Relates to assessments on workers' compensation policies and removes the mandatory aggregate trust fund deposit requirements for non-scheduled permanent partial disability cases.
STATE OF NEW YORK
________________________________________________________________________
7748
IN SENATE
June 17, 2012
___________
Introduced by Sen. SEWARD -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the workers' compensation law, in relation to assess-
ments on workers' compensation policies and removing the mandatory
aggregate trust fund deposit requirements for non-scheduled permanent
partial disability cases
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 151 of the workers' compensation law, as added by
2 chapter 74 of the laws of 1945, subdivision 1 as amended by chapter 694
3 of the laws of 1958, subdivision 2 as separately amended by chapters 125
4 and 316 of the laws of 1991, paragraph (a) of subdivision 2 as amended
5 by chapter 309 of the laws of 1996, paragraphs (b) and (c) of subdivi-
6 sion 2 as amended by section 7 of part G of chapter 57 of the laws of
7 2011, the second undesignated paragraph of paragraph (b) and paragraph
8 (c) of subdivision 2 as further amended by section 104 of part A of
9 chapter 62 of the laws of 2011, subdivision 3 as separately amended by
10 chapters 125 and 285 of the laws of 1991, subdivision 4 as amended by
11 chapter 944 of the laws of 1972, and subdivision 5 as added by chapter
12 540 of the laws of 1984, is amended to read as follows:
13 § 151. Administration expenses. 1. The chairman, as soon as practica-
14 ble after September first in each year, shall submit to the director of
15 the budget for his approval an estimated budget of expenditures for the
16 succeeding fiscal year. There may not be expended by the board for
17 purposes of administration more than the amounts specified in such budg-
18 et for each item of expenditure, except as authorized by the director of
19 the budget. If there be officers or employees of the board whose duties
20 relate partly to the general work of the board and partly to the work of
21 the department of labor, and in case there is other expense which is
22 incurred jointly on behalf of the general work of the board and the
23 department of labor, an equitable apportionment of the expense shall be
24 made and the part thereof which is applicable to the board shall be
25 chargeable thereto. The board shall include in its annual report to the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD16304-02-2
S. 7748 2
1 governor a statement showing the expense of administering the workmen's
2 compensation law for the preceding fiscal year.
3 2. (a) The chair and department of audit and control annually as soon
4 as practicable after April first shall ascertain the total amount of
5 expenses, including in addition to the direct costs of personal service,
6 the cost of maintenance and operation, the cost of retirement contrib-
7 utions made and workers' compensation premiums paid by the state for or
8 on account of personnel, rentals for space occupied in state owned or
9 state leased buildings, such additional sum as may be certified to the
10 chair and the department of audit and control as a reasonable compen-
11 sation for services rendered by the department of law and expenses
12 incurred by such department, for transfer into the training and educa-
13 tion program on occupational safety and health fund created pursuant to
14 chapter eight hundred eighty-six of the laws of nineteen hundred eight-
15 y-five and section ninety-seven-c of the state finance law, for the New
16 York state occupational health clinics network, for the department of
17 labor occupational safety and health program and for transfer into the
18 uninsured employers' fund pursuant to subdivision two of section twen-
19 ty-six-a of this chapter, and all other direct or indirect costs,
20 incurred by the board during the preceding fiscal year in connection
21 with the administration of this chapter, except those expenses for which
22 [an assessment] a surcharge is authorized pursuant to subdivision five
23 of section fifty and sections two hundred twenty-eight and three hundred
24 twenty-five of this chapter.
25 (b) [An itemized statement of the expenses so ascertained shall be
26 open to public inspection in the office of the board for thirty days
27 after notice to the state insurance fund, all insurance carriers and all
28 self-insurers affected thereby, before the board shall make an assess-
29 ment for such expenses. The chair shall assess upon and collect a
30 proportion of such expenses as hereinafter provided from each insurance
31 carrier, the state insurance fund and each self-insurer. The assessment
32 for such expenses shall be allocated to (i) self-insurers and the state
33 insurance fund based upon the proportion that the total compensation
34 payments made by all self-insurers and the state insurance fund in such
35 year bore to the total compensation payments made by all self-insurers,
36 the state insurance fund, and all insurance carriers and (ii) insurance
37 carriers based upon the proportion that the total compensation payments
38 made by all insurance carriers in such year bore to the total compen-
39 sation payments by all self-insurers, the state insurance fund and all
40 insurance carriers. The portion of the assessment for such expenses
41 allocated to self-insurers and the state insurance fund that shall be
42 collected from each self-insurer and the state insurance fund shall be a
43 sum equal to the proportion of the amount which the total compensation
44 payments of each such self-insurer or the state insurance fund in such
45 year bore to the total compensation payments made by all self-insurers
46 and the state insurance fund. The portion of the assessment for such
47 expenses allocated to insurance carriers that shall be collected from
48 each such insurance carrier shall be a sum equal to that proportion of
49 the amount which the total standard premium by each such insurance
50 carrier bore to the total standard premium reported by all insurance
51 carriers for the calendar year which ended with the state fiscal year.
52 The amounts so secured shall be used for the payment of the expenses of
53 administering this chapter.] The chair of the board, with the approval
54 of the superintendent of financial services, may adopt regulations to
55 establish an employer surcharge that shall generate revenue needed to
56 satisfy such ascertained expenses. Such surcharge, at a rate published
S. 7748 3
1 annually by the board, shall constitute a proportionate amount of ascer-
2 tained expenses between self-insurers, the state insurance fund and all
3 insured employers, based on the total compensation payments from the
4 preceding calendar year. Self-insurers, the state insurance fund, and
5 all insurance carriers, shall collect from all employers, an amount
6 equal to the assessed amount through a surcharge based on standard
7 premium. Such surcharge shall not constitute an element of loss for the
8 purpose of establishing rates for workers' compensation insurance but,
9 for the purpose of collection, shall be treated as separate costs
10 imposed upon insured employers. Self-insurers, the state insurance fund,
11 and all insurance carriers shall be deemed to be collection agents for
12 purposes of collecting such surcharge.
