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AB697 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         697--A
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 9, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  MAGNARELLI  -- read once and referred 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, 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.
                                                                   LBD00644-04-7

        A. 697--A                           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  [which
    15  shall include municipal corporations as that term is defined in sections
    16  two  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 case
    33  of municipal corporations as herein defined no proof of financial abili-
    34  ty or deposit of securities or cash need be made in compliance with this
    35  subdivision]. 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 shall

        A. 697--A                           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 of Part GG of chapter 57  of  the
    18  laws of 2013.
    19    [(h)  Any  member terminating membership in a group self-insurer after
    20  less than four years in such group self-insurer, and  any  member  in  a
    21  group self-insurer that has defaulted, shall be precluded from obtaining
    22  prospective  coverage  from  any  group  self-insurer for a period of at
    23  least 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  the

        A. 697--A                           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 and

        A. 697--A                           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  from

        A. 697--A                           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 corporations
     8  as defined in subdivision three-a  of  section  fifty  of  the  workers'
     9  compensation  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 section

        A. 697--A                           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,  2018;  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.
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