Current through Register Vol. 50, No. 9, September 20, 2024
A.
Except upon approval of the commissioner, the fund's administrator, service
company, or any owner, officer, employee of, or any other person affiliated
with, such administrator or service company shall not serve on the board of
trustees of the fund.
B. All
trustees shall be residents of this state or officers of corporations
authorized to do business in this state.
C. The board of trustees of each group shall
ensure that all claims are paid promptly and take all necessary precautions to
safeguard the assets of the group, including all of the following:
1. maintain responsibility for all monies
collected or disbursed from the group and segregate all monies into a claims
fund account and an administrative fund account. At least 70 percent of the
premium, as determined by the commissioner, shall be designated for the sole
purpose of paying claims, allocated claims expenses, and special fund
contributions, including second injury and other loss related funds. This shall
be called the claims fund account. The remaining net premium shall be
designated for the payment of taxes, general regulatory fees, assessments, and
administrative costs. This shall be called the administrative fund account. The
commissioner may approve an administrative fund account of more than 30 percent
and a claims fund account of less than 70 percent only if the group shows to
the commissioner's satisfaction that:
a. more
than 30 percent is needed for an effective safety and loss control program;
or
b. the group's aggregate excess
insurance attaches at less than 70 percent;
2. maintain minutes of its
meetings;
3. designate an
administrator to carry out the policies established by the board of trustees
and to provide day-to-day management of the group, and delineate in the written
minutes of its meetings the areas of authority it delegates to the
administrator;
4. retain an
independent certified public accountant to prepare the statement of financial
condition required by
§1107. A and B
hereof;
5. the trustees 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.
D. The board of trustees shall not:
1. extend credit to individual members for
payment of a premium, except pursuant to payment plans approved by the
commissioner;
2. borrow any monies
from the group or in the name of the group, except in the ordinary course of
business, without first obtaining prior approval from the
commissioner.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
23:1193.
