Bill Text: NY A08471 | 2017-2018 | General Assembly | Introduced

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Bill Title: Removes the state insurance fund's exemption from licensing and other requirements of the insurance law; requires the superintendent of financial services to approve the rules adopted by the state insurance fund for the conduct of its business; removes the requirement for policyholders to provide thirty days notice to withdraw from the state insurance fund.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-01-03 - referred to insurance [A08471 Detail]

Download: New_York-2017-A08471-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          8471
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                      June 16, 2017
                                       ___________
        Introduced by M. of A. WEPRIN -- read once and referred to the Committee
          on Insurance
        AN ACT to amend the insurance law, in relation to removing the exemption
          of  the state insurance fund from licensing and other requirements; to
          amend the workers' compensation law,  in  relation  to  requiring  the
          superintendent  of insurance to approve the rules adopted by the state
          insurance fund for the conduct of its business; to amend the  workers'
          compensation  law, in relation to the requirement for policyholders to
          provide 30 days notice to withdraw from the state insurance fund;  and
          to  permit  the  state insurance fund to compensate licensed insurance
          brokers for services provided to clients insured by the fund
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Section  1108  of  the  insurance  law, subsection (c) as
     2  amended by section 38 of part SS of chapter 54  of  the  laws  of  2016,
     3  subsection (j) as added by section 2 of part R of chapter 56 of the laws
     4  of  2010,  subsection  (k)  as added by chapter 181 of the laws of 2012,
     5  subsection (k) as  added  by  chapter  246  of  the  laws  of  2012  and
     6  subsection  (n)  as added by chapter 454 of the laws of 2014, is amended
     7  to read as follows:
     8    § 1108. Insurers exempt from licensing  and  other  requirements.  The
     9  following  insurers, their officers, agents, representatives and employ-
    10  ees shall be exempt from licensing and other requirements imposed by the
    11  provisions of this chapter (except article seventy-four hereof)  to  the
    12  extent specified below:
    13    (a)  Any  charitable  annuity society which complies with the require-
    14  ments of section one thousand one hundred ten of this  article,  to  the
    15  extent therein stated.
    16    (b)  Any  fraternal  benefit  society, membership corporation or other
    17  organization exempted under the provisions of article forty-five of this
    18  chapter, to the extent therein stated.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09688-04-7
        A. 8471                             2
     1    (c) [The state  insurance  fund  of  this  state,  except  as  to  the
     2  provisions of subsection (d) of section two thousand three hundred thir-
     3  ty-nine,  section  three thousand one hundred ten, subsection (a), para-
     4  graph one of subsection (b),  paragraph  three  of  subsection  (c)  and
     5  subsection (d) of section three thousand two hundred one, sections three
     6  thousand  two  hundred two, three thousand two hundred four, subsections
     7  (a) through (d)  of  section  three  thousand  two  hundred  twenty-one,
     8  subsections  (b)  and  (c)  of section four thousand two hundred twenty-
     9  four, section four thousand two hundred twenty-six and  subsections  (a)
    10  and  (b),  (g) through (j), and (n) of section four thousand two hundred
    11  thirty-five  of  this  chapter  and  except  as  otherwise  specifically
    12  provided by the laws of this state.
    13    (d)] Any corporate trustee or board of trustees acting pursuant to the
    14  banking law in relation to the fund for insurance of deposits in savings
    15  banks  or  the  fund for insurance of shares of savings and loan associ-
    16  ations.
    17    [(e)] (d) Any corporation, organized under  the  laws  of  any  state,
    18  solely  to  provide  gratuitously  for support or relief of the priests,
    19  clergy or ministers of any religious denomination, or their  dependents,
    20  is  exempt  from  all  provisions  of this chapter, except that any such
    21  corporation, created by special act  of  incorporation  of  this  state,
    22  which  by  the  provisions  of such act is subject to the requirement of
    23  examination by, and making annual reports to, the superintendent,  shall
    24  be  subject  to the provisions of article three of this chapter relating
    25  to examinations and statements or reports by insurers.
