Bill Text: NY S04558 | 2017-2018 | General Assembly | Amended

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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 (Republican 1-0)

Status: (Introduced - Dead) 2018-01-03 - REFERRED TO INSURANCE [S04558 Detail]

Download: New_York-2017-S04558-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         4558--A
                               2017-2018 Regular Sessions
                    IN SENATE
                                    February 17, 2017
                                       ___________
        Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
          printed to be committed to the Committee  on  Insurance  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
        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.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09688-03-7
        S. 4558--A                          2
     1    (b)  Any  fraternal  benefit  society, membership corporation or other
     2  organization exempted under the provisions of article forty-five of this
     3  chapter, to the extent therein stated.
     4    (c)  [The  state  insurance  fund  of  this  state,  except  as to the
     5  provisions of subsection (d) of section two thousand three hundred thir-
     6  ty-nine, section three thousand one hundred ten, subsection  (a),  para-
     7  graph  one  of  subsection  (b),  paragraph  three of subsection (c) and
     8  subsection (d) of section three thousand two hundred one, sections three
     9  thousand two hundred two, three thousand two hundred  four,  subsections
    10  (a)  through  (d)  of  section  three  thousand  two hundred twenty-one,
    11  subsections (b) and (c) of section four  thousand  two  hundred  twenty-
    12  four,  section  four thousand two hundred twenty-six and subsections (a)
    13  and (b), (g) through (j), and (n) of section four thousand  two  hundred
    14  thirty-five  of  this  chapter  and  except  as  otherwise  specifically
    15  provided by the laws of this state.
    16    (d)] Any corporate trustee or board of trustees acting pursuant to the
    17  banking law in relation to the fund for insurance of deposits in savings
    18  banks or the fund for insurance of shares of savings  and  loan  associ-
    19  ations.
    20    [(e)]  (d)  Any  corporation,  organized  under the laws of any state,
    21  solely to provide gratuitously for support or  relief  of  the  priests,
    22  clergy  or ministers of any religious denomination, or their dependents,
    23  is exempt from all provisions of this  chapter,  except  that  any  such
    24  corporation,  created  by  special  act  of incorporation of this state,
    25  which by the provisions of such act is subject  to  the  requirement  of
    26  examination  by, and making annual reports to, the superintendent, shall
    27  be subject to the provisions of article three of this  chapter  relating
    28  to examinations and statements or reports by insurers.
    29    [(f)]  (e)  Any retirement system or pension fund that was doing busi-
    30  ness on January first, nineteen hundred forty under the  education  law,
    31  the civil service law, the mental hygiene law, any special act of incor-
    32  poration  of this state, or any municipal charter adopted under the laws
    33  of this state, exclusively for the benefit of the members of such system
    34  or fund or for all or any classes of the employees of this state or  any
    35  municipality  thereof, shall be exempt from the provisions of this chap-
    36  ter, except that if the law under which such system or fund  was  organ-
    37  ized subjects it to examination by, and the making of annual reports to,
    38  the  superintendent,  such  system  or  fund  shall  be  subject  to the
    39  provisions of article three of this chapter relating to examinations and
    40  statements or reports by insurers.
    41    [(g)] (f) Any membership corporation or voluntary  association  organ-
    42  ized  and  operating  in  this  state  prior  to January first, nineteen
    43  hundred thirty-nine and its members may act as indemnitors of a licensed
    44  property/casualty insurance company in respect to surety bonds or  poli-
    45  cies  of  insurance  required  to  be  filed by such members pursuant to
    46  section three hundred seventy of the vehicle and  traffic  law  and  are
    47  exempted  from  the  requirement  of having an insurer's license; but no
    48  such membership corporation or association shall become a surety on  any
    49  such bond or otherwise do an insurance business.
    50    [(h)]  (g) Any relief department or pension plan of any common carrier
    51  subject to the the Railroad Retirement Act of 1974  (45  U.S.C.  §  31),
    52  whose  privileges  and  membership  are  confined to employees or former
    53  employees of such carrier or its affiliated or subsidiary companies,  or
    54  to  any  association  of such common carriers which administers any such
    55  department or plan.
        S. 4558--A                          3
     1    [(i)] (h) Every blood credit system established by a city, pursuant to
     2  section twenty-one-d of the general city law.
     3    [(j)]  (i)  Any  group of employers authorized by the workers' compen-
     4  sation board to provide workers' compensation benefits for the employees
     5  of all member employers pursuant to subdivision three-a of section fifty
     6  of the workers' compensation law.
     7    [(k)] (j) A charitable bail organization holding a certificate  issued
     8  by  the  superintendent  pursuant  to section six thousand eight hundred
     9  five of this chapter.
    10    (k) An institution of higher education, as defined in paragraph two of
    11  subsection (a) of section one thousand one hundred twenty-four  of  this
    12  article, that has a certificate of authority from the superintendent and
    13  complies with the requirements of section one thousand one hundred twen-
    14  ty-four of this article, to the extent therein stated.
    15    [(n)]  (l) A resolution facility established pursuant to section seven
