Section 80. Responsibilities of members' supervisory board

A. The members' supervisory board shall be responsible for holding and managing the assets of and directing the affairs of the pool and shall be elected in the manner prescribed by the pool's governing instruments. At least 75% of the board must be members of the pool, but a board member shall not be an owner, officer or employee of a service agent, its parent or any of its affiliated companies.

B. The board shall determine members' contributions to the pool and supervise the finances of the pool and the pool's operations to the extent necessary to assure conformity with law, this chapter, the member agreement, and the pool's governing instruments.

C. The board shall take all necessary precautions to safeguard the assets of the pool, including, but not limited to, the following:

1. Doing all acts necessary to assure that each member continues to be able to fulfill the obligations of membership, and reporting promptly to the commission any grounds or change in circumstances that may affect the pool's ability to meet its obligations such as withdrawal of a member;

2. Designating an administrator, or establishing alternative procedures acceptable to the commission, to administer the affairs of the pool, to carry out the policies established by the board, and to provide day-to-day management of the pool. The administrator shall furnish a fidelity bond in an amount sufficient to protect the pool against the misappropriation or misuse of any monies or securities. Evidence of the bond shall be filed with the commission as a condition for licensing the pool. The administrator shall not be an owner, officer or employee of a service agent, its parent or any of its affiliated companies.

3. Retaining control of all moneys collected for the pool and the disbursement of such moneys by the pool. All assets of the pool shall remain in the custody of the board or the administrator. However, a claims fund for payment of benefits due and other related expenses may be established for the use of a service agent; and

4. Actively collecting delinquent accounts resulting from any past due contributions by members. Any member of a pool who fails to make the required contributions after due notice may be declared ineligible for the self-insurance privilege until this past due account, including cost of collection, has been paid or adequately provided for.

D. Neither the board nor the administrator shall use any of the moneys collected for any purpose unrelated to securing the members' liability or other rights and obligations under the member agreement and any administrative or other necessary expenses of the pool. Further, the board shall be prohibited from borrowing any moneys from the pool or in the name of the pool without first advising the commission of the nature and purpose of the loan and obtaining the commission's approval.

E. The board may dispose of any surplus as provided in 14VAC5-385-90.

F. The board shall assure that the office of the administrator and service agent of the pool and all pertinent records necessary to verify the accuracy and completeness of all reports submitted to the commission are maintained within this Commonwealth.

G. The board may adopt its own rules and procedures as considered necessary for the operation of the pool provided these rules and procedures are not inconsistent with § 62.1-44.34:12 of the Code of Virginia and this chapter.

H. The board may designate a service agent or agents.

Historical Notes

Derived from Volume 19, Issue 02, eff. October 1, 2002.

Statutory Authority

§§ 12.1-13, 38.2-223, and 62.1-44.34:12 of the Code of Virginia.