13 For purposes of this paragraph, "standard premium" shall mean the
14 premium as defined for the purposes of this [assessment] surcharge by
15 the superintendent of financial services, in consultation with the chair
16 of the board and the workers' compensation rating board. The amounts so
17 secured shall be used for the payment of the expenses of administering
18 this chapter.
19 For the purposes of this paragraph, the term "insurance carrier" shall
20 include only stock corporations, mutual corporations and reciprocal
21 insurers authorized to transact the business of workers' compensation
22 insurance in this state and the term "self-insurer" shall include any
23 employer or group of employers permitted to pay compensation directly
24 under the provisions of subdivision three, three-a or four of section
25 fifty of this chapter. For the purposes of this section, a "self-insur-
26 er" shall be: (i) an employer authorized to self-insure under subdivi-
27 sion three of section fifty of this chapter, or active groups authorized
28 pursuant to subdivision three-a of section fifty of this chapter, a
29 group of employers authorized to self-insure under paragraph ten of
30 subdivision three-a of section fifty of this chapter; or (ii) a public
31 employer as set forth in paragraph a of subdivision four of section
32 fifty of this chapter authorized to self-insure under subdivision three,
33 three-a or four of section fifty or article five of this chapter, wheth-
34 er individually or as a group.
35 (c) [Assessments for the special disability fund, the fund for
36 reopened cases and for the operations of the board shall not constitute
37 elements of loss but shall for collection purposes be treated as sepa-
38 rate costs by carriers. All insurance carriers, including the state
39 insurance fund, shall collect such assessments from their policyholders
40 through a surcharge based on premium in accordance with rules set forth
41 by the New York workers' compensation rating board, as approved by the
42 superintendent of financial services. Such surcharge shall be considered
43 as part of premium for purposes prescribed by law including, but not
44 limited to, computing premium tax, reporting to the superintendent of
45 financial services pursuant to section ninety-nine of this chapter and
46 section three hundred seven of the insurance law,] The surcharge shall
47 be excluded from the definition of "premium" for all purposes, including
48 premium taxes; provided, however, it may be used in determining the
49 limitation of expenditures for the administration of the state insurance
50 fund pursuant to section eighty-eight of this chapter and the cancella-
51 tion by an insurance carrier, including the state insurance fund, of a
52 policy for non-payment of premium.
53 3. Notwithstanding the provisions of subdivision two of this section,
54 the chair [shall require that partial payments for expenses of the
55 fiscal year beginning April first, nineteen hundred eighty-three, and
56 for each fiscal year thereafter, shall be made on March tenth of the
S. 7748 4
1 preceding fiscal year and on June tenth, September tenth, and December
2 tenth of each year] of the board shall prescribe requirements for
3 payment of surcharge amounts collected, or on such other dates as the
4 director of the budget may prescribe, by each insurance carrier, includ-
5 ing the state insurance fund. [Provided, however, that the payment due
6 March tenth, nineteen hundred eighty-three for the fiscal year beginning
7 April first, nineteen hundred eighty-three shall not be required to be
8 paid until June tenth, nineteen hundred eighty-three.] Each such payment
9 shall be a sum equal to [twenty-five per centum of the annual expenses
10 assessed upon each carrier, including the state insurance fund, as esti-
11 mated by the chair. The balance of assessments for the fiscal year
12 beginning April first, nineteen hundred seventy-two and each fiscal year
13 thereafter, shall be paid upon determination of the actual amount due in
14 accordance with the provisions of subdivision two of this section. Any
15 overpayment of annual assessments] surcharge amounts collected during
16 the prior period. Any excess surcharge amounts resulting from the
17 requirements of this subdivision shall be refunded or at the option of
18 the chair shall be applied as a credit against the [assessment of]
19 aggregate surcharge amount to be collected for the succeeding fiscal
20 year. The requirements of this subdivision shall not apply to those
21 carriers whose estimated annual [assessment] surcharge collected for the
22 fiscal year is less than one hundred dollars and such carriers shall
23 make a single payment of the estimated annual [assessment] surcharge on
24 [or before September tenth of the fiscal year] a date determined by the
25 chair.
26 4. [Commencing with the fiscal year beginning April first, nineteen
27 hundred seventy-three, the] The provisions of [subdivision three of]
28 this section shall be applicable to any county, city, town, village, or
29 other political subdivision failing to secure compensation pursuant to
30 subdivisions one and two of section fifty of this chapter, in accordance
31 with regulations promulgated by the chair of the board, with the
32 approval of the superintendent of financial services.
33 5. The provisions of this section shall not apply with respect to
34 policies containing coverage pursuant to [subdivision four-a of section
35 one hundred sixty-seven] paragraph one of subsection (j) of section
36 three thousand four hundred twenty of the insurance law relating to
37 every policy providing comprehensive personal liability insurance on a
38 one, two, three or four family owner-occupied dwelling.
