Directors:
Dewey R. Preslar, Jr.,
Chair
Food Lion, LLC
Thomas R. Yarboro, Vice Chair
Maxwell Family Holding Company System
Diane Harrington, Secretary/Treasurer
Progress Energy
Geoffrey S. Clasper
Blue Cross and Blue Shield
of North Carolina
Stuart Driscoll
Carolinas Roofing & Sheet Metal Contractors SIF
Delphine D. Goines
Duke University
John Hughes
Alex Lee, Inc.
Robert Johnson
Century Furniture Industries, Inc.
Tia Schweikert
Lowe’s Companies, Inc.
Carla J. Stevens
WakeMed
Kevin Walsh
RTI International
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November 30, 2009
Via U. S. Mail and Electronic Mail
Re:
2009 Association Aggregate Security System ("AASS")
Dear Member Self-Insurer:
Pursuant to N.C. Gen. Stat. § 97-185(a1), your company is eligible to participate in the AASS and your participation in the 2009 AASS is mandatory. The following provides an overview of the 2009 AASS; the methodology for determining your portion of the cost of the aggregate security; your 2009 AASS invoice and the consequences of failure to pay the AASS invoice within 30 days.
Summary
of the AASS
The AASS was authorized by Session Law 2005-400 and requires that the Security Association annually file an implementation plan with the Commissioner of Insurance.
The AASS replaced the prior system of individual security deposits by paying aggregate coverage which may be in the form of cash, securities and other financial instruments securing the liabilities of all individual licensed self-insurers. Each self-insurer pays a portion of the cost of the aggregate security based on the self-insurer’s credit rating and its pro-rata share of the aggregate workers’ compensation liabilities.
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Calculation
of your AASS Assessment
Your company’s AASS assessment includes two components:
- Your share of the aggregate cost of purchasing the financial instruments based on your company’s credit rating and your pro-rata portion of the aggregate workers’ compensation liabilities. Credit ratings are based on published ratings established by Moody’s or Standard and Poor’s as of the end of business on October 15, 2009. If your company had ratings from both Moody’s and Standard and Poor’s, the most recent rating was used. However, if the ratings were issued on the same day, the lowest rating was used. If you do not have an established rating with either rating agency, a “shadow” rating was established by our consultant, MMC Securities, using financial information certified by the NCDOI.
- Your pro-rata share of funds that remain with the Security Association to pay for
Security Association liabilities.
Your 2009 AASS assessment invoice is attached.
Failure to pay the AASS assessment within 30 days will subject your company to revocation of its license to self-insure pursuant to N.C. Gen. Stat. § 97-195 (a1)(13). Interest shall accrue on delinquent assessments at the rate of 8.25% pursuant to N.C. Gen. Stat. § 97-133(a)(3a)e.
The 2009 AASS assessments are calculated using an assessment index with 2009 rates that are identical to the 2008 AASS rates. The Security Association is confident that the 2009 AASS assessment rates should result in a substantial savings when compared with the cost for most members to purchase individual security under the former deposit system.
Release of Security
If your company participated in the 2008 AASS your individual security has been released by the NCDOI. If you did not participate in the 2008 AASS and your company currently posts security with the NCDOI in the form of a surety bond, letter of credit or cash, the NCDOI will release your posted security in a reasonable time following notification from the Security Association that you have paid your 2009 AASS assessment.
Contact Information
Inquiries concerning your credit rating and the calculation of your
AASS assessment should be directed to:
Quentin Hills - Telephone: (415) 743-8569; Email Address:
quentin.hills@mmc.com
Bennett Johnson - Telephone: (212) 345-2739; Email Address:
Bennett.Johnsen@mmcer.com
Inquiries regarding release of your security should be directed to:
Paul Francis - Telephone: (919) 733-5633 ext. 270; Email Address:
paul.francis@ncdoi.gov
Ron Ennis - Telephone: (919) 733-5633 ext. 250; Email Address:
ron.ennis@ncdoi.gov
Inquiries to the Security Association should be directed to:
Jim Stuart - Telephone: (919) 787-6050; Email Address:
jstuart@stuartlawfirm.com
Franklin Roberts: Telephone: (919) 787-8212 ext. 106; Email
Address: froberts@btrcpa.com
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Very truly yours,
NORTH CAROLINA
SELF-INSURANCE SECURITY ASSOCIATION
/s/
Dewey R. Preslar, Jr.
Dewey
R. Preslar, Jr.
Chairman, Board of Directors
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Enclosure: 2009 AASS Invoice
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