2017-05-15T12:07:43-07:00 2016-12-31 990 2016-01-01 561179542 North Carolina Rate Bureau NORT 9197839790 2910 Sumner Boulevard Raleigh NC 27616 David E Sink Jr CFO 2017-05-15 2016 2021-01-29 14:40:06Z 15130771 false false X https://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 71 0 0 15736765 15130770 24 0 727 1 15737516 15130771 0 0 5708563 5753132 0 0 9232613 8973345 14941176 14726477 796340 404294 2195505 2567048 1235814 1315562 959691 1251486 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 2016 the Bureau collected and disbursed premiums of 34,051,965 and 34,512,739, 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 2016, $24,800 was collected from companies submitting late data. One 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 Bureaus member companies to North Carolina Commissioner of Insurance. Below is a listing of some of the Bureau's program service accomplishments: General1.Each year the North Carolina Rate Bureau conducts a data call to collect information from the statutory Property and Casualty Annual Statement and Insurance Expense Exhibits. However, the Rate Bureau also collects Automobile, Homeowners, Mobile Homeowners and Dwelling Expense Experience and Installment Premium Payment Charge data through a special data call. This data is used for the preparation of rate filings, apportionment of expenses and assessments. To assist the member companies to comply with the date call requirements, the circular included:a.The Call Reporting Schedule,b.The Financial Call Contact Form,c.The IDC Reporting Guidebook,d.Information about the Industry Data Collection (IDC) web application which is required to be used to respond to all data calls, ande.Deadlines for each data call.f.to submit the various data callsAutomobile1.Circular A-16-1, dated February 11, 2016, announced General Assembly House Bill 288, which added a new statute that allows member companies to incorporate option enhanced endorsements to automobile and homeowner policies if the insurer has filed the optional enhanced endorsement with the Commissioner of Insurance and the Commissioner of Insurance has approved the endorsement.2.Circulars A-16-2 and A-16-3, dated April 4, 2016 and April 6, 2016, respectively, announced the availability of an ISO endorsement and rating rule for certain Limited Transportation Network Driver Coverage.3.Circular A-16-4, dated April 8, 2016, announced the North Carolina Commissioner of Insurance approval of revisions to the Personal Auto Manual related to new Transportation Network Driver Company classification code and optional enhanced endorsements.4.Circular A-16-5, dated April 12, 2016, announced the North Carolina Commissioner of Insurance approval of revised private passenger auto territory definitions, applicable to all new and renewal policies written to become effective on or after October 1, 2016.5.Circular A-16-6, dated May 2, 2016, announced the North Carolina Commissioner of Insurance approval of revisions to the Personal Auto Policy program, including revised territory definitions revised classification plan factors, revised physical damage deductible factors, updates to model year, and revised base rates. The revisions were applicable for all new and renewal policies becoming effective on or after October 1, 2016.6.Circular A-16-7, dated July 6, 2016, announced General Assembly House Bill 959, which removed moped physical damage insurance from the Rate Bureaus jurisdiction effective July 1, 2016.Property1.Circular P-16-1, dated February 16, 2016, announced General Assembly House Bill 288, which added a new N.C.G.S statute that allows member company to incorporate optional enhanced endorsements to their automobile and homeowner policies if the insurer has filed the optional enhanced endorsement with the Commissioner of Insurance and the Commissioner of Insurance has approved the endorsement.2.Circular P-16-1, dated March 24, 2016, announced the results of a survey of Red Springs Fire department by the NC Department of Insurance of State Fire Marshall.3.Circular P-16-3, dated April 4, 2016, announced approval by the NC Commissioner of Insurance regarding various revisions to the Dwelling Fire and Extended Coverage Policy Program, which have an effective date of January 1, 2017.4.Circular P-16-4, dated April 4, 2016, announced the NC Commissioner of Insurance approved Endorsement DP 32 18, Named Storm Deductible, which is applicable to all new and renewal policies becoming effective on or after January 1, 2017.Workers Compensation1.Circular C-16-1, dated January 6, 2016, announced online reporting capabilities for USR Fines within ManageUSR system.2.Circular C-16-2, dated January 13, 2016, announced an NC Department of Insurance-approved North Carolina Basic Manual, effective April 1, 2016.3.Circular C-16-3, dated January 15, 2016, announced the North Carolina Workers Compensation