Current through Reg. 50, No. 187; September 24, 2024
(1) The
board of trustees shall have complete authority over and shall retain ultimate
control of the assets of the fund and shall be responsible for all operations
of the fund.
(2) The trustees shall
have the authority to approve applications for membership in the fund. The
trustees may delegate this authority to the administrator.
(3) The composition of the board of trustees
shall be as follows:
(a) A majority of the
board shall be owners, officers, directors, partners or employees of one or
more members of the fund.
(b) A
trustee, or relative of the trustee, shall not be an owner, officer, director,
partner or employee of the fund's service company. This does not apply to
employment of a relative of the trustee in which the relative's duties are of a
clerical, or non-managerial nature. Non-managerial being a position which
cannot affect the financial standing of a self-insurer, or the benefits to
which an injured employee is entitled under Chapter 440,
F.S.
(4) The trustees
shall act in a prudent and responsible manner in safeguarding the assests of
the fund. The trustees may designate a fiscal agent to oversee, invest and
disburse the fund's assets on a day-to-day basis. The trustees may designate an
administrator to handle the management of the fund on a day-to-day basis. The
administrator may also be delegated the responsibilities of a fiscal
agent.
(5) The administrator,
fiscal agent or any other individual with authority to disburse funds shall
furnish a fidelity bond or insurance policy payable to the trustees in an
amount sufficient to protect the fund's assets against misappropriation or
misuse. The amount of the bond shall an amount equal to not less than 10
percent of the funds handled annually and issued in the name of the fund
covering its trustees, employees, administrator, or other individuals managing
or handling the funds or assets of the fund. In no case may such bond be less
than $1,000 or more than $500,000, except that the division may for good cause
prescribe an amount in excess of $500,000, subject to the 10-percent limitation
of the preceding sentence.
(6) The
fiscal agent, or administrator, or service company shall be subject to the
following conditions:
(a) A fiscal agent or
administrator shall be an employee of or under contract to the fund.
(b) The administrator may provide some or all
of the services required by the rules.
(c) In delegating authority to the
administrator, fiscal agent or service company, the trustees shall insure that
no conflict of interest exists between the interests of the fund and that of
the administrator, fiscal agent, or service company. In the event that fiscal
authority is delegated, the trustees shall insure that adequate division of
responsibility exists and that satisfactory internal fiscal controls are
established to safeguard the fund's assets.
(d) If the administrator provides claims
adjusting services to the fund, the trustees shall not delegate any fiscal
authority to the administrator except for control of the claims revolving
fund.
(e) If the administrator or
its representative, or any officer, director, partner, or management of the
service company has a business or financial relationship with a business
providing goods or services to the fund, then:
1. Such relationship shall be disclosed by
the administrator or service company in writing to the trustees and to the
audit committee; and,
2. All
business transactions between the fund and the business providing goods or
services shall be conducted so that said business or financial relationship
will not influence the outcome of the transactions; and,
3. The trustees shall exercise all reasonable
precautions so that the business providing goods or services is not unjustly
enriched due to the business or financial relationship with the administrator
or service company.
(f)
Upon receipt of notification as required by subparagraph (e)1., above, the
minutes of the next Trustee's meeting shall reflect the discussion of the
notification and the action taken by the trustees. The fund shall also maintain
a file of the written notices for review by the division.
(g) The trustees shall establish an audit
committee subject to the following conditions:
1. The committee shall be independent of the
control of the administrator and the service company and shall report directly
to the trustees.
2. The committee
shall be responsible on a continuing basis for determining that the fund has
instituted and is complying with satisfactory internal fiscal controls in order
to protect the fund's assets.
3.
The committee shall investigate all potential conflicts of interest involving
the administrator or service company. It shall report in writing to the
trustees all cases of actual conflict of interest.
4. The committee shall work closely with the
fund's certified public accountants to verify the accuracy and completeness of
the fund's financial records and reports.
5. The management of the fund, the
administrator, or officer, stockholder, owner, management of the service
company shall not be represented on the committee.
6. The committee shall make at least one
written report to the trustees per year detailing its activities and
findings.
7. All committee reports
shall be reviewed by the trustees and such reviews shall be noted in the
minutes of the meeting at which the review was discussed.
8. All written reports by the committee shall
be made available for review by authorized representatives of the Office as
part of the audit of the fund.
(7) The trustees may establish a revolving
fund for the use of the service company for the payment of claims and related
expenses, subject to the following:
(a) The
service company shall furnish a fidelity bond or insurance policy covering its
officers and employees, payable to the trustees of the fund in an amount
sufficient to protect all monies placed in the revolving fund. The amount shall
be no less than the one months average receipts deposited into the revolving
fund. Average receipts shall be the total deposits made during the previous
fund year divided by twelve (12).
(b) If the bond or policy required pursuant
to subsection 69O-190.064(5),
F.A.C., also covers the monies in the revolving fund, a separate bond or policy
shall not be required from the service company.
(8) All fidelity bonds or insurance policies
required by subsection
69O-190.064(5)
and paragraph 69O-190.064(7)(a),
F.A.C., may provide for a deductible of not more than $5,000.
(9) The trustees shall maintain up-to-date,
accurate, and complete records of the fund's finances. The accounts and records
of the fund shall be audited at least annually and at any other time necessary
to determine the financial condition of the fund.
