ASSOCIATION OF ALBERTA MUNICIPALITIES

Notes to the Consolidated Financial Statements

Year ended December 31, 2022

14.Internally restricted net assets:

The purpose of ABmunis net asset policy is to build reserves to ensure the sustainability of ABMunis's operations. These amounts are not available for other purposes without approval of the Board of Directors.

During the year ended December 31, 2022, the Board of Directors authorized the transfer of $8,409,269 from unrestricted net assets to internally restricted assets (2021 - $4,155,005 transfer from internally restricted net assets to unrestricted net assets).

–to set aside surpluses arising from the ASO and the group benefits insurance program for potential future deficits

–to expenditures and losses

–to fund the development of new programs or the acquisition of an organization

–to

–to fund unexpected deficits arising from the annual convention and tradeshow event

15.Insurance agency commissions:

ABmunis operates a group benefit plan providing insurance coverage for extended health care, disability and life policies. ABmunis also operates an insurance plan providing insurance for liability, property, aviation and automobile policies. ABmunis engages third party administrators to manage claim activity.

Commissions represent the net of insurance premiums billed less amounts due to insurance underwriters and are as follows: