Surplus of Funds
Surplus funds (calculated as funds remaining after payment of claims, overheads and expenses) shall remain in the fund to build resilience for further years. No dividends or payments to members shall be made until such time as the Board determines that the Mutual is sufficiently capitalised to provide reasonable assurance of meeting future claims without outside assistance or reinsurance, in order to ensure sufficient future security for Mutual members.
Shortfall of Mutual Funds
In the event of claims in any one cropping year exceeding available funds in the Mutual, all claims shall be subject to a 10% Deductible.
In the event of further shortfall, claims shall be subject to a further proportional adjustment as determined by the Board to ensure continued solvency. In the event of such “proportional adjustment event”, the Board has resolved that shortfalls from such further proportional adjustment applicable to “five-year members”, shall be carried forward into the subsequent year for consideration for payment from any surplus therein (to be calculated following payment of claims applicable to that cropping year). Shortfall payment considerations may be rolled forward for up to four years, but remain at the discretion of the Board at all times.
The role of the sub-committees
Each major agricultural region/state will have a grower member sub-committee. The key role of the sub-committee’s is to assist in the management of moral hazards with the Latevo Farmers Mutual Farm Income Protection program, especially in reviewing decisions to not plant or dry plant.
Sub-committee members are regional advocates for Latevo Farmers Mutual and the Latevo Farmers Mutual Farm Income Protection program.