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HomeMy WebLinkAboutCouncil Resolution 931RESOLUTION NO. ~3~ A RESOLUTION UPDATING MEMBERSHIP IN THE CITY COUNTY INSURANCE SERVICES TRUST WHEREAS, the City County Insurance Services (CIS) is a h~ust established by the League of Oregon Cities (LOC) and Association of Oregon Counties (AOC) to create and adnunister pooled retention funds to protect members against the financial consequence of property, Casualty, and Workers' Compensation losses pursuant to coverage agreements; and whereas The City of Central Point finds membership in CIS is a benefit in managing the risks involved in providing services to its citizens; and whereas The CIS Bylaws shall constitute a contract between the Member and CIS and that the city shall adopt a resolution acknowledging that contractual relationship; BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CENTRAL POINT, OREGON, does hereby acknowledge and agree that it has received copies of the CIS Agreement, and Declaration of Administrative Trust, Bylaws, and Rules and accepts the ternis and conditions therein with respect to any CIS coverage programs in which it elects to participate and for which it is accepted as a Member by CIS. Passed by the Council and signed by me in authentication of its passage this day of December, 2001. i _~ Mayor Bili Walton ATT T: ~.. City Representative Approved by me this J!~~day of December, 2001. ~ ~ ~~~,~~ie~~„ t~~Mayor Bill Walton CITY COUNTY INSURANCE SERVICES AGREEMENT AND DECLARATION OF ADMINISTRATIVF, TRUST THIS AGREEMENT AND DECLARATION OF ADMINISTRATIVE TRUS"1' (hereinafter "Declaation") is made this IS` day of October, 2000, by and between the LEAGUE OF OREGON CITIES ("League") and the ASSOCIA"PION OF OREGON COUNTIES ("Association"), acting through their respective Boards of Directors. RECITALS I. The LEAGUE is an intergovernmental entity established by intergovernmental agreement pursuant to Oregon Revised Statutes Chapter 190 to perform governmental purposes and functions, to promote the common interests of its member cities and to institute programs to assist those members in performing their proper functions at the least cost to their taxpayers. The ASSOCIATION is an organization for intergovernmental cooperation created by its member counties pursuant to ORS 190.010 to ORS 190.110 to promote the common interests of its member counties and to institute programs to assist those members in performing their proper functions at the least cost to their taxpayers. The above intergovernmental agreements authorize the League and Association to establish by trust or agreement a means to provide risk management and insurance services to their members. This Declaration is adopted as an intergovernmental agreement pursuant to ORS 190.010 and establishes an intergovernmental entity as permitted by ORS 190.010(5). Such entity shall be known as the City County Insurance Services (CIS), and shall be administered pursuant to this Declaration. II. On June 22, 1958, the League established a trust known as the League of Oregon Cities Insurance Trust to provide employee welfare benefits to employees of League members. The trust was revised and restated November 1, 1984, and its name was changed to the League of Oregon Cities Employee Benefits Services Trust ("EBS Trust"). The EBS Trust Agreement was restated again on October 14, 1988, and is attached and incorporated as Exhibit A. On March 11, 1960, the Association established a trust known as the Association of Oregon Counties Insurance Trust ("AOCIT") to provide employee welfaze benefits to employees of Association members. The AOCIT was revised January 1, 1993 and restated on July 1, 1993, and is attached and incorporated as Exhibit B. On July 1, 1981, the League and the Association established the City/County Insurance Services Trust (the "1981 CIS Trust") to provide property, liability and workers' compensation insurance coverage to their members. The 1981 CIS Trust was revised February 1, 1988. A copy of the revised Trust is attached and incorporated as Exhibit C. On April 16, 1993, the League and the Association adopted the City/County Insurance Services Declaration And Agreement of Trust (the "1993 CIS Trust") which established a trust and a successor board of trustees, and consolidated the Exhibit A, B and C trusts for administration by ARTICLE 1. DEFINI"PIONS For the purposes of the consolidated administration of the CIS Trust, the EBS Trust and the AOCIT; the definitions of the EBS 'T'rust Agreement, as restated October 14, 1988, and of the AOCIT Agreement, revised and adopted June 14, 1993, shall apply unless the context clearly indicates otherwise, and "Board of Trustees" or "Trustees" means the CIS Board of Trustees, designated under Article 2 of this Declaration to administer the trust plans of the CIS Trust, the EBS Trust, and the AOCIT. ARTICLE 2. BOARD OF TRUSTEES. 2.1 The ADMINISTRATIVE TRUST shall be governed by a Board of Trustees composed of ten Trustees. Four Trustees shall be appointed by the Board of Directors of the LEAGUE and four shall be appointed by the Board of Directors of the ASSOCIATION. The Executive Directors of the LEAGUE and the ASSOCIATION shall serve as Trustees. The LEAGUE and the ASSOCIATION, with respect to the Trustees appointed by each, shall adopt their own rules and procedures for the appointment, tenure, and removal of Trustees, subject to the following minimum standards: 2.1.1 If Trustees are appointed for a fixed term, terms shall be for no less than one year, and shall be staggered so that no more than one LEAGUE-appointed Trustee's term, and no more than one ASSOCIATION-appointed Trustee's term expires during any calendar year. 2.1.2 As a qualification for appointment and continued service, each appointed Trustee shall be an elected or appointed official of a city or county which is a member of the LEAGUE or ASSOCIATION appointing the Trustee and which is a participant iu one or more coverages offered by the ADMINISTRATIVE TRUST. 2.1.3 In order to insure the faithful, independent, and impartial exercise of judgment and discharge of their obligations, Trustees shall, during their term of office, be subject to removal only for just cause. Nonattendance at three consecutive regular board meetings shall constitute good cause. 2.1.4 No Trustee shall serve, and no appointment shall be effective until such appointee acknowledges in writing full and unconditional acceptance of the terms of this Declaration and Agreement. 2.2 In the event of a Trustee's resignation, ineligibility (including disqualification under Paragraph 2.1.2 hereof), removal, or refusal to act, a successor Trustee shall be appointed as provided in Paragraph 2.1 hereof. 2.2.1 If the Trustee being replaced was serving a fixed term, the successor Trustee shall be appointed to serve the remainder of the unexpired term. 2.2.2 In the event that a Trustee shall cease to be qualified pursuant under Paragraph 2.1.2 hereof as an elected or appointed official, such Trustee may continue to serve for a period of 90 days or until appointment of a successor, whichever shall come first. 3 the ADMINISTRATIVE TRUST in certain cases or kinds of transactions to be specified in writing by the Board of Trustees. ARTICLE 3. PURPOSES OF ADMINIS"I'RATIVE TRUST. 3.1 The express purposes and primary objectives of the ADMINISTRATIVE TRUST are: 3.1.1 To provide for the consolidated administration of the trusts described in the Recitals. 