The Articles of Agreement








 

 





 

Minnesota Automobile Assigned
Claims Plan

231 Centrral Ave Ste. A
Osseo, MN 55369

Phone 763-425-6634
Facsimile 855-976-4878

ARTICLES OF AGREEMENT

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EFFECTIVE DATE
JANUARY 1, 1975


REVISED EDITION
FEBRUARY 24, 2004

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MINNESOTA AUTOMOBILE ASSIGNED CLAIMS BUREAU

ARTICLES OF AGREEMENT

The purpose of these Articles of Agreement is to form and provide for the operation of the Minnesota Automobile Assigned Claims Bureau and Plan.

ARTICLE I
Name

This organization shall be known as the Minnesota Automobile Assigned Claims Bureau, an unincorporated nonprofit association. Its functions are to be carried out by the operation of a Minnesota Automobile Assigned Claims Plan.

ARTICLE II
Objective

The objective shall be the implementation of and the administration of those Sections of the Minnesota No-Fault Automobile Insurance Act, which pertain to the Assigned Claims Bureau and Plan.

ARTICLE III
Effective Date

These Articles of Agreement are subject to approval by the Minnesota Commissioner of Commerce (hereinafter referred to as the Commissioner) and shall become effective
January 1, 1975.

ARTICLE IV
Office

The principle office of the Bureau shall be within the State of Minnesota.

ARTICLE V
Membership

Membership in the Bureau shall consist of each reparation obligor providing basic economic loss insurance in this state.

Termination of Membership. Membership of any member shall terminate when such member no longer provides basic economic loss insurance in the state of Minnesota. Any member whose membership in the Bureau has been terminated shall, nevertheless, continue to be governed by these Articles of Agreement in order to complete its obligation incurred during its term of membership with regard to any assessments, losses, expenses, obligations, or contracts under the program.

ARTICLE VI
Administration

The plan shall be administered by a Governing Committee and an Administrator in accordance with the provisions of the Plan of Operation. The Governing Committee (hereinafter referred to as the Committee) shall consist of seven members. The Committee shall consist of four individuals selected by the insurer members, one individual selected by the self-insurer members, and two public members appointed by the governor. All members shall serve two-year terms.

ARTICLE VII
Duties of the Governing Committee

The Committee shall meet at least annually and as often as may be required to perform the general duties of administration of the Plan. The Committee shall be empowered to appoint an Administrator, budget expenses, levy assessments, disburse funds and perform all duties essential to the proper administration of the Plan.

Annually, the Administrator shall prepare an operating budget in the prescribed manner for submission to the Committee. Such budget shall be approved by the Committee and furnished to the companies which are Bureau members on request. Any expenditure in excess of or not included in the annual budget, shall be subject to the approval of the Committee. The Committee shall furnish to all members of the Bureau a written report of operations annually in such form and detail as the Committee may determine.
A financial report will be prepared annually for submission to the Commissioner for his examination and approval.

ARTICLE VIII
Officers

The Committee shall elect from its membership a chairperson and a vice-chairperson. The chairperson shall preside over all meetings of this Committee and all meetings of the members of the Minnesota Automobile Assigned Claims Bureau. The vice-chairperson shall perform the functions of the chairperson in the event the chairperson is unable to perform his/her tasks. The chairperson and vice-chairperson shall perform such other duties as may be incidental to their offices, or as shall be required of them by these rules or by the Committee.

ARTICLE IX
Designation of Servicing Insurers

A minimum of three (3) Servicing Insurers shall be designated by the Committee.
It will be the responsibility of the designated Servicing Insurers to make adequate provision for the equitable payment of assigned claims. It will be the responsibility of the designated Servicing Insurers to establish adequate internal procedures for the maintenance of statistics that will properly reflect the payments and expenses related to the claims assigned. Such statistics will be provided to the Committee as requested.

ARTICLE X
Assignment of Claims

The Administrator of the Plan shall assign claims to the Servicing Insurers in accordance with procedure determined by the Committee, as approved by the Commissioner.

ARTICLE XI
Cost of Administration

All cost of administration of the Plan including administrative costs, cost of claims payments and all related claims expense shall be borne by the members of the Bureau on a pro rata basis. Assessments on all members shall be made at the discretion of the Committee to meet the cost of administration and to reimburse the Servicing Insurers for their expense of assigned claims payments and related reasonable claims expense.

ARTICLE XII
Audits

The Committee shall annually appoint a properly qualified firm to conduct an annual audit of the operations of the Plan, the scope of which shall be determined by the Committee, and to perform such other functions as may be directed by the Committee. Members of the Bureau shall, at all reasonable times, make books and records available to the Committee or its representative for the purpose of reviewing any matter coming within the scope of these Articles of Agreement.

