Bill Text: NY S04690 | 2019-2020 | General Assembly | Introduced
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 3-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO LOCAL GOVERNMENT [S04690 Detail]
Download: New_York-2019-S04690-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4690 2019-2020 Regular Sessions IN SENATE March 20, 2019 ___________ Introduced by Sen. BIAGGI -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the general municipal law, the workers' compensation law, the insurance law, the volunteer firefighters' benefit law, and the volunteer ambulance workers' benefit law, in relation to partic- ipation 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, volunteer firefighter and volunteer ambulance worker 9 benefits, including participation in a public group self-insurer, and 10 other similar benefits; the approval of attendances at conventions, 11 conferences and schools for public officials and the approval and 12 payment of travel and other expenses incurred in the performance of 13 official duties; the bonding of designated officers and employees; the 14 filing of oaths of office and resignations consistent with general laws 15 applicable thereto; provisions that for specific purposes designated 16 officers or employees of the joint service or a joint water, sewage or 17 drainage project shall be deemed those of a specified participating 18 corporation or district; and provisions that personnel assigned to a 19 joint service or a joint water, sewage or drainage project shall possess 20 the same powers, duties, immunities and privileges they would ordinarily 21 possess (1) if they performed their duties only in the corporation or 22 district by which they are employed or (2) if they were employed by the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01895-01-9S. 4690 2 1 corporation or district in which they are required to perform their 2 duties. 3 § 2. Paragraph 1, subparagraphs (a), (b) and (h) of paragraph 2, 4 subparagraph (a) and item e of subparagraph (d) of paragraph 5 and 5 subparagraph (a) of paragraph 6 of subdivision 3-a of section 50 of the 6 workers' compensation law, paragraph 1, subparagraph (a) and item e of 7 subparagraph (d) of paragraph 5 and subparagraph (a) of paragraph 6 as 8 amended by chapter 139 of the laws of 2008, subparagraphs (a) and (h) of 9 paragraph 2 as amended by section 4 of part G of chapter 57 of the laws 10 of 2011, and subparagraph (b) of paragraph 2 as amended by section 1-a 11 of subpart E of part NNN of chapter 59 of the laws of 2017, are amended 12 to read as follows: 13 (1) Definitions. As used in this chapter the term "employers" shall 14 include: (a) employers with related activity in a given industry [which15shall include municipal corporations as that term is defined in sections16two and six-n of the general municipal law,] employing persons who 17 perform work in connection with the given industry, (b) an incorporated 18 or unincorporated association or associations consisting exclusively of 19 such employers provided they employ persons who perform such related 20 work in the given industry, and (c) a combination of employers as 21 described in subparagraph (a) hereof and an association or associations 22 of employers as described in subparagraph (b) hereof. 23 (a) Any group consisting exclusively of such employers may adopt a 24 plan for self-insurance, as a group, for the payment of compensation 25 under this chapter to their employees, except that no new groups may 26 adopt such a plan, and no group not composed solely of public entities 27 set forth in [paragraph a of] subdivision [four] three-f of this section 28 may insure any liabilities for any employers on and after January first, 29 two thousand twelve, except as provided for in paragraph ten of this 30 subdivision. Under such plan the group shall assume the liability of all 31 the employers within the group and pay all compensation for which the 32 said employers are liable under this chapter[, except that in the case33of municipal corporations as herein defined no proof of financial abili-34ty or deposit of securities or cash need be made in compliance with this35subdivision]. The group qualifying under this subdivision shall be known 36 as a group self-insurer and the employers participating therein and 37 covered thereby shall be known as members. 38 (b) Where such plan is adopted the group self-insurer, except a group 39 composed solely of public entities set forth in subdivision three-f of 40 this section, shall furnish satisfactory proof to the chair of its 41 financial ability to pay such compensation for the members in the indus- 42 try covered by it, its revenues, their source and assurance of contin- 43 uance. The chair shall require the deposit with the chair of such secu- 44 rities as may be deemed necessary of the kind prescribed in subdivisions 45 one, two, three, four and five, and subparagraph (a) of paragraph three 46 of subdivision seven of section two hundred thirty-five of the banking 47 law or the deposit of cash or the filing of irrevocable letters of cred- 48 it issued by a qualified banking institution as defined by rules promul- 49 gated by the chair or the filing of a bond of a surety company author- 50 ized to transact business in this state, in an amount to be determined 51 to secure its liability to pay the compensation of each employer as 52 above provided. Such surety bond must be approved as to form by the 53 chair. The chair shall require each group self-insurer to provide regu- 54 lar reports no less than annually, which shall include but not be limit- 55 ed to audited financial statements, actuarial opinions and payroll 56 information containing proof that it is fully funded. Such reports shallS. 