NY State Senate Bill 2017-S4558A

Senate Bill S4558A

2017-2018 Legislative Session

Removes the state insurance fund's exemption from licensing and other requirements of the insurance law

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to insurance
May 10, 2017	print number 4558a
May 10, 2017	amend (t) and recommit to insurance
Feb 17, 2017	referred to insurance

Bill Amendments

Original

A (Active)

2017-S4558 - Details

See Assembly Version of this Bill:: A8471
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§1108 & 4522, Ins L; amd §§83, 94, 89 & 76, Work Comp L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S1662
2011-2012: S3836
2013-2014: S6755
2015-2016: S254
2019-2020: A4356

2017-S4558 - Summary

Removes the state insurance fund's exemption from licensing and other requirements of the insurance law; requires the superintendent of financial services to approve the rules adopted by the state insurance fund for the conduct of its business; removes the requirement for policyholders to provide thirty days notice to withdraw from the state insurance fund.

2017-S4558 - Sponsor Memo

                                 BILL NUMBER:  S4558

 TITLE OF BILL :

An act to amend the insurance law, in relation to removing the
exemption of the state insurance fund from licensing and other
requirements; to amend the workers' compensation law, in relation to
requiring the superintendent of insurance to approve the rules adopted
by the state insurance fund for the conduct of its business; and to
amend the workers' compensation law, in relation to the requirement
for policyholders to provide 30 days notice to withdraw from the state
insurance fund

 PURPOSE :

The bill would require that the State Insurance Fund (SIF) be licensed
by the Department of Financial Services (DFS) and subject to the same
requirements as other insurance companies providing workers'
compensation insurance. The bill would also require that the
Superintendent of DFS approve the rules adopted by SIF for the conduct
of its business. It would also delete the requirement for SIF policy
holders to provide 30 days notice to withdraw from the Fund.

 SUMMARY OF PROVISIONS :

Section 1. Amends section 1108 of the Insurance Law relating to

insurers exempt from licensing and other requirements.

Section 2. Amends paragraph 2 of subsection (a) of section 4522
relating to membership.

Section 3. Replaces the Commissioner of Labor with the Superintendent
of DFS as the person who must approve the rules adopted by SIF for the
conduct of its business. It also deletes the provision allowing for
rules to be adopted if not approved by the Commissioner of Labor
within 30 days.

Section 4. Deletes the requirement of policyholders of SIP to provide
30 days notice of their intent to withdraw from the Fund. Instead,
policyholders would have to provide written notice of the effective
date of cancellation.

Section 5. Sets for the effective date.

 JUSTIFICATION :

New York Insurance Law section 1108 exempts certain insurers,
including SW from licensing and other requirements of the Insurance
Law. SIP is a non-profit agency of the State of New York established
in 1914 to provide a guaranteed source of workers' compensation
insurance coverage for employers in New York State. SIF is the largest
single carrier of workers' compensation insurance in the State, with
approximately 37 percent of the market. SW is administered by nine
Commissioners, including the Commissioner of Labor and eight members
who are appointed by the Governor with the consent of the Senate. The
Commissioners appoint an executive director who is responsible for the
direction and operation of SIP.  SW is completely self sustaining,
acquiring all of its operating and reserve funds from the premiums it
collects from its policyholders and its investment income. Although a
quasi-public agency, SIF was intended by the Legislature to be treated
the same as a private insurance company. See Commissioners of State
insurance Fund v. Low, 285 App.  Div. 525, 138 N.Y.S.2d 437 (3rd Dept
.1955). It is more closely equated to an insurance company than to a
typical state agency.  Martin Minkiowtiz, PRACTICE COMMENTARIES, N.Y.
Work. Comp. Section 76 (McKinney 1994) Despite the fact that SW was
intended to be treated a s a private insurance company, it is not
licensed by the New York State DFS, not is it subject to the
Department's oversight and regulation. As a result, SIF policyholders
are put at a disadvantage when compared to policyholders of private
workers' compensation insurers. If a SIF policyholder has a dispute
with SIP regarding an unfair insurance practice, they have no recourse
other than to bring the matter up with SIF. In contract, policyholders
of private carriers may appeal to the DFS if they have a dispute with
their insurer. SW policyholders have reported various unfair practices
which have gone unchecked. One common complaint is that SW takes
retaliatory actions against policyholders who seek to move their
business from SIP to another coverage provider.  Policyholders have
reported aggressive and unfair tactics, such as SIF suddenly revising
audits and questioning classifications in an effort to charge a
departing customer a higher premium. Additionally, private insurance
carriers who must be licensed by the DFS and subject to insurance law,
are also placed at a competitive disadvantage compared to the SW which
is not subject to the same rules and regulations. To rectify these
inequities, the bill would place SIF on an even footing with other
insurers providing workers' compensation insurance by removing SIFs
exemption from licensing and other insurance requirements. The bill
would also insert the Superintendent of DFS, as opposed to the
Commissioner of Labor, as the appropriate person to approve the rules
adopted by the commissioners of SIF for the conduct of its business.
These rules of conduct include those pertaining to the issuance of
policies and their terms and conditions, the fixing of premium rates,
record keep, payroll audits, billing and collection of premiums,
inspection of risks and setting standards of safety and the adjustment
and payment of claims and awards.

