TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or 990-EZ or to provide any additional information.
Attach to Form 990 or 990-EZ.
Go to www.irs.gov/Form990 for the latest information.
OMB No. 1545-0047
2020
Open to Public
Inspection
Inspection
Name of the organization
CHESAPEAKE EMPLOYERS' INSURANCE COMPANY
Employer identification number
46-1056754
46-1056754
| Return Reference | Explanation |
|---|---|
| FORM 990, PART VI, SECTION A, LINE 6 | THE ORGANIZATION MEMBERS CONSIST OF THE 9 BOARD MEMBERS. |
| FORM 990, PART VI, SECTION A, LINE 7A | SINCE THE ORGANIZATION'S FORMATION, THE GOVERNOR OF MARYLAND HAS APPOINTED THE BOARD OF DIRECTORS WITH THE ADVICE AND CONSENT OF THE STATE SENATE. UNDER LEGISLATION ADOPTED BY THE STATE OF MARYLAND IN 2015, THE ORGANIZATION'S POLICYHOLDERS WERE GRANTED THE RIGHTPHASED IN FROM 2020 THROUGH 2022 TO APPOINT SEVEN OF THE ORGANIZATION'S NINE DIRECTORS. THE POLICYHOLDERS APPOINTED TWO DIRECTORS TO THE ORGANIZATION'S BOARD EFFECTIVE JUNE 1, 2020. THIS WAS THE FIRST TIME THE POLICYHOLDERS APPOINTED ANY DIRECTORS TO THE ORGANIZATION'S BOARD. THE POLICYHOLDERS EXERCISING THEIR NEW RIGHT TO APPOINT DIRECTORS MAY BE TREATED FOR U.S. FEDERAL INCOME TAX PURPOSES AS A DEEMED EXCHANGE BY THE POLICYHOLDERS OF THEIR INTERESTS IN THE ORGANIZATION FOR NEW INTERESTS IN THE ORGANIZATION THAT PROVIDE THE SAME ECONOMIC RIGHTS ALONG WITH INCREASED VOTING RIGHTS IN A TRANSACTION THAT IS DESCRIBED IN SECTION 368(A)(1)(E) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. IN THAT CASE, THE STATEMENT REQUIRED BY TREASURY REGULATION SECTION 1.368-3(A) IS INCLUDED BELOW. ALTERNATIVELY, THE POLICYHOLDERS EXERCISING THEIR NEW RIGHT TO APPOINT DIRECTORS MAY NOT RESULT IN ANY EXCHANGE BY THE POLICYHOLDERS FOR U.S. FEDERAL INCOME TAX PURPOSES. THE CONSEQUENCES SHOULD BE THE SAME UNDER EITHER ALTERNATIVE: NO GAIN OR LOSS WILL BE RECOGNIZED BY THE ORGANIZATION OR ITS POLICYHOLDERS AS A RESULT OF THE POLICYHOLDERS EXERCISING THEIR NEW RIGHT TO APPOINT DIRECTORS. THERE IS A PENDING PRIVATE LETTER RULING REQUEST THAT WAS SUBMITTED BY THE ORGANIZATION ON OCTOBER 14, 2021 (CONTROL NUMBER PLR-121522-21) THAT RELATES TO THIS MATTER. STATEMENT PURSUANT TO 1.368-3(A) BY CHESAPEAKE EMPLOYERS' INSURANCE COMPANY (EIN: 46-1056754), A CORPORATION A PARTY TO A REORGANIZATION THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO TREASURY REGULATION SECTION 1.368-3(A): 1) THE NAMES AND EMPLOYER IDENTIFICATION NUMBERS OF ALL THE PARTIES: CHESAPEAKE EMPLOYERS' INSURANCE COMPANY (EIN: 46-1056754). 2) THE DATE OF THE REORGANIZATION: JUNE 1, 2020. 