3.1.2. To make available to the LEAGUE and ASSOCIATION, and to those members who choose to participate, membership services in the form of a broad array of risk management services, including but not limited to risk financing, loss prevention and loss control programs, claims management and legal representation, risk management consulting, data gathering, information sharing, training and related services; 3.1.3 To stabilize costs associated with financing risk by aggregating the collective buying power of LEAGUE and ASSOCIATION members to secure the economic advantages of group purchase, joint self-insurance and pooled risk retention; 3.1.4 To assure that there is available to LEAGUE and ASSOCIATION members a market for liability, property and workers' compensation insurance coverage appropriate to the risks to which such members are exposed; 3.1.5 To create and administer health and welfare benefit plans according to sound actuarial and underwriting principles for members of the LEAGUE and ASSOCIATION, - and such other local governments whose participation may be approved by the LEAGUE and ASSOCIATION. 3.1.6 To create and administer pooled self-insured retention fund(s) for members of the LEAGUE and ASSOCIATION, and such other local governments whose participation may be approved by the LEAGUE and ASSOCIATION, and to establish actuarially sound contribution schedules for participants in such pool(s) at appropriate retention levels; 3.1.7 To provide leadership in collaboration with CIS members, the LEAGUE and the ASSOCIATION in presenting to appropriate legislative and administrative bodies and committees information related to the programs administered pursuant to this Declaration. 3.1.8 To receive, account for, invest, and disburse, as lawfully due and payable, moneys collected from participating cities, counties and other local governments as premiums, fees, and other contributions to the ADMINISTRATIVE TRUST, and to establish and maintain reserves reasonably required to provide security and stability to the Trust Plans. 3.1.9 To be a leader in working with other programs and affiliates of AOC and LOC on issues of joint interest. 5 4.1.6 To review and approve policy forms, service contract forms, and other documents appropriate to the operation of the ADMINISTRATIVE TRUST, and to establish the limits of authority of the persons engaged under Paragraphs 4.1. 2, 4.1. 3 and 4.1.4. 4.1.7 To establish methods of calculating premiums for insurance coverages offered, and other service fees to be charged to participants in the ADMINISTRATIVE TRUST'S services; and to establish procedures for the collection, investment, and disbursement of moneys owed to and by the ADMINISTRATIVE TRUST, and actions to be taken with respect to delinquent accounts receivable. 4.1.8 To establish and maintain, from contributions and other assets of the ADMINISTRATIVE TRUST, reserves necessary according to sound actuarial and underwriting principles to provide stability and security to the ADMINISTRATIVE TRUST'S programs. 4.1.9 To provide for complete accounting, and at least annually, audit of the funds received, invested, kept and disbursed by the ADMINISTRATIVE TRUST; and to establish such accounts with financial and investment institutions and brokerages as may be necessary and prudent for the proper management of ADMINISTRATIVE TRUST funds. All such funds of the ADMINISTRATIVE TRUST may be aggregated for purposes of deposit, investment and disbursement. However, records of moneys received and disbursed shall also be maintained by classes of local governments participating in each of the separate programs and services of the ADMINISTRATIVE TRUST. Funds from each separate program of the ADMINISTRATIVE TRUST shall not be commingled but shall be held and used exclusively for the benefit of current and past participants of each separate program. This shall not preclude payment for shared administrative costs in such proportions as the Board of Trustees, in its discretion, may determine. 4.1.10 To acquire and retain, to the extent allowed by state law, every kind of property, real, personal or mixed, and every kind of investment, specifically including, but not by way of limitation, bonds, debentures, and other corporate or government obligations, interests in common trust funds, and securities of any open-end or closed-end management type investment company or investment trust, provided that in the making of investments the Trustees shall comply with the investment limitations of applicable law and investment policies of the Board. 4.1.11 To hold title to all investments or other assets of the ADMINISTRATIVE TRUST in the name of the TRUST, provided that for convenience in transferring bonds or other negotiable securities, title to the securities may be held in the name of the ADMINISTRATIVE TRUST'S custodian bank, or of its nominee 4.1.12 To maintain accurate records and accounts of all transactions, consistent with generally accepted accounting practices, which shall be available at all reasonable times for inspection by members, participating employers or beneficiaries. 7 5.2 Except as provided in Paragraph 5.1, or as authori-red in a budget duly adopted by the Board of Trustees, ADMINISTRATIVE TRUST funds shall not be disbursed, expended or obligated without express approval of the Board of Trustees. 5.3 The Board of Trustees shall provide for an annual audit of ADMINISTRATIVE TRUST funds and operations, and for such interim audits as it deems necessary. Copies of such audits shall be furnished to each Trustee, and to the LEAGUE and the ASSOCIATION. The cost of such audits shall be paid out of ADMINISTRATIVE TRUST funds. 5.4 The Board of Trustees shall adopt an annual budget, consistent with generally accepted government budgeting principles, not later than the last day of June of each year. Such budget shall identify revenue and expenses for each ADMINISTRATIVE TRUST program, including but not limited to the trusts described in the Recitals. The Board of Trustees or its administrator shall, in the process of preparing the annual budget, solicit the advice of the LEAGUE and the ASSOCIATION regarding services required by their respective members. 5.5 Income from investments of the ADMINISTRATIVE TRUST in excess of obligations payable under this Article may, at the direction of the Board of Trustees, be distributed in whole or in part, from time to time, to local government participants in the program, either directly or by way of reduction of premiums, contributions, or other fees assessed to participants. Such distributions shall be based upon such formula as the ADMINISTRATIVE TRUST shall approve which includes both losses incurred and proportionate premiums, contributions, and fees paid by individual local governments participating in the program during the period since the last distribution, if any. Except as provided in this section, investment income shall remain with the ADMINISTRATIVE TRUST for reinvestment or satisfaction of the obligations of the ADMINISTRATIVE TRUST as provided in Paragraphs 5.1 through 5.3. ARTICLE 6. ELIGIBILITY FOR PARTICIPATION AND TERMINATION. 6.1 Subject to the terms of the trusts described in the Recitals and to regulations adopted by the Board of Trustees, the LEAGUE, the ASSOCIATION and each of their members shall be eligible to participate in the coverage, programs and services offered by or through the ADMINISTRATIVE TRUST. 6.2 In addition, "public bodies" as defined in ORS 30.260 (4) (b) and (c), may be allowed to participate in ADMINISTRATIVE TRUST programs and services. ARTICLE 7. INTEREST IN ADMINISTRATIVE TRUST PLAN ASSETS 7.1 Neither participating employees, participating employers, beneficiaries, parties to the Trust Plans nor any other person or entity shall have any right, title, or interest in the assets of the ADMINISTRATIVE TRUST. 7.2 Neither participating employees nor beneficiaries shall have any right to assign any benefits provided by any employee benefit plan of the ADMINISTRATIVE TRUST except to a beneficiary or to a provider of medical or hospital services. The benefits provided by plans of 8.3.2 The balance, if any, of assets arising from health and welfare benefits programs of the ADMINISTRATIVE TRUST remaining after satisfaction of all obligations of the ADMINISTRATIVE TRUST shall be applied to purchase or provision of benefits which the Board of Trustees may determine for employers who are participating employers on the date of termination, or for individuals who are participating employees or beneficiaries on the date of termination. The Trust Plans' assets shall not revert to, or be used for, the Trustees of the Board of Trustees or the LEAGUE or the ASSOCIATION. 