39 § 2. Subdivision 3 of section 50 of the workers' compensation law, as
40 amended by section 3 of part G of chapter 57 of the laws of 2011, the
41 closing paragraph as further amended by section 104 of part A of chapter
42 62 of the laws of 2011, is amended to read as follows:
43 3. By furnishing satisfactory proof to the chair of his financial
44 ability to pay such compensation for himself, or to pay such compen-
45 sation on behalf of a group of employers in accordance with subdivision
46 ten of this section, in which case the chair shall require the deposit
47 with the chair of such securities as the chair may deem necessary of the
48 kind prescribed in subdivisions one, two, three, four and five, and
49 subparagraph (a) of paragraph three of subdivision seven of section two
50 hundred thirty-five of the banking law, or the deposit of cash, or the
51 filing of irrevocable letters of credit issued by a qualified banking
52 institution as defined by rules promulgated by the chair or the filing
53 of a bond of a surety company authorized to transact business in this
54 state, in an amount to be determined by the chair, or the posting and
55 filing as aforesaid of a combination of such securities, cash, irrev-
56 ocable letters of credit and surety bond in an amount to be determined
S. 7748 5
1 by the chair, to secure his liability to pay the compensation provided
2 in this chapter. Any such surety bond must be approved as to form by the
3 chair. If an employer or group of employers posts and files a combina-
4 tion of securities, cash, irrevocable letters of credit and surety bond
5 as aforesaid, and if it becomes necessary to use the same to pay the
6 compensation provided in this chapter, the chair shall first use such
7 securities or cash or irrevocable letters of credit and, when the full
8 amount thereof has been exhausted, he shall then require the surety to
9 pay forthwith to the chair all or any part of the penal sum of the bond
10 for that purpose. The chair may also require an agreement on the part of
11 the employer or group of employers to pay any awards commuted under
12 section twenty-seven of this chapter, into the special fund of the state
13 fund, as a condition of his being allowed to remain uninsured pursuant
14 to this section. The chair shall have the authority to deny the applica-
15 tion of an employer or group of employers to pay such compensation for
16 himself or to revoke his consent furnished, under this section at any
17 time, for good cause shown. The employer or group of employers qualify-
18 ing under this subdivision shall be known as a self-insurer.
19 If for any reason the status of an employer or group of employers
20 under this subdivision is terminated, the securities or the surety bond,
21 or the securities, cash, or irrevocable letters of credit and surety
22 bond, on deposit referred to herein shall remain in the custody of the
23 chair for such time as the chair may deem proper and warranted under the
24 circumstances. In lieu thereof, and at the discretion of the chair, the
25 employer, his or her heirs or assigns or others carrying on or liquidat-
26 ing such business, may execute an assumption of workers' compensation
27 liability insurance policy securing such further and future contingent
28 liability as may arise from prior injuries to workers and be incurred by
29 reason of any change in condition of such workers warranting the board
30 making subsequent awards for payment of additional compensation. Such
31 policy shall be in a form approved by the superintendent of financial
32 services and issued by the state fund or any insurance company licensed
33 to issue this class of insurance in this state. In the event that such
34 policy is issued by an insurance company other than the state fund, then
35 said policy shall be deemed of the kind specified in paragraph fifteen
36 of subsection (a) of section one thousand one hundred thirteen of the
37 insurance law and covered by the workers' compensation security fund as
38 created and governed by article six-A of this chapter. It shall only be
39 issued for a single complete premium payment in advance by the employer
40 or group of employers and in an amount deemed acceptable by the chair
41 and the superintendent of financial services. In lieu of the applicable
42 premium charge ordinarily required to be imposed by a carrier, said
43 [premium] policy shall include [a] the employer surcharge in an amount
44 to be determined by the chair to: (i) satisfy all [assessment] surcharge
45 liability due and owing to the board and/or the chair under this chap-
46 ter; and (ii) satisfy all future [assessment] surcharge liability under
47 this section, and which surcharge shall be adjusted from time to time to
48 reflect any changes to the [assessment] surcharge of group self-insured
49 employers, including any changes enacted by the chapter of the laws of
50 two thousand eleven amending sections fifteen and one hundred fifty-one
51 of this chapter. Said surcharge shall be payable to the board simultane-
52 ous to the execution of the assumption of workers' compensation liabil-
53 ity insurance policy. However, the payment of said surcharge does not
54 relieve the carrier from any other liability, including liability owed
55 to the superintendent of financial services pursuant to article six-A of
56 this chapter. When issued such policy shall be non-cancellable without
S. 7748 6
1 recourse for any cause during the continuance of the liability secured
2 and so covered.
3 § 3. Paragraph 7 of subdivision 3-a of section 50 of the workers'
4 compensation law, as amended by section 4 of part R of chapter 56 of the
5 laws of 2010, subparagraph (a) as amended by section 4 of part G of
6 chapter 57 of the laws of 2011, and as further amended by section 104 of
7 part A of chapter 62 of the laws of 2011, is amended to read as follows:
8 (7) (a) If for any reason, the status of a group self-insurer under
9 this subdivision is terminated, including by operation of law on and
10 after January first, two thousand twelve, the securities or cash or the
11 surety bond on deposit referred to herein shall remain in the custody of
12 the chair for such time as the chair may deem proper and warranted. In
13 lieu thereof, and at the discretion of the chair, the group self-insur-
14 er, its heirs or assigns or others carrying on or liquidating such group
15 self-insurer, including the chair on the group self-insurer's behalf,
16 may execute an assumption of workers' compensation liability insurance
17 policy securing such further and future contingent liability as may
18 arise from prior injuries to workers and be incurred by reason of any
19 change in the condition of such workers warranting the board making
20 subsequent awards for payment of additional compensation. Such policy
21 shall be in a form approved by the superintendent of financial services
22 and issued by the state fund or any insurance company licensed to issue
23 this class of insurance in this state. In the event that such policy is
24 issued by an insurance company other than the state fund, then said
25 policy shall be deemed of the kind specified in paragraph fifteen of
26 subsection (a) of section one thousand one hundred thirteen of the
27 insurance law and covered by the workers' compensation security fund as
28 created and governed by article six-A of this chapter. It shall only be
29 issued for a single complete premium payment in advance by the group
30 self-insurer and in an amount deemed acceptable by the chair and the
31 superintendent of financial services. In lieu of the applicable premium
32 charge ordinarily required to be imposed by a carrier, said [premium]
33 policy shall include [a] the employer surcharge in an amount to be
34 determined by the chair to: (i) satisfy all [assessment] surcharge
35 liability due and owing to the board and/or the chair under this chap-
36 ter; and (ii) satisfy all future [assessment] surcharge liability under
37 this section, and which surcharge shall be adjusted from time to time to
38 reflect any changes to the assessment of group self-insured employers,
39 including any changes enacted by the chapter of the laws of two thousand
40 eleven amending sections fifteen and one hundred fifty-one of this chap-
41 ter. Said surcharge shall be payable to the board simultaneous to the
42 execution of the assumption of workers' compensation liability insurance
43 policy. However, the payment of said surcharge does not relieve the
44 carrier from any other liability, including liability owed to the super-
45 intendent of financial services pursuant to article six-A of this chap-
46 ter. When issued such policy shall be noncancellable without recourse
47 for any cause during the continuance of the liability secured and so
48 covered.
