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To submit legislation, please save this document to your computer, enter the information requested below, and then email a copy to the General Secretary at cio@ame- church.com. Bill Number Title AMEC Captive Insurance Company Reference Part VII, Section IH, Pages 169-171 Intent To create a new business structure to more adequately serve the insurance needs of the African Methodist Episcopal Church Rationale The existing insurance services underwritten by secular insurance providers fail to meet the protective needs of the Church and provide no potential for financial opportunities that may directly benefit the Church. CURRENT TEXT: Delete Current Text AMENDED TEXT: 1 Part VII, Section IH, Pages 169-171 2 The African Methodist Episcopal Church Captive Insurance Company, formerly 3 incorporated as “The Connection Insurance Company” hereinafter referred to as “The 4 Company” is incorporated under the governing insurance laws of the state of Hawaii and 5 registered as a nonprofit Class 2 insurer/reinsurer of both general and long term business 6 under the Hawaii Insurance Commissioner (“Commissioner”) with a minimum 7 contributed capital of $250,000. The African Methodist Episcopal Church is the sole Proposal for Legislation—AME Church Office of the General Secretary/CIO. Updated 9/24/07 Page 1 of 5 8 owner and member of the Company. The Company is a distinct and separate entity of the 9 African Methodist Episcopal Church, administered by a separate, uncompensated Board 10 of Directors as approved by the General Conference and shall be engaged in, but not 11 limited to, the insurance underwriting of all “Church” properties deeded, owned or 12 operated through or by Church corporations, schools and land assets in trust to the 13 African Methodist Episcopal Church, Incorporated, whenever and wherever applicable. 14 The Company shall have, by this legislation, the participation of all of these properties 15 provided that the rate of premium is competitive and the insurance product provided is 16 comparable through the functioning of properly licensed and acceptable insurance “sub 17 agents”, located in the respective Presiding Elder and Episcopal Districts. Participation, 18 by this legislation, shall be confirmed by, recorded on and included in each Pastoral 19 Report to the Annual Conference as a separate line item entry and shall include the 20 amount of insurance coverage in effect and the cost of premium for said coverage so as to 21 maximize the business potential for the financial benefit of the Connectional Church and 22 protection of all related property assets. The Company shall offer and underwrite other 23 lines of insurance products as deemed beneficial and appropriate by the Board of 24 Directors of The Company. The maximum liability of The Company for claims shall be 25 established by its Board. All net revenue earned after the payment of claims and in excess 26 of required and prudent levels of capital reserves and organizational and operating 27 expenses shall be retained in The Company or distributed (subject to approval of the 28 Commissioner) entirely to and for the benefit of the African Methodist Episcopal Church 29 and its duly established component organizations on a percentage basis as determined by 30 the Board of Directors of The Company. Proposal for Legislation—AME Church Office of the General Secretary/CIO. Updated 9/24/07 Page 2 of 5 31 The Company shall comply with all Hawaii statues and regulations governing the 32 operation of a Class 2 captive insurance company, including without limitation, all 33 provisions relating to investments of capital and surplus reserves. The Company shall 34 comply with all annual and other filing regulations imposed upon Class 2 captive 35 insurance companies by Hawaii law, including without limitation, the following which 36 are due on or before the last day of the sixth month following the end of The Company’s 37 fiscal year end: 38 a. Financial statements audited by an independent certified public accounting firm 39 approved by the Commissioner and the Audit Committee of The Company’s 40 Board; and 41 b. a statement of actuarial opinion approved by the Commissioner and The 42 Company’s Board, regarding the year end loss and loss expense reserves. 43 The Company shall provide an Annual Report to the AMEC General Board which shall 44 be included in and a part of the Annual Report submitted to each meeting of the AMEC 45 General Board by the Commission for Annuity Investments and Insurance and the 46 Executive Director of the Department of Annuity Investments and Insurance. 47 In accordance with the Hawaii Revised Statutes (HRS), The Company shall maintain, at 48 its registered office in Hawaii, a copy of all books and records. The registered agent for 49 The Company in Hawaii is Christina Kamaka of AON Insurance Managers (USA) Inc., 50 and its registered office in Hawaii is located at 201 Merchant Street, Suite 2400, 51 Honolulu, Hawaii 96813. 52 The Company is controlled by its Board, which is comprised of two (2) ex officio 53 representatives of the Church who hold the position of Executive Director of the Proposal for Legislation—AME Church Office of the General Secretary/CIO. Updated 9/24/07 Page 3 of 5 54 Department of Annuity Investments and Insurance and the Chairman of the Commission 55 for the Department of Annuity Investments and Insurance respectively, and at least one 56 (1) but no more than five (5) other voting directors who do not hold a leadership position 57 in the Church (but who may otherwise be affiliated with the Church in a membership 58 capacity), and two (2) nonvoting directors who are affiliated with Dickerson Employee 59 Benefits and the Captive insurance managers, respectively. The Board of The Company 60 shall have ultimate authority to manage The Company and to take any such actions as 61 necessary to maintain and ensure a fiscally sound and viable business consistent with the 62 requirements of Hawaii law and the approved business plan of The Company. The Board 63 of The Company may appoint standing and advisory committees, and professional 64 service providers, and elect officers to assist in the oversight and sound operation of The 65 Company. 66 Subject to The Company’s Bylaws, the Board of The Company may, in its sole 67 discretion, declare distributions, which shall be made to and for the exclusive benefit of 68 the Church, in the form of cash, policyholders’ dividends, premium holidays, risk 69 management grants and specific initiatives that improve and enhance the effectiveness of 70 the mission of the Church. The distributions, when made available and after repayment of 71 the organizational expenses, shall be allocated to and for the exclusive benefit of the 72 African Methodist Episcopal Church as follows: 73 (1) Benefits to Local Churches (30%) 74 (2) General Church Treasury (10%) 75 (3) General Church Endowment & Contingency (20%) 76 (4) Connectional Lay Organization (5%) Proposal for Legislation—AME Church Office of the General Secretary/CIO. Updated 9/24/07 Page 4 of 5 77 (5) Women’s Missionary Society (5%) 78 (6) Overseas Development (10%) 79 (7) Young People Division (YPD) (5%) 80 (8) Women In Ministry (WIM) (5%) 81 (9) Church Family Support Service (10%) 82 83 Submitted by: 84 Dr. Jerome V. Harris, Executive Director 85 Department of Annuity Investments and Insurance and 86 The Commission for the Department of Annuity Investments and Insurance 87 African Methodist Episcopal Church Proposal for Legislation—AME Church Office of the General Secretary/CIO. Updated 9/24/07 Page 5 of 5