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• Outstanding Reserves are the sum total of unpaid case reserves, and inc <br />but not reported claims, in the Risk Sharing Layer as determined by the C <br />Auditor and Actuary. <br />3. ANNUAL ACTUARIAL STUDY. BICEP will conduct an annual actuarial analysis to ; <br />the Board of Directors in making funding decisions on a prospective <br />retrospective basis. <br />4. APPLICATION OF TARGET SURPLUS CRITERIA. After annual review of the targ <br />retained earnings ratios, the Board of Directors will be able to determine whether it <br />desirable to increase, decrease, or stabilize retained earnings. If the Board desire <br />to decrease retained earnings, it may approve a funding level below the 85 <br />confidence level. Conversely, a funding decision above the 85% confidence lei <br />will indicate a bias toward increasing retained earnings. A determination to fund <br />the 85% confidence level will reflect the Board's desire to keep retained earnings <br />the current level. <br />5. RETROSPECTIVE DIVIDENDS. Dividends may be available four (4) years from the <br />of a Coverage Period. The Board of Directors, using the target retained earr <br />ratios as a guide, may declare additional retrospective dividends at any time. <br />6. PROSPECTIVE DIVIDEND. To the extent the Board approves funding a new year at <br />confidence level less than the target 85%, the Board recognizes the differen~ <br />between actual funding and the 85% confidence level as a prospective (up fror <br />dividend. <br />7. AMENDMENT. This policy statement, adopted by the Board dated July 1, 2006 ,shat <br />be reviewed annually and reaffirmed or modified accordingly. <br />Liability Program O]-21-06 <br />_g_Z_ <br />