8.4 Automatic termination as provided in Section 8.2 shall not affect the rights of any participating local govermnent under any policy of insurance underwritten by an insurer other than the ADMINISTRATIVE TRUST. 8.5 Upon dissolution or termination of the ADMINISTRATIVE TRUST, the Board of Trustees shall continue to act for the purpose of dissolution and the execution of all instruments which may be required to dissolve and liquidate the Trust Plans or ADMINISTRATIVE TRUST. 8.6 Termination or dissolution of the ADMINISTRATIVE TRUST shall not cause termination or dissolution of the trusts described in the Recitals. Such trusts shall dissolve or terminate according to the terms of each trust declaration. ARTICLE 9. AMENDMENTS. 9.1 This Declaration and Agreement may be amended from time to time by mutual written agreement of the LEAGUE and the ASSOCIATION acting through their respective Boards of Directors; provided that the LEAGUE and the ASSOCIATION deliver to each Trustee a full copy of the proposed amendment at least ten days prior to taking any action approving the amendment, and consider any written or oral comments by the Trustees either individually or as a Board of Trustees prior to such action. 9.2 No amendment shall operate to the prejudice of any vested rights held by any participant in the program under a policy, conU~act, or other document for the benefit of such participants. 9.3 The ADMINISTRATIVE TRUST shall not be amended in any manner inconsistent with the legal requirements applicable to the ADMINISTRATIVE TRUST to permit the ADMINISTRATIVE TRUST'S assets, or any part thereof to revert, or be diverted, to the benefit of any employee or any person other than the Participating Employers, Participating Employees or Beneficiaries to the extent contributions were made for the benefit of the Participating Employees or Beneficiaries. An amendment, by its terms, may be retroactive. ARTICLE 10. SEVERABILITY. If any provision of this Declaration and Agreement is adjudicated to be invalid, wrenforceable, or unconstitutional, the remainder of the provisions not subject to such adjudication shall not be affected and shall continue in full force and effect. 11 CITY COUNTY INSURANCE TRUSTS -BOARD OF TRUSTEES GOVERNANCE POLICY (Last Amended April 2001) SECTION I. BOARD PROCESS Purpose: In these policies, the Board identifies for whom it governs and outlines its governance approach and governing style. 1.0. ResponsibilitX. The Board recognizes its fiduciary duty to the three Trusts it administers: The City County Insurance Services Trust (CIS), established in 1981 by the League of Oregon Cities (LOC) and the Association of Oregon Counties (AOC), offers risk financing and risk management related services to their members, and other governments as approved by LOC and AOC. The Employee Benefits Services Trust (EBS), established by LOC in 1958, provides employee health and welfare benefits plans for city employers. In 1994, LOC designated CIS as the successor of EBS. The Association of Oregon Counties Insurance Trust (AOCIT), formed by AOC in 1960, provides similar employee benefits plans for counties. In 1994, AOC designated CIS as the successor of AOCIT. 1.OA. Role. Administration of the three Trusts was consolidated under the CIS Board of Trustees in 1994 and reaffirmed with passage of an Administrative Trust Agreement in 2000. The Board's allegiance in trust, and CIS' long term business survival, require it to protect and manage CIS' assets for the benefit of its members (those local governments who purchase coverage and services through CIS) and to further the interests of the sponsoring associations. On behalf of its members, the Board directs the CIS organization in the accomplishment of desired results -expressed in Ends Policies (Section 4), and the avoidance of unacceptable activities and conditions -expressed in Executive Limitations Policies (Section 3). 1.1. Linkage to Members. Cities and counties who have joined LOC and AOC are not compelled to purchase coverage and services from CIS. They judge whether the products and services offered by CIS are cost-effective when compared to other alternatives available in the open market place. Competitive market forces influence CIS product selection and pricing. Under Board direction, CIS seeks to attract and retain market share by understanding the dynamics of this market place and by producing outputs and generating outcomes that are highly valued by its members. Trustees are visible and active supporters of more aggressive risk management practices among members. 1.1A. Member Driven. The Board educates itself regarding the values held by cities and counties in LOC and AOC, paying particular attention to those entities that are CIS members. The Board acts under the influence of these values. Education is facilitated by reviewing industry reports prepared by staff and outside sources; studying responses to member surveys and focus groups; engaging in direct contact with members, beneficiaries and stakeholders; and monitoring the demand and utilization of similar products and services in the market place. 1.3B(1). The Board convenes once a quarter, if needed, and designates its annual Spring Seminars held in RiskNet regions around the state as annual member meetings. 1.3B(2). Six trustees constitute a quorum for Board meetings. All Board action requires affirmative votes of a majority of trustees constituting a quorum. 1.3B(3). Trustees prepare for meetings, are well informed and participate productively in discussion, always within the boundaries of discipline established by the Board. 1.3B(4). The Board is the sole authority over its own meeting agenda. The chairperson exercises this control on behalf of the Board, though any trustee - with a majority agreeing -can add or delete business from the agenda. Agenda material is provided to trustees with adequate lead-time for preparation. 1.3B(5). Deliberation at Board meetings is fair and open, but also ef$cient, timely, and orderly. 1.3C. Chairperson. The Board charges the chairperson to make decisions on issues of Board Process and Board-Executive Relationship, within established policies. 1.3C(1). The Board elects from atnong themselves, a chairperson, vice-chair and secretary to serve an annual term beginning July 1 each year. The chair and vice-chair positions alternate annually between appointees of LOC and AOC. 1.3C(2). The chairperson oversees the integrity and fulfillment of the Board's process and occasionally represents the Board to outside parties. 1.3C(3). The chairperson is authorized to use any reasonable interpretation of the provisions in Board Process and Board-Executive Relationship policies, except where the Board specifically delegates portions of this authority to others. 1.3D. Board Members. The Board commits itself and its trustees to ethical, businesslike and lawful conduct, including proper use of authority and appropriate decorum when acting as trustees. 1.3D(1). Because poor governance costs more than learning to govern well, the Board invests in its governance capacity. Trustees participate in educational and training opportunities to ensure continual development in their roles and engage in periodic Board discussion of process improvement. 1.3D(1) a. If available, monies are set aside in CIS' annual operating budget for trustee training, including attendance at relevant conferences and workshops. Training monies are used liberally to maintain and increase trustee education in the governance process. 