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HomeMy WebLinkAbout89-129RESOLUTION N0. 89-129 A RESOLUTION OF BUTTE COUNTY APPROVING ESTABLISHMENT OF THE PROGRAM BETA RISK MANAGEMENT AUTHORITY WHEREAS, this entity is a participant in the PROGRAM BETA self-insurance and insurance pool created to provide significant advantages in terms of cost, liability protection and services; and WHEREAS, it is in the best interests of this entity to continue to receive such benefits, as well as to increase its participation and control by amending the existing joint powers agreement in order to create a separate and independent entity to carry on PROGRAM BETA and similar programs; and WHEREAS, this entity desires to enter into the amended agreement, entitled "PROGRAM BETA RISK MANAGEMENT AUTHORITY JOINT POWERS AUTHORITY AGREEMENT," to participate in such a joint powers authority, and to approve amended bylaws therefor; NOW THEREFDRE, BE IT RESOLVED by the BUTTE COUNTY BOARD of SUPERVISORS ; Section 1. That this entity hereby approves and agrees to be bound by the above-mentioned Agreement (attached), ' and to participate in the Authority to be created thereunder. Section 2. That this entity hereby approves the amended bylaws of the Program Beta Risk Management Authority (attached). Section 3. That the Chairman, Board of Supexvisorsis hereby authorized to execute the Agreement on behalf of this entity; thereafter, the Clerk is directed to certify a copy of this resolution and to immediately forward the same and the signed Agreement to the Program Director of the Program Beta Risk Management Authority. PASSED, APPROVED AND ADOPTED this 29th day of August ~ 1989, by the following vote: AYES: Supervisors Dolan, Mclnturf, McLaughlin, Vercruse and Chairman Fulton NOES: None ABSENT: None ATTEST: WILLIAM H. RANDOLPH, 'e Ad 'n' ti e nd Clerk of the Board By: JWBETA.R2 6/27/89 ' ~~ ~: RESOLUTION N0. A RESOLUTION OF THE BOARD OF DIRECTORS OF HOSPITAL DISTRICT APPROVING ESTABLISHMENT OF THE PROGRAM BETA RISK MANAGEMENT AUTHORITY WHEREAS, this hospital district is a participant in the PROGRAM BETA self-insurance and insurance pool created to provide significant advantages in terms of cost, liability protection and services; and WHEREAS, it is in the best interests of this district to continue to receive such benefits, as well as to increase its participation and control by amending the existing joint powers agreement in order to create a separate and independent entity to carry on PROGRAM BETA and similar programs; and WHEREAS, this district desires to enter into the amended agreement, entitled "PROGRAM BETA RISK MANAGEMENT AUTHORITY JOINT POWERS AUTHORITY AGREEMENT," to participate in such a joint powers authority, and to approve amended bylaws therefor; the NOW THEREFORE, BE IT RESOLVED by the Board of Directors of Hospital District; Section 1. That this Board hereby approves and agrees to be bound by the above-mentioned Agreement (attached), and to participate in the Authority to be created thereunder. Section 2. That this Board hereby approves the amended bylaws of the Program Beta Risk Management Authority {attached). Section 3. That the President of the Board is hereby authorized to execute the Agreement on behalf of this District; thereafter, the Secretary is directed to certify a copy of this resolution and to immediately forward the same and the signed Agreement to the Program Director of the Program Beta Risk Management Authority. PASSED, APPROVED AND ADOPTED this day of , 1989, by the following vote: ATTEST: Secretary President JWBETA.R1 6/2~/a9 PROGRAM BETA RISK MANAGEMENT AUTHORITY JOINT POWERS AUTHORITY AGREEMENT THIS AGREEMENT, is entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1, (Section 6500, et seq.) of the California Government Code, relating to joint exercise of powers, between the local hospital districts, counties and other government entities which operate hospitals, clinics and other health related facilities, and which have signed this Agreement, and those that may sign hereafter, and which are members of the Association of California Hospital Districts, Tnc., for the purpose of operating a program of self-insurance and insurance for professional liability and other coverages for those hospital districts and those counties and other government entities which own and operate hospitals, clinics and other health related facilities, which program is hereinafter designated "PROGRAM BETA." WITNESSETH: WHEREAS, it is to the mutual benefit and in the best public interest of the parties to this Agreement to join together to establish this Joint Powers Authority Agreement for the purposes hereinafter set forth; and WHEREAS, the development, organization and implementation of such a program is of such magnitude that it is necessary for the parties to join together with this Joint Powers Authority Agreement in order to accomplish the purposes herein set forth; and WHEREAS, the parties hereto have determined that there is a need by district hospitals, county hospitals and other government-owned hospitals, clinics and other health related facilities for a self-insurance program and insurance for professional liability and other coverages; and WHEREAS, it has been determined by the parties that group self-insurance and group insurance purchasing for professional liability and other coverages is of value on a mutual basis; and WHEREAS, a group self-insurance and insurance program can adequately serve the needs of all the parties; and WHEREAS, Title 1, Division 7, Chapter 5 of the Government Code of the State of California authorizes joint exercise by two or more public agencies of any power common to them; and WHEREAS, it is the desire of the parties signing this Agreement to jointly provide for a group self-insurance and insurance programs for professional liability and other coverages for their mutual advantage; 1 WHEREAS, Government Code Section 990.8 provides that two or more local entities may, by a joint powers agreement, provide insurance far any purpose by any one or more of the methods specified in Government Code Section 990.4; and WHEREAS, each of the parties to this agreement desires to join together with the other parties for the purpose of pooling certain self-insured claims and losses, as provided in Government Code Section 990.8, and jointly purchasing excess insurance and administrative services in connection with self-insurance and insurance programs for said parties; NOW, THEREFORE, for and in consideration of the mutual advantages to be derived, and in consideration of the execution of this Agreement by hospital districts, counties and other governmental entities, each of the parties hereto does hereby agree that the Program BETA Risk Management Authority ("Authority") be created as follows: I DEFINITIONS AND GENERAL PROVISIONS 1. "Act". The California Joint Exercise of Powers Act as set forth in Title 1, Division 7, Chapter 5, Article 1 of the Government Code of the State of California. 2. "Administrator". The contractor or consultant retained by BETA Council to administer PROGRAM BETA. 3. "Association". The Association of California Hospital Districts, Inc. 4. "Authority" shall mean the Program BETA Risk Management Authority. 5. "BETA Council". The board of directors of the Program BETA Risk Management Authority, consisting of representatives of _ Participants, and charged with the responsibility of governing the Authority and its programs. 6. "Certificate of Participation". The document issued to each Participant evidencing its participation in PROGRAM BETA, 7. "County" Any local.~overnmental agency denoted as such by law. 8. "Coverage Agreement". The basic agreement of self-insurance which defines the extent of the Authority's coverage of Participants' liability.. 2 9. "Fiscal Year" shall mean that period of time commencing July 1 of each year and ending on the following June 3©. 10. "Fiduci~rr". The bank or trust company organized under the laws of the State of California, which shall have title to the Funds and manage the investment of them. 11. "Funds". Unless the context otherwise specifies, all monies paid into the Authority or any of its programs, including any earnings thereon, or any other sums coming to the Authority from any source. 12. "Governing_Board". The Board of Directors of the Association of California Hospital Districts, Tnc. 13. "Governmental Entity", Any political subdivision or nonprofit corporation affiliate owning a health facility or nonprofit corporation operating a health facility which is a local government agency and empowered to execute this Agreement under the laws of the State of California, 14. "Member". Any local hospital district which is a member of the Association of California Hospital Districts, Inc. 15. "Occupied Beds". The daily average number of beds, cribs, and bassinets used far patients during the coverage period. I6. "Participant". A Member, or any county or governmental entity, which is a signatory member of the Authority; provided, however, that this definition shall not be construed to prevent the Authority from extending insurance coverage to any subsidiary, wholly-owned, or affiliated public entity upon terms and conditions approved by the Board. 17. "PROGRAM BETA". The self-insuring plan created by Association for the benefit of Member Participants, which is to be transferred to the Authority upon approval of this amended Joint Powers Authority Agreement, and related documents. 18. "PraQram Director" shall mean the manager of the day-to-day affairs of the Authority, appointed ,by the BETA Council. 19. "Program Underwriter" shall mean an individual or legal entity, either under contract with or employed by the Authority, to provide underwriting services. 20. "Reserves" shall mean funds not yet committed to~the payment of a valid claim but held for the payment of claims. 3 21. "Risk management" shall mean the process of identifying, evaluating, reducing, transferring, sharing, financing, and eliminating risk, Risk management includes various elements of insurance, law, administration, technology, accounting, and general business to effectively manage hazards and Iosses to which members may be exposed. 22. "Risk pooling or sharing" shall mean any common fund: (1) which is composed of cash, investments permitted by Government Code Section 53601 et seq., or other assets; (2) to which two or more members of the Authority have agreed to contribute in accordance with the terms of a contract or memorandum of insurance in which participation is voluntary; (3) from which claims and risk management casts of any contributor to that common fund shall be paid; and (4} which operates in accordance with this joint powers agreement. 23. "Self-insurance" shall mean providing for claims, losses, and risk management by risk-pooling and the maintenance of reserve funds by a member. 24. "Self-insured retention" or "retained limit" shall mean the amount below which a member is liable, at its own expense, under the Certificate of Participation or other insurance program. 25. "Sponsorship Agreement" shall mean the agreement between the Authority and the Association whereby the~Association continues to sponsor PROGRAM BETA for the consideration set forth in the Sponsorship Agreement. TI PURPOSES AND TERM 1. Purposes. The purposes of the Authority are to provide essential protection to Participants otherwise not obtainable; to secure excess insurance on a group basis; to provide Participants with the mechanisms to accumulate, administer and invest funds to self-insure as a group various liabilities up to a specified, predetermined amount; and to effect cost savings to Participants in the administration of such insurance and risk management programs as may be established by the Authority in order to reduce the cost of health care to the patient-consumer. The benefits of such programs shall not be available to any person or entity other than a hospital district which is organized pursuant to the Local Hospital District Law of the State of California or a County or Governmental Entity approved for participation by BETA Council. All Participants must be members of the Association. 4 2. Term. This Agreement shall become effective as of the date hereof, and shall continue in full force and effect for a term of fifteen (Z5) years unless sooner terminated as provided herein. 3. Continuation. This Agreement shall be deemed to be a continuation of the Agreement currently in effect between certain of the Participants, heretofore known as Program BETA. Title to all assets currently held by Association for the benefit of Program BETA shall accrue to the continuing benefit of Participants in this Agreement. Upon execution of this Agreement by any Participant, whatever rights and obligations have accrued to such Participant under the existing Agreement shall be deemed to have accrued under this Agreement and shall be subject to all the terms and provisions hereof. III CREATION OF AUTHORITY Pursuant to Section 6500 et seq. of the Government Cade, there is hereby created a public entity, separate and apart from the parties hereto, to be known as the Program BETA Risk Management Authority. Pursuant to Government Code Section 6508.1, the debts, liabilities, and obligations of the Authority shall not constitute debts, liabilities, or obligations of any party to this agreement. IV ORGANIZATION & ADMINISTRATION 1. Responsibilit_Y, The overall responsibility far administration of PROGRAM BETA and the Authority shall be vested in BETA Council. 2. Compensation. Pursuant to the Sponsorship Agreement, Association shall be paid such reasonable compensation as shall be agreed upon by Governing Berard and BETA Council. Said compensation shall be an expense of Program BETA. 3. Agents. Each Participant hereby appoints BETA Council and its delegates or designees to act as its agents in executing all contracts, reports, waivers, agreements and service contracts and to make and arrange for the payment of claims and all other things required for the proper and orderly operation of PROGRAM BETA. 4. Bylaws. The Authority shall be governed pursuant to this Agreement and to the Bylaws attached hereto as Exhibit "A," and by this reference incorporated herein. Each party to this Agreement agrees to comply with and be bound by the provisions of the said 5 Bylaws and further agrees that PROGRAM BETA and the Authority shall be operated pursuant to this Agreement and the said Bylaws. 5. SETA Council. Governing Board has heretofore established a body known as "BETA Council." Upon approval by the Participants of this amended agreement, the Council shall continue in office and shall be responsible for overseeing the operation of PROGRAM BETA and organization and operation of the Authority, as provided herein. BETA Council shall establish such policies and guidelines as may be necessary to carry out PROGRAM BETA. The organization and structure of BETA Council shall be established in the Bylaws, as they may be amended as provided therein. V POWERS OF AUTHORITY 1. The Authority shall have the following common powers and is hereby authorized to do all acts necessary far the exercise of said common powers: A. Ta make and enter into contracts, including contracts of insurance and self-insurance for its Participants providing far risk--pooling or sharing, whether or not subject to regulation under the Insurance Code, to the extent and in the manner permitted under Government Code Sections 990, 990.4, 990.8, and 6508, or any other provision of Iaw; B. To hire employees, and contract with consultants and legal counsel; C. Ta invest and reinvest money in the treasury of the Authority pursuant to Government Code Section 53601; D. To incur debts, liabilities, ar obligations; E. To acquire, hold, lease, ar dispose of property; F. To sue and be sued in its own name; and G. To exercise all powers necessary and proper to carry out the terms and provisions of this agreement, or otherwise authorized by law. 2. Said powers shall be exercised pursuant to the terms hereof, subject to the restrictions upon the manner of exercising the powers set Earth in the Local Hospital District Law, (Division 23 of the Health & Safety Code.) 6 VI BETA COUNCIL 1. The Authority shall be governed by the BETA Council which is hereby established and which shall be composed of not less than 13, nor more than 21 representatives of the Participants, who shall be elected by the Participants, in accordance with the bylaws of the Authority. 