MCMJIF Bylaws

MIDDLESEX COUNTY MUNICIPAL JOINT INSURANCE FUND
WHEREAS; Public Law 1983, c. 372 (N.J.S.A. 40A:10-36 et seq) permits local units to join together to form a joint insurance fund; and

WHEREAS; Said statute was designed to give local units an opportunity to use alternative risk management techniques, providing they are based on sound actuarial principles; and

NOW THEREFORE, in consideration of the premises and in order to create said fund to be known as the Middlesex County Municipal Joint Insurance Fund, hereinafter called the "Fund", it is mutually understood and agreed as follows that it is the purpose and intent of these bylaws to incorporate the statutory responsibilities and requirements governing joint insurance funds, and to the extent that there is a statutory or regulatory requirement not specifically set forth in these bylaws, it is the intent of these bylaws to incorporate by reference in these bylaws the requirements set forth in N.J.S.A. 40A:10-36 et seq and N.J.A.C. 11:15-2.1 et seq, as same may be amended from time to time.

The following public entities agreed to form said joint insurance fund effective August 6, 1986:

WHEREAS; Revisions to said statute and the regulations promulgated by the Department pursuant thereto require the Fund to revise its existing bylaws.

1.01 For purposes of these Bylaws, unless the context requires otherwise, the following words and phrases shall have the meanings indicated. If no definition is given hereunder and a definition appears within N.J.A.C. 11:15-2.2, then such additional definitions shall be deemed to be incorporated hereunder.

"Actuary" means a person who is a Fellow in good standing of the Casualty Actuarial Society with three years recent experience in loss reserving; an associate in good standing of the Casualty Actuarial Society with five years recent experience in loss reserving; or an associate in good standing of the American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries and who has seven years recent experience in loss reserving.

"Administrator" means a person, partnership, corporation or other legal entity engaged by the joint insurance fund commissioners or executive committee, as defined herein, to act as executive director to carry out the policies established by the joint insurance fund commissioners or executive committee and to otherwise administer and provide day-to-day management of the joint insurance fund. The Administrator may also be the lead agency, an employee of the Fund, a Fund member, or an independent contractor. Additionally, the Administrator/Executive Director may designate an administrative services organization to assist in the administration of the Fund with the consent and approval of the Fund Commissioners. Such organization shall enter into a separate agreement with the Fund, and any restrictions or obligations imposed on the Executive Director/Administrator by the Fund shall also apply to such administrative services organization, including the provisions of these By-laws and the Risk Management Plan, which apply to the Executive Director/Administrator.

"Allocated Claims Expense" means attorneys' fees, expert witness fees (i.e. engineering, physicians, etc.), medical reports, professional photographers' fees, police reports and other similar expenses.

"Automobile and Equipment Liability" means liability resulting from the use or operation of motor vehicles, equipment or apparatus owned by or controlled by the local unit or owned by or under the control of any subdivisions thereof, including its departments, boards, agencies, commissioners or other entities which the local unit may provide coverage for under N.J.S.A.40A:10-2.

"Bureau" means the Compensation Rating & Inspection Bureau, 60 Park Place, Newark, N.J. 07102. "Chairperson" means the chairperson of the Fund commission, elected by the commission pursuant to N.J.S.A. 40A:10-37.

"Commissioner" means the Commissioner of Banking and Insurance.

"Crime and Fidelity" means loss or theft of monies or securities, including blanket bond coverage of certain county or municipal officers and employees for faithful performance and discharge of their duties as provided under section 1 of P.L. 1967, c. 283 (C.40A:5-34.1).

"Department" means the Department of Banking and Insurance.

"Employer's Liability" means the legal liability of a public employer to pay damages because of bodily injury or death by accident or disease at any time resulting therefrom sustained by an employee arising out of and in the course of his or her employment by the public employer, which is not covered by a workers' compensation law.

"Excess Carrier" means an insurer that provides excess insurance or reinsurance to a Fund.

"Excess Insurance" means insurance purchased from an insurance company authorized or admitted in the State of New Jersey or deemed eligible by the Commissioner as a surplus lines insurer, or from any other entity authorized to provide such coverage in this State pursuant to law, covering losses in excess of an amount established between the joint insurance fund and the insurer up to limits of coverage set forth in the insurance contract on a specific per occurrence, or per accident, or annual aggregate basis.
"Executive Committee" means a committee of Insurance Fund commissioners, as provided in P.L. 1983, c. 372 N.J.S.A. 40A:10-36 et seq.

"Fiscal Year" or "Fund Year" means the calendar year January 1 through December 31.

"Fund" means the Middlesex County Municipal Joint Insurance Fund.