1.3D(1) b. If available, training monies are used liberally to orient new trustees, and candidates for service on the Board, in the Board's governance process. SECTION 2. BOARD-F,XECUTIVE DIRECTOR RGLATIONSI-IIP Purpose These policies spell out how the Board tranrfens authority to management. These policies describe the nature of the delegation as well as the way in which the proper use of delegated authority is monitored. Policies do not necessarily describe what is delegated, but rather how delegation occurs. They do not tell the executive director what to do, but rather describe how that position relates to the Board. 2.0 Relationship. The Board conducts its business through the Board's executive director. 2.1 Delegation. The Board instructs the executive director through written policies prescribing the organizational Ends to be achieved -certain results, for identified recipients, at certain costs -and, in Executive Limitation policies -describing organizational situations and actions to be avoided. The executive director is then expected to use a reasonable interpretation of these policies. 2.1A. Executive Director Authority. As long as the executive director uses a reasonable interpretation of the Board's Ends and Executive Limitation Policies, the executive directot• is authorized to make all decisions, take all actions, establish all practices and develop all activities. 2.2. Accountability. The executive director is the Board's link to operational achievement. All authority and accountability of staff, as far as the Board is concerned, is considered the authority and accountability of the executive director. The executive director is accountable to the Board for CIS achieving the Board's Ends policies and avoiding transgressions of the Board's Executive Limitations policies. 2.3. Assuring Performance. Monitoring occurs to determine the degree to which Board policies are being met. Systematic and rigorous monitoring of the executive director's job performance will be against the outputs and outcomes the executive director is charged to deliver - organizational performance upon Ends policies, and organizational operation within limits established in Executive Limitations policies. 2.3A. Method. Adopted policies will be monitored in one ot• more of three ways: Internal Report: Disclosure of compliance information from the executive director. External Report: Discovery of compliance information by a disinterested external auditor or inspector selected by and reporting to the Board. Direct Inspection: Discovery of compliance information by the Board as a whole, or its designated representative. 2.3B. Frequency. Any policy can be monitored by any method at any time the Board chooses. For regular monitoring, however, the Board classifies each Ends and Executive Limitations policy according to established frequency and methods: 5 2.6. Evaluating Performance of Executive Director. Annually, in January, the Board formally evaluates the executive director, considering the degree of organizational accomplislunent upon Ends policies, and organizational compliance with Executive Limitations policies as primary performance criteria. SECTION 3. EXGCUTNE L[MITATIONS Purpose Executive Limitations Policies reflect assurances the Board needs before it is willing to safely withdraw from most details of operation. While Ends policies tell the executive director what the Board intends for the organization to achieve, Executive Limitations policies tell the executive director and staff what the Board will not tolerate. These policies establish the conditions for pre-approval of any staff decisions or• activities that do not violate the policies. In effect, the Board is saying to the executive director any action you take can be considered Board-approved if it does not violate these policies and the executive director is accountable for ensuring that all further decisions and actions constitute reasonable interpretations of the policy limits. If the Board worries about staff making reasonable interpretations of Board policy it can make further clarifying policy sub-sets, until it is satisfied that staff won't get it wrong. The Board monitors whether staff means used does indeed respect the boundaries placed on them by these policies. 3.0 Executive Limitations. The executive director shall not cause nor allow any practice, organizational circumstance, activity or decision that is either imprudent or in violation of commonly accepted business or professional ethics as they might apply to organizations similar to CIS. The executive director shall not endanger CIS' public image or credibility, thereby jeopardizing its ability to accomplish its mission. 3.1. Treatment of Participating Members. With respect to interactions with current or prospective members, the executive director shall not cause or allow conditions, procedures or decisions that are undignified, discourteous or fail to provide appropriate confidentiality or privacy. 3.1A. Member Eligibility. CIS products and services shall not be offered to an entity that do not belong to LOC and AOC, or whose participation AOC and LOC have not approved. 3.2 Treatment of Staff. With respect to treatment of staff, the executive director may not cause or allow conditions that are unlawful, unfair or undignified. 3.2A. Compensation and Benefits. With respect to employment, compensation, and benefits to employees, consultants, contract workers and volunteers, the executive director shall not cause or allow jeopardy to fiscal integrity or public image. 7 3.4A(2). The CIS Trust is a single accounting entity that prices each line of coverage separately. In the event of excessive losses in any coverage line, transfers between lines of coverage shall not be made unless the deficit can 2•easonably be made up by the end of the next full fund year after the transfer is made. 3.4B. Bonding. The executive director shall not authorize nou-bonded personnel access to amounts of funds in excess of $1,000. 3.4C. Investments. The executive director shall not allow investments to be made in violation of the Board's adopted investment policy. 3.4D. Insurance. The executive director shall not intentionally expose CIS, the Board or staff to claims of liability. 3.4D(1). The executive director shall not fail to secure coverage against theft and casualty losses and against liability losses to Board members, staff or each of the Trusts, in amounts that are reasonable for similar organizations of like size. 3.4D(2). The executive director shall not fail to protect intellectual property, information and files from loss, significant damage or misuse. 3.5. Communication and Support to the Board. The executive director shall not permit the Board to be uninformed or unsupported in its work. 3.SA. Monitoring Data. The executive director shall not neglect to submit monitoring data required by the Board, in a timely, accurate and understandable fashion, directly addressing provisions of Board policies being monitored. The executive director shall not let the Board remain unaware of relevant trends, anticipated adverse media coverage and material external and internal changes, with particular emphasis on changes in the assumptions upon which any Board policy has previously been established. 3.SB. Decision Data. The executive director shall not fail to assemble for the Board as many staff and external points of view, opinions and options as needed for fully informed Board choices. Information may not be presented in unnecessarily complex or lengthy form. The executive director shall not fail to supply for the consent agenda all items delegated to the executive director, yet required by law or contract to be Board-approved, along with related monitoring assurance. 3.SC. Other Data. The executive director shall not fail to advise the Board if, in the executive director's opinion, the Board is not in compliance with its own policies on Board Process and Board-Executive Director Relationship. This is appropriate in the case of Board behavior that is detrimental to the working relationship between the Board and the executive director. 