2. Each member of the BETA Council shall serve far one year and until a successor is elected or appointed. 3. Each Council member shall have one vate. VII POWERS OF THE BETA COUNCIL The BETA Council shall have the following powers and functions: A. The BETA Council may review all acts of the Executive Committee and shall have the power to modify and/ar override any decision or action of the Executive Committee upon a majority vote of the entire BETA Council. B. The Council shall review, modify, if necessary, and approve the annual operating budget of the Authority prepared by the Executive Committee. C. The BETA Council shall receive and review periodic accountings of all funds under this Agreement. D. The BETA Council shall have the power to conduct, on behalf of the Authority, all business of the Authority, including that assigned to the Executive Committee, which the Authority may conduct under the provisions hereof and pursuant to law. E. The BETA Council shall have such other powers and functions as are provided for in this Agreement or in the bylaws. VIII MEETINGS OF BETA COUNCIL ,..:~,: 1. MeetinQS. BETA Council shall provide for its regular, adjourned regular, and special meetings upon call of the Chair, Vice Chair, or Program Director of the Authority; provided, 7 however, that it shall hold at least four (4) regular meetings annually, as set forth in the bylaws. 2. Minutes. The Secretary of the Authority shall cause minutes of regular, adjourned regular, and special meetings to be kept and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each member of the Council. 3. uorum. A majority of the members of the Council shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. A vote of the majority of a quorum present at a meeting shall be sufficient to constitute action by the Council, except as otherwise specifically set forth in this Agreement or in the bylaws. IX EXECUTIVE COMMITTEE 1. There shall be an Executive Committee of the BETA Council which shall consist of the Chair, Vice Chair, Secretary and Treasurer-Auditor of the Authority, as provided in the bylaws. 2. Vacancies on the Executive Committee shall be filled as provided in the bylaws. X POWERS OF THE EXECUTIVE COMMITTEE BETA Council may delegate to the Executive Committee such powers as BETA Council deems appropriate. XI MEETINGS OF THE EXECUTIVE COMMITTEE The meetings of the Executive Committee shall be held and conducted as provided in the bylaws. The Committee shall make periodic reports to BETA Council, advising the Council of its decisions and activities. XII OFFICERS OF THE AUTHORITY 1. Chair. Vice Chair. Secretary and Treasurer-Auditor. The BETA Council shall elect from the Council a Chair, Vice Chair, Secretary 8 and Treasurer-Auditor of the Authority for one year terms, each to hold offi~~e until a successor is elected. In the event an officer so elected ceases to be a member of the Council, the resulting vacancy in the office shall be filled at the next regular meeting of the Council held after such vacancy occurs. The Executive Committee may appoint an interim officer pending action by the Council. In the absence or inability of the Chair to act, the Vice Chair shall act as Chair. The Chair, or in his or her absence the Vice Chair, shall preside at and conduct all meetings of the Council and shall chair the Executive Committee. 2. Other Officers. The BETA Council shall have the power to appoint such other officers as may be necessary to carry out the purposes of this Agreement. XIII CONTRIBUTIONS AND OPERATIONS 1. Contributions. The parties agree that each Participant shall make payment of contributions to PROGRAM BETA and the Authority. The amount of such contribution for each Participant shall be determined as provided in the Coverage Agreement entered into by such Participant, and any rating endorsements which are made a part of such Coverage Agreement. It is agreed that there must be a timely and orderly method of determining and paying such contributions. BETA Council is therefore authorized and directed to establish the rate of contribution for each Participant, and the time schedule for payment of such contribution. The timely payment of all contributions~to PROGRAM BETA and the Authority by each Participant shall be a condition precedent to the continuation of participation by each Participant in PROGRAM BETA and the Authority. 2. Annual Nature of Contributions. Participation in PROGRAM BETA, except initial participation which may be less than one (1) year, shall be for one (1} year at a time commencing July 1 and ending June 30, subject to termination at any time upon either Program BETA or Participant giving thirty (30) days' notice in writing to the other. Participation may be renewed far additional one (1) year terms by submitting to the Authority prior to the close of the then_current term, such information as BETA Council may require or may specify in the Coverage Agreement, and by remitting to theme,:Authority upon such payment schedule as the Authority shall specify, the Participant's contribution far the following year. 3. Computation and Notice of Contribution. The amount to be contributed by each Participant shall be determined by BETA Council no later than sixty (50) days prior to the end of the fiscal year. 9 The computations shall be made based on independent actuarial computations, taking into account factors such as, but not limited to, the total number of beds, outpatient visits, inpatient visits, physicians on the medical staff, surgeries, and loss experience. BETA Council shall follow such actuarial recommendations for each Participant. 4. Loss Control and Risk Management. Participants agree to follow the loss prevention and risk management recommendations of BETA Council, and to abide by all conditions, requirements, rules and regulations regarding loss control and risk management which may be promulgated by BETA Council. 5. Ri ht to Ins ect. As provided in the Coverage Agreement, each Participant agrees that BETA Council, Administrator, or any of their respective agents, servants, employees or attorneys shall be permitted at any reasonable time to inspect Participant's property and operations and to examine Participant's books, documents and records as necessary in the proper operation of PROGRAM BETA or the Authority. 6. Audit. BETA Council shall obtain an annual audit of the financial affairs of PROGRAM BETA and Authority, by a certified public accountant at the end of each fiscal year in accordance with generally accepted auditing principles. A copy of the annual audit report shall be delivered to each Pabticipant. The costs of such - -- audit shall be paid from the funds of PROGRAM BETA and Authority, as appropriate. 7. Insurance Audits. Commencing in 1988, BETA Council shall arrange for triennial insurance audits of Program BETA by an insurance consultant. Such audit shall be addressed to underwriting and claims operations, procedures and practices, including claims reserving, and such other insuring operations as may be determined by consultant and BETA Council. BETA Council is also empowered to retain an independent actuary in connection with such audits, Such audits, including any actuarial services shall be an expense of Program BETA. 8. Binding Nature. Any Member, County or Governmental Entity which makes application for participation in PROGRAM BETA, and is accepted as a Participant and signs this Agreement, shall thereupon become a party to this Agreement and shall be bound by all the terms and conditions hereof; provided, however, that any Member, County or Governmental Entity may be refused admission to the Authority or any program thereof in the sole discretion of BETA Council based upon clearly defined standards. 