ASSOCIATION OF ALBERTA MUNICIPALITIES

Notes to the Consolidated Financial Statements

Year ended December 31, 2022

8. Capital assets:

9. Lines and letters of credit:

ABmunis has an operating line of credit of $3,000,000 which is due on demand, bears interest at the lender's prime rate and is secured by a general security agreement covering all assets of ABmunis and assignment of rents and insurance. The line of credit was not utilized during the years ended December 31, 2022 and 2021

ABmunis has an additional operating line of credit in the amount of $4,000,000. There is no minimum retained balance required, interest is at the lender's prime rate, and the facility revolves in increments of $10,000. The line of credit was not utilized during the years ended December 31, 2022 and 2021

In 2010, ABmunis was granted status as an accredited energy retailer in the province of Alberta. ABmunis has issued $100,000 in letters of credit which are payable on demand should ABmunis default on its energy retailer requirements.

10. Provision for claims incurred but not reported:

The IBNR provision has been calculated and verified using a runoff method of claims tracking, to derive a factor of 3.00% (2021 - 3.25%) for extended health and 2.00% (2021 - 2.00%) for dental claims paid in the 12 month period prior to the IBNR calculation date of December 31, 2022. To this, a margin of 9.85% (2021 - 9.85%) was added. The margin consists of 5.00% (2021 - 5.0%) for adverse deviation and 4.85% (2021 - 4.85%) for adjudication costs. The actuarial methodology has not changed from prior year.