9 4.2. Risk Mana e~ment. CIS works with members to aggressively manage risks. 4.2A. Services. CIS makes available effective loss prevention and loss control programs, claims management and consulting, data gathering, information sharing, education, training and related risk management services. 4.2A (I). CIS risk management efforts will focus on areas of greatest risk as reflected in claims experience data -law enforcement, employment-related claims and OR- OSHA compliance. 4.2A (2). As a result of CIS risk management intervention, at least 5% of the entities with incurred loss ratios of over 60% (least desirable) will improve their ratios to between 40% to 60% (more desirable). 4.2A (3). Overall, CIS risk management efforts will result in an overall 5% improvement in loss ratios and reduce the number, frequency and severity of claims. 4.3. Financial Viability of CIS. CIS is financially stable and highly valued by its members. 4.3A. Self-insured Pools. CIS self-insured pools are financed through the use of actuarially sound contribution schedules at appropriate retention levels. Each year's contributions are expected to cover that year's losses and expenses and add to surplus. The Board establishes target surplus levels. 4.3B. Group Purchase. CIS' employee benefits Trusts operate using sound actuarial and underwriting principles. Surplus amounts generated in CIS' employee benefits Trusts may be used, subject to Board approval, as a subsidy to write down group rates proposed by carriers in order to provide pricing stability to members. 43C. Reporting. The CIS Board and members will receive regular reports on key benchmarks that reflect the status of CIS operations. 4.3D. Cooperative Efforts. CIS works together with those who have common interests when these efforts have the potential to produce benefits for CIS members. CIS acts as a catalyst for change and innovation that helps members better finance and manage their risks. CIS is a leader in working with other programs and affiliates of the local government associations on issues ofjointinterest. 4.3E. Membership Services. CIS acknowledges the importance of membership services and works with LOC and AOC to improve and expand services to local governments in ways that are consistent with CIS' own mission. CITY/COUNTY INSURANCE SERVICES ADMINISTRATIVE TRUST BYLAWS ARTICLE 1 DEFINITIONS Terms as utilized in the Bylaws shall have the meanings as set forth in this Article. 1.1. Administration. Administration shall include, without limitation, payment of costs acid expenses related to loss prevention, claims administration, data processing, financial accounting and other Trust expenses, whether performed by the Trust or a Service Company. Capital expenditures for facilities and equipment necessary to carry out the purposes of the Tnist shall be deemed as part of Administration. 1.2. Association of Oregon Counties. Association of Oregon Counties ("AOC") shall mean the Association of Oregon Counties, an intergoverrunental agency established under the laws of the State of Oregon and having a principal place of business in Salem, Oregon. 1.3. Bylaws. The Bylaws shall mean the Bylaws of the City/County Insurance Services Trust as set forth herein and as amended from time to time whether before or after the date hereof. 1.4. Contribution. Contribution shall mean required payments to purchase excess insurance in the name of the Trust, to establish Loss Funds and any other necessary or prudent reserves, and to provide administration. The term Contribution does not include premiums paid to CIS for any insurance coverage provided on a group purchase or individual basis. 1.5. Executive Director. The Executive Director shall mean the person appointed by the Trustees, to be responsible for the daily activities of the Trust. 1.6. Fund Year. The Fund Year shall mean a twelve (12) consecutive month period chosen from time to time by the Trustees. The initial Fund Year shall end on June 30 unless the Board of Trustees shall provide otherwise. A Fund Year maybe any period less than twelve (12) months if it is the first or last such year of the Fund or a year or years involving a change in the Fund Year. 1.7. Governing Body. Governing Body shall mean the City Council in cities, the Board of Commissioners or County Court in counties, and other similar governing bodies of authorities, agencies or entities eligible to become Members. 1.8. Insurer. Insurer shall mean any insurance company providing any insurance contract to the Trust and providing any benefit, directly or indirectly, for any Member or Participant, including, but not limited to, any such policy that the Trustees deem necessary or prudent for the proper operation of the Trust. 1.9. League of Oregon Cities. League of Oregon Cities ("LOC") shall mean the League of Oregon Cities, an intergovernmental agency established under the laws of the State of Oregon and having a principal place of business in Salem, Oregon. Page 1 -CITY/COUNTY INSURANCE SERVICES arcnrvsNSrvccsaN.~o~i~~~reio6ioua-z ADMINISTRATIVE TRUST BYLAWS ARTICLE 2 MEMBERSHIP AND PARTICIPATION 2.1. Eligibility to Become Member. Entities eligible to become Members or Participants of the Trust are: 2.1.1. Any Oregon city which is a member of the LOC. 2.1.2. Any Oregon county which is a member of the AOC. 2.1.3. Any other public body, as defined by ORS 30.260, which is created by a city or county under statutory or home rule charter authority. 2.1.4. Any Oregon community college created under ORS Chapter 341. 2.2. Such entities prior to becoming a Member or Participant must: 2.2.1. Complete such written application as the Trustees shall determine; 2.2.2. Pass by its governing body such resolution or contract as the Trust may prescribe; 2.2.3. Pay the Contributions or Premiums to the Trust deterrined pursuant to the provisions of the Bylaws and the Rules; 2.2.4. Meet all other criteria established and provide all information requested by the Trustees or an Insurer which Trustees deem necessary and prudent for the proper administration of the Trust, including but not limited to underwriting criteria; and 2.2.5. Receive written acceptance of Membership or Participation from the Trust. 2.3. Acceptance as Member or Participant by Trustees. As set forth in Section 2.2 of the Bylaws, an entity shall be accepted as a Member or Participant only upon the approval of the Trustees and any Insurer whose approval is required as a condition of providing insurance. The decision of the Trustees in this regard shall be final. Any such entity which has been refused the status as a Member or Participant in the Fund may again request such status after a period determined by the Trust. 2.4. Effective Time of Becoming a Member or Participant .The effective date upon which an entity may become a Member or Participant shall be determined by the Trustees and set forth in the Trustee's written notice of acceptance of membership or participation. Notwithstanding the foregoing, the date for commencement of membership or participation may be specified by such entity in its written request to become a Member or Participant, in which case such entity shall become a Member or Participant upon such date if approved by the Trustees. 2.5. Effective Date of Acceptance. Each entity, on becoming a Member or Participant, thereby agrees to be bound by the provisions and terms of the Trust Agreement, Bylaws, Rules, Page 3 -CITY/COUNTY INSURANCE SERVICES nrLnri~sNewccenN.eo~~seeioriaio,-z ADMINISTRATIVE TRUST BYLAWS 2.9. Withdrawal. 