"General Liability" means any and all liability which may be insured under the laws of the State of New Jersey, excluding workers compensation and employers liability.

"Hazardous Financial Condition" means that, based on its present or reasonably anticipated financial condition, a Fund, although not yet financially impaired or insolvent, is unlikely to be able:

To meet obligations to claimants with respect ot known claims and reasonably anticipated claims; or
To pay other obligations in the normal course of business.
"Incurred Claims" means claims which occur during a Fund year including claims reported or paid during the later period.

"Indemnity and Trust Agreement" means a written contract signed by and duly adopted by the members of the Fund under which each agrees to jointly and severally assume and discharge the liabilities of each and every party to such agreement arising from the participation in the Fund.

"Insolvent Fund" means a joint insurance fund which has been determined by a court of competent jurisdiction to be unable to pay its outstanding lawful obligations as they mature in the regular course of business, as it may be shown either by an excess of its required reserves and other liabilities over its assets or by its not having sufficient assets to reinsure all of its outstanding liabilities after paying all accrued claims owed by it, or for which, or for the assets of which, a receiver or liquidator, however entitled, has been appointed by a court of competent jurisdiction and authority, after the effective date of this subchapter.

"Insurer" means any corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd’s insurer or other person engaged in the business of insurance pursuant to Subtitle 3 of Title 17 of the Revised Statutes.

"Intertrust fund transfer" means an actual transfer of funds from one claim or loss retention fund account in a fiscal year to another account within the same fiscal year.

"Interyear fund transfer" means the transfer of funds from a claim or loss retention trust account for a fiscal year, to a claim or loss retention trust account of similar risk or liability for a different fiscal year.

"Joint Insurance Fund" means a group organized by two or more local units of government to establish an insurance fund for the purposes of insuring and/or self-insuring against liability, property damage, and worker compensation, to the extent and for coverages approved by the Commissioner pursuant to the authority of N.J.S.A. 40A:10-36 et seq, and this subchapter.

"Joint Insurance Fund commissioners" means local unit representatives chosen to represent those units in the Fund, as provided in N.J.S.A. 40A:10-36 et seq.

"Lead Agency" means a member of the joint insurance fund responsible for the custody and maintenance of the assets of the Fund and such other duties as may be designated by the joint insurance fund commissioners. The duties performed by a lead agency may include duties that may be performed by an administrator or servicing organization.

"Local Unit of Government" or "Local Unit" means a county, [municipality,] county school (pursuant to N.J.S.A. 18A:18B-8 and 40A:10-50), county college (pursuant to N.J.S.A. 18A:64A-25.40 and 40A:10-51), any contracting unit as defined in N.J.S.A. 40A:11-2 or boards of education of certain school districts, to the extent permitted pursuant to N.J.S.A. 40A:10-52 through 57.

"Manual Premium" means the Workers' Compensation premium computed by applying the manual rates established for appropriate classifications to the appropriate payrolls by classification in accordance with the "Manual" of the "Bureau".

"Member" means the governing body of any Local Unit who has, by resolution or ordinance agreed, and has executed the appropriate Resolution and Indemnity and Trust Agreement, to join the Fund pursuant to the requirements of Article II ("Membership") of these bylaws.

"Motor Vehicle and Equipment Liability" means liability resulting from the use or operation of motor vehicles, equipment or apparatus owned by or controlled by the participating municipality, or owned by or under the control of any subdivision thereof including its departments, boards, agencies or commissions for which an Insurance Fund may be established as authorized under N.J.S.A. 40A:10-36.

"Net Current Surplus" or "Surplus" means the amount of monies in a trust account established pursuant to N.J.A.C. 11:15-2.6(b)10 that is in excess of all costs, earned investment income, refunds made pursuant to N.J.A.C. 11:15-2.21, incurred losses and loss adjustment expenses and incurred but not reported reserves, including the associated loss adjustment expenses attributed to the fund net of any recoverable per occurrence or aggregate excess insurance or reinsurance for a particular year.

"Occurrence" means an accident, including continuous or repeated exposure to conditions which results in injury or damage neither expected nor intended from the standpoint of participant within the Fund.

"Probable Net Cost" means the estimated ultimate undiscounted cost of claims incurred during a Fund year plus the cost of allocated claims expense and other costs of operating the fund until all claims incurred during the Fund year are settled.

"Producer" means any person engaged in the business of an insurance agent, insurance broker or insurance consultant as defined in N.J.S.A. 17:22A-1 et seq.

"Property Damage" means any loss or damage, however caused, on property, motor vehicles equipment or apparatus owned by the local unit or owned buy or under the control of any of its departments, boards, agencies, commissioners, or other entities which the local unit may provide coverage for under N.J.S.A. 40A:10-2.

