Ohio Transit Risk Pool

OHIO TRANSIT RISK POOL

Return of Surplus Policy

Originally Adopted by OTRP Board: June 23, 1998

PURPOSE

As a loss year closes, the loss reserves for that particular year become available to the membership. The OTRP Bylaws outline several alternatives for handling each member’s share of these surplus funds including the issuance of a refund, a credit to an upcoming annual billing or some combination thereof.

The purpose of this policy is to prescribe a consistent procedure for handling these funds.

POLICY STATEMENT

When all known claims and lawsuits have been settled and paid, the OTRP Chief Executive Officer shall notify the Finance Committee. The Finance Committee will make a recommendation to the full Board at its next meeting to declare the loss year closed, provided the loss year has been in existence at least four years. The Board may then declare the loss year officially, “closed”. The remaining loss reserves for that year are considered “surplus”.

Once the loss year has been declared closed by the OTRP Board, the remaining loss reserves may be distributed. Within thirty (30) days of declaring the loss year closed, OTRP will deposit each member’s surplus to the General Reserve Fund (GRF) held by OTRP, unless notified in writing prior to that time of the member’s decision to:

1.Apply all or a portion of its surplus to the upcoming loss year’s

invoice for loss fund and administration.

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

OTRP invoice.

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

Participation in the GRF is purely voluntary. The GRF provides resources against which special assessments for unexpected claims against closed loss years may be charged. The fund may also serve as a source of funding for short term cash flow requirements of OTRP with Board authorization.

The fund is established with surplus loss funds from closed loss years with separate accounting designed to preserve each member’s equity in said fund. All interest shall be allocated proportionally to each member’s percentage of ownership in the General Reserve Fund.

A member’s share of the GRF is available to the member at any time for payment of any OTRP invoice. Other withdrawals are permitted only in January of each year.

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