2011-05-13T10:59:56-07:00 2010-12-31 990 2010-01-01 561179542 North Carolina Rate Bureau NORT 9197839790 5401 Six Forks Rd Raleigh NC 27609 David E Sink Jr 2011-05-13 2010 2016-03-07 17:11:31Z 13867545 false false X http://www.ncrb.org/ncrb X 1977 The Bureau was established under Article 36, Chapter 58, N.C. General Statutes. The purpose of the North Carolina Rate Bureau is to administer Property and Casualty Rates for the insurance industry in North Carolina. The Bureau maintains rules and regulations and establishes premium rates for motor vehicle, workers' compensation and property insurance. The Bureau also ensures the availability of workers' compensation insurance to any eligible risk in North Carolina by assigning the risks to members on an equitable basis All expenses are related to those functions. The N. C. Rate Bureau receives no grants and all expenses are borne by its member insurance companies in proportion to written premiums. 12 12 73 0 0 13113649 13858415 250 352 5627 8778 13119526 13867545 0 0 4613455 4928026 0 0 8067690 8280713 12681145 13208739 438381 658806 1585558 1566165 812860 472064 772698 1094101 The Bureau was established under Article 36, Chapter 58, N.C. General Statutes. The purpose of the North Carolina Rate Bureau is to administer Property and Casualty Rates for the insurance industry in North Carolina. The Bureau maintains rules and regulations and establishes premium rates for motor vehicle, workers' compensation and property insurance. The Bureau also ensures the availability of workers' compensation insurance to any eligible risk in North Carolina by assigning the risks to members on an equitable basis All expenses are related to those functions. The N. C. Rate Bureau receives no grants and all expenses are borne by its member insurance companies in proportion to written premiums. false false Workers' Compensation Assigned Risk PlanThe Bureau assures the availability of workers' compensation insurance to any eligible risk in North Carolina by assigning the risks to members on an equitable basis. The Bureau receives premium payments which are deposited and then immediately disbursed to an assigned member company. Since the Bureau acts only as a pass-through for these premiums, these premiums are not recorded on any statement of cash receipts and disbursements.In 2010 the Bureau collected and disbursed premiums of $14,054,100 and $13,987,301, respectively, related to the workers' compensation assigned risk plan. Statutory Annual Data Reporting Requirement for Member Companies Per Article 36 of Chapter 58 of the General Statutes of North Carolina requirements, the North Carolina Rate Bureau must collect on an annual basis information and reports from its member companies. This annual data is used to prepare rate filings, apportionment of expenses, and determination of expense allowances and assessments. The reports that must be collected include Property and Casualty annual Statements and Insurance Expense Exhibits, as well as Private Passenger Automobile, Homeowners, Dwelling and Mobile Homeowners Expense Experience and installment payment data. The Governing Committee approved a penalty fee of $100/day for the late submission of this annual data. During 2010, $9,200 was collected from companies submitting late data. Establishment and administration of classifications, rules, rates, loss costs, rating plans, policy forms and policy provisionsOne of the purposes of the North Carolina Rate Bureau is the "establishment and administration of classifications, rules, rates, loss costs, rating plans, policy forms and policy provisions for the Automobile Insurance, Property Insurance and Workers Compensations Insurance pursuant to Article 36 of Chapter 58 of the General Statutes of North Carolina" (excerpt from North Carolina Rate Bureau Constitution). In order to fulfill this purpose, the North Carolina Rate Bureau files proposed changes on behalf of the Bureau's member companies to North Carolina Commissioner of Insurance.Below is a listing of some of the items that were filed on the member companies' behalf during 2010 that were eventually approved as filed or as amended by the North Carolina Commissioner:Personal Automobile manual revisions effective for new and renewal policies written on or after April 1, 2011Revised endorsement, rule and rate for Extended Enhancement Coverage Revised Endorsement effective immediately on optional basis, but in no event later than February 1, 2011Homeowners & Dwelling manual revision effective for all policies written to become effective on or after May 1, 2011Policy endorsement revision to the Homeowners Enhancement Policy program effective for use on an optional basis with policies effective on or after June 1, 2010 and on a mandatory basis with policies effective on or after December 1, 2010Policy endorsement revision to Homeowners Blanket Policy Program effective for use