49 (b) The chair shall levy an assessment on the members of a defaulted
50 group self-insurer within one hundred twenty days of such default or of
51 the effective date of the chapter of the laws of two thousand eight
52 which amended this subdivision, whichever is later, and against the
53 members of any other terminated group self-insurer when necessary, for
54 such an amount as he or she determines to be necessary to discharge all
55 liabilities of the group self-insurer, including the reasonable cost of
56 liquidation such as claims administration costs, actuarial and account-
S. 7748 7
1 ing services, and the value of future surcharges and assessments on
2 members of such group self-insurer. The chair may impose subsequent
3 deficit assessments, or return funds to members, to adjust the moneys
4 collected to reflect the time of participation, and percent of group
5 self-insurer liabilities for such time. Notwithstanding any such action
6 by the chair, each member of the group self-insurer shall remain jointly
7 and severally responsible for all liabilities provided by this chapter
8 including but not limited to outstanding and estimated future liabil-
9 ities and [assessments] surcharges. Further, separate and apart from,
10 and in addition to a member's joint and several liability and notwith-
11 standing any payments made by any other members of the group self-insur-
12 er pursuant to this subparagraph, in the event that a member neglects or
13 fails to pay an assessment or surcharge levied pursuant to this subpara-
14 graph, the member shall be deemed in default in the payment of compen-
15 sation. Such defaulting member is subject to the enforcement provisions
16 of section twenty-six of this chapter for the payment of all compen-
17 sation relative to awards due and owing on claims filed by the employees
18 of such member that have neither been paid by the member or the group
19 self-insurer. Nothing in this paragraph shall prevent the chair from
20 offering payment plans or settling claims against members of any group
21 self-insurer as necessary to facilitate collection.
22 (c) Upon the assumption of the assets and liabilities of a group self-
23 insurer by the chair or his or her designee pursuant to regulation of
24 the chair, all records, documents and files of whatever nature, pertain-
25 ing to the group self-insurer, be they in the possession of the group
26 self-insurer or a third party, and all remaining assets of the group
27 self-insurer, shall become the property of the chair. All custodians of
28 such records and/or funds shall turn over to the chair or his designee
29 all such original records upon demand.
30 § 4. Clause 2 of subparagraph (a) of paragraph 10 of subdivision 3-a
31 of section 50 of the workers' compensation law, as added by section 4 of
32 part G of chapter 57 of the laws of 2011, is amended to read as follows:
33 (2) The members of the group, through the administrator, (a) jointly
34 deposit sufficient securities in accordance with subdivision three of
35 this section as to secure the liability of the members of the group to
36 pay for all existing claims obligations, provided such deposit shall be
37 made by November first, two thousand eleven, (b) jointly deposit suffi-
38 cient securities in accordance with subdivision three of this section as
39 to secure all anticipated present and future claims of the members of
40 the group, by November first, two thousand fourteen, provided annual
41 deposits are made in accordance with a schedule set by the chair on or
42 before November first of each year, and provided that the deposit shall
43 be deemed an asset of the group for the purpose of determining its fund-
44 ing status, and (c) by November first, two thousand eleven and thereaft-
45 er, shall maintain funds sufficient for all other liabilities besides
46 claims, including reserves for all [assessment] surcharge liabilities,
47 in a trust governed in accordance with Part 126 of title 11 of the New
48 York code of rules and regulations, of which the board shall be the sole
49 beneficiary, and the terms of the trust agreement, and the trustee,
50 shall be approved by the chair in his or her sole discretion, and
51 provided that any group self-insurer that does not hold such funds in a
52 trust that meets the terms of this paragraph shall post them with the
53 board;
54 § 5. Paragraphs 11 and 12 of subdivision 3-a of section 50 of the
55 workers' compensation law, as added by section 4 of part G of chapter 57
56 of the laws of 2011, are amended to read as follows:
S. 7748 8
1 (11) Former group self-insurer. Any group self-insurer that has ceased
2 to self-insure, or has ceased to self-insure any new liabilities after
3 January first, two thousand twelve in accordance with paragraph two of
4 this subdivision, shall remain subject to all the provisions of this
5 subdivision and the regulations issued pursuant thereto and any
6 surcharges or assessments provided for by this section until such time
7 as the group self-insurer no longer possesses any liabilities.
8 (12) Any non-municipal group of employers authorized to self-insure
9 under paragraph ten of this section on or after January first, two thou-
10 sand twelve shall be deemed a "private self-insurer" for purposes of the
11 assessments and surcharges set forth in sections fifteen and one hundred
12 fifty-one of this chapter.