Lastly, the bill would remove a requirement placed upon policyholders
of SIF that does not apply to policyholders of private insurers.
Currently, SW policyholders that want to cancel their policy with SIF
because they have found other coverage must provide SIP with 30 days
advance written notice. During this notice period, policyholders
report that SW employs aggressive and retaliatory tactics in an effort
to retain the business. It is simply unfair to require policyholders
of the SW to provide more notice than is required of policyholders of
private carriers.

 LEGISLATIVE HISTORY :

2015-16 S.254/A.2904;
2014 S.6755/A.9797;
2012 S.3836
2009-10 S.1662;
2007-08 S.7673;

 FISCAL IMPLICATIONS :

TBD

 EFFECTIVE DATE :
This act shall take effect on the ninetieth day after it shall have
become law.

2017-S4558 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4558
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 17, 2017
                                ___________
 
 Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to removing the exemption
   of the state insurance fund from licensing and other requirements;  to
   amend  the  workers'  compensation  law,  in relation to requiring the
   superintendent of insurance to approve the rules adopted by the  state
   insurance fund for the conduct of its business; and to amend the work-
   ers'  compensation law, in relation to the requirement for policyhold-
   ers to provide 30 days notice to withdraw  from  the  state  insurance
   fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 1108  of  the  insurance  law,  subsection  (c)  as
 amended  by  section  38  of  part SS of chapter 54 of the laws of 2016,
 subsection (j) as added by section 2 of part R of chapter 56 of the laws
 of 2010, subsection (k) as added by chapter 181 of  the  laws  of  2012,
 subsection  (k)  as  added  by  chapter  246  of  the  laws  of 2012 and
 subsection (n) as added by chapter 454 of the laws of 2014,  is  amended
 to read as follows:
   §  1108.  Insurers  exempt  from licensing and other requirements. The
 following insurers, their officers, agents, representatives and  employ-
 ees shall be exempt from licensing and other requirements imposed by the
 provisions  of  this chapter (except article seventy-four hereof) to the
 extent specified below:
   (a) Any charitable annuity society which complies  with  the  require-
 ments  of  section  one thousand one hundred ten of this article, to the
 extent therein stated.
   (b) Any fraternal benefit society,  membership  corporation  or  other
 organization exempted under the provisions of article forty-five of this
 chapter, to the extent therein stated.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09688-01-7