3) THE VALUE AND BASIS OF THE ASSETS, STOCK, OR SECURITIES OF THE TARGET CORPORATION TRANSFERRED IN THE TRANSACTION, DETERMINED IMMEDIATELY BEFORE THE TRANSFER: THE VALUE AND BASIS, DETERMINED IMMEDIATELY BEFORE THE EXCHANGE, OF THE ASSETS, STOCK, OR SECURITIES OF THE TARGET CORPORATION TRANSFERRED IN THE TRANSACTION DO NOT APPLY IN THIS INSTANCE BECAUSE THIS REORGANIZATION WAS A RECAPITALIZATION (WITHIN THE MEANING OF SECTION 368(A)(1)(E) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). 4) THE DATE AND CONTROL NUMBER OF ANY PRIVATE LETTER RULING(S) ISSUED BY THE INTERNAL REVENUE SERVICE IN CONNECTION WITH THIS REORGANIZATION: THERE IS A PENDING PRIVATE LETTER RULING REQUEST THAT WAS SUBMITTED BY THE TAXPAYER ON OCTOBER 14, 2021 (CONTROL NUMBER PLR-121522-21) THAT RELATES TO THIS REORGANIZATION. |
| FORM 990, PART VI, SECTION A, LINE 7B | A DIRECTOR APPOINTED BY THE GOVERNOR OF MARYLAND MAY BE REMOVED BY THE GOVERNOR FOR INCOMPETENCE OR MISCONDUCT. A DIRECTOR ELECTED BY MEMBERS MAY BE REMOVED BY THE MEMBERS AT ANY TIME, FOR ANY REASON, BY THE AFFIRMATIVE VOTE OF A MAJORITY OF ALL OF THE VOTES ENTITLED TO BE CAST GENERALLY IN THE ELECTION OF DIRECTORS. THE MARYLAND INSURANCE COMMISSIONER MAY REMOVE A DIRECTOR ELECTED BY THE MEMBERS FOR INCOMPETENCE, MISCONDUCT, OR MALFEASANCE AFTER NOTICE AND AN OPPORTUNITY FOR A HEARING AS REQUIRED PURSUANT TO THE INSURANCE CODE. |
| FORM 990, PART VI, SECTION B, LINE 11B | FORM 990 IS COMPLETED BY AN EXTERNAL ACCOUNTANT AND THE RETURN IS PROVIDED TO EACH MEMBER OF THE BOARD PRIOR TO FILING THE RETURN. |
| FORM 990, PART VI, SECTION B, LINE 12C | ALL EMPLOYEES COMPLETE A CONFLICT OF INTEREST QUESTIONNAIRE EACH YEAR. ANY INSTANCES OF POTENTIAL CONFLICT ARE REVIEWED BY HUMAN RESOURCES OR THE CHIEF LEGAL OFFICER FOR THE APPROPRIATE RESOLUTION. |
| FORM 990, PART VI, SECTION B, LINE 15 | COMPENSATION FOR THE CEO, EXECUTIVES, AND TOP MANAGEMENT POSITIONS ARE DETERMINED UPON THE COMPLETION OF AN ANNUAL EVALUATION AND IS BASED UPON INDIVIDUAL AND COMPANY PERFORMANCE AS WELL AS INDUSTRY CONSIDERATIONS AND OTHER BENCHMARK DATA. COMPENSATION FOR THE CEO IS DETERMINED BY THE BOARD OF DIRECTORS AND COMPENSATION FOR OTHER EXECUTIVES AND TOP MANAGEMENT POSITIONS ARE DETERMINED BY THE CEO. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE ORGANIZATION'S GOVERNING DOCUMENTS AND CERTAIN FINANCIAL INFORMATION IS AVAILABLE UPON REQUEST AND CERTAIN FINANCIAL INFORMATION IS AVAILABLE ON THE ORGANIZATION'S WEBSITE. |
| FORM 990, PART IX, LINE 11G | OTHER FEES FOR SERVICES 29,908,713. |
| FORM 990, PART XI, LINE 9: | CHANGE IN NON ADMITTED ASSETS -3,571,891. BAD DEBT -2,073,173. CHANGE IN PROVISION FOR REINSURANCE 806,000. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2020
Additional Data
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