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North Carolina Chamber Fund Members Receive Surplus Distribution

October 2, 2014

The North Carolina Chamber of Commerce Self-Insurer's Fund is distributing $7.6 million to its members on October 2, 2014 as a result of winding down its operations.

The Fund began operations in 1994 as a self-insured workers' compensation company providing coverage to its members throughout North Carolina. In March 2007, while the Fund was under administrative supervision by the North Carolina Department of Insurance, Synergy Coverage Solutions was awarded an administration contract to help the Fund restore its creditability and produce profitable results.

Shortly after taking over as administrator of the Fund, Synergy worked with the Fund and the North Carolina Department of Insurance to get the Fund back on solid ground. In June 2007, the Fund was released from administrative supervision and Synergy began servicing business for the Fund. The Fund's surplus grew by $3.7 million while under Synergy's management as a result of practical underwriting policies, proactive claims management, and effective loss prevention services.

The Fund's board decided to cease operations and exit the workers' compensation arena and entered into a Loss Portfolio and Assumption Reinsurance Agreement with Synergy Insurance Company on March 31, 2013. This agreement transferred all policy and claim related liabilities to Synergy Insurance Company.

In order to return the $7.6 million surplus to Fund members, the Board developed a plan of distribution which was later approved by the North Carolina Department of Insurance. The amount of distribution was calculated pro rata based upon the earned premium for eligible members for the period beginning 36 months prior to and ending on March 31, 2013. Under the approved plan of distribution, only active members as of March 31, 2013 are entitled to a distribution. The Fund's Board selected this date as it was the last date of coverage before the Fund entered into the Loss Portfolio and Assumption Reinsurance Agreement.

Our team has managed three self-insurance funds over the past 20 years in which dividends in excess of $30 million have been distributed to North Carolina employers. The expertise of our team has allowed us to successfully turn around self-insurance groups that have been in regulatory jeopardy and/or financial distress. Our latest success, the North Carolina Chamber of Commerce Self-Insurers Fund, distributed $7.6 million to employers in North Carolina, including a significant disbursement of approximately $3.4 million to eligible members in the non-profit industry.