Section R20-5-719. Board of Trustees

A.      A pool shall be managed by a board of trustees consisting of at least five individuals elected for a stated term of office. At least 2/3 of a board shall be from the membership of the pool.

B.       Minimum duties and responsibilities of a board. In addition to those duties and responsibilities provided by law, the duties of a board shall include:

1.        Responsibility for all operations of a pool;

2.        Ensuring compliance with this Article and the applicable provisions of the Arizona Workers’ Compensation Act;

3.        Hiring of an administrator to manage the daily operations of a pool;

4.        Reviewing and taking action on applications for member- ship in a pool;

5.        Contracting with a service company or seeking authoriza- tion from the Commission to process workers’ compensa- tion claims in-house;

6.        Determining the premium to be charged to a member;

7.        Investing surplus monies in compliance with this Article and other applicable law;

8.        Enacting procedures that limit disbursement of money to payment and expenses associated with claims processing and administrative expenses necessary to conduct the operations of the pool;

9.        Ensuring that the pool complies with statutory accounting principles (SAP) and provides accurate financial informa- tion to enable complete and accurate preparation of finan- cial reports;

10.     Maintaining all records and documents relating to the for- mation and ongoing operations of the pool; and

11.     Ensuring that accounts and records of the pool are audited as required under this Article.

C.      Delegation of board duties to administrator.

1.        Except as prohibited by law, a board may delegate to an administrator the duties the board determines proper.

2.        Delegation of duties from a board to an administrator shall be in writing. A copy of the delegation agreement shall be provided to the Commission with each renewal application.

D.      Board prohibitions. A board or board trustee shall not commit or perform the following acts:

1.        Extend credit to members for payment of a premium;

2.        Utilize money collected as premiums for a purpose unau- thorized by this Article;

3.        Borrow money from a pool or in the name of a pool with- out providing written notice to the Commission of the nature and purpose of the loan; and

4.        Approve admission into a pool an employer who has a negative net worth and whose admission would impair the ability of the pool to meet its financial obligations under the Arizona Workers’ Compensation Act.

Historical Note

Adopted effective September 9, 1998 (Supp. 98-3).