9. Det~osit of Funds. Participants shall pay contributions to the Authority which shall deposit them with Fiduciary to be administered by BETA Council pursuant to the provisions of PROGRAM BETA. The contributions and income therefrom shall be accumulated is to pay the professional, general liability and other claims against each Participant together with allocated costs and administrative costs, up to a specified amount to be determined from time to time by BETA Council upon the advice of Administrator. Funds received by Program BETA as contributions shall be invested in accordance with laws of the State of California pertaining to the investment of excess funds of Governmental Entities. 10. Contributions b Partici ants. Without in any way limiting the powers otherwise provided for in this Agreement, the Bylaws, or by statute, the Authority shall have the power and authority to receive, accept and utilize the services of personnel offered by any Participants or its representatives or agents; to receive, accept, and utilize property, real or personal, from any Participant or its agents or representatives; and to receive, accept, expend and disburse funds contract or otherwise, for purposes consistent with the provisions of this Agreement, which funds may be provided by any Participant, its agents, or representatives. 11. Excess Insurance and Reinsurance. The Authority shall obtain or cause to be obtained such excess insurance or reinsurance as may be necessary in the judgment of the Actuary and BETA Council. The expense of such excess insurance or reinsurance shall be paid from -_ ~ the Funds of the Authority. XIV CLAIMS ADMINISTRATION & PAYMENT OF LOSSES 1. General. The principal purpose for the establishment of PROGRAM BETA is to provide for the orderly presentment, examination, investigation, defense or settlement of certain identified claims made by third parties against the Participants. It is agreed and understood that the Authority shall use the sums contributed by the Participants to pay such losses and claims. 2. Presentment of Claims, The services and benefits to be provided under PROGRAM BETA shall be paid or furnished to or for the benefit of a Participant with respect to a particular incident or claim only if the Authority is notified as required by the Coverage Agreement. Upon presentation of a claim to the Authority under PROGRAM BETA, the fallowing accounting procedures shall be followed in connection with such claim: (a} The claim shall be evaluated as to probable loss exposure and defense cost. 11 {b) The sum so determined shall be established as a reserve. Such reserved sum shall be held for the administration and payment of such claim, and for no other purpose. (c) Reserves shall be established in order of the presentation of claims. {d) The reserves shall be adjusted from time to time based upon the then evaluation of such claim reserved against. Such adjustment shall not have the effect of diminishing any other previous reserves. Fiduciary, BETA Council and its designees shall be advised by Administrator as to the current status of claims against Participants. 3, Investigation and„Defense. Administrator will investigate, or cause to be investigated, all such claims referred to in the foregoing paragraphs and will attempt to adjust or settle such claims, in accordance with the authority delegated to Administrator by BETA Council or the Participant involved. As required, and subject to the provisions of the Coverage Agreement, the Authority, through its designated counsel will provide legal defense of claims against Participants. The Participant agrees to aid the Authority in such matters and to provide and make available all information and personnel as may be reasonably required in the opinion of Administrator to fully investigate and defend the claim. 4. Payment of Benefits. Fiduciary shall pay claims as directed in writing by BETA Council. Said writing shall contain the following: (a) The name, address and social security number of the payee; (b) The amount to be paid; (c) The manner in which payment is to be made; (d)~ Any conditions, limitations or special instructions with respect to such payment; (e) The signature(s) authorized by BETA Council. zt is understood that BETA Council and Administrator shall use their discretion in making judgments and assumptions as to the actual value of any claim and making such reserves based on such judgments. ~. Installment Pa ent of Jud ents. Upon recommendation of Administrator and General Counsel, BETA Council is authorized to 12 seek authority for installment payment of judgments, pursuant to provisions of California law. XV TERMINATION OR WITHDRAWAL OF PARTICIPANT ].. Withdrawal of Partici ant. A Participant may terminate its participation in Program BETA, programs of the Authority, or the Authority by giving at least thirty days' written notice, unless otherwise provided in the memorandum of coverage or insurance policy, contract or certificate issued by the Authority, but such Participant shall remain liable for any unpaid contribution which shall have accrued prior to termination of its participation. The rights of a Participant after termination shall be limited to those benefits which have accrued as of the date of termination as determined by the provisions of the Certification of Participation, or other evidence of coverage or insurance issued to the Participant. 2. Involuntary Termination. A Participant may be terminated by the Authority for: (i) Failure to pay any contribution or assessment when due; or (ii) Failure to abide by any amendment of this Agreement or the Coverage Contract for PROGRAM BETA or other memorandum, contract or policy issued by the Authority to provide coverage or insurance; or (iii) Failure to give prompt notification to Administrator of incidents and claims; or (iv) Upon recommendation of Administrator and a majority vote of BETA Council, for failure to implement loss control or risk management recommendations. In the case of termination for failure to pay any contribution or assessment when due, BETA Council shall establish such notice periods as it may deem necessary or appropriate. In all other cases of termination for breach of any of the aforementioned conditions Participant shall be given ten (10) days' notice of termination. Upon recommendation of Administrator, BETA Council may terminate a Participant without cause by mailing to the Participant written notice stating when, not less than thirty (30) days thereafter, such termination shall be effective. 13 3. Adjustment. Participant shall remain liable for any unpaid contribution which shall have accrued prior to withdrawal or termination of its participation in PROGRAM BETA, or any other program of the Authority. Adjustment for amounts of contribution due PROGRAM BETA upon termination shall be made within thirty (30} days of the time at which cancellation is effective. 4. Continued Liability. If at any time within three (3} years after a Participant's withdrawal or termination, Governing Board, based upon the recommendation of BETA Council or Actuary, determines that PROGRAM BETA, or any other program of the Authority in which the terminating party participated is in danger of insolvency, such withdrawing party may be assessed to maintain the solvency of such program or programs. The amount of any such terminated or withdrawn party's assessment shall be in the same proportion to the total assessment as the contributions paid by that party during its participation in the program or programs bear to all contributions paid by all participating parties from the inception of the program or programs. 