missouri employers mutual insurance agreement with the state auditor

8/6/2019 Missouri Employers Mutual Insurance agreement with the state auditor

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AGREEMENT

T his AGREEMENT ("A greem ent") is m ade and entered into as of the las t da te wr it tenon the signature pag e (the "EFFECTIVE .D ATE") by and betw een Thom as A . Schweich,M is so uri S ta te Auditor, and the M issouri State A uditor's O ffice ("SA O") and M issouriEmp lo yers M utu al In su ran ce C om pa ny, a M isso uri d om icile d in su rance com pany ("M EM ").

1. M EM w as created by statute to provide M issouri em ployers , p ar tic ula rly smallbusinesses , w ith w ork ers comp en satio n in su ran ce; an d2. The SAO and M EM have a disagreem ent over the legal status ofMEM . MEMacknow ledges that it is an "independent public corporation" but claim s not to be a "public

g overnm ental b ody " or a "qu asi-g overnm en tal body " as defined by 610 .0 10 R SM o; and3. The SAO has the authority pursuant to 29.200, R SM o. to audit appointive officers ofth e s ta te, along w ith state b oards an d commissions; and4. MEM and the SAO have a good faith dispute as the SA O's a uth ority to audit M EM

since the G overnor appoints board m em bers and as to w hether M EM is subject to Chapter 610 ofth e M is so uri R ev ise d S tatu tes (comm only referred to as the "Su nshine Law"); and5. While the parties disagree on the law, both MEM and the SAO believe that

transparency of M EM 's operations is in the best interest of the public and is needed to assurepub lic confiden ce in MEM ; and6. M EM agrees to a one-time audit by the SAO as a comprom ise until such time as eitherthe Legislature or a Court of law resolves the questions of MEM 's legal status and the SAO 'sauthority to audit M EM ; and7. MEM agrees to m ake pub lic certain documents, as ou tlined in A ttachment A , w ith ou tco nced in g that MEM is sub ject to C hapter 610 of the M issou ri R evise d s ta tu te s.8. THER EFO RE, in consideration of the m utual p rom is es, covenants, and agr eemen tsc on ta in ed here in , th e re ceip t and leg al sufficien cy of w hich are hereby ack now ledged, the SAOand M EM do hereby m utually prom ise, covenant, an d ag ree a s fo llows:A . Scope of A udit The SA O w ill audit M EM 's books and records using the sam e rulesand procedure s that the SAO uses to audit state boards, commission s an d appo in tiveofficers. The scop e of th e audit prov id ed pu rsu ant to this A greem ent inclu des, but is no tlimited to , 1) e va lu atin g MEM's in tern al co ntro ls o ver sig nificant m anagem ent andf in ancia l f unctions, 2) evaluating MEM 's comp liance w ith certain legal provisions(in clu din g th e re qu irem en ts o f S ectio ns 2 87 .9 00 th ru 2 87 .9 20, RSMo.), and 3) evaluatingth e eco nomy an d efficien cy o f certain m an ag em en t p ractic es and oper ati ons , includingcertain revenues and expenditures. This includes, but is not lim ited to , utilizing: (a) the"ann ual aud its of the b ooks of accou nts, funds and securities of the com pany" m ade by afirm o f c ertified p ub lic a cco un ta nts" (C PA 's), in clu din g acce ss to su pp orting working