 S. 4558                             2
 
   (c)  [The  state  insurance  fund  of  this  state,  except  as to the
 provisions of subsection (d) of section two thousand three hundred thir-
 ty-nine, section three thousand one hundred ten, subsection  (a),  para-
 graph  one  of  subsection  (b),  paragraph  three of subsection (c) and
 subsection (d) of section three thousand two hundred one, sections three
 thousand  two  hundred two, three thousand two hundred four, subsections
 (a) through (d)  of  section  three  thousand  two  hundred  twenty-one,
 subsections  (b)  and  (c)  of section four thousand two hundred twenty-
 four, section four thousand two hundred twenty-six and  subsections  (a)
 and  (b),  (g) through (j), and (n) of section four thousand two hundred
 thirty-five  of  this  chapter  and  except  as  otherwise  specifically
 provided by the laws of this state.
   (d)] Any corporate trustee or board of trustees acting pursuant to the
 banking law in relation to the fund for insurance of deposits in savings
 banks  or  the  fund for insurance of shares of savings and loan associ-
 ations.
   [(e)] (D) Any corporation, organized under  the  laws  of  any  state,
 solely  to  provide  gratuitously  for support or relief of the priests,
 clergy or ministers of any religious denomination, or their  dependents,
 is  exempt  from  all  provisions  of this chapter, except that any such
 corporation, created by special act  of  incorporation  of  this  state,
 which  by  the  provisions  of such act is subject to the requirement of
 examination by, and making annual reports to, the superintendent,  shall
 be  subject  to the provisions of article three of this chapter relating
 to examinations and statements or reports by insurers.
   [(f)] (E) Any retirement system or pension fund that was  doing  busi-
 ness  on  January first, nineteen hundred forty under the education law,
 the civil service law, the mental hygiene law, any special act of incor-
 poration of this state, or any municipal charter adopted under the  laws
 of this state, exclusively for the benefit of the members of such system
 or  fund or for all or any classes of the employees of this state or any
 municipality thereof, shall be exempt from the provisions of this  chap-
 ter,  except  that if the law under which such system or fund was organ-
 ized subjects it to examination by, and the making of annual reports to,
 the superintendent,  such  system  or  fund  shall  be  subject  to  the
 provisions of article three of this chapter relating to examinations and
 statements or reports by insurers.
   [(g)]  (F)  Any membership corporation or voluntary association organ-
 ized and operating in  this  state  prior  to  January  first,  nineteen
 hundred thirty-nine and its members may act as indemnitors of a licensed
 property/casualty  insurance company in respect to surety bonds or poli-
 cies of insurance required to be  filed  by  such  members  pursuant  to
 section  three  hundred  seventy  of the vehicle and traffic law and are
 exempted from the requirement of having an  insurer's  license;  but  no
 such  membership corporation or association shall become a surety on any
 such bond or otherwise do an insurance business.
   [(h)] (G) Any relief department or pension plan of any common  carrier
 subject  to  the  the  Railroad Retirement Act of 1974 (45 U.S.C. § 31),
 whose privileges and membership are  confined  to  employees  or  former
 employees  of such carrier or its affiliated or subsidiary companies, or
 to any association of such common carriers which  administers  any  such
 department or plan.
   [(i)] (H) Every blood credit system established by a city, pursuant to
 section twenty-one-d of the general city law.
   [(j)]  (I)  Any  group of employers authorized by the workers' compen-
 sation board to provide workers' compensation benefits for the employees

 S. 4558                             3
 
 of all member employers pursuant to subdivision three-a of section fifty
 of the workers' compensation law.
   [(k)]  (J) A charitable bail organization holding a certificate issued
 by the superintendent pursuant to section  six  thousand  eight  hundred
 five of this chapter.
   (k) An institution of higher education, as defined in paragraph two of
 subsection  (a)  of section one thousand one hundred twenty-four of this
 article, that has a certificate of authority from the superintendent and
 complies with the requirements of section one thousand one hundred twen-
 ty-four of this article, to the extent therein stated.
   [(n)] (L) A resolution facility established pursuant to section  seven
 thousand seven hundred nineteen of this chapter.
   §  2.  Paragraph  2 of subsection (a) of section 4522 of the insurance
 law is amended to read as follows:
   (2) Organizations which limit their membership to the employees  of  a
 particular  city  or  town,  or  of a designated business corporation or
 firm, or of one or more business corporations or firms  having  business
 interests  in  common,  except as otherwise provided in subsection [(f)]
 (E) of section one thousand one hundred eight of this chapter. Any  such
 organization  which  limits  its membership to the employees of a corpo-
 ration having more than five thousand employees may provide  for  hospi-
 tal,  surgical and medical benefits for the employee, his or her spouse,
 and his or her child or children not over eighteen years of age.
   § 3. Section 83 of the workers' compensation law, as amended by  chap-
 ter 34 of the laws of 2010, is amended to read as follows:
   §  83.  Rules.  The [commissioner] COMMISSIONERS shall adopt rules for
 the conduct of the business of the state fund, and may from time to time
 alter, amend or repeal any rule therefore adopted. At least six affirma-
 tive votes shall be required for the adoption of any rule, or the amend-
 ment or repeal of any rule. No rule,  and  no  resolution  proposing  to
 alter,  amend  or repeal any rule, shall be effective unless approved by
 the [commissioner of labor. If the commissioner of labor  fails  to  act
 upon any such rule or resolution within thirty days after it is communi-
 cated  to  him  or  her, such rule or resolution shall be deemed to have
 been approved] SUPERINTENDENT OF FINANCIAL SERVICES.
   The rules of the commissioners shall provide for the  conduct  of  the
 business of the state insurance fund, including the issuance of policies
 and their terms and conditions, the fixing of premium rates, the keeping
 of  records,  auditing  of  payrolls,  and the billing and collection of
 premiums therefor, the inspection of risks and the setting of the stand-
 ards of safety, the adjustment and payment of claims and awards, and the
 investigation of all matters relating thereto, the  medical  examination
 of  persons  claiming compensation and the furnishing and supervision of
 medical and surgical treatment to persons injured as set forth  in  this
 chapter,  the conduct of the legal business of the fund and the enforce-
 ment of the subrogated rights of the fund  against  third  parties,  the
 investment  of  the surplus and reserves of the fund, and the collection
 and analysis of statistics of payrolls, premiums,  losses  and  expenses
 and the actuarial consideration thereof.
   §  4. Subdivision a of section 94 of the workers' compensation law, as
 amended by chapter 635 of the laws  of  1996,  is  amended  to  read  as
 follows:
   a.  Any  employer may, upon complying with subdivision two or three of
 section fifty of this chapter, withdraw from the fund by turning in  his
 insurance  contract  for  cancellation,  [provided  he has given written
 notice to the fund of his intention to withdraw  not  less  than  thirty