5. Participant's Liability. Except as otherwise provided by individual contract, pursuant to the provisions of Section 895, of the Government Code of the State of California, each Participant shall be liable for its pro rata share of the debts and liabilities of the Authority, and its pro rata share of all debts and liabilities for claims against all Participants arising out of facts occurring while a Participant. A Participant's pro rata share of debts and liabilities shall be determined in the same manner as a withdrawing Participant's pro rata share of assets is determined. To achieve such purpose, each Participant indemnifies and holds harmless the other Participants for any loss, cost or expense that may be imposed upon such other Participant in excess of such pro rata liability, The rules therefor as set forth in Civil Code Section~2778 are hereby made a part of this Agreement. XvI ADMINISTRATOR 1. Appointment of_Administrator. BETA Council shall appoint an experienced and qualified Administrator to administer the Authority, ixi~tuding PROGRAM BETA. Such Administrator may be a person, association, partnership, corporation, or any other form of entity. 2. Duties of Administrator. Administrator shall have all such duties and authorities as may be delegated to it by BETA Council. BETA Council shall enter into a service agreement with Administrator which shall specify all of the agreed upon duties and obligations, 14 XVII FIDUCIARY 1. Designation of Fiduciary. BETA Council shall appoint a California bank qualified to do a trust business as Fiduciary. 2. Duties. In accordance with policy guidelines established by BETA Council, Fiduciary shall be responsible for investing all funds of PROGRAM BETA and such other funds of the Authority as BETA Council may direct. Fiduciary shall have custody of all such funds and shall pay all claims and settlements on behalf of PROGRAM BETA as directed by Administrator. 3. Payment. Fiduciary shall be paid such reasonable compensation as shall be agreed upon, from time to time, by Fiduciary and BETA Council. Said compensation shall be an expense of PROGRAM BETA and the Authority. 4. Resicrnation. Fiduciary may resign at any time by delivering written notice to BETA Council. Any such resignation shall be effective not less than sixty (60) days after delivery. 5. Removal. BETA Council may remove Fiduciary at any time by delivery of written notice to Fiduciary. Such removal shall be -~- - - ---- effective not less than sixty (60) days after such-delivery. 6.. At~pointment of Successor Fiduciary. Upon removal, resignation or other termination of Fiduciary, BETA Council shall appoint a successor Fiduciary within thirty (30) days following the date Fiduciary fails to qualify or ceases to act. 7. Successor Fiduciary. - Any successor Fiduciary shall be a recognized independent fiduciary such as a bank or trust company organized under the laws of the State of California and authorized by law to administer and control funds. All successor Fiduciaries shall have the same powers, authorities, obligations, and limitations as the original Fiduciary. The appointment of any successor Fiduciary shall be effective upon the date the Fiduciary which such successor Fiduciary is succeeding, ceases to act. XVIII ACCOUNTS AND RECORDS 1. Annual Budget. The BETA Council shall annually adopt an operating budget for the Authority. 2. Funds and Accounts. The Treasurer-Auditor of the Authority shall establish and maintain,' or cause Fiduciary to 15 establish and maintain, such funds and accounts as required by the BETA Council and as required by good accounting practice. Books and records of the Authority in the hands of the Treasurer-Auditor shall be open to any inspection at all reasonable times by BETA Council and as otherwise required by law. 3. Sond. A bond in the amount determined adequate by BETA Council shall be required of all officers and personnel authorized to disburse funds of the Authority, such band may be paid for by the Authority. XVIII ACTUARY 1. Appointment. BETA Council shall retain an Actuary. 2. Duties. Actuary shall have all duties and authorities as may be delegated to it by BETA Council in a written contract between Actuary and BETA Council. It is contemplated that the duties of Actuary shall include but not necessarily be limited to the following: {a) Recommend contribution rates; (b) Review rating structure; (c) Monitor claims and analyze loss reserves; (d) Monitor participation in all self-insurance and insurance programs; (e) Assist BETA Council in financial planning; (f) Evaluate reinsurance proposals. 3. Payment. The professional fee paid Actuary for its services shall be an expense of PROGRAM BETA, except as to any actuarial services provided for other insurance programs of Authority. The professional fee may be based on a flat sum, an hourly rate, or another method as the parties may specify. Unless otherwise specified in the contract, the professional fee shall be full payment by the Authority for discharge of Actuary's duties. The professional fee shall include all overhead expenses of the Actuary except extraordinary items such as duplication of copies, long-distance telephone calls, motels, hotels, travel by public conveyance or other items not incidental to normal overhead. . 4. Termination. The contract between the Authority and Actuary may be terminated by either party on thirty (30) days' written notice to the other party of such ternsination, in which event 1fi Actuary shall be paid for all services rendered by it up until the effective date of such termination, but shall not be paid for any work it may do thereafter except as otherwise specifically agreed. Upon termination, Actuary shall return all books, records, files and other items pertaining to PROGRAM BETA and any other program of the Authority, its Participants and their claims to Governing Board, its assignee (the Authority}, or its designee, promptly upon request by BETA Council. XIX LEGAL COUNSEL 1. A ointment. BETA Council shah, appoint an attorney for the Authority to serve as General Counsel, whose services may be made available to PROGRAM BETA upon request by BETA Council or Administrator. BETA Council may retain Special Counsel as needed. 2. Payment. The professional fees of General and any Special Counsel for services rendered to the Authority shall be based on a retainer, an hourly rate, or other method as the parties may specify. The professional fees shall include all normal overhead expenses of General and Special Counsel except items such as duplication of copies, long-distance telephone calls, hotels, motels, travel or other items not incidental to normal office overhead. XX AMENDMENT AND TERMINATION 1. Amendment. Participants may amend this Agreement at any time and from time to time by an instrument in writing approved by a majority vote of BETA Council and executed by a majority of the Participants, provided, however, that: a. No amendment shal3 increase the duties or liabilities of either Governing Board, BETA Council, Fiduciary, or Administrator without their written consent. b. No amendment shall reduce the benefit of a Participant far any fiscal year which Participant was a fully qualified Participant in PROGRAM BETA. Upon approval, as above, by BETA Council, and upon execution of any amendment by a majority of the Participants, the said amendment shall immediately be effective and binding upon all Participants. Any Participant which has failed to sign the amendment shall have the option of withdrawing from the PROGRAM and the Authority on the first day of the month Wert following the 17 month in which a majority of the Participants have completed approval of the amendment, or remaining in the PROGRAM and Authority and being bound by such amendment. 2. Termination by Agreement. Participants may terminate PROGRAM BETA, or any other insurance program of the Authority or the Authority without a successor program or entity effective as of the end of the then-current fiscal year by an instrument in writing approved by a majority vote of BETA Council, executed by a majority of the Participants; provided, however, if PROGRAM BETA or any other insurance program of the Authority or the Authority shall be so terminated, such termination shall not reduce or terminate the rights, benefits, and obligations of any Participant as to any claim theretofore presented. 