2.9.1. Each Member shall continue its membership for a period not less than that established for a coverage by the Trust, which period shall not exceed three (3) full Fund Years. If no such period is established, the membership period shall be one (1) full Fund Year. A Member may withdraw prior to the end of such period upon delivery to the Trust of a resolution adopted by the Member's governing body authorizing withdrawal. Such resolution shall be delivered 180 days prior to the effective date of withdrawal for three year membership periods and 60 days in all other cases. A Member withdrawing shall have no claim on the reserves being maintained by the Trust for losses incurred by the withdrawing Member. The Trust shall continue the servicing of any covered claim after the withdrawal of a Mernber. 2.9.2. If a Member does not give notice required pursuant to 2.9.1 above, a sum calculated as set forth below shall be deducted from any Distribution of Surplus, or any number of such Distributions, otherwise due to such Member, until total deduction(s) equals the contribution for the coverage from which the Member is withdrawing without notice, multiplied by 1.0 minus the loss ratio for the Trust for that coverage for the rnost current three-year period, as of the end of the Fund Year during which the notice was required to be given, multiplied by one-half if less than two full calendar years of a three-year membership period shall have been completed prior to withdrawal and by one-quarter otherwise. 2.9.3. In the case of withdrawal a Member shall remain liable for any Contribution which has or will have accrued for any Fund Year prior to the effective date of such withdrawal. 2.9.4. Participants may withdraw at any time upon 30 days written notice to CIS. Refund of any Premium will be determined in accordance with the terms of the insurance policy involved. 2.10. AOC and LOC Membership. All Members and Participants eligible for membership in AOC or LOC shall maintain membership in the AOC or LOC. On failure to do so Members or Participants shall be notified that their membership or participation in the Trust shall be terminated if AOC or LOC membership is not renewed prior to the due date of the next Contribution to the Trust in the case of a Member, or policy expiration in the case of a Participant which comes due thirty (30) days or more from the lapse in membership in the AOC or- LOC. Such termination shall be effective as of the due date of such Member's next Contribution to the Trust or Participant's policy expiration. A Member or Participant not eligible to maintain full membership in AOC or LOC may satisfy the provisions of this section by maintaining any other membership status in AOC or LOC for which it is eligible. 2.11. Membership and Participation Review and Termination. 2.11.1. When in the determination of the Executive Director a Member has engaged in conduct, other than nonpayment of Contributions or Premiums, that warrants review of that membership or participation status, the Executive Director shall file a written report with the Trustees. Said report shall contain a summary of the facts and the Page 5 -CITY/COUNTY INSURANCE SERVICES dnewsNervecceN.ao~~„-dbiociaiof-> ADMINISTRATIVE TRUST BYLAWS 3.1.2. To allow the Trust and its agents reasonable access to all facilities of the Member or Participant and all records, including but not limited to financial records, which relate to the purposes or powers of the Trust. 3.1.3. To allow attorneys selected by the Trust or Service Company to represent the Member or Participant in investigation, settlement discussions and all levels of litigation arising out of any claim made against the Member or Participant within the scope of coverage furnished by the Trust. 3.1.4. To furnish full cooperation with the claims adjusters, the Service Company and any agent, employee, officer or independent contractor of the Trust relating to the purposes and powers of the Trust. 3.1.5. To follow loss reduction and prevention procedures established by the Trust within the purposes and powers of the Trust. 3.1.6. To furnish to the Trust any budget and audit information of revenues and expenditures of the Member or Participant for any fiscal year for which figures are requested by the Trust. 3.1.7. To report as promptly as possible all incidents which could result in the Trust being required to consider a claim within the scope of coverage undertaken by the Trust 3.1.8. All information gathered or received by the Trust pursuant to any provision of these Bylaws shall be utilized by the Executive Director only in connection with the operation of and to further the purposes of the Trust and shall not otherwise be distributed, disseminated or communicated to any person unless authorized by the Board of Trustees or required by law. 3.2. Optional Defense by Member. The Trustees shall promulgate Rule(s) to permit Members a reasonable opportunity in casualty cases or claims to participate in their own defense or to prevent the settlement of such cases or claims by the Trust in a manner contrary to the wishes of the Member. The Rule(s) shall provide that in the event that a Member exercises its privilege to prevent the settlement of a case or claim, the Member shall be responsible for any additional cost, including but not limited to legal and investigation expense and subsequent judgment or settlement, above the costs which would have been incurred had the Member not elected to prevent the acceptance of a settlement offer or proposal pursuant to this section. 3.3. Contractual Obligation. The provisions of Articles 2 and 3 of these Bylaws shall constitute a contract between each Member and Participant and the CIS Trust. The agreement of a Member or Participant thereto shall be evidenced by a properly signed application for Membership or Participation and a signed copy of a resolution or contract adopted by its governing body. Nothing herein contained shall be deemed to create any relationship of surety, indernnification guarantee or responsibility between Members or Participants for the debts of or claims against any other Member or Participant or on the part of any Member or Participant with respect to CIS or the Trust. Page 7 -CITY/COUNTY INSURANCE SERVICES arLnwsrvewccsenteoo~,vaaioeiorioi-z ADMINISTRATIVE TRUST BYLAWS ARTICLE 7 COMMITTEES 7.1. Investment Committee. The Trustees may establish an Investment Committee. In selecting committee members the Board shall consider investment expertise and personal and professional qualifications and shall make appointments for such terms as it may deem desirable. 7.2. Underwriting Committee. The Trustees may establish an Underwriting Committee. The duties of the Underwriting Committee shall be determined by the Trustees but may include recommendations regarding development of underwriting standards and rating procedures, and review of applications for membership or participation. 7.3. Loss Prevention Committee. The Board of Trustees may establish a Loss Prevention Committee. The duties of the Loss Prevention Committee shall be determined by the Trustees, but may include arranging for and evaluating the regular conduct of loss control services, production of recommendations to prevent losses, maintenance of a loss control manual and the conduct of seminus regarding loss control. 7.4. Advisory Committees. The Board of Trustees may, in its sole, absolute discretion appoint advisory committees to the Board of Trustees or any Committee of the Board comprised of individuals who are not Trustees but whose expertise, experience or knowledge maybe helpful to the Trustees in the performance of their duties. The Board of Trustees may provide for such compensation to such members of any advisory committee as it shall in its sole discretion determine. ARTICLE 8 ADMINISTRATION 8.1. Appointment of an Executive Director. The Trustees shall appoint an Executive Director to manage the daily affairs of the Trust. The Executive Director shall serve under such terms and conditions as the Trustees shall prescribe. Such Executive Director shall not be an owner, officer or employee of any Service Company. The duties of the Executive Director shall include, without limitation, carrying out of policies established by the Board, locating and recommending various contractors, supervising and reporting on contractor's performance, the prrovision of financial and accounting reports and the maintenance of excess reinsurance or other insurance. In addition, the Executive Director shall: 8.1.1. Pay claims to or on behalf of the Members in accordance with purposes of the Trust Agreement, Bylaws, Rules and coverage documents. 