CORPORATE COMPLIANCE WITH THE LAW
STATEMENT OF UNIVERSAL TRADING & INVESTMENT CO., INC.
APPLICABLE LAWS OF MASSACHUSETTS
A Massachusetts corporation, incorporated on February 11, 1993.
Corporate Compliance is the sum of all actions, policies, procedures, reviewed audits, corrective actions, modifications, training efforts, reporting systems, etc., that are developed and implemented by an organization to prevent and detect illegal or unethical activity, waste, and abuse.
A. UTICo’s Corporate Compliance Guidelines consist of the following components:
1. Policies and procedures that are reasonably capable of reducing the prospect of waste and abuse.
2. Training which effectively communicates corporate compliance requirements to all levels. Training on corporate compliance is included with orientation, and review of applicable policies is to be included on annual review date.
3. Monitoring to ensure that the organization’s Corporate Compliance Plan, and the policies and procedures defined herein, are being followed on a day-to-day basis.
4. Response and Prevention Initiatives which require that, after an offense has been detected, the organization must take all reasonable steps to respond appropriately to the offense and prevent further similar offenses, including any necessary modifications to this program.
B. Compliance Policies in Specific Risk Areas
1. Quality of Services
UTICo is committed to providing quality services and to protecting consumer rights, all in accordance with UTICo’s Mission and Values, Code of Ethical Conduct.
2. Claims Billing and Cost Reporting
Abusive billing practices can result in civil and administrative enforcement actions which would have a profound adverse impact on UTICo. The billing workgroup maintains oversight with detailed work instructions which include procedures for billing, reviewing, monitoring, spot-checking, and auditing to ensure compliance. All cost reporting is done in compliance with Generally Accepted Accounting Principles.
3. Affiliate Relationships
Reference is made to the affiliate agreements.
C. Recordkeeping, Documentation, and Retention of Records Policy
UTICo has policies which provide for the development and implementation of a records retention system which establishes policies and procedures regarding the creation, distribution, retention, and destruction of documents.
D. Compliance as an Element of Performance
Corporate compliance is an overall expectation in performance.
In order for the compliance program to work, it is imperative to be able to ask questions
and report problems. UTICo has an open door policy and encourages those working for or with UTICo to ask questions and seek information from management staff about troubling or confusing practices so that a framework exists to help guide them in their decisions. Quality assurance and zero tolerance of fraud, waste, and illegal activity should be the goal of the Corporate Compliance Plan. This Plan requires monitoring of its implementation and regular reporting to senior executives and the Board.
E. Factors to Consider:
(a) Using evaluative and reporting systems to determine the effectiveness of compliance efforts and to deter and detect violations.
(b) Reviewing and auditing corporate operations to provide measures of how the company is doing in its efforts to comply with the law and its own standards.
(c) Using different compliance review methods for different purposes and in different business environments.
(d) Pursuing self-monitoring and regular reporting in key aspects of business performance related to compliance.
(e) Using evaluative techniques to measure both the degree of substantive compliance, and how well the compliance processes are being implemented.
(f) Evaluating the desirable frequency and scope of such reviews.
(g) Assessing the independence and reliability of persons who perform compliance evaluations.
(h) Determining whether compliance reviews should be done by persons inside or outside an organization or organizational unit.
(I) Devising channels of communication between those who are performing compliance studies or audits and those who need the results to act on the findings.
(j) Establishing systems to assure follow-ups to negative investigation or audit findings.
(k) Using real-time monitoring of conduct as a technique to achieve compliance.
(l) Having a means to report violations of the standards of corporate conduct.
(m) Providing protection against retaliation for those who report misconduct.
(n) Including compliance issues in due diligence studies preceding mergers and acquisitions and in planning for new business activities.
G. Compliance with New Corporate Law Provisions in Massachusetts
The Secretary of State of Massachusetts introduced for compliance the Massachusetts Business Corporations Act G.L. C156D (hereinafter referred to as “the Act”) that applies to all Massachusetts business corporations now governed by G.L. C156B. The Corporations Division has adopted regulations, 950 CMR 113.00, that describe the practices and procedures of the Division relative to the Act. The regulations became effective as of September 24, 2004. With reference to the official publication thereof, the current corporate law statutes in Massachusetts, as relevant, read as follows:
A certificate of change or resignation filed by a director, officer or personal representative pursuant to 950 CMR 113.17(3) shall set forth:
(a) the name of the corporation;
(b) the street address of the corporation’s registered office;
(c) a statement that the corporation has failed, or refused to, file a statement of change in officers and directors within 30 days following a change in directors or officers;
(d) the change in the officers and directors.
113.20: Registered Office and Registered Agent
(1) Each domestic corporation and each foreign corporation authorized to transact business in the commonwealth must continuously maintain a registered office in the commonwealth and a registered agent at that office.
(2) The registered office must be a street address. A post office box address is not sufficient.
The registered office may, but need not be, the corporation’s principal office or its place of business.
(3) The registered agent may be an individual, a domestic corporation, a domestic not-for-profit corporation, a foreign corporation qualified to do business in the commonwealth, or other entity authorized by law.
(4) A domestic corporation that has not previously appointed a registered agent shall file an appointment of registered agent and registered office with the Division.
(5) The appointment of registered agent/registered office consists of a form supplied by the Division or a document formatted in the same manner as the Division form. Such appointment shall set forth:
(a) the name of the corporation;
(b) the street address of its registered office in the commonwealth;
(c) the name of the registered agent at that office; and
(d) the written consent of the registered agent to the appointment.
113.21: Statement of Change of Registered Agent or Registered Office by Corporation
(1) A domestic corporation or an authorized foreign corporation may change its registered office or registered agent by filing a statement of change of registered office/registered agent.
(2) The statement of change of registered office/registered agent consists of a form supplied by the Division or a document formatted in the same manner as the Division form. Such change statement shall set forth:
(a) the name of the corporation;
(b) the street address of its current registered office;
(c) the street address of the new registered office if the current registered office is to be changed; and
(d) the name of the current registered agent;
(e) the name of the new registered agent if the current registered agent is to be changed; and
(f) a statement that after the changes are made, the street address of its registered office and the business address of its registered agent will be identical.
(3) If the statement sets forth the name of a new registered agent, the agent must consent in writing to the appointment.
113.22: Statement of Change of Registered Office by Registered Agent
(1) A registered agent may change the street address of the registered office for any corporation for which he is a registered agent by filing a statement of change of registered office.
(2) The statement of change of registered office consists of a form supplied by the Division or a document formatted in the same manner as the Division form. The statement of change shall set forth:
(a) the name of the registered agent;
(b) the name of each corporation whose street address is to be changed;
(c) the street addresses of each corporation’s current registered office;
(d) the street address of each corporation’s new registered office;
(e) a statement that after the change is made, the street address of its registered office and the business address of the registered agent will be identical; and
(f) a statement that each corporation has been notified in writing of such change.