Assigned Risk Take-Out Credit Program.4.Circular C-16-4, dated January 25, 2016, announced new functionality in the Experience Mod Lookup web application.5.Circular C-16-5, dated February 8, 2016, announced a new report available via the CDQR web application.6.Circular C-16-6, dated March 28, 2016, announced availability of a digital version of the North Carolina Basic Manual for Workers Compensation and Employers Liability Manual.7.Circular C-16-7, dated April 14, 2016, announced Rate Bureaus filing and approval to/from the NC Department of Insurance of revisions to the North Carolina Basic Manual for Workers Compensation and Employer Liability8.Circular C-16-8, dated April 28, 2016, announced Rate Bureaus work with the National Council on Compensation Insurance and other independent state rating bureaus to compile data related to TRIPRA.9.Circular C-16-9, dated June 8, 2016, announced the discontinuation of mailing certain monthly hardcopy policy invoices.10.Circular C-16-10, dated June 15, 2016, announced the filing and approval to the NC Commissioner of Insurance of changes to rules surrounding audit non-compliance charges.11.Circular C-16-11, dated June 23, 2016, announced revisions to Basic Manual classifications12.Circular C-16-12, dated July 5, 2016, announced reference updates to the NCCI Retrospective Rating Plan Manual13.Circular C-16-13, dated July 21, 2016, announced a new NCCI item, the establishment of a methodology to calculate experience rating premium eligibility amounts14.Circular C-16-14, dated August 5, 2016, provided loss cost multiplier filing information15.Circular C-16-15, dated August 10, 2016, announced the Rate Bureaus filing and approval from the NC Department of Revenue of a new state-specific form, which became effective October 1, 2016.16.Circular C-16-16, dated August 22, 2016, announced a new NCIC fee schedule change for Ambulatory Surgical Centers17.Circular C-16-17, dated August 22, 2016, announced the Rate Bureau filed and the NC Department of Insurance approved revisions to the NC Basic Manual for Workers Compensation and Employers Liability18.Circular C-16-18, dated September 1, 2016, announced the 2016 Loss Costs Filing was submitted to the NC Commissioner of Insurance19.Circular C-16-19, dated September 1, 2016, announced the 2016 Residual Market Rate Filing was submitted the NC Commissioner of Insurance20.Circular C-16-20, dated September 8, 2016, provided an update to Circular C-16-8, dated April 28, 201621.Circular C-16-21, dated September 21, 2016, announced the Rate Bureau filed and the NC Department of Insurance approved updates to the NCCI Experience Rating Plan manual, with an effective date of October 1, 201622.Circular C-16-22, dated October 13, 2016, announced revisions to the NC Basic Manual Rule, with an effective date of April 1, 201723.Circular C-16-23, dated October 13, 2016, announced updates to the data reporting rules related to reporting of primary names, which become effective May 1, 2017.24.Circular C-16-24, dated October 18, 2016, announced the loss costs reference filing was filed and would become effective April 1, 2017.25.Circular C-16-25, dated October 18, 2016, announced a Residual Market Rate filing, which would become effective April 1, 2017, was approved as filed.26.Circular C-16-26, dated October 25, 2016, announced the introduction of a single sign on environment for CDX.27.Circular C-16-27, dated October 25, 2016, announced the results of the service carrier bid process.28.Circular C-16-28, dated October 31, 2016, announced the release of CompScope Medical Benchmarks for North Carolina, 17th Edition by the Workers Compensation Research Institute29.Circular C-16-29, dated November 3, 2016, announced an update to the NC Basic Manual regarding the establishment of an audit noncompliance charge30.Circular C-16-30, dated November 17, 2016, provided a copy of the 2016 NC Medical Data Report 31.Circular C-16-31, dated December 23, 2016, announced the elimination of the anniversary rating date in the NC Basic Manual false false false false false false false false false false false false false true 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 41 0 true 71 true 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 true false true true false true true false X The Bureau 9197839790 2910 Sumner Boulevard Raleigh NC 27616 Liberty Mut Ins Co MLapinski Gov Committee 0.00 0.00 X 0 0 0 Builders Mutual JVisintine Gov Committee 0.00 0.00 X 0 0 0 National Gen Ins Corp ALyon Gov Committee 0.00 0.00 X 0 0 0 USAA LSukow Gov Committee 0.00 0.00 X 0 0 0 Hartford Fire Ins AMontano Gov Committee 0.00 0.00 X 0 0 0 Nationwide Mutual TSouder Gov Committee 0.00 0.00 X 0 0 0 Travelers Ind Co SZacchera Gov Committee 0.00 0.00 X 0 0 0 Allstate Ins Co JJabben Gov Committee 0.00 0.00 X 0 0 0 NC Farm Bureau RBatdorff Gov Committee 0.00 0.00 X 0 0 0 Unitrin Auto Home KFlint