8.1.2. Create a reserve for the payment of claims. 8.1.3. Pay or provide for the payment on behalf of Members and Participants hereunder all Premiums as they become due to an Insurer on any policy of insurance. 8.1.4. Cause to be maintained accounts of all investments, receipts, disbursements and all other transactions affecting funds or property of the Trust. Page 9 -CITY/COUNTY INSURANCE SERVICES orcnwsNEwcceex.dooi,vdaioeio,iw-~ ADMINISTRATIVE TRUST BYLAWS ARTICLE 10 GENERAI, PROVISIONS 10.1. Title to Trust Assets. Title to the funds and property of the Trust, including without limitation Loss Funds, shall be vested in and remain exclusively in the Trustees and no Member shall have any right, title or interest in the Loss Funds nor any right to Contributions made or to be made thereto, nor any claim against any Member on account thereof, except only as provided from time to time by the Bylaws. 10.2. Nonalienation of Benefits. The funds and property of the Trust, including without limitation Loss Funds, shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by any person other than the Trustees and their duly authorized representative to the extent and for the purposes as herein specifically provided. 10.3. Examination of Books and Records by the Trust. The Trust, its agents, employee or attorneys shall be permitted at all reasonable times prior to the expiration of two (2) years after the termination of a Member's participation in the Trust to examine the Member's books, vouchers, contracts, documents and records of any and every kind which show or tend to show or verify the amount which is payable from the Fund to such Member or any of its Employee. 10.4. Examination of Books and Records by Members. Any member, or their designated representative, shall be permitted to examine the Trust's books, contracts, documents and records. However, such examination shall not extend to matters relating to other Members. Such examination shall be limited to such times and places as is reasonable. The cost of copying, transcribing or abstracting records shall be borne by the Member. 10.5. Right to Obtain Adjudication of Disputes. In the event any question or dispute shall arise as to the property or person or persons to whom any payment shall be made from the Fund, the Trustees may withhold such payment until an adjudication of such question or dispute satisfactory to the Trustees in their sole absolute discretion shall have been made, or the Trust shall have been adequately indemnified against loss. 10.6. Notice of Delivery of Documents. Any notice required to be given hereunder, except as otherwise provided, shall be in writing and by certified mail, return receipt requested and shall be deemed to have been given as of the date of posting to whomever may properly receive legal service of process for the addressee of such notice. Any notice actually received shall be deemed properly given whether or not pursuant to the provisions of the Bylaws. 10.7. Gender, Number and Captions. Wherever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine or neuter gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. Titles of articles and headings of sections and subsections are inserted for convenience of reference only and are not to be considered in the construction hereof. Page 11 -CITY/COUNTY INSURANCE SERVICE: QYLAH'SNE{VCLEAKdodwdG/0(/0//01-2 ADMINISTRATIVE TRUST BYLAWS Date: August 17, 2001 To: CIS Members and Local Agents From: Noel J. Klein, Executive Director Re: CIS Membership Documents Notebook Recently you received a CIS Membership Documents Notebook. One of the tabs in the notebook refers to the CIS Trust Agreement, Bylaws and Rules. Along with the specific coverage documents, these items are an integral part of the contract between CIS and its members because they spell out the obligations and entitlements of membership in CIS'joint self-insured pools. The CIS Bylaws calls on members to express their agreement to join CIS in two ways: (1) By signing an application for membership or participation. This occurs when a representative of the entity signs and returns the proposal form request coverage each year, and (2) By providing CIS with a signed copy of a resolution adopted by the governing body that affirms the entity's acceptance of membership in the joint self-insured pool. This occurs when a Member initially joins the pool and when changes have been made to the underlying Trust documents. Because the Trust Agreement, Bylaws and Rules were revised during the past year, members are being asked to sign a new resolution affirming that they accept coverage consistent with the new documents. The Notebook includes a copy of a model resolution for this purpose. When the Notebook was assembled, the Rules were inadvertently omitted. They are enclosed with this letter, together with a brief explanation of changes to the documents. Please insert these items in your Notebook behind the CIS Trust Agreement, Bylaws and Rules tab. Article 8 Article 8 in the prior agreement has been deleted because the paragraph about collective bargaining is governed by state law and has no effect. New Article 8 refers to dissolution or termination of this Administrative Trust. In effect, LOC and AOC can dissolve this trust while not affecting the other three trusts. Appendix The appendix in the prior agreement has been eliminated. B. B, laws The Bylaws are established by the CIS Board of Trustees. Trustees cannot give themselves powers or duties that have not been delegated by LOC or AOC in the Declaration creating the Administrative Trust. The recent amendments to the Bylaws make them consistent with the Administrative Trust Agreement. Explanation of Revisions Title Now incorporates the word "Administrative" trust. Article 1 Redundant language is removed. Language that is not definitional is eliminated since it is incorporated in applicable Rules. Article 2 Formatting and editorial changes only. Membership in CIS is still continuous until terminated. Article 3 Removes unnecessary and redundant language. This article outlines the conriactual obligation that exists between a Member, Participant and the CIS Trust. Article 4 Eliminates language in old Bylaws regarding appointment and resignation of trustees because these are powers over which trustees have no control. Article re-titled as "Meetings" and addresses meetings of the Board. Article 5 Old Article 5 has been eliminated as only LOC and AOC can determine the powers of trustees and this has been done in the Administrative Trust Agreement. New Article 5 identifies Officers of the Board of Trustees. Articles 6 & 7 Language in old Articles 6 & 7 is eliminated. Accrual of Net Income (Surplus) and Loss Fund Protection are addressed in the Rules New Article 6 incorporates prior language in old Article 5 regarding compensation of trustees. New Article 7 restates prior language in old Article 5 relating to Committees. Article 8 Old Article 8 language regarding termination is eliminated because LOC and AOC are the only ones with authority to adopt these provisions. New Article 8 restates old Article 5 language relating to Administration. The relationship between the Board and staff is further defined in the Board's Governance Policies. These policies are also included in the membership documents notebook. CITY COUNTY INSURANCE SERVICES TRUST LOSS FUND