Distribution of Insurance Premium Dividends Policy

Originally Adopted by MVRMA Board: March 17, 1997

Purpose

An incentive dividend program was offered to MVRMA as part of its liability coverage, beginning in the policy year for 1995, and may continue to be offered in the future. Under this program MVRMA may receive a partial refund of premiums, if losses are kept below certain thresholds. The purpose of this policy is to prescribe a consistent procedure for handling the distribution of these dividends/refunds.

Policy Statement

When insurance premium dividend payments are received by MVRMA from its excess insurer(s), they shall be allocated to members according to the percentage established in the final loss fund equity chart developed for the loss year for which said dividends were paid.

Upon receipt of the dividend, the funds will be deposited in MVRMA's General Reserve Fund and each member will be notified of its proportionate share. Within 30 days of this notification, each MVRMA member may elect to:

1. Apply all or a portion of its surplus to the upcoming year's invoice for loss fund and operation contributions.

2. Apply all or a portion of its surplus to any other outstanding MVRMAinvoice.

3. Receive all or a portion of its surplus in the form of a refund.

If no further election is made by the member during the 30 day notification period, MVRMA shall maintain the member's share of the dividend in the General Reserve Fund. The member municipality may subsequently apply its General Reserve Fund balance, at any time, for the payment of any MVRMA invoice. Other withdrawals from this fund are permitted only in January each year.