2.01 AGREEMENT TO JOIN THE FUND:

A. Pursuant to N.J.S.A. 40A:10-36, the governing body of any local unit of government may, by resolution or ordinance as appropriate, agree to join the Fund.

1. The resolution or ordinance shall provide for execution of a written agreement specifically providing for acceptance of the Fund's Bylaws as approved and adopted pursuant to N.J.S.A. 40A:10-39.
2. The agreement shall specify the extent of the local unit’s participation in the Fund with respect to the types of insurance coverage to be provided by the Fund and shall include the duration of the Fund membership, which in no event shall be less than or exceed three years, pursuant to N.J.S.A. 40A:11-15(6).

B. The agreement shall include an executed indemnity and trust agreement.

C. The agreement shall also specify that the member has never defaulted on claims if self-insured and has not been cancelled for non-payment of insurance premiums for a period of at least two years prior to the application.

D. The Fund commissioners or executive committee, if an executive committee is established, may approve the application by two-thirds vote of the full membership based on the following criteria:

1. 1. The applicant's five (5) year claims history shows safety performance consistent with the Fund's objectives and the applicant's physical location and makeup indicates a prospective likelihood of satisfactory future claim performance.
2. A safety inspection and evaluation conducted by the Fund's safety consultant at the expense of the applicant shows the applicant meets the Fund's safety standards including, but not limited to, an evaluation of physical plant, personnel, and operating procedures.
3. The Fund has the administrative capability to absorb additional memberships without undue inconvenience or strain. Membership is limited to local units within the State of New Jersey.

E. If the application is approved by the Fund, it shall within 15 days of approval be concurrently filed with the Department and the Department of Community Affairs and shall be accompanied by such amendments to the Fund’s Budget and Plan of Risk Management as well as any other documents required pursuant to N.J.A.C. 11:15-2 et seq.

F. If a non-member is not approved for membership, the Fund shall set forth in writing the reasons for disapproval and send the reasons for disapproval to the non-member. The Fund shall retain a copy of all membership application disapprovals for five years.

2.02 CONDITIONS OF MEMBERSHIP:

As a condition of initial and continued membership, each member shall:

A. Form a safety committee and actively participate in all Fund sponsored safety programs and agree to comply with safety and risk management procedures as required by the Fund.

B. Promptly comply with the bylaws, risk management plan and other requirements of the Fund.

C. Promptly pay all assessments charged to it.

D. Execute and comply with the indemnity and trust agreements furnished as part of the initial and subsequent membership requirements.

E. Comply with the statutes and regulations governing joint insurance funds.

F. Each member may appoint a risk management consultant to assist the member on matters relating to the Fund’s operation and coverage. Any compensation arrangement will be negotiated by the member and such compensation may be added to the members assessment. If a member uses the services of a non employee as its risk management consultant the individual must be licensed as a New Jersey Insurance Producer.

2.03 MEMBERSHIP RENEWALS, TERMINATION OR WITHDRAWAL OF FUND MEMBERS:

A. Membership Renewals:

1. Members may renew their participation by execution of a new agreement to join the Fund, as provided for in 2.01 above, ninety (90) days prior to the expiration of the term period .
2. The Fund commissioners (or executive committee) must act upon any renewal application no later than forty-five (45) days prior to the expiration of the member's term. Otherwise, the renewal application is automatically approved.
3. In order to deny a renewal application, the Fund shall find by majority vote of the Fund membership that the applicant has failed to fulfill its responsibilities as a member or no longer meets the Fund's written safety standards or other objective criteria duly adopted.
4. If a member's renewal application is rejected, the Fund shall comply with subsections B, C and D below.
5. Non-renewal of a Fund member does not relieve the member of responsibility for claims incurred during its period of membership.

B. A member must remain in the Fund for the full term of membership unless earlier terminated by a majority vote of the Fund for non-payment of assessments or continued noncompliance after written notice to comply with these Bylaws or other obligations set forth in 2.02, or other reasons approved by the Commissioner.

C. A member shall not be terminated or non renewed until:

1. The Fund gives by registered mail to the member a written notice of its intention to terminate the member in thirty (30) days; and
2. 2. like notice shall be filed with the Department and Department of Community Affairs, together with a certified statement that the notice provided for above has been given; and
3. 3. thirty (30) days have elapsed after the filing required by 2 above.

D. A member of the Fund that does not desire to continue as a member after the expiration of its membership term shall give written notice of its intent ninety (90) days before the expiration of the term period. The Fund shall immediately notify the Department and the Department of Community Affairs that the member has given notice to cease membership in the Fund.

E. A member that has been terminated or does not continue as a member of the Fund shall remain jointly and severally liable for claims incurred by the Fund and its members during the period of its membership, including, but not limited to being subject to and liable for supplemental assessments. It is understood and agreed that a separate and independent trust fund exists for each type of coverage offered or to be offered and that the liability of a member exists only as respects those trust funds and types of coverage in which it is a participant.

F. The Fund shall immediately notify the Department and the Department of Community Affairs if the termination or withdrawal of a member causes the Fund to fail to meet any of the requirements of N.J.S.A. 40A:10-36 et seq or any other law or regulation of the State of New Jersey. Within fifteen (15) days of such notice, the Fund shall advise the Department and the Department of Community Affairs of its plan to bring the Fund into compliance.

G. A Fund member that does not abide by the withdrawal provisions shall be subject to a withdrawal penalty in the amount of five percent (5%) of its annual assessment subject to a minimum of $5,000.