3. Termination b~,y Withdrawals. If, at any time, by reason of withdrawals orterminations of Participants, the Actuary shall determine that PROGRAM BETA, or any other insurance program of the Authority is no longer economically feasible or actuarily sound, then such program or programs shall be terminated and dissolved by BETA Council. 4. Disyosition of Funds Ut~on~Terminaton. Upon termination of PROGRAM BETA, or any other program of the Authority, Fiduciary shah. retain in a liquidation fund such sums up to the entire amount held by the Authority for the benefit of the Participants as the BETA Council deems sufficient to pay the remaining obligations of the Authority. In the alternative, the Authority may insure or reinsure all outstanding liabilities of Participants. Any funds remaining after termination of PROGRAM BETA ar other program of the Authority, after adequate provision for all liabilities and claims thereunder, shall be distributed to Participants and former Participants in the same proportion as each Participant's {or former Participant's) total contributions paid by that Participant, reduced by the amount of losses and allocated claims expenses paid on behalf of that Participant, hear to all contributions paid by all Participants, reduced by the total losses and allocated claims expenses paid on behalf of all Participants from the inception of PROGRAM BETA or other program of the Authority to its termination. If the Authority insures or reinsures all outstanding liabilities of Participants, any funds remaining in excess of amounts necessary to pay the cost of such insurance or reinsurance shall be distributed to Participants in accordance with this Section, not later than twelve (Z2) months after payment of the final insurance or reinsurance premium. if the Authority elects to liquidate the liabilities by means of a liquidation fund, any excess funds shall be distributed not later than twenty-five {25) years following the date of termination of PROGRAM BETA or any other program of the Authority. BETA Council shall determine such distribution within six months after disposal of the last pending claim or loss covered by the program being terminated. Z8 5, TERMINAT ON OF THE AUTHORITY. The Authority itself may be terminated and dissolved in the same manner and subject to the same conditions as any program may be terminated; provided that, in addition, the Treasurer-Auditor shall disburse any funds in the treasury not held by Fiduciary as directed by BETA Council. BETA Council is vested with all powers of the Authority for the purpose of winding up and dissolving the business affairs of the Authority. XXI CLAIMS. LITIGATION, OR JUDGMENTS AGAINST THE AUTHORITY 1. Defense of Claims. As to any claim or action against the Authority which is based on or arises out of an occurrence involving an officer or employee of the Authority during the course and in the scope of such duties, who is also an officer or employee of a Participant, such claim or action against the Authority will be defended by the Authority to the extent required by law. Such claims or actions shall not be considered claims or actions against such Participant solely as a result of employment by the Authority. 2. Claims and Judgment. Against the Authority. Claims and judgments against the Authority shall be paid from, or charged to, ~-- the appropriate coverages or self-insured funds the Authority has established against such claims, judgments or losses. Such amounts shall be paid from the Authority's own coverage ar self-insured funds, 3. Arbitration. Any differences, claims or matters in dispute arising between or among Participants shall, if such differences arise out of this Agreement or the bylaws, be submitted by such Participants to arbitration by the American Arbitration Association or its successor under the pertinent provisions of the laws of the State of California relating to arbitration. The decision of the arbitrator(s) may be entered as a judgment in any court of the State of California or elsewhere. Costs of arbitration, including reasonable attorneys fees, shall be recoverable in arbitration. XXII MISCELLANEOUS 1. Binding Nature. This Agreement contains the entire agreement of the parties and shall be binding upon and inure to the benefit of the original parties hereto and any substitute or additional parties who are bound hereby in accordance with the provisions hereof, their successors and assigns. 19 2. Notices. Any notices required by law or this Agreement shall be sufficient if given in writing and deposited in the United States mail, postage prepaid, addressed to the Participant at the last address an file with the Authority. Notices to be given to the Authority shall be directed to such address as the Authority sha13 designate for such purpose, 3. Partial Invalidity. If any one ar more of the terms, provisions, promises, covenants, or conditions of this Agreement shall to any extent be judged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. 4. Successors. This Agreement shall be binding upon and shall inure to the benefit of successors of the parties. ~. Counterparts. This Agreement may be executed in one or more counterparts, and shall be deemed effective as to all signatories as though signed in one document. 7. Fiscal Year. The Authority shall operate on a fiscal year commencing July 1 and ending on the following June 30. 8. Inspection of Records. The Authority and Association agree to make all of their documents, books and records related to the operations of PROGRAM BETA accessible and available to the Secretary of Health and Human Services, to the Comptroller General or their duly authorized representative as required by Section 952 of Public Law 96-499. Said access shall be limited to four {~) years after the rendering of services costing $10,000 or more over a twelve {12) month period. This shall include all said services rendered after December 5, 1980. 20 IN WITNESS WHEREOF, Agreement to be executed authorized, and their August 29 .-_ _-, 19 $~ the parties hereto have caused this by their proper officers thereunto duly official seals to be affixed as of BUTTE CQUNTY BOARD QF SUPERVISORS Name o District or other Govern~ental E~('~ity (BETAS pa .1) July $ 1989 By: Its : Chairmar~l, '$o"a1`c~1 of "PARTICIPANT" 21 BYLAWS OF PROGRAM BETA RISK MANAGEMENT AUTHORITY PREAMBLE These Bylaws are an integral part of the Joint Powers Agreement among Participants in the Program BETA Risk Management Authority who are members of the Association of California Hospital Districts, Inc., entered into far the purpose of providing the services, funds and personnel necessary and appropriate to establish, operate and maintain programs of insurance, including PROGRAM BETA, for payment of claims against signatories to the said Agreement related to professional liability and other coverages. ARTICLE I AUTHORITY Section 1. Authorit~t. Authority, acting by and through BETA Council, shall have the authority necessary to carry out all -- functions of PROGRAM BETA and other insurance programs, including, but pat limited to, making and entering into contracts, employing agents and employees, acquiring, holding and disposing of personal property, and insuring and reinsuring debts, liabilities ar obligations necessary for the establishment and maintenance of PROGRAM BETA. Section 2. Expenses of Association. Association shall be paid in full for administration and other services rendered by Association, as agreed between Association and Authority. In addition, Association shall be paid a sponsorship fee pursuant to the Sponsorship Agreement entered into between Authority and Association. Said payments shall be made from the total Participants' contributions required herein. Section 3. Definitions. The definitions contained in the Agreement to which these Bylaws are an Exhibit shall be applicable in these Bylaws. Section 4. Participants' Meetings. There shall be an annual meeting of Participants for the purpose of electing members of BETA Council and to transact any other Authority business. The annual meeting, and any additional meetings, shall be held at the call of the Chair. Twenty percent of the Participants may also call a meeting of Participants. 