in writing by the
			 Director.
(c) Each Fund shall file
			 with the Director a quarterly claims status report and a quarterly financial
			 statement prepared according to statutory accounting principles, generally
			 accepted accounting principles or governmental accounting principles in the
			 case of government funds which reflects the financial condition of each open
			 Fund year. The report shall be filed within forty-five (45) days after the
			 close of each quarter and shall be signed by the Administrator. These reports
			 may be completed by the certified public accountant, in-house personnel or the
			 Fund's Service Company. For good cause shown, the Director may grant an
			 extension of time.
(d) Loss reserve
			 discounting - Present value discounting of workers' compensation loss reserves
			 shall be permitted. Loss reserves shall not be discounted in an amount greater
			 than that amount allowed by the Internal Revenue Service.
(e) In addition to the reporting requirements
			 in subsections (b) and (c) of this section, the Fund's certified public
			 accountant shall:
1. Report, in writing,
			 within five (5) business days to the Fund's Administrator and the Director any
			 determination that the Fund has intentionally misstated its financial condition
			 by a material amount.
2. Report, in
			 writing, to the Fund's Administrator and the Director any facts which have come
			 to his knowledge after the filing of the annual financial statement which might
			 have affected the statement.
3.
			 Furnish the Fund's Board of Trustees a written report describing significant
			 deficiencies in the Fund's internal control structure. The Board of Trustees
			 shall submit a copy of the report and their response to the Director.
(f) Each Fund shall make a copy of
			 its most recent annual financial statement available to all Participants upon
			 request. This requirement may be satisfied by making available to all
			 Participants an extract of the statement in a form approved by the
			 Director.