The following provides the Fortis membership with important policies and procedures as it relates to your financial obligations. It's important to note when the obligations are required to be in place to retain your membership in good standing position.
A. Premium Installments
- 1st Installment due to broker by July 1st
- 2nd Installment due to broker by October 1st
- 3rd Installment due to broker by January 1st
- 4th Installment due to broker by April 1st
*Failure to pay premiums would result in cancellation of coverage.
B. Security Collateral Requirement (either cash or letter of credit)
- 2/3rds of A Fund Yr. 1
- 2/3rds of A Fund Yr. 2
- 2/3rds of A Fund Yr. 3
- Maximum 2A for the three most recent underwriting years. Will be adjusted annually up or down after your participation in 3 complete underwriting years.
- Letter of Credit is required to be in place within 60 days of inception date for New Members.
- Letter of Credit is required to be in place within 60 days of renewal date for all Members.
C. Experience Adjustment (i.e., Claims Indemnification Billings, A Fund Assessment Billing):
|Quarterly Billing Dates||Based on Financial Statement Dates|
|July 1st||June 30th|
|October 1st||June 30th|
|January 1st||December 31st|
|April 1st||December 31st|
Adjustments Billings Due Upon Receipt, with finance charges of 1.5% of unpaid balance levied monthly if unpaid after 60 days from billing date.
All Members must be compliant with all financial requirements each year or they would be subject to non-renewal. Each member’s situation is reviewed at the November meeting to determine if a non-renewal notice is warranted. Judgment by the executive committee for recommending non-renewal of a member will be based upon the frequency and degree of non-compliance with all of the financial obligations as outlined above.
E. Financial Watch List Factors
- Failure to provide updated financial statements annually to Fortis’s independent consultant.
- Failure to comply with letter of credit requirements and verbiage.
- Consistently late in assessment payments.
- Drop below acceptable ratios as determined by Fortis’s independent financial consultant.
- Member subject to bankruptcy proceedings.
- Members on the Financial Watch List are required to provide updated financial information on a quarterly basis to the independent consultant.
The member will be notified of its inclusion on the financial watch list and the criteria used to make that determination. Failure to make corrective action in a reasonable time period will result in the member being subject to non-renewal.