4690 3 1 also include a contribution year analysis detailing contributions and 2 expenses associated with each specific contribution year. For purposes 3 of this paragraph, proof that a group self-insurer is fully funded shall 4 at a minimum include proof of unrestricted cash and investments permit- 5 ted by regulation of the chair of at least one hundred percent of the 6 total liabilities, including the estimate presented in the actuarial 7 opinion submitted by the group self-insurer in accordance with this 8 chapter. The chair by regulation, may set further financial standards 9 for group self-insurers. Any group self-insurer that fails to show that 10 it is fully funded shall be deemed underfunded, and must submit a plan 11 for achieving fully funded status which may include a deficit assessment 12 on members of such group self-insurer which shall be subject to approval 13 or modification by the chair. The amount of such under-funding, as meas- 14 ured by the actuarial opinion or assumption of loss policy quotation 15 submitted by the group, shall be considered unfunded claims as set forth 16 in subdivision two of section sixteen hundred eighty-q of the public 17 authorities law as added by section [35] thirty-five of Part GG of chap- 18 ter [57] fifty-seven of the laws of [2013] two thousand thirteen. 19 [(h) Any member terminating membership in a group self-insurer after20less than four years in such group self-insurer, and any member in a21group self-insurer that has defaulted, shall be precluded from obtaining22prospective coverage from any group self-insurer for a period of at23least three years from the effective date of termination.] 24 (a) Each private group self-insurer shall, and each group self-insurer 25 may, secure the services of a group administrator to be responsible for 26 assisting the group self-insurer in complying with the provisions of 27 this section and the rules and regulations promulgated hereunder, and 28 for coordinating services including but not limited to claims process- 29 ing, loss control, legal, accounting and actuarial services. No person, 30 firm or corporation shall coordinate such services or otherwise carry 31 out the tasks of a group administrator as provided in this subdivision 32 or in the regulations issued pursuant thereto on behalf of a group self- 33 insurer unless such person shall have obtained from the chair a license 34 authorizing it to act as a group self-insurer administrator, which 35 license may be revoked for good cause. The chair shall promulgate regu- 36 lations setting forth any additional qualifications for such license, 37 governing the conduct and compensation of group self-insurer administra- 38 tors, and setting a license fee in an amount not less than five thousand 39 dollars per year for such license for each group self-insurer the admin- 40 istrator administers. Each administrator shall post a bond in the amount 41 of five hundred thousand dollars for each group self-insurer adminis- 42 tered or such other amount as may be set by the chair based on the cost 43 and availability of such bond, from which the chair may recover any 44 recoveries or penalties against the administrator under this section. 45 Nothing in this section shall relieve the trustees of a group self-in- 46 surer of any fiduciary obligation they hold to the other members of such 47 group self-insurer. 48 e. the number and amount of rate deviations provided to members during 49 the prior year and whether the recipient of any such deviation was a 50 trustee, provided that the application of rating factors in a manner 51 consistent with the filed rating plan is not a deviation which must be 52 reported under this subdivision; and 53 (a) Group self-insurers must file with the board, as soon as practica- 54 ble but no later than sixty days prior to the start of the fund year a 55 rating plan which is supported by an actuarial rate study prepared by an 56 independent, qualified actuary that is a fellow or associate of theS. 4690 4 1 casualty actuarial society, that clearly identifies the actuary's indi- 2 cated rate assumptions therein. The rating plan must apply consistently 3 to all members, and must provide for a common renewal date for all 4 private group self-insurer members. The rates filed can be adjusted 5 based on an experience modification calculated for every member in 6 accordance with the experience rating plan promulgated by the workers' 7 compensation rating board. Experience modification formulas must be 8 applied identically to all members. Other rate deviations may be permis- 9 sible provided a plan has been approved by the board. Such deviations 10 shall not be in excess of ten percent of the actuary's indicated rate 11 unless otherwise approved by the board for a fully funded group self-in- 12 surer, and shall in no event result in amounts less than the actuary's 13 overall indicated rate. The chair by regulation may set further rate 14 plan and actuarial reporting standards. 