on an optional basis with policies effective on or after June 1, 2010 and on a mandatory basis with policies effective on or after December 1, 2010New endorsement for Named Storm Percentage Deductible Policy Forms, Rules and Rates MH(C) and MH(F) Policy Programs for beach and coastal territories only on an optional basis by the member companies of the Rate Bureau with the MH(C) and MH(F) Policy Programs; effective on or after March 31, 2010New endorsement for Named Storm Percentage Deductible Policy Forms, Rules and RatesDwelling Policy Program for use in North Carolina in the beach and coastal territories only on an optional basis by the member companies of the Rate Bureau with the Dwelling Policy Program; effective on or after March 4, 2010Elimination of group claim reporting as an option for member companies reporting workers compensation unit statistical data directly to the North Carolina Rate Bureau or for member companies reporting data to the North Carolina Rate Bureau via the National Council on Compensation Insurance Inc. (NCCI); effective April 1, 2011 and applies to all new and subsequent unit statistical reports corresponding to an effective date on or after April 01, 2011. The expenses related to the establishment and administration of these program achievements listed above are part of the general operating expenses (i.e. salary, benefits, legal, outside consulting, etc) for the organization and cannot be segregated or individually identified. These expenses are later reapportioned to the member companies being served by these programs. false false false false false false false false false false false false false false true false true false false false false false false false false false false false false true false false false false false false false false false false false false false false false false false false false false false true 13 0 true 73 true false false false false false false false false false false false false false false false X 12 12 false false false false true true true true true false false false false true false true true false true true false false X The Bureau 9197839790 5401 Six Forks Rd Raleigh NC 276094462 Vicki Godbold 37.50 X 130028 0 0 United Services AA D Pickens 0.00 X 0 0 0 Travelers Ind Co K Barronton 0.00 X 0 0 0 Susan Taylor 37.50 X 168511 0 0 State Farm Mut Auto ABentley 0.00 X 0 0 0 Shelley Chandler 37.50 X 121989 0 0 Raymond Evans 37.50 X 214328 0 0 Paula Stana 0.00 X 109048 0 0 NC Farm Bureau Mut RBatdorff 0.00 X 0 0 0 Nationwide Mut Ins A Powell 0.00 X 0 0 0 Liberty Mut Ins Co M Grove 0.00 X 0 0 0 James Auman 37.50 X 103233 0 0 Integon Ind Corp A Lyon 0.00 X 0 0 0 Hartford Fire Ins Co R Iyer 0.00 X 0 0 0 David Sink 37.50 X 145446 0 0 Cincinnati Ins Co J Gron 0.00 X 0 0 0 Auto-Owners Ins D Klasing 0.00 X 0 0 0 American Home I Feuerlicht 0.00 X 0 0 0 Allstate Ins Co B Payne 0.00 X 0 0 0 Adrienne Bizzell 37.50 X 116321 0 0 1108904 9 false true false Young Moore & Henderson 3101 Glenwood Ave Raleigh NC 27622 Legal 1123438 Pro-Active Management Hal Marcus 8125 Glenbrittle Way Raleigh NC 27615 Consultng,Procedures 119025 Ernst & Young 200 Plaza Drive Secaucus NJ 07094 Audit 173000 3 0 Memberhip Dues & Assmts 524298 13858415 13858415 13858415 352 352 0 0 0 0 0 0 0 Miscellaneous (Schedule) 524298 8778 8778 8778 13867545 13867545 0 0 0 0 528285 0 2654440 687516 730690 327095 0 994640 18000 0 0 0 6279329 0 165841 345575 0 327324 38273 0 0 0 0 0 28328 Taxes 4688 Subscriptions/Memberships 33503 Miscellaneous 1078 Luncheons 44134 0 13208739 0 0 0 0 1303609 1466940 0 75680 74922 0 0 0 0 0 0 0 0 0 0 206269 24303 1585558 1566165 37244 -117508 775616 589572 812860 472064 X 772698 1094101 772698 1094101 1585558 1566165 X 658806 -337403 X false true true X false false Rounding 1 Restricted Medical Premiums 24303 Restricted Insurance for Retirees 565268 589572 13867545 13208739 658806 -677463 -677463 -18657 13528188 -339357 -339357 13867545 13867545 13546845 188106 188106 13358739 -150000 -150000 13208739 Part XIII, Line 2d Part XIII, Line 2d: Other expenses and losses per audited F/S Reclass entries to present @ cash basis $188105 Misc rounding adj $1 Part XI, Line 8 Part XI, Line 8: Other Changes in Net Assets or Fund Balances Misc rounding $1 Reapportionment to Member Companies of 2008 Assessment & Exp $ -334304 Write-off O/S Assessment/Mbrshp/Misc Fees $ -3100 X X false true X X X false false false Susan Taylor 151072 17439 168511 Raymond Evans 194829 18000 1499 214328 Sch J, Part I, Line 1b Part I, Line 1b: Reason for not following policy regarding payment provisions for expenses The reimbursement of social club dues was not documented in a written policy. During the employment search for a General Manager for the North Carolina Rate Bureau, the Bureau's governing committee verbally approved the policy of reimbursing social club dues. In addition, the paid travel for the General Manager's companion (wife) was verbally approved and such travel is infrequent, primarily for attendance of the organization's annual meeting. Sch J, Part I, Line 1a Part I, Line 1a: Relevant information in regards to selections on 1a. Form 990, Part VI, Line 19 Form 990, Part VI, Line 19: Other Organization Documents Publicly Available Since the North Carolina Rate Bureau was created by state statute, its organizational governing documents are public record. The conflict of interest statements are disclosed as agenda items and minutes in each governing committee, committee, and sub-committee meeting the of the Bureau.The financials of the organizations are made available to the public in these two manners:1) The annual filing of the organization's Form 990, Return of Organization Exempt from Income Tax, and 2) The annual filing of the organization's audited financial statements with the North Carolina Commissioner of Insurance Form 990, Part VI, Line 15b Form 990, Part VI, Line 15b: Compensation Review and Approval Process for Officers and Key Employees Compensation data is obtained through WorldAtWork, Mercer and Hewitt & Associates salary surveys. Independent consultants have been utilized in the past to prepare guidelines and ranges for top management compensation, as well as conducting a full compensation audit.This data is presented to a Joint Compensation Sub-committee, consisting of 3 member companies, during the 4th quarter of the year. After a review, the Joint Compensation sub-committe will recommend ranges for salary increases, merit increases for the following year. These recommendations are presented to the organization's governing body for approval, normally during the last month of the calendar year along with a comprehensive budget presentation. Form 990, Part VI, Line 12c Form 990, Part VI, Line 12c: Explanation of Monitoring and Enforcement of Conflicts Each new employee receives an organizational handbook that outlines the requirement of all employees to devote their full time to employment with the North Carolina Rate Bureau. If an employee is engaged in outside work or holds another job, the handbook specifically states that the other business cannot interfere with satisfactory job performance and attendance at the Bureau. Further, the Bureau requires that all employees fully disclose any possible conflict of interest such as outside employment to their supervisor or manager in order to prevent a compromising situation.Conflict of interest is also regularly reviewed at each North Carolina Rate Bureau Governing Committee meeting as well as every Bureau committee or sub-committee meeting. The North Carolina Rate Bureau's conflict of interest statement is included in the agenda and is referenced in every every governing committee, committee, and sub-committee meeting as a reminder to the governing committee and employees of their responsibilities. Per policy, members are not to vote, take action or use his or her personal influence on a matter that represents a personal conflict of interest. Form 990, Part VI, Line 11 Form 990, Part VI, Line 11: Form 990 Review Process The annual Form 990 is prepared internally by the organization's Accounting Manager using tax preparation software. The completed return, including schedules and other necessary supporting information, is then forwarded to the organization's Director of Finance for review and approval. After the review and approval, the completed return is filed electronically to the Internal Revenue Service. The governing committee is notified when the return has been filed but does not receive a copy unless specifically requested by one of the member companies serving on the committee. Form 990, Part VI, Line 7a Form 990, Part VI, Line 7a: How Members or Shareholders Elect Governing Body Member companies of the North Carolina Rate Bureau elect 12 voting members to the Governing Committee. (There are also 2 non-voting Governing Committee members that are appointed by the North Carolina Governor that are not employed or associated with any insurance company or the North Carolina Department of Insurance.) Governing Committee members serve for three-year terms; the terms cannot be served consecutively. The Governing Committee, elected by the North Carolina Rate Bureau members, handle administration, supervision, and direction of all committees. The Governing Committee also appoints a General Manager, who under the supervision of the Governing Committee has general control of the Bureau's activities and associates. Form 990, Part VI, Line 6 Form 990, Part VI, Line 6: Explanation of Classes of Members or Shareholder Every insurance carrier that is is authorized to write Automobile Insurance, Property Insurance or Workers Compensation Insurance in the State of North Carolina is required to become a Member of the Bureau as required by the provisions of Article 36 of Chapter 58 of the General