"Secretary" means the secretary of the fund commission elected by the commission pursuant to N.J.S.A. 40A:10-37.

"Servicing Organization" means an individual, partnership, association or corporation, other than the administrator, that has contracted with the Fund to provide, on the Fund’s behalf, any function as designated by the fund commissioners including, but not limited to, actuarial services, claims administration, cost containment services, loss prevention/safety engineering services, legal services, auditing services, financial services, compilation and maintenance of the fund’s underwriting file, coordination and preparation of coverage documents, risk selection and pricing, excess insurance or reinsurance producer services, which include producer negotiations on behalf of the fund for excess insurance or reinsurance form an insurer, member assessment and fee development, report preparation pursuant to N.J.S.A. 40A:10-36 et seq and this subchapter, and such other duties as designated by the Fund.

"Unpaid Claims" or "Unpaid Losses" means case reserves and reserves for incurred but not reported claims attributed to the fund net of any recoverable per occurrence or aggregate excess insurance or reinsurance for a particular year.

"Workers’ Compensation" means any benefit and/or expenses payable under the workers’ compensation law.

"Workers' Compensation Law" means the provisions of N.J.S.A. 34:15-7 et seq and the obligations thereunder which may be funded per N.J.S.A. 40A:10-13.

2.01 AGREEMENT TO JOIN THE FUND:

A. Pursuant to N.J.S.A. 40A:10-36, the governing body of any local unit of government may, by resolution or ordinance as appropriate, agree to join the Fund.

The resolution or ordinance shall provide for execution of a written agreement specifically providing for acceptance of the Fund's Bylaws as approved and adopted pursuant to N.J.S.A. 40A:10-39.
The agreement shall specify the extent of the local unit’s participation in the Fund with respect to the types of insurance coverage to be provided by the Fund and shall include the duration of the Fund membership, which in no event shall be less than or exceed three years, pursuant to N.J.S.A. 40A:11-15(6).
B. The agreement shall include an executed indemnity and trust agreement.

C. The agreement shall also specify that the member has never defaulted on claims if self-insured and has not been cancelled for non-payment of insurance premiums for a period of at least two years prior to the application.

D. The Fund commissioners or executive committee, if an executive committee is established, may approve the application by two-thirds vote of the full membership based on the following criteria:

1. The applicant's five (5) year claims history shows safety performance consistent with the Fund's objectives and the applicant's physical location and makeup indicates a prospective likelihood of satisfactory future claim performance.
A safety inspection and evaluation conducted by the Fund's safety consultant at the expense of the applicant shows the applicant meets the Fund's safety standards including, but not limited to, an evaluation of physical plant, personnel, and operating procedures.
The Fund has the administrative capability to absorb additional memberships without undue inconvenience or strain. Membership is limited to local units within the State of New Jersey.
E. If the application is approved by the Fund, it shall within 15 days of approval be concurrently filed with the Department and the Department of Community Affairs and shall be accompanied by such amendments to the Fund’s Budget and Plan of Risk Management as well as any other documents required pursuant to N.J.A.C. 11:15-2 et seq.

F. If a non-member is not approved for membership, the Fund shall set forth in writing the reasons for disapproval and send the reasons for disapproval to the non-member. The Fund shall retain a copy of all membership application disapprovals for five years.

2.02 CONDITIONS OF MEMBERSHIP:

As a condition of initial and continued membership, each member shall:

A. Form a safety committee and actively participate in all Fund sponsored safety programs and agree to comply with safety and risk management procedures as required by the Fund.

B. Promptly comply with the bylaws, risk management plan and other requirements of the Fund.

C. Promptly pay all assessments charged to it.

D. Execute and comply with the indemnity and trust agreements furnished as part of the initial and subsequent membership requirements.

E. Comply with the statutes and regulations governing joint insurance funds.

F. Each member may appoint a risk management consultant to assist the member on matters relating to the Fund’s operation and coverage. Any compensation arrangement will be negotiated by the member and such compensation may be added to the members assessment. If a member uses the services of a non employee as its risk management consultant the individual must be licensed as a New Jersey Insurance Producer.

2.03 MEMBERSHIP RENEWALS, TERMINATION OR WITHDRAWAL OF FUND MEMBERS:

A. Membership Renewals:

Members may renew their participation by execution of a new agreement to join the Fund, as provided for in 2.01 above, ninety (90) days prior to the expiration of the term period .
The Fund commissioners (or executive committee) must act upon any renewal application no later than forty-five (45) days prior to the expiration of the member's term. Otherwise, the renewal application is automatically approved.
In order to deny a renewal application, the Fund shall find by majority vote of the Fund membership that the applicant has failed to fulfill its responsibilities as a member or no longer meets the Fund's written safety standards or other objective criteria duly adopted.
If a member's renewal application is rejected, the Fund shall comply with subsections B, C and D below.
Non-renewal of a Fund member does not relieve the member of responsibility for claims incurred during its period of membership.
B. A member must remain in the Fund for the full term of membership unless earlier terminated by a majority vote of the Fund for non-payment of assessments or continued noncompliance after written notice to comply with these Bylaws or other obligations set forth in 2.02, or other reasons approved by the Commissioner.

