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AB697 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         697--B
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 9, 2017
                                       ___________
 
        Introduced  by  M. of A. MAGNARELLI, SEPULVEDA -- read once and referred
          to the Committee on  Labor  --  committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          recommitted to the Committee on Labor in accordance with Assembly Rule
          3, sec. 2 -- 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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00644-07-8

        A. 697--B                           2
 
     1  the same powers, duties, immunities and privileges they would ordinarily
     2  possess (1) if they performed their duties only in  the  corporation  or
     3  district  by which they are employed or (2) if they were employed by the
     4  corporation  or  district  in  which  they are required to perform their
     5  duties.
     6    § 2. Paragraph 1, subparagraphs (a),  (b)  and  (h)  of  paragraph  2,
     7  subparagraph  (a)  and  item  e  of  subparagraph (d) of paragraph 5 and
     8  subparagraph (a) of paragraph 6 of subdivision 3-a of section 50 of  the
     9  workers'  compensation  law, paragraph 1, subparagraph (a) and item e of
    10  subparagraph (d) of paragraph 5 and subparagraph (a) of paragraph  6  as
    11  amended by chapter 139 of the laws of 2008, subparagraphs (a) and (h) of
    12  paragraph  2 as amended by section 4 of part G of chapter 57 of the laws
    13  of 2011, and subparagraph (b) of paragraph 2 as amended by  section  1-a
    14  of  subpart E of part NNN of chapter 59 of the laws of 2017, are amended
    15  to read as follows:
    16    (1) Definitions. As used in this chapter the  term  "employers"  shall
    17  include:  (a) employers with related activity in a given industry [which
    18  shall include municipal corporations as that term is defined in sections
    19  two and six-n of the  general  municipal  law,]  employing  persons  who
    20  perform  work in connection with the given industry, (b) an incorporated
    21  or unincorporated association or associations consisting exclusively  of
    22  such  employers  provided  they  employ persons who perform such related
    23  work in the given industry,  and  (c)  a  combination  of  employers  as
    24  described  in subparagraph (a) hereof and an association or associations
    25  of employers as described in subparagraph (b) hereof.
    26    (a) Any group consisting exclusively of such  employers  may  adopt  a
    27  plan  for  self-insurance,  as  a group, for the payment of compensation
    28  under this chapter to their employees, except that  no  new  groups  may
    29  adopt  such  a plan, and no group not composed solely of public entities
    30  set forth in [paragraph a of] subdivision [four] three-f of this section
    31  may insure any liabilities for any employers on and after January first,
    32  two thousand twelve, except as provided for in  paragraph  ten  of  this
    33  subdivision. Under such plan the group shall assume the liability of all
    34  the  employers  within  the group and pay all compensation for which the
    35  said employers are liable under this chapter[, except that in  the  case
    36  of municipal corporations as herein defined no proof of financial abili-
    37  ty or deposit of securities or cash need be made in compliance with this
    38  subdivision]. The group qualifying under this subdivision shall be known
    39  as  a  group  self-insurer  and  the employers participating therein and
    40  covered thereby shall be known as members.
    41    (b) Where such plan is adopted the group self-insurer, except a  group
    42  composed  solely  of public entities set forth in subdivision three-f of
    43  this section, shall furnish satisfactory  proof  to  the  chair  of  its
    44  financial ability to pay such compensation for the members in the indus-
    45  try  covered  by it, its revenues, their source and assurance of contin-
    46  uance. The chair shall require the deposit with the chair of such  secu-
    47  rities as may be deemed necessary of the kind prescribed in subdivisions
    48  one,  two, three, four and five, and subparagraph (a) of paragraph three
    49  of subdivision seven of section two hundred thirty-five of  the  banking
    50  law or the deposit of cash or the filing of irrevocable letters of cred-
    51  it issued by a qualified banking institution as defined by rules promul-
    52  gated  by  the chair or the filing of a bond of a surety company author-
    53  ized to transact business in this state, in an amount to  be  determined
    54  to  secure  its  liability  to  pay the compensation of each employer as
    55  above provided.  Such surety bond must be approved as  to  form  by  the
    56  chair.  The chair shall require each group self-insurer to provide regu-

