Amd §§27 & 86, Work Comp L; amd §§1108 & 4117, Ins L
Specifies methods of calculating deposits and reserves for the aggregate trust fund and reserves of the state insurance fund; provides that all computations made or directed by the workers' compensation board shall be on the basis of the survivorship annuitants table of mortality, the remarriage tables of the Dutch Royal Insurance Institution applicable to claims for accidents occurring on or before December 31, 2025, and beginning January 1, 2026 and on January 1 of each tenth year thereafter, the United States life table for the total population published by the department of health and human services and the remarriage table published by the department of health and human services and the remarriage table published by the United States railroad retirement board applicable to claims for accidents occurring on or after January first of the year following the adoption of any revision of such tables; makes related provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4969
SPONSOR: Bronson TITLE OF BILL:
An act to amend the workers' compensation law and the insurance law, in
relation to specifying methods of calculating deposits and reserves for
the aggregate trust fund and reserves of the state insurance fund
PURPOSE OR GENERAL IDEA OF BILL::
This bill would update the discount rates for the New York State Insur-
ance Fund's reserves and deposits.
SUMMARY OF PROVISIONS::
Section one would amend Subdivision 5 of Section 27 of Workers' Compen-
sation Law changing the computation of payments into the Aggregated
Trust Fund to use modern mortality and remarriage tables utilized by the
Department of health and human services and published by the United.
States railroad retirement board.
Section 2 would amend Subdivision 7 of Section 27 of Workers' Compen-
sation Law to clarify that the computed payment amount based on the
updated computation formula shall be applicable to the calculation of
the deposit for the claim on which such deposit is based.
Section 3 would amend section 86 of Workers' Compensation Law by chang-
ing the reserve discount rate used to calculate reserve levels for the
State Insurance Fund's Workers' Compensation Fund. It would remove the
requirement that the state insurance fund reserves be discounted by 5%
and instead uses the same reserve standard applied to private workers'
compensation insurers.
Section four would amend section 1108 of the Insurance Law to add
further sections to the list of exceptions therein.
Section five would amend section 4117 of the Insurance Law to expand the
section to apply when the superintendent judges the loss and loss
expenses reserves of any property/casualty insurance company is doing
business of the New York State Insurance Fund.
Section six would establish the effective date.
JUSTIFICATION::
The State Insurance Fund (SIF) is the largest provider of workers'
compensation insurance in New York State. Its solvency is key for New
Yorkers and its businesses to always have a lifeline in case of injury
or disability. Currently SIF uses a century old mortality and remarriage
table to compute deposits into the Aggregated Trust Fund. The current
table is outdated and has led to an under payment of deposits into the
fund. Similarly, the current rate applied for its workers' compensation
fund (WCF) needs updating too. SIF argues that WCF's reserves are
currently set at a discounted rate of five percent, but that such
reserve was set in 1989 when interest rates were higher than they are
now.
This bill would address both issues by permitting SIF to use modern
mortality and remarriage tables to calculate deposits and reserves for
the Aggregate Trust Fund, and by removing that discounted rate and using
the same reserve standard private workers' compensation insurers use
under the Insurance Law.
PRIOR LEGISLATIVE HISTORY::
2021-2022: A7505 - Referred to Labor
2023: A1996 - Referred to Labor; enacting clause stricken
2024: A8936
(Bronson) - Referred to Labor
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS::
To be determined.
EFFECTIVE DATE::
This act would take effect January 1, 2026.
STATE OF NEW YORK
________________________________________________________________________
4969
2025-2026 Regular Sessions
IN ASSEMBLY
February 10, 2025
___________
Introduced by M. of A. BRONSON, TAPIA, SHIMSKY, STECK, ZINERMAN, JACOB-
SON -- read once and referred to the Committee on Labor
AN ACT to amend the workers' compensation law and the insurance law, in
relation to specifying methods of calculating deposits and reserves
for the aggregate trust fund and reserves of the state insurance fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 5 of section 27 of the workers' compensation
2 law, as amended by chapter 6 of the laws of 2007, is amended to read as
3 follows:
4 5. All computations made or directed by the board shall be upon the
5 basis of (i) the survivorship annuitants table of mortality, the remar-
6 riage tables of the Dutch Royal Insurance Institution applicable to
7 claims for accidents occurring on or before December thirty-first, two
8 thousand twenty-five, and (ii) beginning January first, two thousand
9 twenty-six, and on January first of each tenth year thereafter, the
10 United States life table for the total population published by the
11 department of health and human services and the remarriage table
12 published by the United States railroad retirement board applicable to
13 claims for accidents occurring on or after January first of the year
14 following the adoption of any revision of such tables as provided in
15 this subdivision and interest at three and one-half per centum per annum
16 on claims based on accidents occurring up to and including June thirti-
17 eth, nineteen hundred thirty-nine, at three per centum per annum on
18 claims based on accidents occurring from July first, nineteen hundred
19 thirty-nine up to and including August thirty-first, nineteen hundred
20 eighty-three, at six per centum per annum on claims based on accidents
21 occurring from September first, nineteen hundred eighty-three up to and
22 including December thirty-first, two thousand and at the industry stand-
23 ard rate on claims based on accidents occurring thereafter, except (a)
24 that computations of present values of death benefits required to be
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08517-01-5
A. 4969 2
1 paid into the aggregate trust fund by an insurance carrier which is a
2 stock corporation or a mutual association shall be based, in the case of
3 a dependent parent, grandparent, blind or physically disabled child or
4 spouse, upon said table of mortality disregarding possible change in or
5 termination of dependency, with interest at three and one-half per
6 centum per annum on claims based on accidents occurring up to and
7 including June thirtieth, nineteen hundred thirty-nine, at three per
8 centum per annum on claims based on accidents occurring from July first,
9 nineteen hundred thirty-nine up to and including August thirty-first,
10 nineteen hundred eighty-three, at six per centum per annum on claims
11 based on accidents occurring from September first, nineteen hundred
12 eighty-three up to and including December thirty-first, two thousand and
13 at the industry standard rate on claims based on accidents occurring
14 thereafter and (b) that computations of present values of permanent
15 partial disability benefits awarded for a definite number of weeks shall
16 be on the basis of annuities certain with interest at three and one-half
17 per centum per annum on claims based on accidents occurring up to and
18 including June thirtieth, nineteen hundred thirty-nine, at three per
19 centum per annum on claims based on accidents occurring from July first,
20 nineteen hundred thirty-nine up to and including August thirty-first,
21 nineteen hundred eighty-three, at six per centum per annum on claims
22 based on accidents occurring from September first, nineteen hundred
23 eighty-three up to and including December thirty-first, two thousand and
24 at the industry standard rate on claims based on accidents occurring
25 thereafter.