1 ~~~~~ ~ ~ Section 5. uorum. A majority of the Participants shall constitute a quorum for transaction of business at the meeting. The Liability Cooperative of Nevada {LICON) shall be deemed to be a single Participant for purposes of a quorum. ARTICLE II BETA COi7NCIL Section 1. BETA Council Membership. The BETA Council shall consist of thirteen (13) persons, elected by Program BETA Participants. Of such elective members, seven (7) shall be elective directors of hospital districts, four {4} shall be administrators of district hospitals, and one (1} shall represent any other types of governmental entities which are Participants, and shall either be {i} a risk manager, (ii) an administrative head, or (iii) an administrator of a health facility owned and operated by a non-district hospital governmental entity, and one {1} shall be elected from the Liability Cooperative of Nevada {LICON}. The election of BETA Council members by Participants shall be by written ballot, which may be cast at a meeting of Participants or received by the Program Director twenty-four hours prior to the date of the election. Each Participant shall have one vote, except --~----- that LICON shall be deemed to be a single Participant. Section 2. Term of Office. Each member of BETA Council shall serve for a term of one {1) year and until a successor is elected. Section 3. Vacancies. Any BETA Council member representing a member which ceases to be a Participant, or any member of BETA Council whose term of office as a director of a Participant terminates, or any member of BETA Council who ceases to be an administrator of a district hospital or who ceases to be an employee of a non-district hospital governmental entity Participant, shall automatically cease to be a member of BETA Council, and that person's position for the unexpired term shall be filled by BETA Council at its next regular or special meeting. Section 4. Committees. There shall be six (6) standing committees made up of Council members, as follows: A. Executive Committee. -` B. Underwriting. C. Claims Committee, D. Investment Committee. 2 %1 E . No~iiinating Committee . The Council may constitute such other ad hoc committees from its membership as may prove necessary. Such committees shall automatically be dissolved upon completion of their assignments. Section 5. Executive Committee. The Executive Committee shall consist of the Chair, Vice Chair, Secretary and Treasurer-- Auditor, The Executive Committee shall have and may exercise the powers and authority of the BETA Council in the management of the business and affairs of the Authority and PROGRAM BETA in those situations in which full participation of BETA Council is not required or is not feasible. Such situations may include, but. are not necessarily limited to review of claims for settlement, review of actuarial data for the determination of costs, and review of investments. Any decisions made by the Executive Committee shall be subject to ratification by the full BETA Council at its next meeting. Section 6. Underwritin Committee. The Underwriting Committee shall consist of six (6) members of the Council appointed by the Chair. The Program Administrator shall designate one (1) person, who shall be an ex-officio, non-voting member. The Underwriting Committee shall be responsible far -~~ ~ development, monitoring and amendment of underwriting guidelines. Section 7. Claims Committee. The Claims Committee shall consist of six (6) members of the Council appointed by the Chair. The Program Administrator shall designate one person who shall be an ex-officio non-voting member of the Committee. The Claims Committee shall be charged with the responsibility for the supervision of the claims operations and shall review and evaluate losses incurred by Participants. Section 8. Investment Committee. The Investment Committee shall consist of five (5} members of the Council appointed by the Chair. The Investment Committee shall recommend to the Council an investment advisor or advisors who are conversant with the requirements of investments of joint powers groups as provided by statute. The committee shall be responsible for recommending investment policies to BETA Council. Section 9. Nominating Committee. The Nominating Committee shall consist of five (5} members of the Council appointed by the Chair. 3 The Nominating Committee shall be responsible for nominating persons, who qualify under these Bylaws, to fill vacancies occurring on the Council. At least annually, the Nominating Committee shall present to BETA Council a slate of nominees to fill the offices of the Council for the following year. Section 10. Risk Management Committee. The Risk Management Committee shall consist of five (5) members of the Council appointed by the Chair. -The Risk Management Committee shall be responsible for assessing the risk management and quality assurance needs of Program BETA Participants and developing and implementing programs and services to reduce and control risk, enhance quality assurance efforts and monitor results. Section 11. Program Administrator. A representative of the Program Administrator shall attend all committee meetings, unless otherwise directed by BETA Council, and shall attend as an advisor only. Section 12. Meetings. There shall be a minimum of four (4) meetings of BETA Council each year. Such meetings shall be held .. at the call of the Chair, at such times as may be recommended by the Executive Committee, the Program Director, or the Administrator, BETA Council may establish by resolution a time and place to hold regular meetings. -- Meetings shall be conducted pursuant to the most current edition of Roberts Rules of Order or such other procedural rules as the BETA Council may establish from time to time. M i n u t e s ' shall be kept of all Council and Committee meetings. Section 13. Notice of Meetin s. At least seven (7) days' notice of each Council and each Committee meeting shall be ,given to each member, either personally, or by mail, postage prepaid, addressed to such member at his address appearing from the records of Authority. Such notice shall contain the date, time, and place of the meeting and to the extent possible, shall contain a specific description of the business to be transacted thereat. Section 14. Participation in Meetings. Any representative of a Participant shall be entitled to make recommendations in writing to BETA Council or any committee thereof with respect to any matter at any meeting thereof. Any person designated as a representative of a Participant shall have the right to attend any meeting of BETA Council or any committee thereof as an observer, but shall nat participate in the 3iscussion unless invited, and shall have no power to vote. Proxy voting shall nat be permitted. Any member may designate a substitute for not more than two ( 2 ) meetings in any one fiscal year, provided, however, such substitute shall be of the same category, i,e. directors shall substitute for directors, administrative personnel shall substitute for administrators. 