Bill Text: NY A10063 | 2015-2016 | General Assembly | Amended
Bill Title: Defines a public group self-insurer for the payment of compensation to employees of county self-insurance plans, boards of cooperative educational services and consortia by boards of cooperative educational services; makes related provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-06-01 - print number 10063a [A10063 Detail]
Download: New_York-2015-A10063-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 10063--A IN ASSEMBLY May 10, 2016 ___________ Introduced by M. of A. MAGNARELLI -- read once and referred to the Committee on Local Governments -- reference changed to the Committee on Labor -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general municipal law, the workers' compensation law and the insurance law, in relation to participation in a public group self-insurer The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph b of subdivision 2 of section 119-o of the gener- 2 al municipal law, as amended by chapter 681 of the laws of 1961, is 3 amended to read as follows: 4 b. The manner of employing, engaging, compensating, transferring or 5 discharging necessary personnel, subject, however, to the provisions of 6 the civil service law where applicable; the making of employer's 7 contributions for retirement, social security, health insurance, work- 8 men's compensation, including participation in a public group self-in- 9 surer, and other similar benefits; the approval of attendances at 10 conventions, conferences and schools for public officials and the 11 approval and payment of travel and other expenses incurred in the 12 performance of official duties; the bonding of designated officers and 13 employees; the filing of oaths of office and resignations consistent 14 with general laws applicable thereto; provisions that for specific 15 purposes designated officers or employees of the joint service or a 16 joint water, sewage or drainage project shall be deemed those of a spec- 17 ified participating corporation or district; and provisions that person- 18 nel assigned to a joint service or a joint water, sewage or drainage 19 project shall possess the same powers, duties, immunities and privileges 20 they would ordinarily possess (1) if they performed their duties only in 21 the corporation or district by which they are employed or (2) if they 22 were employed by the corporation or district in which they are required 23 to perform their duties. 24 § 2. Paragraph 1, subparagraphs (a), (b) and (h) of paragraph 2, 25 subparagraph (a) and item e of subparagraph (d) of paragraph 5 and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15236-04-6A. 10063--A 2 1 subparagraph (a) of paragraph 6 of subdivision 3-a of section 50 of the 2 workers' compensation law, paragraph 1, subparagraph (a) and item e of 3 subparagraph (d) of paragraph 5 and subparagraph (a) of paragraph 6 as 4 amended by chapter 139 of the laws of 2008 and subparagraphs (a), (b) 5 and (h) of paragraph 2 as amended by section 4 of part G of chapter 57 6 of the laws of 2011, are amended to read as follows: 7 (1) Definitions. As used in this chapter the term "employers" shall 8 include: (a) employers with related activity in a given industry [which9shall include municipal corporations as that term is defined in sections10two and six-n of the general municipal law,] employing persons who 11 perform work in connection with the given industry, (b) an incorporated 12 or unincorporated association or associations consisting exclusively of 13 such employers provided they employ persons who perform such related 14 work in the given industry, and (c) a combination of employers as 15 described in subparagraph (a) hereof and an association or associations 16 of employers as described in subparagraph (b) hereof. 17 (a) Any group consisting exclusively of such employers may adopt a 18 plan for self-insurance, as a group, for the payment of compensation 19 under this chapter to their employees, except that no new groups may 20 adopt such a plan, and no group not composed solely of public entities 21 set forth in [paragraph a of] subdivision [four] three-f of this section 22 may insure any liabilities for any employers on and after January first, 23 two thousand twelve, except as provided for in paragraph ten of this 24 subdivision. Under such plan the group shall assume the liability of all 25 the employers within the group and pay all compensation for which the 26 said employers are liable under this chapter[, except that in the case27of municipal corporations as herein defined no proof of financial abili-28ty or deposit of securities or cash need be made in compliance with this29subdivision]. The group qualifying under this subdivision shall be known 30 as a group self-insurer and the employers participating therein and 31 covered thereby shall be known as members. 32 (b) Where such plan is adopted the group self-insurer, except a group 33 composed solely of public entities set forth in subdivision three-f of 34 this section, shall furnish satisfactory proof to the chair of its 35 financial ability to pay such compensation for the members in the indus- 36 try covered by it, its revenues, their source and assurance of contin- 37 uance. The chair shall require the deposit with the chair of such secu- 38 rities as may be deemed necessary of the kind prescribed in subdivisions 39 one, two, three, four and five, and subparagraph (a) of paragraph three 40 of subdivision seven of section two hundred thirty-five of the banking 41 law or the deposit of cash or the filing of irrevocable letters of cred- 42 it issued by a qualified banking institution as defined by rules promul- 43 gated by the chair or the filing of a bond of a surety company author- 44 ized to transact business in this state, in an amount to be determined 45 to secure its liability to pay the compensation of each employer as 46 above provided. Such surety bond must be approved as to form by the 47 chair. The chair shall require each group self-insurer to provide regu- 48 lar reports no less than annually, which shall include but not be limit- 49 ed to audited financial statements, actuarial opinions and payroll 50 information containing proof that it is fully funded. Such reports shall 51 also include a contribution year analysis detailing contributions and 52 expenses associated with each specific contribution year. For purposes 53 of this paragraph, proof that a group self-insurer is fully funded shall 54 at a minimum include proof of unrestricted cash and investments permit- 55 ted by regulation of the chair of at least one hundred percent of the 56 total liabilities, including the estimate presented in the actuarialA. 