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B. Funding Policy Plan members are required to contribute to the System at rates ranging from 5% to 11% of annual covered compensation. The Town is required. to pay into the System, its share of the remaining systemwide actuarially determined contribution plus administration costs which are apportioned among the employers based on active covered payroll. The contribu- tions of plan members and the Town are governed by Chapter 32 of the Massachusetts General Laws. The Town's contributions to the System for the years ended June 30, 1999, 1998 and 1997 were $ 673,065, ' $ 578,964 and $ 573,956, respectively, which were equal to its annual required contributions for each of these years. 22. Self Insurance The Town self insures for health insurance through a joint purchase agree- ment with the Cape Cod Municipal Health Group (CCMHG). The CCMHG self funds all of its health benefit plans, while participating governmental units pay premiums into the group trust funds. CCMHG is a common risk management and insurance program servicing 15 towns and 26 other governmental entities. The Town pays an annual premium to CCMHG for its health insurance coverage for all active and retired employees. The Municipal Health Group Agreement for Joint Negotiation and Purchase of Health Coverage provides that CCMHG will be self-sustaining through member premiums and will rein- sure through commercial companies for claims in excess of$ 120,000 per individual, per policy year. Town management and CCMHG believe that member assessments are adequate to meet all claim requirements, including ' claims incurred but not reported as of June 30, 1999. 23. Risk Management The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. There were no significant reductions in insurance coverage from the previous year ' and have been no material settlements in excess of coverage in any of the past three fiscal years. 22