PROTECTION AND SURPLUS DISTRIBUTION RULE NUMBER 'I This Rule, effective July 1, 2001, supercedes and replaces Rule Number 1 ("Net Income Distribution"); Rule Number 2 ("Contribution and Loss Allocation"); and the policy statement on "Loss Fund Surplus" dated April 14, 1989. The City County Insurance Services (CIS) Board of Trustees adopts the following rule regarding the protection of CIS Trust Loss Funds for pooled self-insurance operations and the distribution of surplus from such funds. A. Loss Funds. CIS Trust Loss Funds consist of Member Contributions, investment earnings and other miscellaneous revenue. For such coverage as the Member elects in a Fund Year, an "Initial Contribution" is charged in accordance with CIS rating guidelines. CIS rates are based on estimated losses expected expenses and a prudent level of reserves determined by the Board. In any one Fund Year, the Board's targeted reserve funding level is an amount sufficient to pay the maximum probable claims in that year at confidence levels determined by the Board upon the advice of its consulting actuary. "Initial Contributions" represent a deposit into the Loss Fund against which losses and expenses are charged. The Board may impose "Deferred Contributions" as described in Section B of this rule, in the event that: (1) Ultimate losses and expenses exceed Loss Fund revenues for the Fund Year, and (2) In the judgement of the Board, this shortfall presents a threat to the overall fiscal viability of the Trust's Loss Funds, The Board may declare a Surplus distribution as described in Section C of this rule when Loss Fund amounts exceed ultimate losses, expenses and the Board's target level for outstanding claims reserves. (1) If the Board declares a distribution of Surplus funds for one or more Fund Years, it may direct staff to offset such distribution for individual Members by some, or all, of any Deferred Contributions that Member may be required to pay under Part B of this rule. (2) No Member shall have a right to any specific share of Surplus funds except as herein provided. (3) Distributions, as determined herein, and with appropriate offset for Deferred Contributions, shall be by means of loss stabilization credits held in the name of the Member and available to apply against future contributions or, at the sole discretion of the Board, by means of cash payments to current Members. Loss stabilization credits accruing to non-Members expire on July 1 following three complete Fund Years after the distribution is made. (4) No distribution of Surplus shall be made in any manner to any Member which withdraws prior to the end of the period of Membership established by the Trust, which period shall not exceed three (3) full Fund Years. (5) At such time as the Board determines an amount of Surplus available for distribution, said Surplus shall be distributed as follows: i. One-third (1/3) of the Surplus will be distributed to Members who made contributions in the Fund Year, for the coverage for which Surplus is to be distributed. The proportion is that which each Member's contribution bears to the total contributions of all Members in the Fund Year, for the coverage for which Surplus is to be distributed. ii. Two-thirds (2/3) of the Surplus will be distributed to Members who made contributions in the Fund Year, for the coverage for which Surplus is to be distributed. The proportion is that which each Member's contributions, less incurred losses, bears to the total contributions, and Tess total incurred losses, of all Members in the Fund Year, for the coverage for which Surplus is to be distributed. However, no distribution shall be made of the two- thirds of Surplus to Members whose contributions, in the Fund Year, for the coverage for which Surplus is to be distributed, are less than their incurred losses. (6) More than one distribution may be made for a given coverage for any Fund Year. In the event of a second, or subsequent, distribution the amount to be distributed to a Member shall be computed in accordance with this rule, based on contributions and loss information as of the date of such later distribution. The amount so determined shall be reduced by any amounts previously distributed to the Member. No adjustment will be made due to changes in incurred losses after the date of the distribution. CITY COUNTY INSURANCE SERVICES TRUST APPLICATION OF AGGREGATE PAID LOSS DEDUCTIBLE RULE NUMBER 2 Adopted April 6t", 2001. The following supercedes and replaces Rule 3 adopted 8/16/91 The City County Insurance Services Trust (CIS) adopts the following Rule regarding the application of aggregate paid loss deductibles for all Fund Years beginning on or after July 1, 1987. 1. Paid losses shall be invoiced and paid quarterly. Amounts due under the deductible shall be considered Contributions subject to the provisions of Articles 2.8 and 3.1.1. of the CIS Bylaws. 2. For ease of administration, the liability deductible shall apply jointly to general automobile liability losses. The obligation of the Member to pay for losses shall cease when the aggregate amount paid equals the amount of the deductible, regardless of the type of the claims involved. 3. CIS and any Member with a deductible may, by mutual written agreement, agree to a liquidated value for the remaining payments due under the deductible. 4. Surplus Distribution which may be due to a Member pursuant to Rule Number 1 shall be computed as if the Member had no deductible. From such distribution shall be deducted the savings, if any, resulting to the Member from the deductible. For liability coverage such savings shall be computed by allocating the deductible between general liability and automobile liability based on initial contributions, less paid losses for each coverage. 5. For liability coverage, Contributions and Loss Allocation pursuant to Rule Number 1 shall be computed as if the Member had no deductible and the full amount of the initial Contributions had been paid. CITY COUNTY INSURANCE SERVICES TRUST WORKER'S COMPENSATION DEFERRED CONTRIBUTION RULE NUMBER 4 Adopted August 16th, 1991. City County Insurance Services (CIS) Trust has deferred a portion of workers' compensation Contributions for larger Members of the CIS Workers' Compensation Group. The following policy sets forth the terms under which such deferred Contributions may be collected for all Fund Years beginning on or after July 1, 1986. 1. Initial determination of the amounts to be collected shall be made at the end of the 30th month of the Fund Year if the reserves are reasonably stable. However, the Trustees may, in their sole discretion, select such later date, as may be appropriate if the reserves for some or all Members are subject to significant change, 2. If the Member's loss ratio is between 60% and 100%, the deferred Contribution due shall be prorated. If the Member's loss ratio exceeds 100%, the entire deferred Contribution shall be due. 3. Each Member shall be advised of the initial determination of the amount of deferred Contribution calculated as due under Numbers 1 and 2 above. 4. The final determination of the amount of deferred Contribution due shall be made at the end of the 36th month of the Fund Year, unless the initial determination shall have been delayed under Number 1 above. In such case, the final determination shall be delayed by a similar time. 5. No deferred Contribution shall be collected from a Member unless the Member shall have been advised of the final amount due under Number 4 above six months prior to the start of the Member's fiscal year in which the deferred Contribution is due. 6. For Fund Year 1986-87, for which deferred Contribution is contingent upon the loss ration of the entire group, the entire deferred Contribution may be collected if the group loss ration exceeds 60%. The Trustees may, in their sole discretion, choose to collect less than the entire amount due based on the group loss ratio.