N.J. Admin. Code § 11:15-2.4

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:15-2.4 - General requirements

(a) Every joint insurance fund shall be subject to and operate in compliance with the provisions of the "Local Fiscal Affairs Law" (40A:5-1 et seq.), the "Local Public Contracts Law" (40A:11-1 et seq.), regulations (including, but not limited to, N.J.A.C. 5:34), the various statutes authorizing the investment of public funds, including but not limited to, 40A:10-10(b), 40A:10-38, 17:12B-241 and 17:16I-1 et seq., and in the case of a joint insurance fund providing environmental impairment liability coverage, the "Local Bond Law" (40A:2-1 et seq.), but shall not be subject to the debt limitation set forth in 40A:2-6.

(b) All monies, assessments, funds and other assets of a joint insurance fund shall be under the exclusive control of its board of insurance fund commissioners or executive committee, as applicable.

(c) A joint insurance fund shall be considered a local unit for purposes of the "Local Public Contracts Law" (40A:11-1 et seq.) and shall be governed by the provisions of that law in the purchase of any goods, materials, supplies and services.

(d) Each joint insurance fund shall utilize as its fiscal year, the calendar year, January 1 through December 31.

(e) Each joint insurance fund shall adopt a resolution designating a public depository or depositories for its monies pursuant to 40A:5-14. Such resolution shall also designate a person to be custodian of funds for the joint insurance fund and shall authorize the custodian to invest the temporarily free balances of any claim/trust or administrative accounts periodically as authorized by law. The custodian of funds shall possess a certified municipal finance officer certificate issued pursuant to 40A:9-140.2, or to the extent the fund is comprised of entities other than municipalities, possess the appropriate professional credentials required by the Department of Community Affairs pursuant to the "Local Fiscal Affairs Law" (40A:5-1 et seq.). The custodian shall report to the fund commissioners at least quarterly on investment and interest income.

(f) The joint insurance fund commissioners shall annually prepare in November of each year the proposed budget for the fund's subsequent 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.

1. 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 its adoption. No budget or amendment shall be adopted until a public hearing has been held in accordance with 40A:4-1 et seq. giving all members of the joint insurance fund the opportunity to present comments or objections.

2. Not later than December 31 of each year, the joint insurance fund commissioners, or the executive committee thereof, shall adopt by majority vote the budget for the fund's operations for the subsequent fiscal year.

3. An adopted budget may be amended by majority vote of the membership of the joint insurance fund commissioners, or executive committee thereof.

4. A copy of each adopted budget shall be filed with the governing body of each participating local unit, the Commissioner and the Commissioner of the Department of Community Affairs within 30 days of its adoption, including a certification by an actuary that the budget is actuarially sound with respect to funding for the claim or loss retention fund accounts.

5. A copy of any amendment to a fund budget shall be filed quarterly with the governing body of each participating local unit.

6. 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 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.

(g) All books, records, files, documents and equipment of the joint insurance fund are the property of the fund, except as provided at 11:15-2.2 2(e), and shall be retained by the secretary of the fund or fund administrator at the discretion of the fund commissioners or executive committee.

1. All claims information for a particular fund year and all financial information shall be retained for a period not less than the longer of either:

i. For financial information, seven years from the date of their creation; for claims information, seven years after all claims for that year have been fully paid; or

ii. Until the completion and filing of the next financial condition examination of the fund by the Commissioner.

(h) Each fund shall maintain written minutes of its meetings and shall file such approved, ratified and adopted minutes with the Commissioner within 30 days after such minutes are approved, ratified and adopted.

(i) A joint insurance fund shall provide its members with periodic reports covering 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 joint insurance fund commissioners and shall include, but not be limited to, the minutes, the administrator's or lead agency's report and a summation of fund activity, including comments on previously reported claims and newly reported claims, and any other information required by the fund commissioners, but excluding any closed session minutes of portions of a meeting as provided in N.J.S.A. 10:4-12b. The Department may require that such reports be submitted to the Department if it is deemed necessary to ensure compliance with these reporting requirements. Such reports shall also be made available to the Department for review during any examination of the joint insurance fund. The Department may also require that copies of closed session minutes be filed for its review. Copies of closed session minutes filed with the Department shall be held confidential by the Department and shall not be subject to public inspection or copying pursuant to the "Right-to-Know" law, 47:1A-1 et seq.

(j) 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.

(k) A joint insurance fund may utilize the services of a member to serve as lead agency for the fund.

1. A lead agency may be compensated for its reasonable expenses incurred in administering the affairs of a joint insurance fund. Any administrative costs agreed upon to be paid to a lead agency shall be received by it as a Miscellaneous Revenue and be available for expenditure through the budget appropriation method.

2. A lead agency shall not advance funds of its own to cover a purchase on behalf of the fund or the other participating units.

N.J. Admin. Code § 11:15-2.4

Amended by R.1989 d.507, effective 9/18/1989.
See: 21 N.J.R. 3051(b), 21 N.J.R. 3017(a).
Definitions for "Fiscal year", "Intertrust fund transfer", "Interyear fund transfer", "Net current surplus", and "Unpaid claims" added.
Amended by R.1991 d.16, effective 1/7/1991.
See: 22 N.J.R. 16(a), 23 N.J.R. 112(a).
Amended definitions of "actuary", "indemnity and trust agreement", "local unit of government" and "property damage"; added "automobile and equipment liability" and deleted "motor vehicular and equipment liability".
Amended by R.1995 d.408, effective 8/7/1995.
See: 26 N.J.R. 2725(a), 26 N.J.R. 3592(a), 27 N.J.R. 2938(a).
Added definitions for "Chairman", "Environmental impairment liability fund", "Producer" and "Secretary" and amend "Administrator", "Excess insurance", "Executive committee", "Indemnity and trust agreement", "Joint insurance fund", "Joint insurance fund commissioners", "Lead agency", "Local unit of government", "Net current surplus", "Servicing organization", "Unpaid claims" and "Workers' compensation law".
Amended by R.1996 d.534, effective 11/18/1996.
See: 28 N.J.R. 4027(a), 28 N.J.R. 4877(a).
Amended by R.1999 d.350, effective 10/18/1999.
See: 31 N.J.R. 2125(b), 31 N.J.R. 3091(a).
Inserted "Blanket bond coverage".
Amended by R. 2005 d. 112, effective 4/4/2005.
See: 36 N.J.R. 4625(a), 37 N.J.R. 1075(a).
In "Actuary", substituted "a Member" for "an associate" preceding "in good standing of the American Academy of Actuaries"; in "Commissioner", inserted "the Department of" preceding "Banking and Insurance".
Amended by R.2005 d.263, effective 8/15/2005.
See: 37 N.J.R. 1121(a), 37 N.J.R. 3043(a).
Rewrote definition "Local unit of government".

Amended by R.1991 d.16, effective 1/7/1991.
See: 22 New Jersey Register 16(a), 23 New Jersey Register 112(a).
At (g) added "fund administrator" as retainer of records and at (i) added specifications to reports.
Amended by R.1995 d.408, effective 8/7/1995.
See: 26 New Jersey Register 2725(a), 26 New Jersey Register 3592(a), 27 New Jersey Register 2938(a).
At (a) added requirements for provision of environmental impairment liability coverage; at (e) required custodian of funds to be a certified municipal finance officer; at (f) changed the basis on which the annual budget is prepared; at (g) added 1.i and 1.ii; and at (k) amended duties of the lead agency.
Amended by R.1996 d.534, effective 11/18/1996.
See: 28 New Jersey Register 4027(a), 28 New Jersey Register 4877(a).