Illinois Fair Plan Association

“The association is an unincorporated association of those insurance companies writing certain types of property casualty insurance coverage in illinois, collectively referred to as "member companies" of the association. Each member company shares in the association's results of operations, receiving cash excesses and paying for cash shortfalls with timing of payments or assessments determined by the finance and audit committee. The extent of a member company's equity participation in the results of operations is determined annually, and is a function of the member company's voting participation percentage adjusted for certain credits. A member company's voting participation percentage for a given year represents the proportion that its premiums written in illinois bear to the total of all members' premiums written in illinois; premiums written for this calculation are for those types of insurance coverage offered by the association.”

“As stated in the articles of association, the association is administered by an eleven member governing committee comprised of six insurance industry representatives; four persons who are not employees of or otherwise affiliated with the insurance industry; and, one person who is an illinois licensed insurance producer. The terms of each member of the governing committee begin on the date of the association's annual meeting. The members of the governing committee serve for one year or until their successors are elected, appointed, or otherwise designated. One member of the governing committee shall be designated or elected by each of the following: the american insurance association; the property casualty insurers association of america; the group comprising all other stock insureres not members of the above; and, the group comprising all other non-stock insurers not members of the above. Two additional directors representing the insurance industry shall be elected, by majority vote of the four industry members of the governing committee. The four non-insurance industry affiliated persons and the illinois licensed producer shall be appointed to the governing committee by the illinois director of insurance. Finally, the governing committee annually elects a chairman and vice chairman, and may elect additional officers, including a secretary. All such officers are elected by majority vote of those members present at the meeting and they will be members of the governing committee. Six members of the governing committee shall constitute a quorum. Each member present at the meeting shall be entitled to one vote.”

“As stated in the articles of association, the governing committee has responsibility for the administration of the association; it may adopt and promulgate such rules and establish such committees and subcommittees as may be necessary to carry out the purposes of the association. The general manager and other management employees designated by the governing committee perform the duties provided in the articles and such other duties as the governing committee may designate. There will be an annual meeting of the members on a date and at a location fixed by the governing committee. Special meetings of the members may also be called by the governing committee and will be called by the governing committee upon written request to the governing committee by any ten members, none of which may be in a group under the same management or ownership as any other. The governing committee will fix the time and place of any special meeting. At any regular or special meeting at which the vote of the members is or may be required on any proposal, including amendment of the articles, or with respect to any vote of the members which may be taken by mail on any proposal, votes will be weighted according to the percentage that each member's premiums written bears to the total of all premiums written by all members. A proposal will become effective when approved by at least two-thirds of the votes, computed on the weighted basis. The articles of association may be amended by the members, subject to the approval of the illinois director of insurance. Any person or member of the association aggrieved by any ruling, decision, action, or refusal to act on the part of the association may appeal to the governing committee; however, this right of appeal does not apply to disputes concerning coverages, amounts of loss, or related defenses. Finally, the governing committee's decision may be appealed to the illinois director of insurance within 35 days after the date of the governing committee's decision.”

“Form 990 is completed by an independent cpa and is then reviewed by the general manager and the executive committee before it is filed.”

“Conflict of interest statement is completed annually by all committee members and employees of the association with any potential conflicts reviewed by the general manager, and the executive and compensation committees.”

“Compensation is based on a salary grid with specific salary ranges for all employees at the association. Salary ranges in place for all positions within the association were developed based on similar positions within the industry and are updated annually with cost of living adjustments. A salary survey was completed in 2011 to confirm accuracy. Annual adjustments in compensation are proposed by appropriate supervisor, based on industry averages and performance, and approved by the general manager as well as the executive and compensation committee. The general manager's annual salary is determined by the executive and compensation committees.”

“Association financial statements are made available to members through a password protected website with governing documents and conflict policy available upon request; and, by statute the financials are published in two major illinois newspapers annually.”

“Change in pension and retiree health liability -741,294. Change in non-admitted assets -620,268. Distributions to member companies -162,746.”

“As a regulated insurance company, the association uses statutory accounting practices in conformity with accounting practices prescribed or permitted by the department of insurance of the state of illinois. The state of illinois requires that insurance companies domiciled in the state of illinois prepare their statutory basis financial statements in accordance with the national association of insurance commissioners ("naic") accounting practices and procedures manual.”