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papers maintained by the CPA's; (b) the Annual Statem ent of the finan cia l condition ofMEM filed in accordance w ith procedures governing annual reports ad opted by theNational Association of Insurance Commiss ioners ; (c ) the res ults of th e re gular auditsexam ination of the company by the M issouri Department of Insurance, Finan cialIn stitutions and Professional Registration (DIFP) in the manner and under the conditionsprovided by the statutes of the insurance code for the examination of insurance ca rriers;(d ) the annual filing of co rpora te re turns w ith th e Internal Reven ue Service; (e) com panybylaws, hoard minutes, co rrespondence , and policies and proced ure s; (f) re ports filedwith the gener al assembly and state off ici al s; ( g) d etailed financial tran sa ctions reco rds ;(h) ac tuar ial rep orts ; and (i) reco rd s rela ted to the se lec tion process fo r var iouspro fes sional se rvices. The scope of o ur au dit will include, but is not necess ari ly limitedto , the 2 most rece nt fis cal yea rs.B . Term. This A greem ent shal l commence on the Effective Date an d shal l continue untilthe comple tion of the SAO's audit. Howev er , both part ies will use their good faith bestefforts to complete the au dit in s ix mon ths.C. Books and Record s. A s established by SAO procedure s, if MEM deems anydocuments to be protected under the Attorn ey-C lient Privile ge or wor k pr oduct, MEMshall provide the SAO with a privilege log outlin ing which documents it deem sprivileged and the reasons fo r th e assertio n.D . Confid ential Inform ation. The SAO sha ll comply with Section 29.070, RSMo. inregards to al l information, wh eth er o ra l or written, received from MEM. The in formationobta ined sh all be included as part of the SAO 's w orking paper s which are consider edco nfidential pursuant to the SA O's statutes an d policies an d ar e not subject to th eSunshine Law pursu ant to Chapter 610 of the Missouri Revised Statutes. MEM and theSAO shal l en ter in to a se parate confidentiality ag reement co nsi stent with co nfidentia lityagreem ents the SAO enters in to with other st at e depar tments and agencies.E. Report of State A udito r. Pursuan t to SAO procedure s, prior to public release of thefinal report, MEM will hav e th e opportunity to review the report for a reaso nable time notto exceed tw o w eeks, an d p ro vide response s to an y finding fo r inclusion in the finalre port by the SAO.F. Survival . MEM and the Com pany agree that P aragraph D shall survive theterm ination of this Agreement.G . Limited Autho rity. Nothing in this Agreem ent shall be deemed as an admission ofliab ili ty or as an admission that MEM is subject to the jurisdiction or authority of 'th eSAO.H. Waiver. No de lay O r omiss ion b y either p arty to ex ercise any right or power it hasunder thi s Agreement shall impair or be construed as a waiv er of such right or power . Awaiver by any party of any breach or Coven ant shall not be constru ed to be a waiver ofan y su cceeding breach or an y other covenant. A ll wa iv ers must be in writing and signed

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by the party waiving its rights.I. EntireAgreement. T his A greem en t co nstitu tes the entire agreement betw een thep artie s w ith re sp ec t to its s ub je ct m atte r, and there are no othe r re pre sentations,understanding s or agreem ents between the parties relat ive to such subject mat te r.J. Severab ili ty . If an y p rovision of th is Agreement is h eld by a court of COmpeten tjurisd ictio n to b e co ntra ry to law , then the rem aining provisions of this A greem ent w illremain in full fo rce and effect.K . Governing Law . This Agreement shall be governed by the laws of th e State ofM issouri without reference to co nflict of laws principles .L. Counterparts. This Agreement may be executed in two or more co unterparts each ofwhich shall be deemed an original but all of which together shall constitute one and th esame in strument.

IN WlTNESSWHEREOF, the parties have each caused this A greemen t to be si gnedar id delivered by th ei r duly authoriz ed r ep re sen ta ti ve s.

Name: Harry J. ttoT itle: ~ ~ ditorDat e: Il/iI

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By: _~~=-~Name: Jam es C. OwenTitle: Interi EO & Presid entDate: II II

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ATTACHM.ENT AMEM agrees to m ake the follow ing docum ents public pursuant to paragraph 7 of theAgreement:

All minutes for the past two years (Subject to redaction of any conf ident ia l, proprietary,personne l o r a tt or ney- cl ie nt p rivi le ged inf ormat ion) .' All audits conducted pursuant to Section 287.920.1, RSMo. and all "statem en ts" pursuant

to Section 287.920.2, RSM o (posting of these audits and statements on M EM's websiteshall be considered m aking them public pursuant to this A greement). 2010 MEM Director compensation by individual The present salaries ofMEM 's ten highest-com pensated em ployees, disassociated withth eir n ames an d p ositio ns . The 20lO rep ort o n av erag e mark et comp en satio n.

) MEM understands that while they may redact the minutes for pub lic d is clo su re, MEM willallow the SAO full access to these documents subject to the term s set forth in paragraph 8C o ft he Agre ement.

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missouri employers mutual insurance agreement with the state auditor

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