(10) The trustees shall obtain audits of the
fund and disclose the financial condition of the fund as indicated below.
(a) Audits shall be made by a certified
public accountant. Audits may also be made by authorized representatives of the
Office.
(b) The Office shall
prescribe a standard report of financial condition to be used by all
self-insurers funds pursuant to Rule
69O-190.059, F.A.C.
(c) The Office reserves the right to
prescribe the types of audits to be performed to determine fund
solvency.
(d) The reserves for
losses and loss development shall be reviewed annually pursuant to Rule
69O-190.059, F.A.C., to
determine the adequacy of these reserves.
(e) Copies of all audits and financial
reports required pursuant to Rule
69O-190.059, F.A.C., and
prepared by personnel other than Office personnel shall be filed with the
Office pursuant to Rule
69O-190.059,
F.A.C.
(11) Subject to
the terms and conditions indicated below, the trustees may establish a penalty
rate to produce premium in excess of standard premium for any class of
employers with unfavorable loss experience.
(a) The trustees shall submit to the Office a
justification for the application of the penalty rate as well as a description
of how it will be applied.
(b)
Approval by the Office shall be required prior to implementation of the penalty
rate.
(c) Employers subject to a
penalty rate shall be notified in writing prior to the effective date of the
penalty rate.
(12) The
trustees, fiscal agent, or administrator shall not utilize any of the money
collected as premium from members for any purpose other than those specifically
authorized by these rules or the fund's indemnity agreement.
(13) The trustees shall be prohibited from
borrowing money from the fund or in the name of the fund without obtaining
prior approval from the Office. Approval shall be granted only if:
(a) The loan is for a productive
purpose;
(b) It is consistent with
the fund's purpose; and,
(c) It
does not impair the financial solvency of the fund.
(14) The trustees shall be authorized to
invest the fund's assets only in the manner prescribed by Rule
69O-190.071, F.A.C.
(15) The safety of any investment shall be
the responsibility of the trustees.
(16) The trustees shall be prohibited from
making any type of investment as authorized by these rules with the intent to
trade, dispose or sell the security in any manner other than redeeming it at
maturity. Therefore, it shall be the responsibility of the trustees to purchase
securities in such denominations and with dates of maturity to ensure that
these securities shall be redeemable at the same time and in the same amounts
as the self-insurers fund's current and long-term liabilities.
(17) The trustees of each authorized
self-insurers fund shall cause to be adopted a set of by-laws or shall enter
into a trust agreement which shall govern the operation of the fund. These
by-laws or trust agreement shall contain, but not be limited to the following
subjects:
(a) Qualifications for self-insurers
fund membership including underwriting considerations.
(b) The method for selecting the trustees,
including the term of office.
(c)
The method of amending the by-laws.
(d) Employer's Liability Limit provided by
the self-insurers fund.
(e) The
amount of the trustees' remuneration which is in excess of actual expenses
incurred.
(18) In
addition to the above by-laws, the trustees shall adopt written policies on the
following subjects, such policies shall be recorded in the minutes of the
meeting at which they were adopted and shall be binding on the administrator
and service company:
(a) Investment of surplus
monies and claims reserves in accordance with Chapter 440, F.S., and Chapter
69O-190, F.A.C.
(b) Frequency and
extent of loss control and safety engineering service to members.
(c) The size of the revolving claims
fund.
(d) A schedule for payment
and collection of premiums including a definition of delinquent
premium.
(e) Cancellation
procedures, including cancellation for non-payment of premium and cancellation
for excessive losses.
(f)
Delineation of authority granted to the administrator or fiscal
agent.
(g) Delineation of authority
granted to the service company.
(h)
A penalty program for surcharging members with excessive losses.
(i) Procedures for handling disputes
regarding premium paid by members.
(j) Dividend policies including underwriting
criteria.
(19) The
trustees shall review at least annually the following items for the purpose of
determining whether these areas of concern are being adequately provided for
and the findings of such review shall be recorded in the minutes of the meeting
at which they were discussed:
(a) Service
company performance.
(b) Loss
control and safety engineering.
(c)
Investment policies.
(d) Collection
of bad debt.
(e) Cancellation
procedures.
(f) Initial member
review.
(g) Administrator
performance.
(h) Dividend
policies.
(20) All
self-insurers shall file copies of the current by-laws or trust agreement and
required written policies with the Office. Any changes in the by-laws, trust
agreement or written policies shall be filed with the Office no later than ten
(10) days after their taking effect. The Office reserves the right to order the
self-insurers fund to rescind or revoke any by-law or policy if it is in
violation of these rules or the Law.
(21) The board of trustees of a self-insurers
fund shall meet from time to time as needed to conduct the business of the
fund. However, the trustees shall meet at least four (4) times per fund year
and written minutes of each meeting shall be kept. The minutes shall be signed
and dated by the chairman or secretary of the board of trustees. Such minutes
shall be open to inspection by the Office.
Rulemaking Authority 624.4621 FS. Law Implemented 624.4621
FS.
New 10-1-82, Amended 12-25-84, Formerly 38F-5.64, Amended
3-11-87, 12-19-93, Formerly 38F-5.064,
4-190.064.