13 § 6. Paragraph (h) of subdivision 8 of section 15 of the workers'
14 compensation law, as amended by chapter 6 of the laws of 2007, subpara-
15 graph 4 as amended by section 1 of part QQ of chapter 56 of the laws of
16 2009, the opening paragraph, clause (A) and clause (B) of subparagraph 4
17 as amended by section 1 of part G of chapter 57 of the laws of 2011,
18 clause (B) of subparagraph 4 as further amended by section 104 of part A
19 of chapter 62 of the laws of 2011, is amended to read as follows:
20 (h) Special disability fund. (1) The fund heretofore maintained and
21 provided for by and pursuant to former subdivision eight of this
22 section, is hereby continued and shall retain the liabilities heretofore
23 charged or chargeable thereto under the provisions of such former subdi-
24 vision eight of this section as it existed immediately prior to the time
25 this subdivision, as hereby added, takes effect, and the liabilities
26 chargeable thereto under the provisions of former subdivision eight-a of
27 this section as added by chapter seven hundred forty-nine of the laws of
28 nineteen hundred forty-four and repealed at the same time this subdivi-
29 sion, as heretofore added, takes effect, and payments therefrom on
30 account of such liabilities shall continue to be made as provided here-
31 in. The said fund shall be known as the special disability fund and
32 shall be available only for the purposes stated in this subdivision, and
33 the assets thereof shall not at any time be appropriated or diverted to
34 any other use or purpose.
35 (2) (A) No carrier or employer, or the state insurance fund, may file
36 a claim for reimbursement from the special disability fund, for an inju-
37 ry or illness with a date of accident or date of disablement on or after
38 July first, two thousand seven. No carrier or employer, or the state
39 insurance fund, may file a claim for reimbursement from the special
40 disability fund after July first, two thousand ten, and no written
41 submissions or evidence in support of such a claim may be submitted
42 after that date.
43 (B) All requests for reimbursement from the special disability fund
44 with a date of injury or date of disablement prior to July first, two
45 thousand seven as to which the board has determined that the special
46 disability fund is liable must be submitted to the special disability
47 fund by the later of (i) one year after the expense has been paid, or
48 (ii) one year from the effective date of this paragraph.
49 (C) All claims for reimbursement from the special disability fund must
50 be accompanied by a filing fee of two hundred fifty dollars, to be
51 deposited in the special disability fund. Upon any final ruling that a
52 claim is eligible for reimbursement from the fund, the fund will return
53 two hundred dollars of this fee to the claimant.
54 (3) The chair of the board shall, as soon as practicable after April
55 first, nineteen hundred forty-five, assess upon and collect from each
56 insurance carrier, including the state insurance fund and any county,
S. 7748 9
1 city, town, village or other political subdivision failing to secure
2 compensation pursuant to subdivision one or two of section fifty of this
3 chapter, a sum equal to one per centum of the total compensation paid by
4 such carrier in the year ending March thirty-first next preceding the
5 date of such assessment.
6 (4) As soon as practicable after May first in the year nineteen
7 hundred fifty-eight, and annually thereafter as soon as practicable
8 after January first in each succeeding year, the chair of the board
9 shall [assess upon and collect from] establish an employer surcharge to
10 be collected by all self-insurers, the state insurance fund, and all
11 insurance carriers (A) a sum equal to one hundred fifty per centum of
12 the total disbursements made from the special disability fund during the
13 preceding calendar year (not including any disbursements made on account
14 of anticipated liabilities or waiver agreements funded by bond proceeds
15 and related earnings), less the amount of the net assets in such fund as
16 of December thirty-first of said preceding calendar year, and (B) a sum
17 sufficient to cover debt service, and associated costs (the "debt
18 service [assessment] surcharge") to be paid during the calendar year by
19 the dormitory authority, as calculated in accordance with subparagraph
20 five of this paragraph. Such [assessments] surcharges shall be allocated
21 to (i) self-insurers and the state insurance fund based upon the propor-
22 tion that the total compensation payments made by all self-insurers and
23 the state insurance fund bore to the total compensation payments made by
24 all self-insurers, the state insurance fund, and all insurance carriers,
25 and (ii) insurance carriers based upon the proportion that the total
26 compensation payments made by all insurance carriers bore to the total
27 compensation payments by all self-insurers, the state insurance fund and
28 all insurance carriers during the fiscal year which ended within said
29 preceding calendar year. [Insurance carriers and self-insurers shall be
30 liable for all such assessments regardless of the date on which they
31 came into existence, or whether they have made any claim for reimburse-
32 ment from the special disability fund. The portion of such sum allocated
33 to self-insurers and the state insurance fund that shall be collected
34 from each self-insurer and the state insurance fund shall be a sum equal
35 to the proportion of the amount which the total compensation payments of
36 each such self-insurer or the state insurance fund bore to the total
37 compensation payments made by all self-insurers and the state insurance
38 fund during the fiscal year which ended within said preceding calendar
39 year.] The portion of such sum allocated to [insurance carriers that
40 shall be] insured employers and collected [from] by each insurance
41 carrier shall be a sum equal to that proportion of the amount which the
42 total standard premium by each such insurance carrier bore to the total
43 standard premium reported by all insurance carriers during the calendar
44 year which ended within said preceding fiscal year. The payments from
45 the debt service [assessment] surcharge, unless otherwise set forth in
46 the special disability fund financing agreement, are hereby pledged
47 therefor and shall be deemed the first monies received on account of
48 [assessments] surcharges in each year. For the purposes of this para-
49 graph, "standard premium" shall mean the premium as defined for the
50 purposes of this [assessment] surcharge by the superintendent of finan-
51 cial services, in consultation with the chair of the board and the work-
52 ers' compensation rating board. An employer who has ceased to be a self-
