Current through Register Vol. 35, No. 18, September 24, 2024
A. As a
condition precedent to maintenance of a certificate of pool self-insurance,
each pool shall compel its administrator and any service company to provide to
the director the following information and access to records:
(1) a copy of any reinsurance or excess
insurance agreements;
(2) an
explanation of reserving methodology and accident year claims data on an annual
basis;
(3) rate change information
within thirty days of approval by the board of directors of the pool;
(4) loss runs in a format acceptable to the
director within 60 days of receipt by the administrator of the director's
request; and
(5) an annual
actuarial opinion.
(a) This opinion shall
include actuarially appropriate reserves for (1) known claims and associated
expenses; and (2) claims incurred but not reported and associated
expenses.
(b) This actuarial
opinion shall also include a rate adequacy evaluation.
(c) The actuarial opinion shall be given by a
member of the American academy of actuaries.
(6) a copy of any rate adequacy evaluations
and reviews of loss and loss adjustment expenses prepared for the pool by an
actuary who shall be a member of the American academy of actuaries.
(7) notification to the director of any
additions or deletions to the pool's membership roster; additionally, each pool
shall provide within 30 days of the end of each calendar quarter a roster of
members, including the number of employees employed by each member on the last
day of the quarter.
B.
Examination and reviews:
(1) The director or
his designees may examine the affairs, transactions, accounts, records and
assets and liabilities of each governmental entity that has been issued a
certificate of pool self-insurance pertaining to the entity's activities under
that certificate, whether considered individually or through its pool as often
as deemed advisable, whether such information is maintained by a governmental
entity, the pools administrator or the pool's service company.
(a) The governmental entity, pool,
administrator or pool service company shall cooperate fully with the director's
representatives in any evaluation or audit of the pool self-insurance program,
and resolve, in good faith, issues raised in those evaluations or
audits.
(b) Failure to resolve such
audit issues in good faith will constitute a violation of this rule, and may
result in sanctions.
(c) Any
dispute concerning issues raised shall be referred by the deputy director for
compliance to the director for determination, if not first informally
resolved.
(2) In lieu of
performing the examination, the director may request:
(a) financial audits conducted by a certified
public accountant approved by the state auditor;
(b) audits of claims management by the pool
performed by the pool's reinsurer or other outside claims auditing
firm;
(c) loss control audits
performed by the pool's reinsurer; or
(d) any other independent claims audit of a
scope and by an auditing organization deemed acceptable by the
director.
(3) Each
governmental entity that has been issued a certificate of pool self-insurance,
individually, or collectively through its pool, shall be reviewed at least
annually by an auditor acceptable to the director to verify proper
classifications, experience rating, payroll and rates.
C. A governmental entity that has been issued
a certificate of pool self-insurance under these rules shall assist the
director in any investigation of specific allegations of unfair claims
processing, bad faith or fraud within the scope of NMSA 1978, Section
52-1-28.1,
by directing the administrator of the pool to make all records concerning any
such claim available to the director upon written request by the director or
the records.