Insurance Scheme

Insurance Scheme Manager
Crombie Lockwood and Partners
Auckland Office Ph: +64 9 358 2258,
address 191 Queen Street Auckland Central.
Representative – Jane Mackenzie ph: +64 9 357 4880, mobile: +64 27 836 1326.

Rules of Governance for RMCA Insurance Scheme
Adopted by Resolution of RMCA Council  2007

Preamble

Under the Rules and Constitution of the Ruapehu Mountain Clubs Association (RMCA, Clause 12 states inter alia; “The Executive shall for the purpose of administration of these Rules have power to promulgate such Regulations as may be found to be necessary or expedient……”  The Executive Council believes it will be in the Association’s best interest and for the benefit of Members, to have a non compulsory insurance scheme which members can elect to join or not as each Member sees fit.

1 Objects:

(a) To provide a stable, long term, transparent and equitable insurance facility for participating Members.

(b) To bulk purchase insurance with the aim of providing a cost effective solution to fluctuating insurance costs over the long term.

(c) To create a reserve fund that will self fund a substantial insurance policy (or policies) excess. The amount of this excess shall be agreed by the Governing Council, in conjunction with the Scheme’s insurers, prior to the 31 July policy anniversary date each year.  Starting 31 July 2006, the Scheme excess shall be $75,000.

(d) The Governing Council may also arrange other insurances for participating Members, such as but not limited to, public, employer’s and statutory liability should sufficient members request it.

2 Membership:

(a)  Shall be open to any Member of the Ruapehu Mountain Clubs Association as defined in the Rules and Constitution of the Association.  Members may join at any time after 31 July 2006.

3 Financial contributions:

(a) Contributions to Reserve Fund:
All participating Members shall share in the contribution to the reserve fund in proportion to the value that their insured assets compare to the total sum insured of the insurance scheme at the start of each insurance year.

(b) Club share in Reserve Fund interest and other income:
All participating Members shall share in the interest and other income credited to the reserve fund in proportion to the value that their insured assets compare to the total sum insured of the insurance scheme at the time that the income accrues to the scheme.

(c) Claims on Reserve Fund:
(i) Any claim upon the fund shall be shared by all participating Members at the time of the event in proportion to the value that its insured assets compares to the total sum insured of the insurance scheme at the time of the event.
(ii) Payment of any valid claim shall have no regard to the participating Member’s own contributions into the fund.

(d) Clubs joining mid term and fixed costs: All Members joining the insurance scheme mid term shall pay pro-rata from the date of joining to the end of the insurance year their proportionate share of fire levies and management fees which will be paid into the reserve fund and will be treated as income.

(e) Spreading of Reserve Fund contribution:
For clubs wishing to join the Scheme, the Governing Council may agree to spread the new Member’s contribution to the Reserve Fund over 2 or more years to make it easier financially for that club, but may charge interest on any Reserve Funds outstanding.

(f)   Withdrawal from the Scheme:
(i) When or if any participating Member withdraws from the insurance scheme they will only receive a refund of the unexpired portion of the insurance premium and that the withdrawing Member’s share of the reserve fund will then be shared at that date by participating Members in proportion to the value that their insured assets compare to the total sum insured of the insurance scheme at that time.
(ii) Reserve Fund contributions are not owned by individual participating Members.

4 Composition of Governing Council:

All members of the RMCA Executive Council shall be members of the Governing Council for the insurance  scheme.

5 Powers of the executive:

The Governing Council shall have the same powers as the Executive Council in fulfilling the Objects of this    document, and as provided for under Clause 7 of the Rules and Constitution of the Association.

6 Scheme management:

For all participating Members, the Governing Council shall;

(a) Insure lodge buildings and the contents thereof up to the Full Replacement Value.  Building valuations every second year will determine the underlying replacement value of all lodges upon which reserve contributions, premiums, fire levies and management fees shall be calculated. The replacement value of lodge contents shall be insured for the replacement value nominated by each participating Member.  The Governing Council may at its discretion waive the need for a building valuation at any time, either for an individual Member or Members collectively.

(b) Insure lodge buildings and contents for accidental physical loss or damage, including earthquake and volcanic eruption, but subject to the usual exclusions found in a commercial fire insurance policy.

(c) Agree the overall insurance excess to be borne by the RMCA scheme. This shall be decided by the Governing Council prior to renewal on 31 July each year.  The RMCA insurance policy excess (deductible) on commencement of the scheme shall be $75,000 for any one claim or series of claims in any one period of insurance.  Insurance purchased by the Governing Council through its Scheme Manager shall accurately reflect the scheme deductible.