26 § 2. The closing paragraph of subdivision 7 of section 27 of the work-
27 ers' compensation law, as amended by chapter 6 of the laws of 2007 and
28 as further amended by section 104 of part A of chapter 62 of the laws of
29 2011, is amended to read as follows:
30 Such additional payments shall be required until the surplus of the
31 fund equals or exceeds one per centum of the total outstanding loss
32 reserves as shown by three successive annual reports of the fund to the
33 superintendent of financial services and such additional payment shall
34 be required as a payment upon each award based on an accident occurring
35 prior to July first next succeeding the third such annual report, but
36 not as a payment upon any award based on an accident occurring on or
37 after said July first; provided, however, that if and when the surplus
38 of the fund as shown by any annual report thereafter shall be less than
39 one per centum of the total outstanding loss reserves, then the addi-
40 tional payments as provided in paragraphs (a), (b), (c) and (d) of this
41 subdivision shall be resumed and shall be payable upon any award based
42 on an accident occurring on or after July first next succeeding the
43 close of the year for which such annual report is made. Thereafter, the
44 suspension or resumption of additional payments as required by this
45 subdivision shall be governed by the foregoing provisions. Such loss
46 reserves shall be computed based upon the tables specified in subdivi-
47 sion five of this section applicable to the calculation of the deposit
48 for the claim on which such deposit is based and interest at a standard
49 to be determined by the superintendent of financial services by regu-
50 lation.
51 § 3. Section 86 of the workers' compensation law, as amended by chap-
52 ter 7 of the laws of 1989 and as further amended by section 104 of part
53 A of chapter 62 of the laws of 2011, is amended to read as follows:
54 § 86. Catastrophe surplus and reserves for workers' compensation. Ten
55 per centum of the premiums collected from employers insured in the fund
56 for workers' compensation shall be set aside for the creation of a
A. 4969 3
1 surplus until such surplus shall amount to the sum of one hundred thou-
2 sand dollars, and thereafter five per centum of such premiums, until
3 such time as in the judgment of the commissioners such surplus shall be
4 sufficiently large to cover the catastrophe hazard. Thereafter the
5 contribution to such surplus may be reduced or discontinued conditional
6 upon constant maintenance of a sufficient surplus to cover the catastro-
7 phe hazard. Reserves shall be set up and maintained adequate to meet
8 anticipated losses and carry all claims and policies to maturity, which
9 reserves shall be computed [to reflect the present values, at five
10 percent interest per annum, of the determined and estimated unpaid loss-
11 es, and other requirements computed in accordance with such rules as
12 shall be approved by the superintendent of financial services] pursuant
13 to subsections (d) and (e) of section four thousand one hundred seven-
14 teen of the insurance law.
15 § 4. Subsection (c) of section 1108 of the insurance law, as amended
16 by section 38 of part SS of chapter 54 of the laws of 2016, is amended
17 to read as follows:
18 (c) The state insurance fund of this state, except as to the
19 provisions of subsection (d) of section two thousand three hundred thir-
20 ty-nine, section three thousand one hundred ten, subsection (a), para-
21 graph one of subsection (b), paragraph three of subsection (c) and
22 subsection (d) of section three thousand two hundred one, sections three
23 thousand two hundred two, three thousand two hundred four, subsections
24 (a) through (d) of section three thousand two hundred twenty-one,
25 subsections (d) and (e) of section four thousand one hundred seventeen,
26 subsections (b) and (c) of section four thousand two hundred twenty-
27 four, section four thousand two hundred twenty-six and subsections (a)
28 and (b), (g) through (j), and (n) of section four thousand two hundred
29 thirty-five of this chapter and except as otherwise specifically
30 provided by the laws of this state.
31 § 5. Subsection (e) of section 4117 of the insurance law, as amended
32 by chapter 11 of the laws of 1986, is amended to read as follows:
33 (e) Whenever in the judgment of the superintendent, the loss and loss
34 expense reserves of any property/casualty insurance company doing busi-
35 ness in this state or of the state insurance fund of this state calcu-
36 lated in accordance with the foregoing provisions are inadequate or
37 excessive, [he] the superintendent may prescribe any other basis [which]
38 that will produce adequate and reasonable reserves.
39 § 6. This act shall take effect January 1, 2026.
