(A) Each participating entity will set reserves for all potential claims and losses reported to the fund pursuant to paragraph 7 of these rules and regulations. The amount of the reserves shall be reported to the fund on Form A when Form A is initially sent to the Fund by the participating entity. Changes in the level of reserves shall be reported to the Fund on Form B as soon as practicable after the amount of the reserves has been changed by the participating entity, but net later than April 1 or October 1 annually, as specified in paragraph 7(d) of these rules and regulations.
(B) In accordance with § 1.1 of general conditions of part II of the agreement (page 22), for any claim for which a participating entity initially establishes a reserve for 50% or more of the participating entity’s retained limit (pages 17 and 19 of the agreement), or for which a participating entity changes a reserve to an amount that is 50% or more of the retained limit, the participating entity must immediately provide written notice to the Fund Manager on Form A or Form B, as appropriate.
(C) The reserve information reported by the participating entities shall be reviewed by the Fund Manager and Fund Advisors, who may recommend changes in the amount reserved for any claim to the appropriate participating entity.
(D) Pursuant to § 4.4(K) of part I of the agreement (page ten), the Fund Manager, with the concurrence of a majority of the Fund Advisors, may establish a reserve of the fund for any potential claim or loss reported by a participating entity. The amount of the reserve established by the Fund for a potential claim may be different from the amount of the reserve established by the participating entity.
(E) In accordance with generally accepted accounting principles, reserves established by the fund may be discounted and retained on the accounts of the fund as discounted items.
(F) In accordance with generally accepted accounting principles, the fund’s reserve amounts may be reduced to reflect structured settlements.
(G) Claims still on appeal after a judgment has been entered may not be reserved for less than the judgment amount, subject to discounting in accordance with paragraph 8(e) above.
(Ord. MET 93-21, passed 11-9-1993)