Trustee Election. Trustees shall be elected or appointed for a stated term of office. A trustee may not be an owner, officer, or employee of a service company with which the Board of Trustees contracts for a purpose authorized by this chapter, except that a Trustee may be an employee of the governmental group or sponsoring organization. Delegation of Authority to Administrator. Subject to final approval by the Commission, the Board of Trustees may delegate authority to perform specific functions to an Administrator including, but not limited to, the authority to: Contract with a service company and other providers; Determine the premium charged to and refunds payable to members subject to the restrictions of the Commission; Invest surplus monies subject to the restrictions set forth in this regulation; and Approve applications for membership. The Board of Trustees shall include in the written minutes of trustee meetings the specific authority delegated to an administrator pursuant to this section. The Board of Trustees shall submit a copy of the minutes under §B(2) of this regulation to the Commission for approval. An Administrator designated by the Board of Trustees: May not be an owner, officer, or employee of a service company with which the Board of Trustees has contracted for a purpose authorized by this chapter, except that the Administrator may be an employee of the governmental group or sponsoring organization; and Shall furnish a fidelity bond, with the Fund as obligee, in an amount, as determined by the Commission, sufficient to protect the Fund against misappropriation or misuse of any monies or securities. Authority of Board of Trustees. The Board of Trustees may not: Extend credit to individual members for payment of premiums other than normal premium payment plans; Utilize any of the monies collected as premiums for any purpose unrelated to the Fund's workers' compensation program; or Borrow any monies from the Fund or in the name of the Fund: Without obtaining the prior approval of the Commission; or For the purpose of engaging in an investment activity pursuant to this chapter. The Board of Trustees may: Direct the administration of the Fund; Approve applications for membership in the Fund; Invest surplus monies subject to the restrictions set forth in Labor and Employment Article, §9-404(a), Annotated Code of Maryland, and this chapter; and Contract with a service company or other provider for a purpose authorized by this chapter. The Board of Trustees shall: Retain control of monies collected or disbursed from the Fund; Establish a claims fund sufficient to cover payment of the entire aggregate loss fund as defined in any aggregate excess policy required by the Commission; Establish a trustee fund sufficient to pay the administrative costs of the Fund and from which all administrative costs and other disbursements shall be made; Establish a revolving fund, to be replenished from time to time from the claims fund, for use by the Fund's staff or an authorized service company; Arrange for the annual audit of the accounts and records of the Fund by an independent certified public accountant, copies of which shall be filed with the Commission no later than 5 months after the close of the Fund fiscal year; and Determine the premiums charged to and refunds payable to members. Use of Service Company. The Board of Trustees may contract with a service company to perform any function not specifically reserved to the Board of Trustees. Prior to entering into a contract with a service company or other provider for a purpose authorized by this chapter, the Board of Trustees or Administrator shall provide to the Commission satisfactory proof that the service company or provider: Is covered by a fidelity bond, with the Fund as obligee, in an amount sufficient to protect monies over which the service company or provider exercises control; Maintains fiduciary liability insurance, and if not, how the Fund's interests are protected; Possesses experience and expertise relevant to the activity that the service company or provider has been contracted to provide; Holds the qualifications required by the state or federal agency responsible for regulating the activity that the service company or provider has been contracted to provide; and Is licensed, registered, or exempt from licensing or registration, with the state or federal agency responsible for regulating the activity that the service company or provider has been contracted to provide. Prohibited Transactions. Except as provided in §E(3), a fiduciary with respect to the Fund may not cause the Fund to engage in a transaction, if the fiduciary knows or should know that such transaction constitutes direct or indirect: Sale, exchange, or leasing of property between the Fund and a party in interest; Lending of money or other extension of credit between the Fund and a party in interest; Furnishing of goods, services, or facilities between the Fund and a party in interest; Transfer to, or use by or for the benefit of, a party in interest, of an asset of the Fund; or Engaging in investment, or other activity not provided for in the approved annual investment plan, this chapter, or Labor and Employment Article, §9-404(a), Annotated Code of Maryland. Except as provided in §E(3) of this regulation, a fiduciary may not: Deal with Fund assets in the fiduciary's own interest or for the fiduciary's own account; Act in a transaction involving the Fund on behalf of a party whose interests are adverse to the interest of the Fund or its members; or Receive any consideration for the fiduciary's own personal account from a person dealing with the Fund in connection with a transaction involving the assets of the Fund. The prohibitions in §E(1) and (2) of this regulation do not apply to the following transactions: Contracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the Fund and its workers' compensation insurance program, if not more than reasonable compensation is paid for those services; or Transactions described in §E(1) and (2) of this regulation between the Fund and a person that is a party in interest, other than a fiduciary, who has or exercises any discretionary authority or control with respect to the investment of the Fund assets involved in the transaction, or who renders investment advice, within the meaning of Regulation .01B(7)(a) of this chapter, with respect to those assets, solely by reason of providing services to the plan or solely by reason of a relationship to such a service provider, but only if in connection with such transaction the Fund receives no less, or pays no more, than adequate consideration as defined in Regulation .01A(2) of this chapter. Upon application, the Commission may authorize other exemptions for fiduciaries or transactions.