Section 7

NONCOMPLIANCE AND GROUNDS FOR ACTION AGAINST A MEMBER

Adopted 4/11/2013

  1. BACKGROUND MHAPCI risk management policiesrequire Members to promote and support risk management initiatives, identify risk exposures that might cause financial loss if untreated, and take appropriate action to correct or address these exposures. MHAPCI’s Scope of Coverage document and Claims Handling Procedures require that Members provide prompt notice of loss, provide a description of how, when and where the loss or damage occurred, take all reasonable steps to protect the property from further damage, and cooperate with MHAPCI in the investigation or settlement of the claim. The Scope of Coverage further requires that a Member repair the premises within 180 days of the date of the covered loss or damage.

Members further agree to pay premium and assessments to MHAPCI, comply with MHAPCI’sBylaws, Coverage Terms, rules and regulations andMHAPCI-developed risk management programs. A material failure to comply with these conditions following notice and an opportunity to cure may result in the Member’s expulsion from MHAPCI, cancellation of the Member’s coverage, or other consequences.

  1. NONCOMPLIANCEMHAPCI’s Board of Directors may find material noncompliance based on any one or more of the following reasons:
  2. Nonpayment of premiums, assessments or other charges;
  3. Fraud or material misrepresentation affecting the coverage, or in the presentation of a claim or violation of any of the terms or conditions of the coverage;
  4. Conviction of theMember’s Executive Director for a crime arising out of acts which increase the hazards insured against;
  5. Physical changes in the covered property which increase the hazards insured against; including, but not limited to, failure to maintain and protect covered properties which could endanger the safety of the Member’s residents, visitors, and staff;
  6. Failure to comply with loss control recommendations identified as critical by MHAPCI.
  1. CONSEQUENCES OF NONCOMPLIANCE In the event of a finding by MHAPCI’s Board of Directors that a Member has failed to comply with the terms of the Member Agreement, MHAPCI’s Bylaws, Scope of Coverage terms, or any rules and regulations which may be adopted by MHAPCI’s Board of Directors, the Board will determine whether such noncompliance is material. If the Board determines that noncompliance is material, the Member will be given an opportunity to cure such noncompliance.

If the Member fails to cure the noncompliance within 30 days from receipt of written notice of such noncompliance, then MHAPCI may impose any of the following consequences upon such Member:

  1. Expel the Member from MHAPCI membership and exclude from coverage upon the failure to cure the noncompliance;
  2. Exclude the Member from coverage under specified lines of coverage, such as Housing Authority Officials’ Liability, Employment Wrongful Acts Liability,or Employee Benefits Liability;
  3. Collect amounts owed to MHAPCI, with interest;
  4. Impose financial penalties including, but not limited to:
  5. Moving the Member to the high risk category, with increased premiums;and/or
  6. Increasing the deductible for property coverage or imposing a deductible for liability coverages.
  1. APPLICATION FOR REINSTATEMENTAfter the noncompliance is cured, a former Member who has been expelled from MHAPCI membership may apply as a new Member andmay be admitted by a majority vote of all Directors at a regular, special or annual Directors’ meeting.