10063--A 3 1 opinion submitted by the group self-insurer in accordance with this 2 chapter. The chair by regulation, may set further financial standards 3 for group self-insurers. Any group self-insurer that fails to show that 4 it is fully funded shall be deemed underfunded, and must submit a plan 5 for achieving fully funded status which may include a deficit assessment 6 on members of such group self-insurer which shall be subject to approval 7 or modification by the chair. 8 (h) Any member terminating membership in a private group self-insurer 9 after less than four years in such private group self-insurer, and any 10 member in a group self-insurer that has defaulted, shall be precluded 11 from obtaining prospective coverage from any private group self-insurer 12 for a period of at least three years from the effective date of termi- 13 nation. 14 (a) Each private group self-insurer shall, and each group self-insurer 15 may, secure the services of a group administrator to be responsible for 16 assisting the group self-insurer in complying with the provisions of 17 this section and the rules and regulations promulgated hereunder, and 18 for coordinating services including but not limited to claims process- 19 ing, loss control, legal, accounting and actuarial services. No person, 20 firm or corporation shall coordinate such services or otherwise carry 21 out the tasks of a group administrator as provided in this subdivision 22 or in the regulations issued pursuant thereto on behalf of a group self- 23 insurer unless such person shall have obtained from the chair a license 24 authorizing it to act as a group self-insurer administrator, which 25 license may be revoked for good cause. The chair shall promulgate regu- 26 lations setting forth any additional qualifications for such license, 27 governing the conduct and compensation of group self-insurer administra- 28 tors, and setting a license fee in an amount not less than five thousand 29 dollars per year for such license for each group self-insurer the admin- 30 istrator administers. Each administrator shall post a bond in the amount 31 of five hundred thousand dollars for each group self-insurer adminis- 32 tered or such other amount as may be set by the chair based on the cost 33 and availability of such bond, from which the chair may recover any 34 recoveries or penalties against the administrator under this section. 35 Nothing in this section shall relieve the trustees of a group self-in- 36 surer of any fiduciary obligation they hold to the other members of such 37 group self-insurer. 38 e. the number and amount of rate deviations provided to members during 39 the prior year and whether the recipient of any such deviation was a 40 trustee, provided that the application of rating factors in a manner 41 consistent with the filed rating plan is not a deviation which must be 42 reported under this subdivision; and 43 (a) Group self-insurers must file with the board, as soon as practica- 44 ble but no later than sixty days prior to the start of the fund year a 45 rating plan which is supported by an actuarial rate study prepared by an 46 independent, qualified actuary that is a fellow or associate of the 47 casualty actuarial society, that clearly identifies the actuary's indi- 48 cated rate assumptions therein. The rating plan must apply consistently 49 to all members, and must provide for a common renewal date for all 50 private group self-insurer members. The rates filed can be adjusted 51 based on an experience modification calculated for every member in 52 accordance with the experience rating plan promulgated by the workers' 53 compensation rating board. Experience modification formulas must be 54 applied identically to all members. Other rate deviations may be permis- 55 sible provided a plan has been approved by the board. Such deviations 56 shall not be in excess of ten percent of the actuary's indicated rateA. 10063--A 4 1 unless otherwise approved by the board for a fully funded group self-in- 2 surer, and shall in no event result in amounts less than the actuary's 3 overall indicated rate. The chair by regulation may set further rate 4 plan and actuarial reporting standards. 5 § 3. Paragraph (g) of subdivision 3-e of section 50 of the workers' 6 compensation law, as added by chapter 729 of the laws of 1993, is 7 amended and a new subdivision 3-f is added to read as follows: 8 (g) The state insurance fund, any other insurer or any group self-in- 9 surer for municipal corporations as defined in subdivision [three-a] 10 three-f of this section may, at its option, offer a deductible in an 11 amount specified in paragraph (c) of this subdivision to any policyhold- 12 er who is not otherwise eligible for a deductible under this subdivi- 13 sion. 14 3-f. (1) Any group consisting exclusively of municipal corporations 15 and public corporations as such terms are defined in section sixty-six 16 of the general construction law, county self-insurance plans established 17 under article five of this chapter, boards of cooperative educational 18 services and consortia established by boards of cooperative educational 19 services may adopt a plan for self-insurance, as a group, for the 20 payment of compensation under this chapter to their employees. Such 21 group shall be known as a "public group self-insurer". All other groups 22 established under this section are "private group self-insurers". A 23 county self-insurance plan established under article five of this chap- 24 ter is not itself a public group self-insurer, and is not itself subject 25 to the requirements of this section, but may join a public group self- 26 insurer and, if it does so, shall assume all of the obligations of its 27 participants to the public group self-insurer. No