Bill Text: NY S04558 | 2017-2018 | General Assembly | Amended
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
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. LBD09688-03-7S. 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 the5provisions of subsection (d) of section two thousand three hundred thir-6ty-nine, section three thousand one hundred ten, subsection (a), para-7graph one of subsection (b), paragraph three of subsection (c) and8subsection (d) of section three thousand two hundred one, sections three9thousand two hundred two, three thousand two hundred four, subsections10(a) through (d) of section three thousand two hundred twenty-one,11subsections (b) and (c) of section four thousand two hundred twenty-12four, section four thousand two hundred twenty-six and subsections (a)13and (b), (g) through (j), and (n) of section four thousand two hundred14thirty-five of this chapter and except as otherwise specifically15provided 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 act37upon any such rule or resolution within thirty days after it is communi-38cated to him or her, such rule or resolution shall be deemed to have39been 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 written7notice to the fund of his intention to withdraw not less than thirty8days 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 at13least ten days after the date of such filing, any earlier date mentioned14in 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.