ARTICLE XIII
Indemnification

In General
1.    Each person serving on the Committee or any sub-committee thereof, each member or servicing carrier of the Bureau and their employees, and each officer, employee and/or consultant of the Bureau (hereinafter jointly referred to as "persons"), shall be indemnified by the Bureau against all costs and expenses actually and necessarily incurred by them or it in connection with the defense of any action, suit or proceeding in which they or it is made a party by reason of their or its status in one of the above categories, except in relation to matters as to which they or it have been judged in such action, suit or proceeding to be liable by reason of misconduct in the performance of their or its duties. Indemnification hereunder shall not be exclusive of the rights to which such persons may be entitled as a matter of law.

2. Any person who shall seek indemnification hereunder shall promptly notify the Bureau of any action, suite or proceeding, or any threat thereof, in writing at its main office. The Bureau shall have the right to and may defend and/or dispose of any such pending or threatened action, suit or proceeding when its Committee has determined that said action is in the best interest of the members of the Bureau. In every instance where a claim is made, including claims in the nature of bad faith or punitive damages, the Bureau shall have the right to defend such action in any way it deems to be in the best interests of its membership.

3. The cost and expense of fulfilling the obligations of the Bureau hereunder, including reasonable attorneys' fees and court costs, shall be apportioned among all the members of the Bureau in accordance with the basis of apportionment as provided in Section 9 of the Bureau's Plan of Operation and as set forth in its Articles.

B.  Claims of Bad Faith or for Punitive Damages
1. Each insurer which serves as a servicing insurance carrier of the Bureau or any predecessor or successor organization of the Bureau and the carrier's employees (hereinafter collectively referred to as "the servicing carrier"), shall be indemnified by the Bureau against all costs and expenses reasonably incurred by or imposed upon such servicing carrier in connection with or resulting from any settlement or award, by court or by jury, on a claim of bad faith or punitive damages arising out of the conduct of a servicing carrier in connection with a claim assigned to it through the Bureau.

Provided, however, that settlements or awards in the nature of bad faith or punitive damages claims will only be reimbursed by the members of the Bureau in those situations in which the servicing carrier has acted for a purpose which it reasonably believed to be in the best interests and objectives of the Bureau and in connection with which it had no reasonable cause to believe that its conduct was unlawful or improper. Nor shall any settlement or award of punitive damages or bad faith claims be reimbursed in cases where the servicing carrier has acted fraudulently or with reckless disregard of a claimant's rights.

2. In every instance where a claim of bad faith or for punitive damages is asserted, the Bureau shall have the right to defend and/or dispose of such action as is set forth in paragraph A.2.

3. No settlement of a punitive damages or bad faith claim shall be made without the approval of the Bureau's Committee prior to the time the settlement is entered into or agreed upon.

4. The forgoing right to indemnity shall include reimbursement of the expenses paid in settling any such action, suit or proceeding, including reasonable attorneys' fees and court costs.

ARTICLE XIV
Insolvency

In the event any member fails, by reason of insolvency, to pay its proportion of any expense or of any loss incurred by the Bureau or Plan under the program, such unpaid loss or expense shall be paid by the remaining members, each contributing on a pro rata basis, deleting therefrom the proportion of defaulting member. The Bureau shall be subrogated to the rights of the remaining members in any liquidation proceedings and shall have full authority on their behalf to exercise such rights in any action or proceeding.

ARTICLE XV
Legal Action

Legal action may be maintained by or against the Bureau or Plan.

ARTICLE XVI
Citation to Commissioner

Failure of any member to comply with these Articles of Agreement or with any rules prescribed thereunder by the Committee or to pay any assessment levied within 30 days of notice thereof, shall be grounds for citation of such member to the Commissioner.

ARTICLE XVII
Right of Appeal

Any person or member aggrieved by any ruling, order, decision, action, or refusal to act on the part of the Plan may appeal to the Committee. The Committee shall promptly notify the person or member as to the ruling on the appeal.

A ruling, action or decision of the Committee may be appealed to the Commissioner within 30 days. A final action or order of the Commissioner is subject to judicial review in the manner provided by chapter 14 of the Minnesota Statutes. In lieu of an appeal to the Commissioner, judicial review of the Committee's ruling, action, or decision may be sought.

ARTICLE XVIII
Amendments

The Governing Committee shall have the authority to amend the Minnesota Automobile Assigned Claims Plan by a two-thirds affirmative vote at a regular or special meeting of the members of the Governing Committee at which a quorum is present. Any such amendment shall be subject to the approval of the Commissioner of Commerce within 30 days, otherwise, the amendment shall be deemed approved.

ARTICLE XIX
Bylaws

The Governing Committee shall have the authority to adopt, amend and repeal such Bylaws or rules, as it deems appropriate to carry out its duties and responsibilities. Any such change shall be subject to the approval of the Commissioner of Commerce within 30 days, otherwise, the amendment shall be deemed approved.

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Last updated: Sunday, October 18, 2010
2001 Minnesota Automobile Assigned Claims Bureau
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