53 insurer shall continue to be liable for any [assessments] surcharges
54 into said fund on account of any compensation payments made by him or
55 her on his or her account during such fiscal year, and the security
56 fund, created under the provisions of section one hundred seven of this
S. 7748 10
1 chapter, shall, in the event of the insolvency of any insurance company,
2 be liable for any [assessments] surcharges that would have been [made
3 against] charged to such company except for its insolvency. No [assess-
4 ment] surcharge shall be payable from the aggregate trust fund, created
5 under the provisions of section twenty-seven of this article, but such
6 fund shall continue to be liable for all compensation that shall be
7 payable under any award or order of the board, the commuted value of
8 which has been paid into such fund. Such [assessments] surcharges when
9 collected shall be deposited with the commissioner of taxation and
10 finance for the benefit of such fund. [Unless otherwise provided, such
11 assessments, shall not constitute an element of loss for the purpose of
12 establishing rates for compensation insurance but shall for the purpose
13 of collection be treated as separate costs by carriers.] All insurance
14 carriers and the state insurance fund, shall collect [such assessments,
15 from their policyholders through a surcharge] surcharges based on premi-
16 ums in accordance with rules set forth by the superintendent of finan-
17 cial services in consultation with the New York workers' compensation
18 rating board and the chair of the board. Such surcharge shall not be
19 considered as part of premium for purposes [prescribed by law including,
20 but not limited to,] of computing premium tax, however, such surcharge
21 may be used for reporting purposes to the superintendent of financial
22 services pursuant to section ninety-nine of this chapter and section
23 three hundred seven of the insurance law, determining the limitation of
24 expenditures for the administration of the state insurance fund pursuant
25 to section eighty-eight of this chapter and the cancellation by an
26 insurance carrier, including the state insurance fund, of a policy for
27 non-payment of premium. The provisions of this paragraph shall not apply
28 with respect to policies containing coverage pursuant to subsection (j)
29 of section three thousand four hundred twenty of the insurance law
30 relating to every policy providing comprehensive personal liability
31 insurance on a one, two, three or four family owner-occupied dwelling.
32 [The state insurance fund shall notify its insureds that such assess-
33 ments, shall be, for the purpose of recoupment, treated as separate
34 costs, for the purpose of premiums billed on or after October first,
35 nineteen hundred ninety-four.] For the purposes of this section, a
36 "self-insurer" shall be: (i) an employer authorized to self-insure under
37 subdivision three of section fifty of this chapter, active groups
38 authorized pursuant to subdivision three-a of section fifty of this
39 chapter or a group of employers authorized to self-insure under para-
40 graph ten of subdivision three-a of section fifty of this chapter; or
41 (ii) a public employer authorized as set forth in paragraph a of subdi-
42 vision four of section fifty of this chapter to self-insure under subdi-
43 vision three, three-a or four of such section or article five of this
44 chapter, whether individually or as a group.
45 For the purposes of this paragraph, except as otherwise provided: the
46 term "insurance carrier" shall include only stock corporations, mutual
47 corporations and reciprocal insurers authorized to transact the business
48 of workers' compensation insurance in this state; the term "self-insur-
49 er" shall include any employer or group of employers permitted to pay
50 compensation directly under the provisions of subdivision three, three-a
51 or four of section fifty of this chapter.
52 The board is hereby authorized to issue credits or refunds as neces-
53 sary, in the case of overpayments made to the fund. An insurance carrier
54 that knowingly underreports premiums for the purposes of this section
55 shall be guilty of a class E felony.
S. 7748 11
1 (5) (A) The chair and the commissioner of taxation and finance are
2 authorized and directed to enter into a financing agreement with the
3 dormitory authority, to be known as the "special disability fund financ-
4 ing agreement." Such agreement shall set forth the process for calculat-
5 ing the annual debt service of the bonds issued by the dormitory author-
6 ity and any other associated costs. For purposes of this section,
7 "associated costs" may include a coverage factor, reserve fund require-
8 ments, all costs of any nature incurred by the dormitory authority in
9 connection with the special disability fund financing agreement or
10 pursuant thereto, the operating costs of the waiver agreement management
11 office, the costs of any independent audits undertaken under this
12 section, and any other costs for the implementation of this subparagraph
13 and the issuance of bonds by the dormitory authority, including interest
14 rate exchange payments, rebate payments, liquidity fees, credit provider
15 fees, fiduciary fees, remarketing, dealer, auction agent and related
16 fees and other similar bond-related expenses, unless otherwise funded.
17 By January first of each year, the dormitory authority shall provide to
18 the chair the calculation of the amount expected to be paid by the
19 dormitory authority in debt service and associated costs for purposes of
20 calculating the debt service [assessment] surcharge as set forth in
21 subparagraph four of this paragraph. All monies received on account of
22 any [assessment] surcharge under subparagraph four of this paragraph and
23 this subparagraph shall be applied in accordance with this subparagraph
24 and in accordance with the financing agreement until the financial obli-
25 gations of the dormitory authority in respect to its contract with its
26 bondholders are met and all associated costs payable to the dormitory
27 authority have been paid, notwithstanding any other provision of law
28 respecting secured transactions. This provision may be included by the
29 dormitory authority in any contract of the dormitory authority with its
30 bondholders.
31 The special disability fund financing agreement may restrict disburse-
32 ments, investments, or rebates, and may prescribe a system of accounts
33 applicable to the special disability fund, including custody of an
34 account with a trust indenture trustee that may be prescribed by the
35 dormitory authority as part of its contract with the bondholders. For
36 purposes of this paragraph, the term "bonds" shall include notes issued
37 in anticipation of the issuance of bonds, or notes issued pursuant to a
38 commercial paper program.