        A. 697--B                           3
 
     1  lar reports no less than annually, which shall include but not be limit-
     2  ed to audited  financial  statements,  actuarial  opinions  and  payroll
     3  information containing proof that it is fully funded. Such reports shall
     4  also  include  a  contribution year analysis detailing contributions and
     5  expenses associated with each specific contribution year.  For  purposes
     6  of this paragraph, proof that a group self-insurer is fully funded shall
     7  at  a minimum include proof of unrestricted cash and investments permit-
     8  ted by regulation of the chair of at least one hundred  percent  of  the
     9  total  liabilities,  including  the  estimate presented in the actuarial
    10  opinion submitted by the group  self-insurer  in  accordance  with  this
    11  chapter.  The  chair  by regulation, may set further financial standards
    12  for group self-insurers. Any group self-insurer that fails to show  that
    13  it  is  fully funded shall be deemed underfunded, and must submit a plan
    14  for achieving fully funded status which may include a deficit assessment
    15  on members of such group self-insurer which shall be subject to approval
    16  or modification by the chair. The amount of such under-funding, as meas-
    17  ured by the actuarial opinion or assumption  of  loss  policy  quotation
    18  submitted by the group, shall be considered unfunded claims as set forth
    19  in  subdivision  two  of  section sixteen hundred eighty-q of the public
    20  authorities law as added by section 35 of Part GG of chapter 57  of  the
    21  laws of 2013.
    22    [(h)  Any  member terminating membership in a group self-insurer after
    23  less than four years in such group self-insurer, and  any  member  in  a
    24  group self-insurer that has defaulted, shall be precluded from obtaining
    25  prospective  coverage  from  any  group  self-insurer for a period of at
    26  least three years from the effective date of termination.]
    27    (a) Each private group self-insurer shall, and each group self-insurer
    28  may, secure the services of a group administrator to be responsible  for
    29  assisting  the  group  self-insurer  in complying with the provisions of
    30  this section and the rules and regulations  promulgated  hereunder,  and
    31  for  coordinating  services including but not limited to claims process-
    32  ing, loss control, legal, accounting and actuarial services. No  person,
    33  firm  or  corporation  shall coordinate such services or otherwise carry
    34  out the tasks of a group administrator as provided in  this  subdivision
    35  or in the regulations issued pursuant thereto on behalf of a group self-
    36  insurer  unless such person shall have obtained from the chair a license
    37  authorizing it to act  as  a  group  self-insurer  administrator,  which
    38  license  may be revoked for good cause. The chair shall promulgate regu-
    39  lations setting forth any additional qualifications  for  such  license,
    40  governing the conduct and compensation of group self-insurer administra-
    41  tors, and setting a license fee in an amount not less than five thousand
    42  dollars per year for such license for each group self-insurer the admin-
    43  istrator administers. Each administrator shall post a bond in the amount
    44  of  five  hundred  thousand dollars for each group self-insurer adminis-
    45  tered or such other amount as may be set by the chair based on the  cost
    46  and  availability  of  such  bond,  from which the chair may recover any
    47  recoveries or penalties against the administrator  under  this  section.
    48  Nothing  in  this section shall relieve the trustees of a group self-in-
    49  surer of any fiduciary obligation they hold to the other members of such
    50  group self-insurer.
    51    e. the number and amount of rate deviations provided to members during
    52  the prior year and whether the recipient of any  such  deviation  was  a
    53  trustee,  provided  that  the  application of rating factors in a manner
    54  consistent with the filed rating plan is not a deviation which  must  be
    55  reported under this subdivision; and