    16  thousand seven hundred nineteen of this chapter.
    17    § 2. Paragraph 2 of subsection (a) of section 4522  of  the  insurance
    18  law is amended to read as follows:
    19    (2)  Organizations  which limit their membership to the employees of a
    20  particular city or town, or of  a  designated  business  corporation  or
    21  firm,  or  of one or more business corporations or firms having business
    22  interests in common, except as otherwise provided  in  subsection  [(f)]
    23  (e)  of section one thousand one hundred eight of this chapter. Any such
    24  organization which limits its membership to the employees  of  a  corpo-
    25  ration  having  more than five thousand employees may provide for hospi-
    26  tal, surgical and medical benefits for the employee, his or her  spouse,
    27  and his or her child or children not over eighteen years of age.
    28    §  3. Section 83 of the workers' compensation law, as amended by chap-
    29  ter 34 of the laws of 2010, is amended to read as follows:
    30    § 83. Rules. The [commissioner] commissioners shall  adopt  rules  for
    31  the conduct of the business of the state fund, and may from time to time
    32  alter, amend or repeal any rule therefore adopted. At least six affirma-
    33  tive votes shall be required for the adoption of any rule, or the amend-
    34  ment  or  repeal  of  any  rule. No rule, and no resolution proposing to
    35  alter, amend or repeal any rule, shall be effective unless  approved  by
    36  the  [commissioner  of  labor. If the commissioner of labor fails to act
    37  upon any such rule or resolution within thirty days after it is communi-
    38  cated to him or her, such rule or resolution shall  be  deemed  to  have
    39  been approved] superintendent of financial services.
    40    The  rules  of  the commissioners shall provide for the conduct of the
    41  business of the state insurance fund, including the issuance of policies
    42  and their terms and conditions, the fixing of premium rates, the keeping
    43  of records, auditing of payrolls, and  the  billing  and  collection  of
    44  premiums therefor, the inspection of risks and the setting of the stand-
    45  ards of safety, the adjustment and payment of claims and awards, and the
    46  investigation  of  all matters relating thereto, the medical examination
    47  of persons claiming compensation and the furnishing and  supervision  of
    48  medical  and  surgical treatment to persons injured as set forth in this
    49  chapter, the conduct of the legal business of the fund and the  enforce-
    50  ment  of  the  subrogated  rights of the fund against third parties, the
    51  investment of the surplus and reserves of the fund, the compensation  of
    52  insurance producers through commissions, and the collection and analysis
    53  of statistics of payrolls, premiums, losses and expenses and the actuar-
    54  ial consideration thereof.
        S. 4558--A                          4
     1    §  4. Subdivision a of section 94 of the workers' compensation law, as
     2  amended by chapter 635 of the laws  of  1996,  is  amended  to  read  as
     3  follows:
     4    a.  Any  employer may, upon complying with subdivision two or three of
     5  section fifty of this chapter, withdraw from the fund by turning in  his
     6  insurance  contract  for  cancellation,  [provided  he has given written
     7  notice to the fund of his intention to withdraw  not  less  than  thirty
     8  days  before the effective date of such cancellation] along with written
     9  notice of the effective date of the cancellation. Upon receipt  of  such
    10  notice  the  fund shall[, at least ten days prior to the effective date]
    11  file in the office of the chairman a notice of such cancellation date.
    12    [In no event shall the insurance contract be deemed cancelled until at
    13  least ten days after the date of such filing, any earlier date mentioned
    14  in the notice to the contrary notwithstanding.]
    15    If an employer withdraws from the fund upon complying with subdivision
    16  two of section fifty of this chapter, the new  insurance  contract  with
    17  the stock corporation, mutual corporation or reciprocal insurer shall be
    18  deemed  not  to  take  effect  until the cancellation of such employer's
    19  contract with the state insurance fund has become effective.
    20    § 5. Subdivision 1 of section 89 of the workers' compensation law,  as
    21  amended  by  chapter  135  of  the  laws  of 1998, is amended to read as
    22  follows:
    23    1. Employments and employees in the state fund shall be  divided  into
    24  such  groups and classes as shall be equitable based upon differences of
    25  industry or hazard for the purpose of  establishing  premium  rates  for
    26  workers'  compensation insurance, and for such purpose a system of merit
    27  rating may be employed which shall take account of the  peculiar  hazard
    28  of each individual risk.  Such premiums in the state fund shall be fixed
    29  at  the  lowest  possible  rates  consistent  with  the maintenance of a
    30  solvent fund and of reasonable reserves and surplus, notwithstanding the
    31  payment of broker commission arrangements as provided for in this  arti-
    32  cle.
    33    §  6.  Subdivision 5 of section 76 of the workers' compensation law is
    34  renumbered subdivision 6 and a new subdivision 5 is  added  to  read  as
    35  follows:
    36    5.  The  purposes  of  such  state  insurance  fund are hereby further
    37  enlarged to permit it to compensate licensed insurance brokers  for  the
    38  services  they provide their clients who are insured in the fund through
    39  the payment of commissions. The commissioners  of  the  state  insurance
    40  fund  are hereby authorized and directed to establish, within the exist-
    41  ing rate structure, a factor to compensate licensed insurance  producers
    42  for  the  services provided to their clients who obtain coverage through
    43  the fund.
    44    § 7. This act shall take effect on the ninetieth day  after  it  shall
    45  have become a law.