    26    [(f)] (e) Any retirement system or pension fund that was  doing  busi-
    27  ness  on  January first, nineteen hundred forty under the education law,
    28  the civil service law, the mental hygiene law, any special act of incor-
    29  poration of this state, or any municipal charter adopted under the  laws
    30  of this state, exclusively for the benefit of the members of such system
    31  or  fund or for all or any classes of the employees of this state or any
    32  municipality thereof, shall be exempt from the provisions of this  chap-
    33  ter,  except  that if the law under which such system or fund was organ-
    34  ized subjects it to examination by, and the making of annual reports to,
    35  the superintendent,  such  system  or  fund  shall  be  subject  to  the
    36  provisions of article three of this chapter relating to examinations and
    37  statements or reports by insurers.
    38    [(g)]  (f)  Any membership corporation or voluntary association organ-
    39  ized and operating in  this  state  prior  to  January  first,  nineteen
    40  hundred thirty-nine and its members may act as indemnitors of a licensed
    41  property/casualty  insurance company in respect to surety bonds or poli-
    42  cies of insurance required to be  filed  by  such  members  pursuant  to
    43  section  three  hundred  seventy  of the vehicle and traffic law and are
    44  exempted from the requirement of having an  insurer's  license;  but  no
    45  such  membership corporation or association shall become a surety on any
    46  such bond or otherwise do an insurance business.
    47    [(h)] (g) Any relief department or pension plan of any common  carrier
    48  subject  to  the  the  Railroad Retirement Act of 1974 (45 U.S.C. § 31),
    49  whose privileges and membership are  confined  to  employees  or  former
    50  employees  of such carrier or its affiliated or subsidiary companies, or
    51  to any association of such common carriers which  administers  any  such
    52  department or plan.
    53    [(i)] (h) Every blood credit system established by a city, pursuant to
    54  section twenty-one-d of the general city law.
    55    [(j)]  (i)  Any  group of employers authorized by the workers' compen-
    56  sation board to provide workers' compensation benefits for the employees
        A. 8471                             3
     1  of all member employers pursuant to subdivision three-a of section fifty
     2  of the workers' compensation law.
     3    [(k)]  (j) A charitable bail organization holding a certificate issued
     4  by the superintendent pursuant to section  six  thousand  eight  hundred
     5  five of this chapter.
     6    (k) An institution of higher education, as defined in paragraph two of
     7  subsection  (a)  of section one thousand one hundred twenty-four of this
     8  article, that has a certificate of authority from the superintendent and
     9  complies with the requirements of section one thousand one hundred twen-
    10  ty-four of this article, to the extent therein stated.
    11    [(n)] (l) A resolution facility established pursuant to section  seven
    12  thousand seven hundred nineteen of this chapter.
    13    §  2.  Paragraph  2 of subsection (a) of section 4522 of the insurance
    14  law is amended to read as follows:
    15    (2) Organizations which limit their membership to the employees  of  a
    16  particular  city  or  town,  or  of a designated business corporation or
    17  firm, or of one or more business corporations or firms  having  business
    18  interests  in  common,  except as otherwise provided in subsection [(f)]
    19  (e) of section one thousand one hundred eight of this chapter. Any  such
    20  organization  which  limits  its membership to the employees of a corpo-
    21  ration having more than five thousand employees may provide  for  hospi-
    22  tal,  surgical and medical benefits for the employee, his or her spouse,
    23  and his or her child or children not over eighteen years of age.
    24    § 3. Section 83 of the workers' compensation law, as amended by  chap-
    25  ter 34 of the laws of 2010, is amended to read as follows:
    26    §  83.  Rules.  The [commissioner] commissioners shall adopt rules for
    27  the conduct of the business of the state fund, and may from time to time
    28  alter, amend or repeal any rule therefore adopted. At least six affirma-
    29  tive votes shall be required for the adoption of any rule, or the amend-
    30  ment or repeal of any rule. No rule,  and  no  resolution  proposing  to
    31  alter,  amend  or repeal any rule, shall be effective unless approved by
    32  the [commissioner of labor. If the commissioner of labor  fails  to  act
    33  upon any such rule or resolution within thirty days after it is communi-
    34  cated  to  him  or  her, such rule or resolution shall be deemed to have
    35  been approved] superintendent of financial services.