Statutes of North Carolina.Each Member must pay an annual membership fee for each category of insurance for which it is licensed to write in North Carolina. Each member must also annually or when requested, provide statistical data related writing Automobile, Property, or Workers Compensation Insurance. Client Note 5 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Part XII, Line 2c, Committe responsibility for oversight of audit, review and selection of an independent accountantThe audit financials are drafted by the management of the North Carolina Rate Bureau and are audited by the Bureau's independent audit firm. Once the audit report has been generated, it is distributed to the Bureau's Governing Committee for review. Client Note 4 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Part VII, Section B, Line 1, Independent ContractorsThe expenses of 3 North Carolina organizations created by North Carolina state statute Chapter 58 (the North Carolina Rate Bureau created by Article 36, the North Carolina Reinsurance Facility created by Article 37, and the North Carolina Insurance Guaranty Association created by Article 48) are managed and paid by the 3 organization's shared North Carolina Rate Bureau accounting department. Each organization is a separate, unrelated entity guided by separate state statutes and governing documents and each organization maintains separate general ledger accounts and financial statements. At the end of each month, a report is generated that details the total expenses that were paid by the North Carolina Rate Bureau on behalf of the North Carolina Reinsurance Facility and Guaranty Association by the North Carolina Rate Bureau checking accounts; these amounts are then reimbursed to the North Carolina Rate Bureau from the North Carolina Reinsurance Facility and Guaranty Association's checking accounts.The annual Form 1099-MISC for the North Carolina Rate Bureau will reflect the total amounts paid to an independent contractor for all of the organizations listed in the above paragraph; these are the amounts that are reflected on Form 990, Section B, Line 1 for each listed contractor. The amounts reflected on Form 990, Part IX correspond to the net expense attributable only to the North Carolina Rate Bureau. Client Note 3 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Schedule J, Part II, Columns B(iii) & Column D, Officers, Directors, Trustees, Key Employees and Highest Compensated EmployeesThe employees listed in Part II of Schedule J are eligible and are participating in the organization's health and benefit programs including, medical, dental, vision, as well as basic life and accidental death and dismemberment coverage. The costs of these benefits for these employees are included in Line 9 (Other employee benefits) in Part IX, Statement of Functional Expenses, on Form 990.Also, employees listed in part II of Schedule J are eligible and are participating in the organization's defined benefit plan; contributions to the plan are vested in 5 years. Actuarial estimates for the defined benefit plan are determined by employees' salary history, years of service, and anticipated retirement age. The specific costs associated with the employees listed in Form 990, Schedule J, Part II are not easily segregated and are included in Line 8 (Pension plan contributions) in Part IX, Statement of Functional Expenses, on Form 990.There were no deferred compensation agreements for any of the employees of the North Carolina Rate Bureau.No current year compensation for the employees listed in part II of Schedule J was reported in a prior year Form 990. Client Note 2 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Part VII, Line 1a, Officers, Trustees, Key Employees, and Highest Compensated EmployeesForm 990, Part VII, Line 1a, lists the 12 Governing Committee member companies with voting rights as Institutional Trustees. An employee of the elected member company serves on the Governing Committee.Since these Governing Committee members are employees of various insurance companies, we cannot determine the average hours per week devoted to this responsibility.There was no compensation, contribution to a benefit plan, expense allowance paid to these Governing Committee members of the North Carolina Rate Bureau. Client Note 1 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Part VI, Line 14, Written Document Retention and Destruction PolicyThe North Carolina Rate Bureau began creating a formal document retention and destruction policy during 2008. A final written policy has not yet been created.Although no formal document retention and destruction policy existed, informal policies did exist within the North Carolina Rate Bureau. Once the formal project resumes, the formal document retention and destruction policy project will consolidate these individual policies and procedures into an office-wide document and system.