15 § 3. Paragraph (g) of subdivision 3-e of section 50 of the workers' 16 compensation law, as added by chapter 729 of the laws of 1993, is 17 amended and a new subdivision 3-f is added to read as follows: 18 (g) The state insurance fund, any other insurer or any group self-in- 19 surer for municipal corporations as defined in subdivision [three-a] 20 three-f of this section may, at its option, offer a deductible in an 21 amount specified in paragraph (c) of this subdivision to any policyhold- 22 er who is not otherwise eligible for a deductible under this subdivi- 23 sion. 24 3-f. (1) Any group consisting exclusively of municipal corporations 25 and public corporations as such terms are defined in section sixty-six 26 of the general construction law, county self-insurance plans established 27 under article five of this chapter, boards of cooperative educational 28 services and consortia established by boards of cooperative educational 29 services may adopt a plan for self-insurance, as a group, for the 30 payment of compensation under this chapter to their employees. Such 31 group shall be known as a "public group self-insurer". All other groups 32 established under this section are "private group self-insurers". A 33 county self-insurance plan established under article five of this chap- 34 ter is not itself a public group self-insurer, and is not itself subject 35 to the requirements of this section, but may join a public group self- 36 insurer and, if it does so, shall assume all of the obligations of its 37 participants to the public group self-insurer. No entity which is not a 38 municipal corporation as defined in section sixty-six of the general 39 construction law, a county self-insurance plan established under article 40 five of this chapter, or a consortium established by a board of cooper- 41 ative educational services, may join a public group self-insurer unless 42 it may levy taxes or is otherwise directly capable of generating revenue 43 in the event of a funding deficiency within the public group self-insur- 44 er, or its obligations are guaranteed by another member which is such a 45 municipal corporation. A public group self-insurer shall comply with all 46 of the requirements of subdivision three-a of this section; including 47 any obligations imposed by such subdivision upon a group administrator, 48 but shall not be required to obtain a license authorizing it to act as a 49 group self-insurer administrator, to pay a license fee or to post a 50 bond. No proof of financial ability to pay the compensation provided for 51 by this chapter or deposit of securities shall be required of a public 52 group self-insurer and, in lieu thereof, the liability of the public 53 group self-insurer's members shall serve as the security required under 54 paragraph two of subdivision three-a of this section. The chair shall 55 implement the provisions of this subdivision by promulgating rules andS. 4690 5 1 regulations, but no such rules and regulations shall be necessary for 2 any provisions of this subdivision to be effective. 3 (2) A public group self-insurer as defined in paragraph one of this 4 subdivision may offer, as part of the agreement or by endorsement, 5 deductibles optional to the member for benefits payable under the agree- 6 ment, upon a determination by the chair that the plan is supported by an 7 actuarial analysis prepared by an independent, qualified actuary who is 8 a member of the casualty actuarial society that clearly identifies the 9 actuary's indicated deductible credit and rate assumptions, and subject 10 to underwriting by the public group self-insurer, consistent with the 11 following standards or factors: 12 (a) claimants' rights are properly protected and claimants' benefits 13 are paid without regard to any such deductible; 14 (b) appropriate premium reductions reflect the type and level of any 15 deductible approved by the chairman and selected by the member; 16 (c) premium reductions for deductibles are determined before applica- 17 tion of any experience modification, premium surcharge, or premium 18 discount; 19 (d) recognition is given to member characteristics, including size, 20 financial capabilities, nature of activities, and number of employees; 21 (e) if the member selects a deductible, the member is liable to the 22 public group self-insurer for the deductible amount in regard to bene- 23 fits paid for compensable claims; 24 (f) the public group self-insurer pays all of the deductible amount, 25 applicable to a compensable claim, to the person or provider entitled to 26 benefits and requires the member to pay to it in advance an amount actu- 27 arially determined to be sufficient to pay the portion of the compen- 28 sation claim that is within the deductible amount as those payments 29 become due; provided that such periodic payments shall be paid to the 30 public group self-insurer in intervals of no greater of six months; and 31 (g) failure to reimburse deductible amounts by the member to the 32 public group self-insurer is treated under the coverage agreement in the 33 same manner as nonpayment of contributions. 34 (3) Whenever the chair determines that a public group self-insurer has 35 become insolvent or that the compensation and benefits provided by this 36 chapter may be unpaid by reason of the default of a public group self- 37 insurer, the chair shall pay such compensation and benefits from admin- 38 istration expenses as provided in section one hundred fifty-one of this 39 chapter upon audit and warrant of the comptroller and upon vouchers 40 approved by the chair, which payments shall be considered expenses of 41 administration. As used in this paragraph, insolvent means the value of 42 the public group self-insurer's assets is less than the total costs of 43 the workers' compensation liabilities that it is anticipated the public 44 group self-insurer is required to pay within the succeeding six months. 45 Upon the insolvency of a public group self-insurer, each member shall 46 assume responsibility for the claims against it. The chair shall be 47 reimbursed for any payment made under this paragraph first by the public 48 group self-insurer itself and if the public group self-insurer is unable 49 to fully reimburse the chair for payments made by the chair then second 50 by the member of the public group self-insurer against which the claim 51 is asserted. If the chair is unable to obtain reimbursement from that 52 member, the chair make seek reimbursement from any other member of the 53 public group self-insurer. Any member which reimburses the chair for 54 payments made under this paragraph with respect to claims against any 55 other member may recover those payments from the member whose claims 56 were paid by the chair. Nothing herein shall preclude the chair fromS. 