C. A member shall not be terminated or non renewed until:

The Fund gives by registered mail to the member a written notice of its intention to terminate the member in thirty (30) days; and
2. like notice shall be filed with the Department and Department of Community Affairs, together with a certified statement that the notice provided for above has been given; and
3. thirty (30) days have elapsed after the filing required by 2 above.
D. A member of the Fund that does not desire to continue as a member after the expiration of its membership term shall give written notice of its intent ninety (90) days before the expiration of the term period. The Fund shall immediately notify the Department and the Department of Community Affairs that the member has given notice to cease membership in the Fund.

E. A member that has been terminated or does not continue as a member of the Fund shall remain jointly and severally liable for claims incurred by the Fund and its members during the period of its membership, including, but not limited to being subject to and liable for supplemental assessments. It is understood and agreed that a separate and independent trust fund exists for each type of coverage offered or to be offered and that the liability of a member exists only as respects those trust funds and types of coverage in which it is a participant.

F. The Fund shall immediately notify the Department and the Department of Community Affairs if the termination or withdrawal of a member causes the Fund to fail to meet any of the requirements of N.J.S.A. 40A:10-36 et seq or any other law or regulation of the State of New Jersey. Within fifteen (15) days of such notice, the Fund shall advise the Department and the Department of Community Affairs of its plan to bring the Fund into compliance.

G. A Fund member that does not abide by the withdrawal provisions shall be subject to a withdrawal penalty in the amount of five percent (5%) of its annual assessment subject to a minimum of $5,000.

3.01 COMMISSIONERS

A. Appointment:

1. Commissioners: In the manner generally prescribed by law, each member shall appoint one commissioner to the Fund who shall be either a member of the governing body or one of its employees. Each member may also appoint an alternate commissioner who shall also be either a member of its governing body, or one of its municipal employees.
2. Special Commissioner: In the event that the number of members is an even number, one (1) additional commissioner shall be appointed by a member on a rotating basis determined alphabetically. The special commissioner shall be a member of the governing body, or one of its employees.
3. The member's privilege to appoint the special commissioner shall remain with that member for one entire Fund year and the subsequent admission to the Fund of a member with a preceding alphabetical prefix shall not deprive any member already a member of the Fund of its prerogative to appoint a special commissioner during a current Fund year.

B. Terms of Office and Vacancy:

1. All terms of office shall expire on January 1st or when a successor is duly appointed and qualified.
2. Commissioners, and alternates other than the special commissioner, who are members of the appointing member's governing body shall hold office for two (2) years or for the remainder of their term of office as a member of the governing body, whichever shall be less.
3. Commissioners and alternates who are employees of the appointing member shall hold office at the pleasure of the member and can be removed by the member at any time without cause.
4. The special commissioner, if any, shall serve until January 1st of the year following appointment, provided, however, that if the special commissioner is an employee of the appointing member, such special commissioner may be removed by the appointing member at any time without cause.
5. The unexpired term of a commissioner or alternate other than the special commissioner shall be filled by the appointing member in the manner generally prescribed by law.
6. In the event of a vacancy of the special commissioner or alternate caused by reason other than the expiration of the term of office, the member which appointed the commissioner or alternate shall appoint the replacement for the unexpired term.
7. Commissioners shall serve without compensation.

C. Responsibilities:

1. 1. The commissioners are hereby authorized and empowered to operate the Fund in accordance with these Bylaws and appropriate state laws and regulations.
2. 2. Each commissioner shall have one vote, provided, however, that the special commissioner, if any, shall only vote in the event of a tie.

3.02 OFFICERS:

A. As soon as possible after the beginning of each year, the commissioners shall meet to elect the officers of the Fund from their own membership including a Chairperson and a secretary who shall be elected annually. Fund officers shall serve until January 1st of the following year, or until a successor is duly elected and qualified.

1. Chairperson: The Chairperson shall preside at all meetings of the commissioners and shall perform such other duties provided for in these Bylaws and the laws and regulations of the State of New Jersey.
2. Secretary: The Secretary shall preside over the meetings of the commissioners in the absence of the Chairperson, maintain minutes of its meetings, retain all books, records, files and other documents of the Fund, and shall perform such other duties as provided for in these Bylaws and the laws and regulations of the State of New Jersey.
   The Secretary shall have the responsibility to maintain the books and records of the Fund at the office of the Fund as from time to time designated by the Fund commissioners, to which office the Secretary shall have free access.