Gov Committee 0.00 0.00 X 0 0 0 State Farm Mut ABentley Chairman 0.00 0.00 X 0 0 0 Progressive Cas KMcGee Gov Committee 0.00 0.00 X 0 0 0 Raymond Evans General Manager 37.50 0.00 X 272248 0 0 David E Sink Jr CFO 37.50 0.00 X 184916 0 0 Joanna Bilouris Chief Operating Officer 37.50 0.00 X 175688 0 0 Shelley Chandler Chief Info Officer 37.50 0.00 X 157970 0 0 Vicki Godbold Chief Adm Officer 37.50 0.00 X 168490 0 0 Laura Lee Longest Director, SW Dev 37.50 0.00 X 134692 0 0 Adrienne Bizzell Mgr, IT Projects 37.50 0.00 X 130502 0 0 Paula Stana Mgr, IT Projects 37.50 0.00 X 145028 0 0 1369534 20 false true false Nelson Mullins Riley & Scarborough LLP PO Box 11070 Columbia SC 292111070 Legal - NCIGA 428309 2910 Sumner LLC PO Box 33483 Raleigh NC 27636 Building rental 461588 Young Moore & Henderson 3101 Glenwood Ave Raleigh NC 27622 Legal - NCRB 1154406 Wellington Management Company LLC 280 Congress Street Boston MA 02210 Invstmt Mgmt - NCRF 743333 Spectrum Partners LLC 7701 France Ave So Ste 450 Edina MN 554353200 IT Mgmt & Consulting 300000 5 0 Membership Dues & Assmts 524298 15130770 15130770 15130770 0 0 0 0 0 0 0 0 Miscellaneous (Schedule) 524298 1 1 1 15130771 15130771 X 0 0 0 0 632852 0 3110854 657217 960344 391865 0 920421 25400 0 0 0 7013204 794 140973 335255 0 331749 62025 0 0 0 0 0 33509 Subscriptions/Memberships 54895 Luncheons 49808 Taxes 3758 Miscellaneous 1554 0 14726477 0 0 0 0 1254057 1587463 0 242114 206414 0 0 0 0 0 0 0 0 0 0 699334 773171 2195505 2567048 -17416 -17416 1253230 1332978 1235814 1315562 X 959691 1251486 959691 1251486 2195505 2567048 X 404294 -112499 X false true X true false Restricted Cash - Medical Premiums 773171 773171 Restricted Insurance for Retirees 559807 Restricted Medical Premiums 773171 1332978 15053972 -76799 -76799 15130771 15130771 14652638 -73839 -73839 14726477 14726477 X X false true X X X false false false David E Sink Jr CFO 171916 13000 184916 Joanna Bilouris Chief Operating Officer 162688 13000 175688 Raymond Evans General Manager 246401 24000 1847 272248 Shelley Chandler Chief Info Officer 149303 8667 157970 Vicki Godbold Chief Adm Officer 155490 13000 168490 Part I, Line 1a: Relevant information in regards to selections on 1a. 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. Client Note 1 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. Client Note 2 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 3 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.For eligible and participating associates listed in Part II of Schedule J, contributions to the organization's defined benefit 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 4 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 5 Client Note 5 - Supplemental Information to Form 990North Carolina Rate Bureau, EIN 56-1179542Form 990, Part XII, Line 2c, Committee 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. 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. 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 7b: Describe Decisions of Governing Body Approval by Members or Shareholders One 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. The North Carolina Rate Bureau's proposed filings are subject to the Commissioner of Insurance's approval. If the Commissioner of Insurance disapproves a filing, the Governing Committte has the ability to follow the appropriate appeals process within the State of North Carolina.In general, the North Carolina Rate Bureau's Governing Committe is authorized and does make operating decisions on behalf of the member companies. However, in some rare instances, high level document changes do require a 3/4 majority vote from the Bureau's member companies. Form 990, Part VI, Line 11b: 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 Chief Financial Officer 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 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 15b: Compensation Review and Approval Process for Officers and Key Employees Compensation data is obtained through WorldAtWork, Mercer, and Aon Hewitt Associates salary surveys. Independent consultants have been utilized in the past to prepare guidelines and ranges for General Manager's and 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 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 appointment of two non-voting public members who are not employed or affiliated with any insurance company or the Department of Insurance to the Governing Committee by the North Carolina Commissioner of Insurance. The audited financial statements are presented to these members along with the rest of the Governing Committee on an annual basis. Other Changes In Net Assets Or Fund Balances - Other Decreases Reapportionment to Member Companies of 2014 Assmts & Expense = -$109949 Other Changes In Net Assets Or Fund Balances - Other Decreases Write off o/s Assmts/Mbrshps/Misc Fees/Refund to Carriers = -$2550