12-2627. Board of trustees of pool, qualifications, duties; administrator, bond; audits; credit transactions; delegation of authority from board to administrator.
12-2627
12-2627. Board of trustees of pool, qualifications, duties;
administrator, bond; audits; credit transactions; delegation of authority
from board to administrator.
To ensure the financial stability of the operations of each group-funded
pool, the board of trustees of each pool is responsible for all operations
of the pool. The board of trustees shall consist of not less than three
persons selected according to the bylaws of the pool for stated terms of
office to direct the administration of a pool, and whose duties include
approving applications by new members of the pool. The majority of the
trustees must be a member of the governing body or an officer or employee
of members of the pool, but a trustee may not be an owner, officer or
employee of any service agent or representative. All trustees shall be
residents of this state unless the pool was formed on or before January 1,
1990, in which event the number of Kansas resident trustees of the pool must be
that percentage of all trustees of the pool that equals the percentage of the
number of Kansas lives covered by the pool with respect to all lives covered by
the pool on the last day of the prior fiscal year of the operation of the
pool. The board of trustees of each
fund shall take all
necessary precautions to safeguard the assets of the fund, including all of the
following:
(a) Designate an administrator to administer the financial affairs of
the pool who shall furnish a fidelity bond to the pool in an amount determined
by the trustees to protect the pool against the misappropriation or misuse
of any moneys or securities. The administrator shall file evidence of the
bond with the commissioner. The bond shall be one of the conditions
required for approval of the establishment and continued operation of a
pool. Any administrator so designated shall be a resident of Kansas if an
individual or shall be authorized to do business in Kansas if a corporation.
(b) Retain control of all moneys collected or disbursed from the pool
and segregate all moneys into a claims fund account and an administrative
fund account. All administrative costs and other disbursements shall be
made from the administrative fund
account. The trustees may establish a revolving fund for use by
the authorized service agent which is replenished from time to time from
the claims fund account. The service agent and its employees shall be covered
by a fidelity bond, with the pool as obligee, in an amount sufficient to
protect all moneys placed in the revolving fund.
(c) Audit the accounts and records of the pool annually or at any time
as required. The commissioner shall prescribe the type of audits and a uniform
accounting system for use by pool and service agents to determine the
ability of the pool to pay current and future claims.
(d) The trustees shall not extend credit to individual members for any purpose.
(e) The board of trustees shall not borrow any moneys from the pool or
in the name of the pool without advising the commissioner of the nature
and purpose of the loan.
(f) The board of trustees may delegate authority for specific functions
to the administrator of the pool. The functions which the board may delegate
include such matters as contracting with a service agent, determining the
premium chargeable to and refunds payable to members, investing surplus
moneys and approving applications for membership. The board of trustees
shall specifically define all authority it delegates in the written minutes
of the trustees' meetings. Any delegation of authority shall not be effective
without a formal resolution passed by the trustees.
History: L. 1987, ch. 74, § 12; L. 1989, ch. 65, § 1;
L. 1991, ch. 60, § 6; May 23.