B. In the event of a vacancy in any of the officer positions caused by other than the expiration of the term of office, the commissioners shall, by majority of vote, fill the vacancy for the unexpired term.

C. Any officer can be removed without cause at any time by a two-thirds vote of the full membership of the Fund commissioners. In this event, the full membership of the Fund commissioners shall fill the vacancy for the unexpired term.

D. The Chairperson and the Secretary shall serve without compensation.

3.03 APPOINTED AGENCIES AND OFFICIALS:

As soon as possible after the beginning of each year, the commissioners or executive committee if one is established shall meet and select Agencies and Officials to serve in the following appointed positions. These individuals shall be retained by contract in accordance with the Local Public Contracts Law.
The Fund commissioners or executive committee shall notify the Department and the Department of Community Affairs within ten (10) days of any determination to terminate or nonrenew any agreement with a servicing organization.

A. Administrator:

1. The Administrator shall serve as Executive Director of the Fund and may be an employee of the Fund. The Administrator shall be experienced in risk management matters evidenced by attaining an Associate in Risk Management designation from the Insurance Institute of America and shall also be experienced in self funded entities.
2. Except with the approval of the Commissioner, the administrator, its employees, officers, or Directors, shall not be an employee, officer or director of or have either a direct or indirect financial interest in a servicing organization.
3. The administrator shall have the following duties and responsibilities:
   a) The administrator shall carry out the policies of the commissioners to provide for the day-to-day management of the Fund.
   b) The administrator shall advise the commissioners on risk management matters and shall prepare a draft risk management plan.
   c) The administrator shall maintain underwriting data and if required, assist the Fund in the purchase of excess insurance.
   d) The administrator shall prepare draft bid specifications for services such as claims administration, safety engineering, and actuarial projections as necessary.
   e) The administrator shall monitor the performance of the service companies.
   f) The administrator shall review and analyze statistics and prepare an analysis, including assessment, loss and expense reports.
   g) The administrator shall prepare the Fund’s budget, compile and bill assessments.
   h) The administrator shall perform such other duties as provided for by the Fund commissioners, these Bylaws, and in the laws and regulations of the State of New Jersey.
4. The administrator shall be bonded in a form and amount acceptable to the Commissioner. The Administrator shall also be covered by Errors and Omissions insurance as provided by N.J.A.C. 11:15-2.

B. Actuary: The Actuary shall certify the actuarial soundness of the Fund and shall provide such actuarial reports as required by the Department. [The Actuary shall also certify that the Fund’s annual budget is actuarially sound with respect to funding for the claim or loss retention accounts (N.J.A.C. 11:15-2.4(f)4).]

C. Auditor: The auditor shall be an independent certified public accountant (CPA) and not a commissioner. The auditor shall conduct the annual audit of Fund in accordance with N.J.S.A. 40A:10-36 and N.J.A.C. 11:15-2.24 and shall perform such other duties as provided for by the Fund commissioners or executive committee, these Bylaws and in the laws and regulations of the State of New Jersey.

D. Attorney:

1. The Fund attorney shall be admitted to the Bar of the State of New Jersey and shall not be a Fund commissioner, and shall not be general counsel to any member.
2. The Fund attorney shall have the following responsibilities:
   a) The Fund attorney shall advise the Fund on legal matters and the appropriateness of claim settlements recommended by the claims administrator. However, the Fund attorney shall not defend any claim which is the responsibility of the Fund.
   b) The attorney, in conjunction with the service agent, insurer, and administrator, shall advise the commissioners on the selection of counsel to represent the Fund in the defense of claims. Such defense counsel may represent one or more of the participants in other capacities.
   c) The Fund attorney shall perform such other duties as provided for by the Fund commissioners, these Bylaws, and in the laws and regulations of the State of New Jersey.

E. The Fund attorney may be an employee of the Fund. F. G. Custodian of Funds: The custodian shall be a certified municipal finance officer and not a commissioner with the following duties;

1. Custodian of Fund assets and maintenance of various trust funds.
2. Approval of receipts, disbursements & financial records.
3. Preparation of cash management plan and investment of funds.
4. Other related duties as designated by the Fund commissioners in accordance with the Bylaws and laws and regulations of the State of New Jersey.

H. Service Agent: The Fund shall designate and appoint an agent in New Jersey to receive service and process on behalf of the Fund.

