Section 90. Contribution requirements

A. For the purpose of funding the liability of a pool the members shall make contributions to the pool in the manner prescribed in the member agreement.

B. For the purpose of funding the workers' compensation liability of a pool, the members shall make contributions to the pool based on annual payrolls for all employees of each member using rates and stock or nonstock discounts as adopted by the board and approved by the commission. The rates to be used are those in effect as of the inception of each pool's fiscal year. A plan that allows for consideration of past experience in developing a factor to be applied to a member's contribution may be used provided this plan has been approved by the commission.

Nothing contained herein shall be construed to prevent a pool from filing with the commission its own rates or a deviation from these rates or an alternative method of determining contributions that may be used upon approval by the commission.

C. At the effective date of a pool's license, $250,000 shall have been paid into a designated depository. The balance of the first year's contributions shall be paid no later than the end of the ninth month of the pool's fiscal year, either in quarterly or monthly installments at the discretion of the board. For each subsequent year of operation of the pool, the payment schedule shall provide for annual or periodic payments in intervals no more frequently than once a month, at the discretion of the board.

D. Each pool shall file with the commission the basis for establishing the annual contributions of its members. Such contributions must be based on reasonable assumptions and certified by an actuary or other person satisfactory to the commission as to the sufficiency of such contributions. This subsection shall not apply to a pool's workers' compensation business.

E. The total amount of each member's annual contribution to the pool shall be certified by the board to the governing body of each member at least one month prior to the beginning of the next fiscal year, if practical.

F. Each pool may levy upon its members an additional assessment whenever needed to supplement the pool's surplus to assure payment of its obligations. A member may be assessed for any fiscal year during which the member participated in the pool. Such assessment may be made after the end of the pool's fiscal year and after the member has discontinued membership in the pool.

1. The pool may assess each participating member an additional proportionate amount, as provided in the pool's member agreement or as provided in the pool's plan filed with the commission to correct a deficit condition.

2. The board shall submit to the commission a report of the causes of the pool's insufficiency, the assessments necessary to replenish it and the steps taken to prevent a recurrence of such circumstances.

Historical Notes

Derived from Regulation 30, Case No. INS870057, § 6, eff. September 1, 1987; amended, Volume 26, Issue 14, eff. March 1, 2010.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.