(d) In the event of loss or damage suffered by Participating Members, an individual excess of $5,000 each and every claim shall apply.

(e) A sub limit for losses caused by fire only may be selected by the Governing Council at its discretion, but this shall not be less than $10,000,000.

(f) Ensure that the Insurer(s) providing cover above the scheme deductible shall have a current claims paying rating from Standard and Poors of “A-“ or an A M Best rating of “A-“, or better.

(g) Ensure that all insurance premiums payable are net of commission.

(h) When or if reserves reach $250,000, the Governing Council shall seek the views of participating Members on whether or not reserves should be allowed to increase. This may be undertaken by a postal ballot or at an AGM at the discretion of the Governing Council.   A simple majority of participating Members voting will decide the outcome of such vote.
(i) All correspondence and other records shall be made available by the Scheme Manager (Contractor) to the Governing Council upon request within 14 days.
(j) All intellectual property associated with the insurance scheme shall belong to RMCA and returned to the Governing Council on termination of the management contract.

7 Appointment and conduct of a Scheme Manager:

(a) In deciding which person or firm shall be appointed as Scheme Manager, the Governing Council shall ensure that a stable, long term, transparent and equitable insurance facility for participating Members is their over-riding concern.  The cheapest insurance provider or tenderer for management services shall not necessarily be selected.

(b) The Governing Council shall select an appropriately qualified person or company to manage the scheme.  The appointee should be an experienced insurance practitioner, consultant or broker, who is a Qualified Practicing Insurance Broker (QPIB) and member of the Insurance Brokers Association of NZ.

(c) The process of selecting a Scheme Manager shall be at the sole discretion of the Governing Council.  It may decide to put the entire scheme up for tender or select and appoint arbitrarily.  The Governing Council may also decide to tender for the provision of insurance separate to that of providing the management services.

(d)  The appointment of a Scheme Manager shall be for a period as agreed between the Governing Council
and appointee for any term up to 5 years, and may be renewed at the Governing Council’s discretion for further periods of up to 5 years at a time.

(e) If the Scheme Manager is a company, the appointment as Scheme Manager must be relinquished in the event that the business is sold, liquidated or is made bankrupt.  The outgoing Scheme Manager may be professionally audited at the request of the Governing Council, the cost of which shall be paid for out of  the reserve fund.

(f) If the Scheme Manager does not provide the services required to a high professional standard and in accordance with the contract for services agreement between the Governing Council and the Scheme Manager, the Governing Council may terminate the contract at its option by providing 30 days notice or settle on an earlier date by mutual agreement.

(g) The Scheme Manager’s appointment may be summarily terminated in the event of malfeasance or criminal activity on the part of the Scheme Manager or employee managing the RMCA account for the Scheme Manager.

(h) The scheme management fee shall be negotiated annually between the Governing Council and provider or prospective providers of management services for the scheme, at least 90 days in advance of the scheme annual renewal date.  If no agreement on the fee is reached, the Governing Council may at its discretion terminate any agreement between the Association and Scheme Manager, or seek arbitration on mutually agreed terms.

8 Insurance policy wording:

This shall be approved by the Governing Council annually and any changes in cover circulated to participating Members at renewal.

9 Claims handling:

(a) In the event that a participating Member or Members suffer loss or damage that might exceed the excess applicable for each individual Member, advice of such loss is to be rendered to the Scheme Manager.  The Scheme Manager shall take appropriate action to either appoint a Loss Adjuster or authorise repair or replacement for simple claims with a repair estimate of up to $5,000 over and above the Member’s individual excess.
(b) The Scheme Manager will inform the Governing Council that such claims be met without involving a Loss Adjuster, provided that a claim form plus proofs of ownership and purchase of the item or items lost or damaged are supplied to the Scheme Manager.

10 Meetings:

(a)  The President shall preside at all meetings but in his or her absence the Vice President shall take the Chair.  If neither the President or vice President are present, the other Councillors may elect one of their number to preside.

(b) The Chairman at all meetings shall in the case of an equality of voting, have a casting vote, provided that the President being Chairman only one deliberative vote shall be exercised.

(c) Should there be any conflict of interest, real or apparent, it shall be declared prior to the commencement of any meeting held to discuss the insurance scheme.  A person declaring such interest shall not be entitled to vote on any matter regarding the governance of the insurance scheme.

(d) If the Chairman of a meeting being held to discuss governance of the insurance scheme shall declare a possible conflict of interest, then that person shall stand aside from the chair, and the Vice President shall preside.  If the Vice president is absent, a Chairman shall be elected from Councillors present.