I. In the event of a vacancy in any one of the appointed positions caused by other than the expiration of the term of office, the commissioners shall by majority vote fill the vacancy for the unexpired term. In the event that any of the appointed officials is incapacitated, the commissioners shall by majority vote appoint an acting official.

J. Compensation for appointed agencies and officials shall be pursuant to written fee guidelines submitted annually and approved by a majority of the commissioners or executive committee, if one is established, prior to appointment.

K. Any appointed official shall serve at the pleasure of the commissioners and can be removed by a majority vote of the commissioners at any time without cause.

L. All Fund professionals shall be retained on a contractual basis, approved by the Fund commissioners or executive committee and submitted to the Commissioners of Banking and Insurance and Community Affairs. Compensation for their services shall be pursuant to written fee guidelines made part of the Professional Services Agreement with said Professional.

3.04 EXECUTIVE COMMITTEE:

A. If the total number of commissioners exceeds seven (7), as soon as possible after the beginning of the year they shall meet and elect seven (7) commissioners to serve as the executive committee of the Fund including a chairperson and secretary. The executive committee shall exercise the full power and authority of the commission. The commissioners may also select up to seven (7) commissioners to serve as alternates on the executive committee. The commissioners shall designate a specific alternate to serve in the case of absence for a specific commissioner serving on the executive committee. In the event two or more members are from the same municipality (i.e., municipality, its school board or an authority) only one such member may serve on the executive committee at any given time.

B. The executive committee shall serve until January 1st of the following year, or until their successors are duly elected and qualified.

C. Vacancies on the executive board caused by a reason other than the expiration of the term of office shall be filled by a majority vote of the full membership of the Fund.

D. Any member of the executive committee can be removed for cause by a two-thirds vote of the full membership of the Fund commissioners.

3.05 SAFETY COMMITTEE:

A. Membership: The commissioners shall also be members of the Safety Committee. A commissioner may appoint another employee or official of his member to act in his stead. The committee may also request additional members to join the committee.

B. Organization: At the beginning of each year the Safety Committee shall select a Chairperson, a vice Chairperson and a secretary.

C. Duties: The Committee shall meet monthly and shall have the following duties or responsibilities.

1. Work with the safety engineering service organization to develop a comprehensive safety and loss control program.
2. Review all accident reports and monitor accident trends and frequencies.
3. Coordinate the annual safety inspections and identify locations requiring more frequent inspection.
4. Conduct safety education programs.
5. Review the activities of each member's safety committee and notify the Fund commissioners if any member is not conducting an active safety program.
6. Forward copies of minutes of safety and loss control committee meetings to commissioners.
7. Perform such other duties that are requested by the Fund commissioners, or are provided for by state regulation and law.

4.01 GENERAL OPERATION:

A. The Fund shall be subject to and operate in compliance with the provisions of the "Local Fiscal Affairs Law" (N.J.S.A. 40A:5-1 et seq.), "Local Public Contracts Law" (N.J.S.A. 40A:11-1 et seq.) and such other rules and regulations and statutes governing the investment and expenditure of public Funds by local units.

B. The Fund shall be considered a local unit for purposes of the "Local Public Contracts Law" (N.J.S.A. 40A11-1 et seq.) and shall be governed by the provisions of that law in the purchase of any goods, materials, supplies and services.

C. The Fund shall be operated with sufficient aggregate financial strength and liquidity to assure that all obligations will be promptly met. The Fund shall prepare a financial statement on a form acceptable to the Commissioner of the Department showing the financial ability of the Fund to meet its obligations. The members may, upon majority vote, request that the Commissioner of the Department order an examination of any Fund member which the Fund, commissioners or executive committee, if any, in good faith believes may be in a financial condition detrimental to other Fund members or to the public.

D. The minimum aggregate contribution of the members for workers compensation exposure shall be at least $250,000 for the Fund's first year and at least $500,000 for each subsequent year of operation unless otherwise approved by the Commissioner.

4.02 RISK MANAGEMENT PLAN:

A. The Fund commissioners shall prepare or cause to be prepared a plan of risk management for the Fund. The plan shall include, but not be limited to:

1. The perils or liability to be insured against.
2. Limits of coverage, whether self-insurance, direct insurance purchased from a commercial carrier or reinsurance.
3. The amount of risk to be retained by the Fund.
4. The amount of unpaid claims to be established.
5. The proposed method of assessing contributions to be paid by each member of the Fund.
6. Procedures governing loss adjustment and legal fees.
7. Coverage to be purchased from a commercial insurer, if any.
8. Re-insurance to be purchased, if any, and the amount of premium therefore.
9. Procedures for the closure of Fund years including the maintenance of all relevant accounting records.
10. The assumptions and methodology used for the calculation of appropriate reserves required to be established, maintained and administered in accordance with sound actuarial principles.
11. The maximum amount a certifying and approving officer may approve for payment pursuant to N.J.A.C. 11:15-2.22.