        A. 697--B                           4

     1    (a) Group self-insurers must file with the board, as soon as practica-
     2  ble  but  no later than sixty days prior to the start of the fund year a
     3  rating plan which is supported by an actuarial rate study prepared by an
     4  independent, qualified actuary that is a  fellow  or  associate  of  the
     5  casualty  actuarial society, that clearly identifies the actuary's indi-
     6  cated rate assumptions therein. The rating plan must apply  consistently
     7  to  all  members,  and  must  provide  for a common renewal date for all
     8  private group self-insurer members. The  rates  filed  can  be  adjusted
     9  based  on  an  experience  modification  calculated  for every member in
    10  accordance with the experience rating plan promulgated by  the  workers'
    11  compensation  rating  board.  Experience  modification  formulas must be
    12  applied identically to all members. Other rate deviations may be permis-
    13  sible provided a plan has been approved by the  board.  Such  deviations
    14  shall  not  be  in excess of ten percent of the actuary's indicated rate
    15  unless otherwise approved by the board for a fully funded group self-in-
    16  surer, and shall in no event result in amounts less than  the  actuary's
    17  overall  indicated  rate.  The  chair by regulation may set further rate
    18  plan and actuarial reporting standards.
    19    § 3. Paragraph (g) of subdivision 3-e of section 50  of  the  workers'
    20  compensation  law,  as  added  by  chapter  729  of the laws of 1993, is
    21  amended and a new subdivision 3-f is added to read as follows:
    22    (g) The state insurance fund, any other insurer or any group  self-in-
    23  surer  for  municipal  corporations  as defined in subdivision [three-a]
    24  three-f of this section may, at its option, offer  a  deductible  in  an
    25  amount specified in paragraph (c) of this subdivision to any policyhold-
    26  er  who  is  not otherwise eligible for a deductible under this subdivi-
    27  sion.
    28    3-f. (1) Any group consisting exclusively  of  municipal  corporations
    29  and  public  corporations as such terms are defined in section sixty-six
    30  of the general construction law, county self-insurance plans established
    31  under article five of this chapter, boards  of  cooperative  educational
    32  services  and consortia established by boards of cooperative educational
    33  services may adopt a plan  for  self-insurance,  as  a  group,  for  the
    34  payment  of  compensation  under  this  chapter to their employees. Such
    35  group shall be known as a "public group self-insurer".  All other groups
    36  established under this section  are  "private  group  self-insurers".  A
    37  county  self-insurance plan established under article five of this chap-
    38  ter is not itself a public group self-insurer, and is not itself subject
    39  to the requirements of this section, but may join a public  group  self-
    40  insurer  and,  if it does so, shall assume all of the obligations of its
    41  participants to the public group self-insurer. No entity which is not  a
    42  municipal  corporation  as  defined  in section sixty-six of the general
    43  construction law, a county self-insurance plan established under article
    44  five of this chapter, or a consortium established by a board of  cooper-
    45  ative  educational services, may join a public group self-insurer unless
    46  it may levy taxes or is otherwise directly capable of generating revenue
    47  in the event of a funding deficiency within the public group self-insur-
    48  er, or its obligations are guaranteed by another member which is such  a
    49  municipal corporation. A public group self-insurer shall comply with all
    50  of  the  requirements  of subdivision three-a of this section; including
    51  any obligations imposed by such subdivision upon a group  administrator,
    52  but shall not be required to obtain a license authorizing it to act as a
    53  group  self-insurer  administrator,  to  pay  a license fee or to post a
    54  bond. No proof of financial ability to pay the compensation provided for
    55  by this chapter or deposit of securities shall be required of  a  public
    56  group  self-insurer  and,  in  lieu thereof, the liability of the public

