Business Plan And Budget Template Page 4
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50Association (ALIA). The governance for the new indemnity program now rests with the Advisory
Board of ALIA and the Alberta Lawyers Insurance Exchange (ALIEX). This governance includes
the review and approval of the budgets for ALIA and ALIEX and setting the insurance levy for
the errors and omissions and trust safety portions of the insurance policy. The insurance levy
will be established by the Advisory Board prior to the next insurance policy year commencing
July 1, 2015.
As a consequence of this change, the Assurance Fund has transitioned to a legacy fund
required to pay claims for trust misappropriations that occurred prior to July 1, 2014. The fund
has an accumulated reserve of approximately $5 million that management considers adequate
to fund legacy claims (although this assessment could change if large misappropriation claims
come to the Law Society’s attention in the near future).
Under this new insurance structure and to simplify the budget and financial reporting process,
the costs of the Trust Safety program, investigations, custodianships and allocated General
Fund overhead previously contained in the Assurance Fund (about $6.3 million annually) have
been moved to the General Fund for the 2015 budget. Since the Assurance Fund has adequate
reserves to fund legacy misappropriation claims, an Assurance Fund levy is not required in
2015. However, the General Fund practice fee will now need to cover the costs outlined above
that were previously charged to the Assurance Fund.
Proposed 2015 Business Plan & Budget
Page 4 of 50
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