4690 6 1 directing that an underfunded public group self-insurer levy an assess- 2 ment on its members as part of a plan implemented pursuant to subpara- 3 graph (b) of paragraph two of subdivision three-a of this section. 4 § 4. The opening paragraph of section 3443 of the insurance law, as 5 added by chapter 924 of the laws of 1990, is amended to read as follows: 6 An insurer issuing a workers' compensation and employers' liability 7 insurance policy, [and a group self-insurer for municipal corporations8as defined in subdivision three-a of section fifty of the workers'9compensation law,] may offer, as part of the policy or by endorsement, 10 deductibles optional to the policyholder for benefits payable under the 11 policy, subject to approval by the superintendent and subject to under- 12 writing by the insurer, consistent with the following standards or 13 factors: 14 § 5. Subdivision 9 of section 30 of the volunteer firefighters' bene- 15 fit law, as amended by chapter 61 of the laws of 1989, is amended to 16 read as follows: 17 9. Insurance authorized to be purchased pursuant to subdivision eight 18 of this section may be secured from the state fund or any stock corpo- 19 ration, mutual corporation or reciprocal insurer authorized to transact 20 the business of workers' compensation in this state. If such insurance 21 is not secured, the political subdivision liable shall be deemed to have 22 elected to be a self-insurer unless it is a participant in a county plan 23 of self-insurance or its liability for benefits under this chapter is 24 covered by a town's participation in a county plan of self-insurance as 25 provided in subdivision three of section sixty-three of the workers' 26 compensation law, or is a participant in a group self-insurance plan 27 consisting solely of municipal corporations as provided in subdivision 28 three-f of section fifty of the workers' compensation law. Every such 29 self-insurer shall file with the chair of the workers' compensation 30 board a notice of such election prescribed in form by such chair. For 31 failure to file such notice within ten days after such election is made, 32 the treasurer or other fiscal officer of such political subdivision 33 shall be liable to pay to the chair of the workers' compensation board 34 the sum of one hundred dollars as a penalty, to be transferred to the 35 state treasury. A notice of election to be a self-insurer for compen- 36 sation and benefits to volunteer firefighters under the provisions of 37 the workers' compensation law and the general municipal law in effect 38 prior to March first, nineteen hundred fifty-seven, which was filed 39 prior to such date pursuant to the provisions of subdivision four of 40 section fifty of the workers' compensation law as in effect prior to 41 such date shall be deemed to be a notice of election filed under this 42 section unless the chair of the workers' compensation board is notified 43 to the contrary. The provisions of subdivision five of section fifty of 44 the workers' compensation law shall be applicable to such self-insurers. 45 § 6. Subdivision 8 of section 30 of the volunteer ambulance workers' 46 benefit law, as amended by chapter 61 of the laws of 1989, is amended to 47 read as follows: 48 8. Insurance authorized to be purchased pursuant to subdivision seven 49 of this section may be secured from the state fund or any stock corpo- 50 ration, mutual corporation, group self-insurers or reciprocal insurer 51 authorized to transact the business of workers' compensation in this 52 state. If such insurance is not secured, the political subdivision 53 liable shall be deemed to have elected to be a self-insurer unless it is 54 a participant in a county plan of self-insurance or its liability for 55 benefits under this chapter is covered by a town's participation in a 56 county plan of self-insurance as provided in subdivision nine of sectionS. 4690 7 1 sixty-three of the workers' compensation law, or is a participant in a 2 group-insurance plan consisting solely of municipal corporations as 3 provided in subdivisions three-f of section fifty of the workers' 4 compensation law. Every such self-insurer shall file with the chair of 5 the workers' compensation board a notice of such election prescribed in 6 form by such chair. For failure to file such notice within ten days 7 after such election is made, the treasurer or other fiscal officer of 8 such political subdivision shall be liable to pay to the chair of the 9 workers' compensation board the sum of one hundred dollars as a penalty, 10 to be transferred to the state treasury. A notice of election to be a 11 self-insurer for compensation and benefits to volunteer ambulance work- 12 ers under the provisions of the workers' compensation law and the gener- 13 al municipal law in effect prior to March first, in the year of enact- 14 ment of this chapter, which was filed prior to such date pursuant to the 15 provisions of subdivision four of section fifty of the workers' compen- 16 sation law as in effect prior to such date shall be deemed to be a 17 notice of election filed under this section unless the chair of the 18 workers' compensation board is notified to the contrary. The provisions 19 of subdivision five of section fifty of the workers' compensation law 20 shall be applicable to such self-insurers. 21 § 7. This act shall take effect January 1, 2021; provided however, 22 that subdivision 3-f of section 50 of the workers' compensation law, as 23 added by section three of this act, shall take effect immediately.