        A. 697--B                           5
 
     1  group self-insurer's members shall serve as the security required  under
     2  paragraph  two  of  subdivision three-a of this section. The chair shall
     3  implement the provisions of this subdivision by promulgating  rules  and
     4  regulations,  but  no  such rules and regulations shall be necessary for
     5  any provisions of this subdivision to be effective.
     6    (2) A public group self-insurer as defined in paragraph  one  of  this
     7  subdivision  may  offer,  as  part  of  the agreement or by endorsement,
     8  deductibles optional to the member for benefits payable under the agree-
     9  ment, upon a determination by the chair that the plan is supported by an
    10  actuarial analysis prepared by an independent, qualified actuary who  is
    11  a  member  of the casualty actuarial society that clearly identifies the
    12  actuary's indicated deductible credit and rate assumptions, and  subject
    13  to  underwriting  by  the public group self-insurer, consistent with the
    14  following standards or factors:
    15    (a) claimants' rights are properly protected and  claimants'  benefits
    16  are paid without regard to any such deductible;
    17    (b)  appropriate  premium reductions reflect the type and level of any
    18  deductible approved by the chairman and selected by the member;
    19    (c) premium reductions for deductibles are determined before  applica-
    20  tion  of  any  experience  modification,  premium  surcharge, or premium
    21  discount;
    22    (d) recognition is given to member  characteristics,  including  size,
    23  financial capabilities, nature of activities, and number of employees;
    24    (e)  if  the  member selects a deductible, the member is liable to the
    25  public group self-insurer for the deductible amount in regard  to  bene-
    26  fits paid for compensable claims;
    27    (f)  the  public group self-insurer pays all of the deductible amount,
    28  applicable to a compensable claim, to the person or provider entitled to
    29  benefits and requires the member to pay to it in advance an amount actu-
    30  arially determined to be sufficient to pay the portion  of  the  compen-
    31  sation  claim  that  is  within  the deductible amount as those payments
    32  become due; provided that such periodic payments shall be  paid  to  the
    33  public group self-insurer in intervals of no greater of six months; and
    34    (g)  failure  to  reimburse  deductible  amounts  by the member to the
    35  public group self-insurer is treated under the coverage agreement in the
    36  same manner as nonpayment of contributions.
    37    (3) Whenever the chair determines that a public group self-insurer has
    38  become insolvent or that the compensation and benefits provided by  this
    39  chapter  may  be unpaid by reason of the default of a public group self-
    40  insurer, the chair shall pay such compensation and benefits from  admin-
    41  istration  expenses as provided in section one hundred fifty-one of this
    42  chapter upon audit and warrant of  the  comptroller  and  upon  vouchers
    43  approved  by  the  chair, which payments shall be considered expenses of
    44  administration. As used in this paragraph, insolvent means the value  of
    45  the  public  group self-insurer's assets is less than the total costs of
    46  the workers' compensation liabilities that it is anticipated the  public
    47  group  self-insurer is required to pay within the succeeding six months.
    48  Upon the insolvency of a public group self-insurer,  each  member  shall
    49  assume  responsibility  for  the claims against it.   The chair shall be
    50  reimbursed for any payment made under this paragraph first by the public
    51  group self-insurer itself and if the public group self-insurer is unable
    52  to fully reimburse the chair for payments made by the chair then  second
    53  by  the  member of the public group self-insurer against which the claim
    54  is asserted. If the chair is unable to obtain  reimbursement  from  that
    55  member,  the  chair make seek reimbursement from any other member of the
    56  public group self-insurer. Any member which  reimburses  the  chair  for