39 (B) The chair may conduct periodic audits of any self-insurer, insur-
40 ance carrier and the state insurance fund concerning any information or
41 payment required under this paragraph, including any information rele-
42 vant to the payment or calculation of any [assessments] surcharges. The
43 self-insurer, insurance carrier and the state insurance fund shall
44 provide all necessary documents and information in relation to an audit
45 in a manner prescribed by the chair. Upon the determination of the chair
46 that a self-insurer, insurance carrier or the state insurance fund has
47 underpaid [an assessment] a surcharge as a result of its inaccurate
48 reporting, the self-insurer, insurance carrier or the state insurance
49 fund upon notice from the chair, shall pay the full amount of the under-
50 paid [assessment] surcharge, along with interest at the rate of nine per
51 cent per annum on the unpaid [assessment] surcharge due not later than
52 thirty days after such notice.
53 (6) The commissioner of taxation and finance is hereby authorized to
54 receive and credit to such special disability fund any sum or sums that
55 may at any time be contributed to the state by the United States of
S. 7748 12
1 America under any act of congress, or otherwise, to which the state may
2 be or become entitled by reason of any payments made out of such fund.
3 (7) The commissioner of taxation and finance shall be the custodian of
4 said fund and, unless otherwise provided for in the special disability
5 fund financing agreement, shall invest any surplus or reserve moneys
6 thereof in securities which constitute legal investments for savings
7 banks under the laws of this state and in interest bearing certificates
8 of deposit of a bank or trust company located and authorized to do busi-
9 ness in this state or of a national bank located in this state secured
10 by a pledge of direct obligations of the United States or of the state
11 of New York in an amount equal to the amount of such certificates of
12 deposit, and may sell any of the securities or certificates of deposit
13 in which such fund is invested if necessary for the proper adminis-
14 tration or in the best interest of such fund. Disbursements from such
15 fund as provided by this subdivision shall be made by the commissioner
16 of taxation and finance upon vouchers signed by the chair of the board
17 unless the financing agreement provides for some other means of author-
18 izing such disbursements that is no less protective of the fund.
19 The commissioner of taxation and finance, as custodian of such fund,
20 annually as soon as practicable after January first, shall furnish to
21 the chair of the workers' compensation board a statement of the fund,
22 setting forth the balance of moneys in the said fund as of the beginning
23 of the calendar year, the income of the fund, the summary of payments
24 out of the fund on account of reimbursements and other charges ordered
25 to be paid by the board, and all other charges against the fund, and
26 setting forth the balance of the fund remaining to its credit on Decem-
27 ber thirty-first. Such statement shall be open to public inspection in
28 the office of the secretary of the board. The chair, not less than nine-
29 ty days after the issuance of the dormitory authority's annual audit,
30 shall furnish to the temporary president of the senate and the speaker
31 of the assembly the following reports on the special disability fund: a
32 revenue and operating expense statement; a financing plan; a report
33 concerning the assets and liabilities; the number of waiver agreements
34 entered into by the waiver agreement management office; the number of
35 claimants remaining in the fund; the estimated current unfunded liabil-
36 ity of the fund with respect to such claims; and a debt issuance report
37 including but not limited to (i) pledged [assessment] surcharge revenue
38 and securitization coverage, (ii) debt service maturities, (iii) inter-
39 est rate exchange or similar agreements, and (iv) financing and issuance
40 costs.
41 The commissioner of taxation and finance may establish within the
42 special disability fund such accounts and sub-accounts as he or she
43 deems useful for the operation of the fund, or as necessary to segregate
44 moneys within the fund, subject to the provisions of the financing
45 agreement. The waiver agreement management office, as defined in section
46 thirty-two of this article, shall make application to the chair on a
47 quarterly basis for any administrative costs incurred by the office.
48 § 7. Subdivision 3 of section 25-a of the workers' compensation law,
49 as amended by chapter 6 of the laws of 2007, the second and third undes-
50 ignated paragraphs as further amended by section 104 of part A of chap-
51 ter 62 of the laws of 2011, is amended to read as follows:
52 3. Any awards so made shall be payable out of the special fund hereto-
53 fore created for such purpose, which fund is hereby continued and shall
54 be known as the fund for reopened cases. The employer, or, if insured,
55 his insurance carrier shall pay into such fund, or, in the case of
56 awards made on or after July first, nineteen hundred sixty-nine, either
S. 7748 13
1 into such fund or the uninsured employers' fund under section twenty-
2 six-a of this article in accordance with the provisions thereof, for
3 every case of injury causing death for which there are no persons enti-
4 tled to compensation the sum of three hundred dollars where such injury
5 occurred prior to July first, nineteen hundred forty and the sum of one
6 thousand dollars where such injury shall occur on or after said date and
7 prior to April first, nineteen hundred forty-five, and the sum of
8 fifteen hundred dollars where such injury shall occur on or after April
9 first, nineteen hundred forty-five and prior to September first, nine-
10 teen hundred seventy-eight and the sum of three thousand dollars where
11 such injury shall occur on or after September first, nineteen hundred
12 seventy-eight, and in each case of death resulting from injury sustained
13 on or after July first, nineteen hundred forty and prior to September
14 first, nineteen hundred seventy-eight, where there are persons entitled
15 to compensation but the total amount of such compensation is less than
16 two thousand dollars exclusive of funeral benefits, the employer, or, if
17 insured, his insurance carrier, shall pay into such fund, or, in the
18 case of awards made on or after July first, nineteen hundred sixty-nine
19 and prior to September first, nineteen hundred seventy-eight, either
20 into such fund or the uninsured employers' fund under section twenty-
21 six-a of this article in accordance with the provisions thereof, the
22 difference between the sum of two thousand dollars and the compensation,
23 exclusive of funeral benefits, and in each case of death resulting from
24 injury sustained on or after September first, nineteen hundred seventy-
25 eight, the employer, or if insured, his insurance carrier shall pay into
26 such fund or the uninsured employers' fund under section twenty-six-a of
27 this article in accordance with the provisions thereof, the difference
28 between the sum of five thousand dollars and the compensation, exclusive
29 of funeral benefits actually paid to or for the dependents of the
30 deceased employee together with any expense charge required by section
31 twenty-seven of this article; provided, however, that where death shall
32 occur subsequent to the periods limited by subdivision one of this
33 section no payment into such special fund nor to the special fund
34 provided by subdivision nine of section fifteen nor to the uninsured
35 employers' fund provided by section twenty-six-a of this article shall
36 be required. In addition to the [assessments made against all] employer
37 surcharge collected by insurance carriers for the expenses of adminis-
38 tering this chapter provided for under the provisions of section one
39 hundred fifty-one of this chapter, and the payments above provided, the
40 employer, or, if insured, his insurance carrier, shall pay the sum of
41 five dollars into said fund for each case in which an award is made
42 pursuant to the provisions of paragraphs a to s inclusive of subdivision
43 three of section fifteen of this [chapter] article by reason of injury
44 sustained between July first, nineteen hundred forty and June thirtieth,
45 nineteen hundred forty-two, both dates inclusive, and the sum of ten
46 dollars for each such case by reason of injury sustained between July
47 first, nineteen hundred forty-two and June thirtieth, nineteen hundred
48 fifty, both dates inclusive, which payment shall be in addition to any
49 payment of compensation to the injured employee as provided in this
50 chapter.