4 Section 15. uorum. A majority of the members of BETA Council shall constitute a quorum far the transaction of business at any meeting. A majority of the members of any committee shall constitute a quorum for transaction of the business of that committee. Unless otherwise provided herein, the act of a majority of the members present at a meeting of the BETA Council, or any committee thereof, at which a quorum is present, shall be the act of the Council or of that committee. Section 15. Fees and Comyensation. Members of BETA Council and all Council committees, other than those members designated or employed by Program Administrator, shall receive a per diem fee, and shall be reimbursed far all necessary out-of-pocket costs. The amount of such fees and the rate of reimbursement shall be determined from time to time by BETA Council. Section 17. Removal. Any member of BETA Council may be removed from office at any time by a two-thirds (2/3) vote of BETA Council if such member ceases to have the qualifications required by these bylaws, or for cause, such as inefficiency, failure to attend more than three (3) consecutive meetings of BETA Council or three (3) consecutive meetings of any committee of BETA Council of which such person is a member, or any combination thereof. Notification of removal shall be by written instrument. - -- ARTICLE III OFFICERS OF THE AUTHORITY Section Z. Officers. The officers of the Authority shall be: {a) Chair (b) Vice Chair {c) Secretary {d) Treasurer-Auditor Section 2. Method of_Selection. {a) The BETA Council shall elect from the Council a Chair, Vice Chair, Secretary, and Treasurer-Auditor of the Authority for one year terms at the first meeting in each fiscal year. The officers shall hold office until their successors are elected. In the case of a vacancy in the office of the Chair, the Vice Chair shall succeed to the mice and a new Vice Chair elected. (b) The SETA Council may appoint such other officers as may be necessary to carry out the purposes of the Authority. 5 (c) Any Officer may be recalled at any time by a two-thirds vote of the BETA Council. Section 3. Chair. (a) The Chair shall be elected by the BETA Council from its membership. (b) The duties of the Chair are to: Council; (1) preside at and conduct meetings of the BETA (2) appoint committee chairs: (3) preside at and conduct meetings of the Executive Committee; and (4) execute documents on behalf of the Authority. Section 4. Vice Chair. (a) The Vice Chair shall be elected by the BETA Council from its membership. - -(b) The Vice Chair shall exercise the duties of the Chair in the absence, or upon a vacancy in the office, of the Chair. Section 5. Secretarv. (a) The Secretary shall be elected by the BETA Cauncil from its membership. (b) The duties of the Secretary are to: (?.) attend the meetings of the BETA Council and keep minutes thereof; (2} keep ail official records of the Authority not _ required to be kept by the Treasurer-Auditor; (3) file such notices and statements as are required by Sections 6543.5 and 53051 of the Government Code; and (4) give notice of meetings as may required by law. Section 6. Treasurer-Auditor. (a}The Treasurer-Auditor shall be elected by the BETA Council from its membership. ' 6 (b) The Treasurer-Auditor of the Authority shall have the custody of and disburse the Authority's funds, other than those funds required by law to be in the custody or disbursed by the Fiduciary. The Treasurer-Auditor shall have the authority to delegate the signatory function of the Treasurer-Auditor to such persons as are authorized by the BETA Council. As to funds not required to be in the custody of the Fiduciary, the duties of the Treasurer-Auditor are to: (1) Receive and receipt for money of the ;.B~uthority and place it in the treasury of the Authority; (2) Be responsible upon the Treasurer's bond for the safekeeping and disbursement of Authority money held by the Treasurer; (3) Pay demands against the Authority from Authority money when the demands have been approved by the Chair or such other persons as authorized by the BETA Council. (c) The Treasurer-Auditor shall verify and report quarterly to the BETA Council the amount of money held for the Authority, the amount of receipts since the last report, and the amount paid out since the last report. (d) The Treasurer-Auditor, within 120~days after the close of fiscal year, shall give a complete written report of all financial activities of the Authority far such fiscal year to the BETA Council and to each participant. (e) The Treasurer-Auditor shall independent audit to be made by a Certified approved by the BETA Council. A report thereof a public record with each of the Participants. be filed within six months of the end of examination. Section 7. PROGRAM DIRECTOR cause an annual Public Accountant shall be filed as Such report shall the year under There may be a Program Director appointed by the BETA Council. The Program Director shall be responsible for the day to day administration, management and operation of Authority's programs of risk management and he or she shall be subject to the direction and control of the BETA Council and Executive Committee. The Program Director shall be compensated for his/her services to the Authority in such amounts and manner as may be fixed from time to time by the BETA Council. Details respecting compensation, termination, bonding requirements, and other employment-related matters pertaining to the Program Director shall in accordance with terms and conditions as the BETA Council shall set. 7 ARTICLE IV PARTIES Section 1. Any party to the Agreement is a "party" or "Participants" as used in these Bylaws. The Authority shall also be considered an unrepresented "party." Any public entity or qualified non-profit hospital corporation may become a party to the Agreement by consenting to be bound by the Agreement and these Bylaws and by complying with all of the following requirements: (a) Membership in the Association; (b) submit application for membership and obtain BETA Council approval; (c) execute an original of the Agreement, as amended from time to time; and {d} accept the terms and conditions of the Certificate of Participation issued through the Authority, as amended from time to time. Section 2. An Entity which does not meet the above criteria may became a named insured if conditions (a}, {b), (c} and (d) ~- - above are met; and (3) the BETA Council determines that the entity's risks are of the same or similar character to those faced by Participants; and (4) legal counsel for the Authority determines that the entity is a public entity for the purposes of insurance. ARTICLE V EXPULSION OF PARTICIPANTS Section 1. A party to this Agreement may be excluded from Authority participation when its actions: (a) Cause the Participant to not substantially comply with the terms of the Agreement; or {b} Cause the member to fail in substantially complying with a written and acknowledged term or condition of participation previously established by BETA Council; {c) Cause an adverse effect on the Authority's relations with the insurance market and the party fails to remedy the adverse effect within a reasonable time after receiving written notice from BETA Council as to appropriate corrective action. 8 Section 2. BETA Council may, by a two-third (2/31 vote, terminate and exclude the offending party from any and all benefits of participation in Authority. ARTICLE VI AMENDMENT Section 1. Amendment to_Bylaws. Amendment of these bylaws may be proposed by any Participant. A copy of the proposed amendment and reasons therefor, shall be forwarded to the BETA Council. Council shall review the proposed amendment, and disseminate it to all Participants, together with the Council's recommendation. The Council may recommend approval, disapproval, or it may make no recommendation. Recommendations by SETA Council shall be by majority vote of a quorum. Amendments may also be proposed by BETA Council by majority vote of a quorum of the Council. All proposed amendments shall be approved by written vote of a majority of the Participants before the amendment shall become effective. The effective date of any such amendment shah be the July lst following adoption by Participants, unless otherwise stated in the amendment. - ARTICLE VTI EFFECTIVE DATE These Bylaws shall be effective approval. BETAbyl. July ~, 1989 immediately upon their 9