(e) Voting shall be by voice unless a show of hands is requested by any Councillor present.

(f) Four Councillors shall comprise a quorum.

(g) At least one Council meeting shall be held every year, but may be held more often in order to ensure good governance of the insurance scheme.  Meetings shall be held at a time and place as is mutually convenient and agreed to by Councillors.

11  Pecuniary gain:

The insurance scheme shall not be conducted for the profit of any Member or Councillors and no part of the income or assets shall enure to the benefit of any Councillor or Member of the Association.  However, this clause shall not prevent any person who is or may become in the future a member of the Association’s Executive and or a Governing Councillor from tendering to provide services under the scheme, such as but not limited to, Scheme Manager, Valuer or Loss Adjuster.

12  Indemnity:

The Association hereby covenants and agrees that it will at all times and from time to time indemnify and keep harmless and indemnified each and every member for the time being of the Governing Council and all other lawful servants and agents of the Association in respect of all duly authorised acts deeds matters and things lawfully done omitted or accomplished by them or any of them in the conduct of the Association’s business and without limiting the generality of the forgoing indemnity each person so indemnified shall be fully indemnified and kept harmless in respect of any and all claims damages penalties costs or expenses made against or incurred in respect of such duly authorized acts deeds matters and things.

13  Management of Scheme and funds:

(a)  Reserve contributions paid by Members shall be deposited into an interest bearing bank trust account kept by the Association for the express purpose of meeting claims and associated costs by Members, provided that an amount not less than the policy deductible is held at call at any one time unless a claim has been made during a policy year that exceeds the insurance policy deductible.  Funds over and above the insurance policy excess at whatever level that is set by the Governing council may be invested in such securities as are interest bearing and authorised trustee securities.

(b) Building valuations completed by a suitably qualified person eg. registered valuer, engineer or architect shall be supplied by participating Members to the Scheme Manager every second year.

(c) An insurance premium differential may apply to lodges situated at different locations on or around Mt Ruapehu, or for other underwriting criteria that the insurer deems relevant.

(d) All insurance premiums shall be net of commission.  No remuneration at all is to be paid by an insurer to the Scheme Manager, either directly or indirectly.

(e) The Scheme Manager shall render accounts on behalf of the Governing Council to all participating Member clubs as soon as possible in July each year, with the intent of dispatching invoices by 10 July.

(f) All payments of the annual self insurance charge (reserve contribution, insurance, fire levies and fees) made to the Scheme Manager shall be deposited into its premium trust account prior to disbursement.

(g) All reserve contributions belong to the Ruapehu Mountain Clubs Association, and shall be transferred within 14 days of receipt by the Scheme Manager into the trust account kept by RMCA for the purpose of accruing reserves.

(h) The Scheme Manager shall be required to indemnify RMCA for all reserve contributions, insurance premiums, fire levies and valuation fees paid by a participating member to the Scheme Manager but not transferred to the appropriate recipients.

(i) The Scheme Manager shall be required to pay the insurer(s) all amounts due and paid by Members within 80 days of the policy anniversary date unless the insurer(s) agree to an extension.

(j) Accounts rendered to Members by the Scheme Manager shall be due and payable on or before the policy anniversary date. Cover may continue beyond that date by agreement and consent of the Scheme Manager, but the right to cancel a Member’s cover for non payment rests with the Scheme Manager.

14 Auditor:

The auditor elected at each AGM, who shall not be a member of the Executive, may also audit the Scheme Manager’s accounts, systems and processes.  If the auditor elected at each AGM declines to carry out such audit, the Governing Council shall be empowered to appoint an auditor at a fee to be agreed between the auditor selected and the Governing Council.

15 Alteration to rules:

The Governing Council may add to alter or delete any of these rules by Resolution at a Council Meeting which is adopted by a simple majority of the persons present and entitled to vote therat, provided that not less than five weeks notice shall have been given to Governing Councillors of the proposed additions, alterations or deletions to be brought before the meeting and provided that nothing in this rule shall prevent the Meeting from amending any proposal which has been specified in the notice.

16  Winding up:

In the event of the winding up of the insurance scheme, any surplus shall be equitably divided amongst participating Members who at the time of such winding up are financial Members of the Association, provided that if at the General Meeting of participating Members at which a decision to wind up is made and the persons present and entitled to vote so resolve the surplus or such parts thereof as are set forth in the Resolution may be handed over to a new or existing organisation formed to carry out one or more of the Objects of this insurance scheme and in such event a receipt from such an organisation for such funds shall be a due and lawful receipt.