        A. 697--B                           6
 
     1  payments  made  under  this paragraph with respect to claims against any
     2  other member may recover those payments from  the  member  whose  claims
     3  were  paid  by  the  chair. Nothing herein shall preclude the chair from
     4  directing  that an underfunded public group self-insurer levy an assess-
     5  ment on its members as part of a plan implemented pursuant  to  subpara-
     6  graph (b) of paragraph two of subdivision three-a of this section.
     7    §  4.  The  opening paragraph of section 3443 of the insurance law, as
     8  added by chapter 924 of the laws of 1990, is amended to read as follows:
     9    An insurer issuing a workers' compensation  and  employers'  liability
    10  insurance  policy,  [and a group self-insurer for municipal corporations
    11  as defined in subdivision three-a  of  section  fifty  of  the  workers'
    12  compensation  law,]  may offer, as part of the policy or by endorsement,
    13  deductibles optional to the policyholder for benefits payable under  the
    14  policy,  subject to approval by the superintendent and subject to under-
    15  writing by the insurer,  consistent  with  the  following  standards  or
    16  factors:
    17    §  5. Subdivision 9 of section 30 of the volunteer firefighters' bene-
    18  fit law, as amended by chapter 61 of the laws of  1989,  is  amended  to
    19  read as follows:
    20    9.  Insurance authorized to be purchased pursuant to subdivision eight
    21  of this section may be secured from the state fund or any  stock  corpo-
    22  ration,  mutual corporation or reciprocal insurer authorized to transact
    23  the business of workers' compensation in this state.  If such  insurance
    24  is not secured, the political subdivision liable shall be deemed to have
    25  elected to be a self-insurer unless it is a participant in a county plan
    26  of  self-insurance  or  its liability for benefits under this chapter is
    27  covered by a town's participation in a county plan of self-insurance  as
    28  provided  in  subdivision  three  of section sixty-three of the workers'
    29  compensation law, or is a participant in  a  group  self-insurance  plan
    30  consisting  solely  of municipal corporations as provided in subdivision
    31  three-f of section fifty of the workers' compensation  law.  Every  such
    32  self-insurer  shall  file  with  the  chair of the workers' compensation
    33  board a notice of such election prescribed in form by  such  chair.  For
    34  failure to file such notice within ten days after such election is made,
    35  the  treasurer  or  other  fiscal  officer of such political subdivision
    36  shall be liable to pay to the chair of the workers'  compensation  board
    37  the  sum  of  one hundred dollars as a penalty, to be transferred to the
    38  state treasury. A notice of election to be a  self-insurer  for  compen-
    39  sation  and  benefits  to volunteer firefighters under the provisions of
    40  the workers' compensation law and the general municipal  law  in  effect
    41  prior  to  March  first,  nineteen  hundred fifty-seven, which was filed
    42  prior to such date pursuant to the provisions  of  subdivision  four  of
    43  section  fifty  of  the  workers' compensation law as in effect prior to
    44  such date shall be deemed to be a notice of election  filed  under  this
    45  section  unless the chair of the workers' compensation board is notified
    46  to the contrary. The provisions of subdivision five of section fifty  of
    47  the workers' compensation law shall be applicable to such self-insurers.
    48    §  6.  Subdivision 8 of section 30 of the volunteer ambulance workers'
    49  benefit law, as amended by chapter 61 of the laws of 1989, is amended to
    50  read as follows:
    51    8. Insurance authorized to be purchased pursuant to subdivision  seven
    52  of  this  section may be secured from the state fund or any stock corpo-
    53  ration, mutual corporation, group self-insurers  or  reciprocal  insurer
    54  authorized  to  transact  the  business of workers' compensation in this
    55  state.   If such insurance is not  secured,  the  political  subdivision
    56  liable shall be deemed to have elected to be a self-insurer unless it is

        A. 697--B                           7
 
     1  a  participant  in  a county plan of self-insurance or its liability for
     2  benefits under this chapter is covered by a town's  participation  in  a
     3  county plan of self-insurance as provided in subdivision nine of section
     4  sixty-three  of  the workers' compensation law, or is a participant in a
     5  group-insurance plan consisting  solely  of  municipal  corporations  as
     6  provided  in  subdivisions  three-f  of  section  fifty  of the workers'
     7  compensation law. Every such self-insurer shall file with the  chair  of
     8  the  workers' compensation board a notice of such election prescribed in
     9  form by such chair. For failure to file  such  notice  within  ten  days
    10  after  such  election  is made, the treasurer or other fiscal officer of
    11  such political subdivision shall be liable to pay to the  chair  of  the
    12  workers' compensation board the sum of one hundred dollars as a penalty,
    13  to  be  transferred  to the state treasury. A notice of election to be a
    14  self-insurer for compensation and benefits to volunteer ambulance  work-
    15  ers under the provisions of the workers' compensation law and the gener-
    16  al  municipal  law in effect prior to March first, in the year of enact-
    17  ment of this chapter, which was filed prior to such date pursuant to the
    18  provisions of subdivision four of section fifty of the workers'  compen-
    19  sation  law  as  in  effect  prior  to such date shall be deemed to be a
    20  notice of election filed under this section  unless  the  chair  of  the
    21  workers'  compensation board is notified to the contrary. The provisions
    22  of subdivision five of section fifty of the  workers'  compensation  law
    23  shall be applicable to such self-insurers.
    24    §  7.  This  act  shall take effect January 1, 2019; provided however,
    25  that subdivision 3-f of section 50 of the workers' compensation law,  as
    26  added by section three of this act, shall take effect immediately.
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