B. There shall be a separate risk management plan for each of the categories which the Fund is authorized to insure and has agreed to insure (viz; Workers' Compensation, General Liability, Motor Vehicle and Equipment Liability, and Property Damage).

C. The risk management plan and all amendments must be approved by the Commissioner of the Department and the Department of Community Affairs before it takes effect.

4.03 SERVICING ORGANIZATIONS:

A. The Fund may contract to have the following services performed:

1. claims administration;
2. safety engineering;
3. actuarial evaluation;
4. compilation of statistics and preparation of assessments, loss and expense reports;
5. preparation of reports required by 40A:10-36 et seq or regulations and/or rules of the New Jersey Department including N.J.A.C. 11:15-2.1 et seq.;
6. development of members' assessments and fees.

The Fund may arrange to have the above services performed by its own staff.

B. No servicing organization or its producer or their employees, officers or directors shall have either a direct or indirect financial interest in the administrator or Administrative Service Organization or be an employee, officer or director of such organization, unless notice such interest has been provided to the fund commissioners and members.

C. D. No administrator of a Fund, or administrative service organization, or its employees, officers or directors shall be an employee, officer or director of, or have either a direct or indirect financial interest in, a servicing organization of that fund, or the insurance producer that may be appointed by the Fund pursuant to N.J.A.C. 11:15-2.6(c)10, unless notice of such interest has been provided to the fund commissioners and members.

E. The Fund may at its option contract for these services from different servicing organizations, or may elect to have its own staff perform these services.

F. Any service contract shall include a clause stating "unless the Fund commissioners or executive committee otherwise permits, the servicing organization shall handle to their conclusion all claims and other obligations incurred during the contract period".

1. The Fund commissioners shall notify the Department and the Department of Community Affairs within ten (10) days of any determination to terminate or nonrenew any agreement with a servicing organization. The notification shall include a detailed statement that sets forth the manner and method by which claims handling and other obligations performed by the servicing organization will be provided or a statement that sets forth the reasons why the Fund commissioners believe that the particular service is no longer necessary.
2. Any employee, officer or director of an administrator, servicing organization or insurance producer that may be appointed pursuant to N.J.A.C. 11:15-2.6 ( c ) 10 shall disclose to the Fund commissioners or executive committee, as applicable, any direct or indirect financial interest such employee, officer or director has in any other administrator, servicing organization or insurance producer.
3. All officers, employees and agents of the joint insurance fund, including the administrator and servicing organization of the Fund, on the final day of their contract or employment shall surrender and deliver to their successors all accounts, funds, property, records, books and any other material relating to their contract or employment.

G. Any servicing organization shall provide a surety bond and errors and omissions coverage in a form and amount acceptable to the Commissioner.

4.04 FINANCIAL STATEMENT AND REPORTS:

A. The Fund shall provide its members with periodic reports concerning the activities and status of the Fund for the reporting period. Such reports shall be made at least quarterly and may be made more frequently at the discretion of the Fund commissioners or executive committee and shall include, but not be limited to, the minutes, the administrators report and a summation of fund activity including comments on previously reported claims and newly reported claims and other such information required by the fund commissioners.

B. A sworn annual report in a form acceptable by the Commissioner of the Department shall be prepared by the Fund, filed concurrently with the Department and the Department of Community Affairs and made available to each Fund member on or before May 1st of each year. The report shall be accompanied by:

1. An annual audited statement of the financial condition of the Fund prepared by the auditor and performed in accordance with generally accepted accounting principles and N.J.S.A. 40A:10-46, which shall include a statement of the organization of the fund indicating the persons who perform each function for the fund and the relationship and interdependency of each function, and including its balance sheet and revenue and expense for the preceding year;
2. Reports of outstanding liabilities showing the number of claims, amounts paid to date and current reserves for losses, claims and unearned assessments as certified by an actuary.

C. It shall be the duty of the Fund members, commissioners, executive committee, administrator and chairman to notify the Commissioner of any information indicating that the Fund may be insolvent or in a financial condition detrimental to the Fund’s members or the public. The Fund members, commissioners or executive committee may, upon majority vote, request that the Commissioner order an examination of the Fund.

4.05 COVERAGES:

The Fund shall offer the types of coverage to the members which are allowed by statute and approved by the members in the resolutions which authorize membership in the Fund, but each type of coverage offered shall be separate and independent of each other.