    36    The rules of the commissioners shall provide for the  conduct  of  the
    37  business of the state insurance fund, including the issuance of policies
    38  and their terms and conditions, the fixing of premium rates, the keeping
    39  of  records,  auditing  of  payrolls,  and the billing and collection of
    40  premiums therefor, the inspection of risks and the setting of the stand-
    41  ards of safety, the adjustment and payment of claims and awards, and the
    42  investigation of all matters relating thereto, the  medical  examination
    43  of  persons  claiming compensation and the furnishing and supervision of
    44  medical and surgical treatment to persons injured as set forth  in  this
    45  chapter,  the conduct of the legal business of the fund and the enforce-
    46  ment of the subrogated rights of the fund  against  third  parties,  the
    47  investment  of the surplus and reserves of the fund, the compensation of
    48  insurance producers through commissions, and the collection and analysis
    49  of statistics of payrolls, premiums, losses and expenses and the actuar-
    50  ial consideration thereof.
    51    § 4. Subdivision a of section 94 of the workers' compensation law,  as
    52  amended  by  chapter  635  of  the  laws  of 1996, is amended to read as
    53  follows:
    54    a. Any employer may, upon complying with subdivision two or  three  of
    55  section  fifty of this chapter, withdraw from the fund by turning in his
    56  insurance contract for cancellation,  [provided  he  has  given  written
        A. 8471                             4

     1  notice  to  the  fund  of his intention to withdraw not less than thirty
     2  days before the effective date of such cancellation] along with  written
     3  notice  of  the effective date of the cancellation. Upon receipt of such
     4  notice  the  fund shall[, at least ten days prior to the effective date]
     5  file in the office of the chairman a notice of such cancellation date.
     6    [In no event shall the insurance contract be deemed cancelled until at
     7  least ten days after the date of such filing, any earlier date mentioned
     8  in the notice to the contrary notwithstanding.]
     9    If an employer withdraws from the fund upon complying with subdivision
    10  two of section fifty of this chapter, the new  insurance  contract  with
    11  the stock corporation, mutual corporation or reciprocal insurer shall be
    12  deemed  not  to  take  effect  until the cancellation of such employer's
    13  contract with the state insurance fund has become effective.
    14    § 5. Subdivision 1 of section 89 of the workers' compensation law,  as
    15  amended  by  chapter  135  of  the  laws  of 1998, is amended to read as
    16  follows:
    17    1. Employments and employees in the state fund shall be  divided  into
    18  such  groups and classes as shall be equitable based upon differences of
    19  industry or hazard for the purpose of  establishing  premium  rates  for
    20  workers'  compensation insurance, and for such purpose a system of merit
    21  rating may be employed which shall take account of the  peculiar  hazard
    22  of each individual risk.  Such premiums in the state fund shall be fixed
    23  at  the  lowest  possible  rates  consistent  with  the maintenance of a
    24  solvent fund and of reasonable reserves and surplus, notwithstanding the
    25  payment of broker commission arrangements as provided for in this  arti-
    26  cle.
    27    §  6.  Subdivision 5 of section 76 of the workers' compensation law is
    28  renumbered subdivision 6 and a new subdivision 5 is  added  to  read  as
    29  follows:
    30    5.  The  purposes  of  such  state  insurance  fund are hereby further
    31  enlarged to permit it to compensate licensed insurance brokers  for  the
    32  services  they provide their clients who are insured in the fund through
    33  the payment of commissions. The commissioners  of  the  state  insurance
    34  fund  are hereby authorized and directed to establish, within the exist-
    35  ing rate structure, a factor to compensate licensed insurance  producers
    36  for  the  services provided to their clients who obtain coverage through
    37  the fund.
    38    § 7. This act shall take effect on the ninetieth day  after  it  shall
    39  have become a law.