Section 110. Member agreement

A. Every member of a group self-insurance pool shall execute a member agreement which shall set forth the rights, privileges and obligations of the member, and the terms, coverages, limits, and deductibles of the plan. This agreement shall be subject to the approval of the commission and shall provide for, in substance, the following:

1. Election by pool members of a governing authority for the pool, a majority of whom shall be elected or appointed officials of pool members;

2. A requirement that the members' supervisory board designate and appoint an administrator empowered to accept service of process on behalf of the pool and authorized to act for and bind the pool and members in all transactions relating to or arising out of the operation of the pool;

3. The right of substitution of the administrator and revocation of the power of attorney and rights thereunder;

4. A financial plan or plan of risk management which is further described in 14VAC5-360-40 A 5;

5. A management plan which is further described in 14VAC5-360-40 A 6;

6. A requirement that the pool, at the request of a member, provide without unreasonable delay, to any person designated by the member, proof of the coverages provided by the pool, including any insurance or reinsurance, applicable deductible levels and the maximum liability which the pool will retain; and

7. For group life, accident and health coverages, a requirement that the pool provide to each covered pool member and to employees of pool members a certificate setting forth (i) the coverage, including any limitations, reductions and exclusions applicable to the coverage provided; (ii) to whom benefits are payable; and (iii) any family member or dependent's coverage.

Such member agreement may also contain such other provisions not inconsistent with law or this chapter.

B. The first page of the member agreement shall include a summary that shall disclose:

1. In regard to coverage:

a. The coverages provided;

b. The period of the coverage;

c. The amount of the deductible, if any, per claim or in the aggregate; and

d. For each coverage, the maximum amount of coverage to be borne by the pool.

2. In regard to the contribution:

a. The contribution and dates payments are due for the political subdivision to become a member of the pool;

b. The basis upon which each member's contribution is determined; and

c. Whether any additional assessments of the members may be made.

3. In regard to excess coverage of the pool:

a. A description of the excess coverage for the pool as to its coverage per occurrence, coverage per occurrence per person, if appropriate, and in the aggregate for each coverage offered; and

b. A statement that there is no excess coverage for the pool if the pool has not obtained such coverage.

4. The name of the proposed service agent.

C. The member agreement shall include a prominent disclosure notice that must be signed by a duly authorized officer of the political subdivision. The disclosure notice shall use the following or substantially similar language:

A local government group self-insurance pool is not protected by any Virginia insurance guaranty association against default due to insolvency. In the event of insolvency, members and persons filing claims against members may be unable to collect any amount owed to them by the pool regardless of the terms of the member agreement. In the event the pool is in a deficit position, a member may be liable for any and all unpaid claims against such member.

With regards to workers' compensation liability, each member agrees to assume and discharge, jointly and severally, any liability under the Virginia Workers' Compensation Act of any and all employers party to such agreement and which provides that, in addition to the rights of the pool, in the event of failure of the pool to enforce such rights after reasonable notice to the pool, the commission shall have the right independently to enforce on behalf of the pool the joint and several liability of its members under the Virginia Workers' Compensation Act and the liability of members for any unpaid contributions and assessments.

The member agreement may also contain such other provisions not inconsistent with law or this chapter.

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.