5.01 MEETINGS:

A. Annual Organization Meeting - On or before January 10th of each year, the commissioners shall meet to elect officers and the executive committee, if any, appoint officials and conduct such other business as is necessary. The time and place for the meeting shall be established by the Chairperson, and the secretary shall send written notice to the administrators and or clerks of members at least two weeks in advance.

B. Monthly Business Meetings - The commissioners (or executive committee) shall establish a schedule of monthly meetings to conduct business of the Fund. All commissioners may attend open or closed sessions of the executive committee.

C. Special Meetings - The Chairperson, or three (3) commissioners may call a special meeting by notifying the secretary at least three (3) days in advance. The secretary shall notify the commissioners (or members of the executive committee if such committee is established) by telephone. If the secretary is unable to reach a member seventy-two (72) hours before the meeting, the secretary shall notify the commissioners or executive committee by mailgram.

5.02 CONDUCT OF MEETINGS:

A. All meetings of the Fund shall be subject to the rules and regulations of the Open Public Meetings Act.

B. Unless otherwise provided in these Bylaws or in the laws or regulations of the State of New Jersey, Robert's Rules of Order shall govern the conduct of all meetings.

C. A quorum shall be a majority of the commissioners or the executive committee, as the case may be. At least a majority vote of commissioners or executive committee if established shall be required to make any action effective. A greater number shall be required if mandated by statute or regulations promulgated by the State Department.

D. If a commissioner or member of the executive committee, or their alternate, cannot attend a meeting, the commissioner or member of the executive committee may designate in writing a substitute to attend the meeting and participate in the discussion but such substitute shall have no authority to vote and shall not be counted in determining a quorum.

5.03 AMENDMENTS TO THE BYLAWS:

A. Any member may propose an amendment to the Bylaws by filing the proposed amendment in writing with the Secretary.

B. Upon receipt of a proposed amendment, the secretary shall notify the Chairperson who shall schedule a hearing to be held not more than forty-five (45) days from the date the amendment was filed. The secretary shall notify in writing all commissioners of the hearing date and shall send all commissioners a copy of the proposed amendment.

C. The amendment is adopted by the Fund when the governing bodies of three-fourths (3/4ths) of the member municipalities approve by resolution the amendment within six (6) months of the hearing on the amendment. In the event section N.J.S.A. 40A:10-43 is amended, the procedure and vote required by said statute, as amended, shall control. If after six (6) months the secretary has not received written notice of approval from each member, the secretary shall notify the members that time has expired for the adoption of the amendment.

D. If adopted, the amendment shall not take effect until approved by the Commissioner of the Department and the Department of Community Affairs as provided by N.J.S.A. 40A:10-43.

E. A member of the Fund that did not approve any amendment to the Fund bylaws approved pursuant to N.J.S.A. 40A:10-43, and desiring to withdraw from the Fund pursuant to N.J.S.A. 40A:10-43(e), shall provide written notice of intent to withdraw ninety (90) days prior to its withdrawal. The Fund will immediately notify the Department and the Department of Community Affairs of all members that have given notice of withdrawal.

6.01 BUDGET PREPARATION:

A. In November of each year, the Fund shall prepare the budget for the upcoming fiscal year. The budget shall identify the proposed items and amounts of expenditure for its operations in the aggregate and allocated by member, the anticipated amounts and sources of assessments and other income to be received during the fiscal year, and the status of the self-insurance or loss retention trust accounts maintained by the joint insurance fund. The budget shall be prepared on a basis that does not recognize investment income or discounting of claim reserves, but recognizes all anticipated or forecasted losses and administrative expenses associated with that fiscal year.

B. A copy of the Fund’s proposed budget or any amendments thereto shall be made available to each member of the joint insurance fund at least two weeks prior to the time scheduled for it s adoption. No budget or amendments shall be adopted until a public hearing has been held in accordance with N.J.S.A. 40A:4-1 et seq. giving all members of the joint insurance fund the opportunity to present comments or objections.

6.02 BUDGET ADOPTION:

A. By the December 31st of each year, the Fund commissioners, or the executive committee, if such is established, shall adopt the budget for the coming fiscal year by majority vote.

B. A copy of the Fund's proposed budget (as changed to reflect the actuary report) shall be sent to each member at least fifteen (15) days prior to the time scheduled for its adoption. No budget or amendment shall be adopted until a hearing has been held giving all members the opportunity to present comments or objections.

C. An adopted budget may be amended by a majority vote after giving the members fifteen (15) days advance written notice and conducting a hearing on the proposed amendment.

D. A copy of any amendment to a Fund budget shall be filed with the Commissioner and the Commissioner of the Department of Community Affairs within thirty (30) days of the adoption of any budget amendment which either singly or cumulatively with other adopted budget amendments changes the total budget five percent from the original budget or the latest filed amended budget.