New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 15 - GROUP SELF-INSURANCE › Subchapter 2 - JOINT INSURANCE FUNDS FOR LOCAL GOVERNMENTAL UNITS PROVIDING PROPERTY AND LIABILITY COVERAGES › Section 11:15-2.21 - Refunds; interyear fund transfers

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Any monies for a fund year in excess of the amount necessary to fund all obligations for that fiscal year as certified by an actuary may be declared to be refundable by the fund not sooner than the time periods after the end of the fiscal year as set forth in (b) and (c) below.
(b) The fund may seek approval from the Commissioner to make initial and subsequent refund payments from a claims or loss retention fund account remaining from any year which has been completed for at least the time periods set forth in this subsection and (c) below by submitting a written notification to the Department and Department of Community Affairs at least 30 days prior to the proposed refund. For a fund other than an environmental impairment liability fund, if the Commissioner does not disapprove, in writing, the request to make the refund within the 30 day period, the request shall be deemed approved. The Commissioner may also affirmatively approve the request prior to the expiration of the 30 day period. An environmental impairment liability fund may not refund any monies without the prior approval of the Commissioner. The written notification shall be accompanied by appropriate documentation including, but not limited to, assessment, claims and expense detail; actuarial certification that the loss and loss expense reserves are adequate for the fund to have an overall surplus for that fiscal year; and such other information that the Commissioner may require. For an environmental impairment liability fund, the initial and any subsequent refund for any year from a claim or loss retention trust account may be in any amount subject to the limitation that after the refund, the remaining net current surplus in the account from which the refund is made must equal or exceed 35 percent of unpaid claims for the account for the fiscal year, plus an amount in the fund's debt service account equal to two years' debt service on any outstanding bonds. Unpaid claim reserves, including reserves for incurred but not reported claims, shall be established at full value and not discounted, and shall be so certified by an actuary. For a fund other than an environmental impairment liability fund, the initial and any subsequent refund for any year from a claim or loss retention trust account may be in any amount subject to the limitation that after the refund, the remaining net current surplus in the account from which the refund is made must equal or exceed the surplus retention requirement to be calculated as follows:
1. Fund year paid losses shall be multiplied by the appropriate paid loss factor for the line of coverage and duration of maturity set forth in Exhibit E in the Appendix incorporated herein by reference;
2. Fund year unpaid claim reserves, excluding reserves for incurred but not reported claims, shall be multiplied by the appropriate unpaid claim factor for the line of coverage and duration of maturity set forth in Exhibit E in the Appendix incorporated herein by reference. Unpaid claim reserves, excluding reserves for incurred but not reported claims, shall be established at full value and not discounted;
3. The greater of the results from the calculation set forth in (b)1 and 2 above shall then be reduced by the amount of outstanding losses reported, including incurred but not reported claims, as certified by an actuary. The result of this calculation, but not less than zero, shall be the surplus retention requirement for that fund year.