(1) Each pool shall
be operated by a board of trustees which shall consist of not less than five
(5) persons whom the members of a pool elect for stated terms of office. No
less than two-thirds (2/3) of the members of the board shall be comprised of
members of the pool. The pool's administrator and any owner, officer, employee
of, or any other person affiliated or contracting with the administrator shall
not serve on the board of trustees unless the administrator is a wholly-owned
subsidiary of the sponsoring association, whose directors are simultaneously
trustees of the pool and members of the pool and all serve without compensation
and expense reimbursement. All members of the board of trustees shall be
residents of this State or officers of corporations authorized to do business
in this State. The board of trustees of each pool shall ensure that all claims
are paid promptly and take all necessary precautions to safeguard the assets of
the pool.
(2) The board of trustees
shall:
(a) Maintain responsibility for all
monies collected or disbursed from the pool.
(b) Conduct regular meetings, maintain
minutes of such meetings and make such minutes available to the Commissioner.
The board of trustees shall meet no less than once every quarter.
(c) Have the sole and undelegable authority
to approve an application for membership into the pool and the initial premium
of a new member.
1. The board of trustees may
choose to delegate the decision to admit new members into the pool to one (1)
or more board members as long as those board members are also members of the
pool.
2. The decision whether to
accept new members into the pool must be based on the pool's approved
underwriting guidelines.
3. The
entire board of trustees remains liable for the decision to appoint new members
even if that decision is delegated to one (1) or more board members.
(d) Establish an investment policy
for the pool. Such policy shall address credit, quality of investments, maximum
maturity of investments and such other matters as the board deems
appropriate.
(e) Designate an
administrator to carry out the policies established by the board of trustees
and to provide daily management of the pool. The areas of authority delegated
to the administrator must be delineated in the written minutes of its meetings
or in the written contract between the pool and the administrator.
(f) Appoint a third party administrator,
should the board in its discretion desire to do so, for certain daily
operations of the pool to be delegated.
(g) Retain an independent certified public
accountant to prepare the statement of financial condition required by Rule
0780-01-54-.09.
(3) The
board of trustees shall not:
(a) Extend credit
to individual members for payment of premium, except pursuant to payment plans
approved in writing by the Commissioner prior to the extension of credit;
or
(b) Allow anyone to borrow
monies from the pool.
(4) Each pool shall include in its bylaws or
articles of incorporation the method by which a trustee can be replaced or
terminated.