51 There shall be maintained in the special fund at all times assets at
52 least equal in value to the sum of (1) the value of awards charged
53 against such fund, (2) the value of all claims that have been reopened
54 by the board as a charge against such fund but as to which awards have
55 not yet been made, (3) effective January first, nineteen hundred seven-
56 ty-one, the total supplemental benefits paid from such fund as
S. 7748 14
1 reimbursement pursuant to subdivision nine of this section during the
2 calendar year immediately preceding, and (4) a reserve equal to ten per
3 cent of the sum of items (1) and (2) of this paragraph. For the purpose
4 of accumulating funds for the payment of supplemental benefits pursuant
5 to subdivision nine of this section, the chairman shall impose against
6 all carriers an assessment in the sum of five million dollars to be
7 collected in the respective proportions established in the fiscal year
8 commencing April first, nineteen hundred sixty-eight, under the
9 provisions of section one hundred fifty-one of this chapter for each
10 carrier. Annually, as soon as practicable after January first in each
11 year, the chairman shall ascertain the condition of the fund and whenev-
12 er the assets shall fall below the prescribed minimum as herein provided
13 the chairman shall [assess and collect from] establish an employer
14 surcharge to be collected by all insurance carriers, [in the respective
15 proportions] established in the prior [fiscal] calendar year under the
16 provisions of section one hundred fifty-one of this chapter for each
17 carrier, an amount sufficient to restore the fund to the prescribed
18 minimum. The chairman before [making an assessment] establishing a
19 surcharge as provided in this section shall give thirty days' notice to
20 the representative of the fund, designated pursuant to subdivision five
21 of this section, that an itemized statement of the condition of the fund
22 is open for his inspection. The superintendent of financial services may
23 examine into the condition of the fund at any time on his own initiative
24 or on request of the chairman or representative of the fund.
25 Such [assessment] surcharge and the payments made into said fund shall
26 not constitute an element of loss for the purpose of establishing rates
27 for workers' compensation insurance as provided in the insurance law
28 [but shall for the purpose of recoupment be treated as separate costs by
29 carriers]. Carriers shall [assess such costs on] collect such surcharge
30 from [their policyholders] insured employers in accordance with rules
31 set forth by the New York workers' compensation rating board, as
32 approved by the superintendent of financial services.
33 The provisions of this subdivision shall not apply with respect to
34 policies containing coverage pursuant to section thirty-four hundred
35 twenty of the insurance law relating to every policy providing compre-
36 hensive personal liability insurance on a one, two, three or four family
37 owner-occupied dwelling.
38 § 8. Paragraph (f) of subdivision 9 of section 25-a of the workers'
39 compensation law, as added by chapter 830 of the laws of 1968, is
40 amended to read as follows:
41 (f) The special disability fund created under subdivision eight of
42 section fifteen and the reopened cases fund created under section twen-
43 ty-five-a and the aggregate trust fund created under section twenty-sev-
44 en of this chapter shall be deemed to be insurance carriers for purposes
45 of this subdivision, other than the payment of the [assessment]
46 surcharge under the provisions of subdivision three of this section.
47 § 9. Subparagraph (a) of paragraph 10 of subdivision 3-a of section 50
48 of the workers' compensation law is amended by adding a new clause 8 to
49 read as follows:
50 (8) (a) Notwithstanding anything in this section, present and future
51 liabilities may be secured in a trust fund pursuant to department of
52 financial services regulation 114 trust account;
53 (b) Notwithstanding the provisions of this section, a trust meeting
54 the following criteria is subject to posting a security not to exceed
55 ten percent of total reserves:
56 (i) Assets over one hundred million dollars;
S. 7748 15
1 (ii) Non-profit administrator subject to a collective bargaining
2 agreement; and
3 (iii) Administrator is also the administrator of more than five ERISA
4 trust funds.
5 (c) Total liabilities shall not include assessment liability;
6 (d) The members of any such group shall enter into an agreement among
7 themselves and with the group's administrator which shall, at a minimum
8 indicate that each of the members of the group is protected as to any of
9 the members liabilities of the group by a form of security acceptable to
10 the board including but not limited to stop loss insurance, bonds,
11 secured in a trust fund pursuant to department of financial services
12 regulation 114 trust account, or other forms of security;
13 § 10. This act shall take effect immediately.