entity which is not a 28 municipal corporation as defined in section sixty-six of the general 29 construction law, a county self-insurance plan established under article 30 five of this chapter, or a consortium established by a board of cooper- 31 ative educational services, may join a public group self-insurer unless 32 it may levy taxes or is otherwise directly capable of generating revenue 33 in the event of a funding deficiency within the public group self-insur- 34 er, or its obligations are guaranteed by another member which is such a 35 municipal corporation. A public group self-insurer shall comply with all 36 of the requirements of subdivision three-a of this section; provided 37 however that no proof of financial ability to pay the compensation 38 provided for by this chapter or deposit of securities shall be required 39 and, in lieu thereof, the liability of the public group self-insurer's 40 members shall serve as the security required under paragraph two of 41 subdivision three-a of this section. The chair shall implement the 42 provisions of this subdivision by promulgating rules and regulations, 43 which shall include provisions establishing an aggregate security 44 requirement, guarantee fund, or other mechanism to provide interim fund- 45 ing whenever the chair shall determine that the compensation and bene- 46 fits provided by this chapter may be unpaid by reason of the default of 47 the public group self-insurer, but no such rules and regulations shall 48 be necessary for any provisions of this subdivision to be effective. 49 (2) A public group self-insurer as defined in paragraph one of this 50 subdivision may offer, as part of the agreement or by endorsement, 51 deductibles optional to the member for benefits payable under the agree- 52 ment, upon a determination by the chair that the plan is supported by an 53 actuarial analysis prepared by an independent, qualified actuary who is 54 a member of the casualty actuarial society that clearly identifies the 55 actuary's indicated deductible credit and rate assumptions, and subjectA. 10063--A 5 1 to underwriting by the public group self-insurer, consistent with the 2 following standards or factors: 3 (a) claimants' rights are properly protected and claimants' benefits 4 are paid without regard to any such deductible; 5 (b) appropriate premium reductions reflect the type and level of any 6 deductible approved by the chairman and selected by the member; 7 (c) premium reductions for deductibles are determined before applica- 8 tion of any experience modification, premium surcharge, or premium 9 discount; 10 (d) recognition is given to member characteristics, including size, 11 financial capabilities, nature of activities, and number of employees; 12 (e) if the member selects a deductible, the member is liable to the 13 public group self-insurer for the deductible amount in regard to bene- 14 fits paid for compensable claims; 15 (f) the public group self-insurer pays all of the deductible amount, 16 applicable to a compensable claim, to the person or provider entitled to 17 benefits and requires the member to pay to it in advance an amount actu- 18 arially determined to be sufficient to pay the portion of the compen- 19 sation claim that is within the deductible amount as those payments 20 become due; provided that such periodic payments shall be paid to the 21 public group self-insurer in intervals of no greater of six months; and 22 (g) failure to reimburse deductible amounts by the member to the 23 public group self-insurer is treated under the coverage agreement in the 24 same manner as nonpayment of contributions. 25 (3) If, in the determination of the chair, a public group self-insurer 26 becomes insolvent or otherwise defaults on its obligations, the insol- 27 vent group will require each member and each former member to pay a 28 supplemental assessment in an amount sufficient to make the public group 29 self-insurer solvent based upon a formula to be established by the chair 30 in regulations which considers the members' annual contributions and 31 loss experience; provided however, nothing herein shall preclude the 32 chair from directing that an underfunded public group self-insurer levy 33 an assessment on its members as part of a plan implemented pursuant to 34 subparagraph (b) of paragraph two of subdivision three-a of this 35 section. As used in this paragraph, insolvent means the sum of the 36 public group self-insurers' assets being less than the total cost of all 37 of the public group self-insurer's anticipated workers' compensation 38 liabilities that will accrue within the succeeding six months. If an 39 assessment is not sufficient to cure the insolvency or default, (i) each 40 member and any former member will be liable for the remaining deficit 41 based upon a supplemental assessment formula determined by the chair; 42 and (ii) whenever the chair shall determine that the compensation and 43 benefits provided by this chapter may be unpaid by reason of the default 44 of a public group self-insurer, the chair shall pay such compensation 45 and benefits from administration expenses as provided in section one 46 hundred fifty-one of this chapter upon audit and warrant of the comp- 47 troller upon vouchers approved by the chair. Such payments shall be 48 considered expenses of administration. The chair shall be reimbursed 49 therefor from any member of the public group self-insurer, first pursu- 50 ant to the supplemental assessment formula determined by the chair. 51 § 4. The opening paragraph of section 3443 of the insurance law, as 52 added by chapter 924 of the laws of 1990, is amended to read as follows: 53 An insurer issuing a workers' compensation and employers' liability 54 insurance policy, [and a group self-insurer for municipal corporations55as defined in subdivision three-a of section fifty of the workers'56compensation law,] may offer, as part of the policy or by endorsement,A. 10063--A 6 1 deductibles optional to the policyholder for benefits payable under the 2 policy, subject to approval by the superintendent and subject to under- 3 writing by the insurer, consistent with the following standards or 4 factors: 5 § 5. This act shall take effect immediately.