 S. 4558                             4

 days  before the effective date of such cancellation] ALONG WITH WRITTEN
 NOTICE OF THE EFFECTIVE DATE OF THE CANCELLATION. Upon receipt  of  such
 notice  the  fund shall[, at least ten days prior to the effective date]
 file in the office of the chairman a notice of such cancellation date.
   [In no event shall the insurance contract be deemed cancelled until at
 least ten days after the date of such filing, any earlier date mentioned
 in the notice to the contrary notwithstanding.]
   If an employer withdraws from the fund upon complying with subdivision
 two  of  section  fifty of this chapter, the new insurance contract with
 the stock corporation, mutual corporation or reciprocal insurer shall be
 deemed not to take effect until  the  cancellation  of  such  employer's
 contract with the state insurance fund has become effective.
   §  5.  This  act shall take effect on the ninetieth day after it shall
 have become a law.

2017-S4558A (ACTIVE) - Details

See Assembly Version of this Bill:: A8471
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§1108 & 4522, Ins L; amd §§83, 94, 89 & 76, Work Comp L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S1662
2011-2012: S3836
2013-2014: S6755
2015-2016: S254
2019-2020: A4356

2017-S4558A (ACTIVE) - Summary

2017-S4558A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4558A

 TITLE OF BILL :

An act to amend the insurance law, in relation to removing the
exemption of the state insurance fund from licensing and other
requirements; to amend the workers' compensation law, in relation to
requiring the superintendent of insurance to approve the rules adopted
by the state insurance fund for the conduct of its business; to amend
the workers' compensation law, in relation to the requirement for
policyholders to provide 30 days notice to withdraw from the state
insurance fund; and to permit the state insurance fund to compensate
licensed insurance brokers for services provided to clients insured by
the fund

 PURPOSE :

The bill would require that the State Insurance Fund (SIF) be licensed
by the Department of Financial Services (DFS) and subject to the same
requirements as other insurance companies providing workers'
compensation insurance. The bill would also require that the
Superintendent of DFS approve the rules adopted by SIF for the conduct
of its business. It would also delete the requirement for SIF policy
holders to provide 30 days notice to withdraw from the Fund.

 SUMMARY OF PROVISIONS :

Section 1. Amends section 1108 of the Insurance Law relating to
insurers exempt from licensing and other requirements.

Section 2. Amends paragraph 2 of subsection (a) of section 4522
relating to membership.

Section 3. Replaces the Commissioner of Labor with the Superintendent
of DFS as the person who must approve the rules adopted by SIF for the
conduct of its business. It also deletes the provision allowing for
rules to be adopted if not approved by the Commissioner of Labor
within 30 days.

Section 4. Deletes the requirement of policyholders of SIF to provide
30 days notice of their intent to withdraw from the Fund. Instead,
policyholders would have to provide written notice of the effective
date of cancellation.

Sections 5, 6 and 7. Provides for commissions to be paid to licensed
brokers.

Section 8. Sets the effective date.

 JUSTIFICATION :

New York Insurance Law section 1108 exempts certain insurers,
including SW from licensing and other requirements of the Insurance
Law. SIF is a non-profit agency of the State of New York established
in 1914 to provide a guaranteed source of workers' compensation
insurance coverage for employers in New York State. SIF is the largest
single carrier of workers' compensation insurance in the State, with
approximately 37 percent of the market. SIF is administered by nine
Commissioners, including the Commissioner of Labor and eight members
who are appointed by the Governor with the consent of the Senate. The
Commissioners appoint an executive director who is responsible for the
direction and operation of SIF. SIF is completely self-sustaining,
acquiring all of its operating and reserve funds from the premiums it
collects from its policyholders and its investment income. Although a
quasi-public agency, SIF was intended by the Legislature to be treated
the same as a private insurance company. See Commissioners of State
insurance Fund v. Low, 285 App. Div. 525, 138 N.Y.S.2d 437 (3rd Dept
1955). It is more closely equated to an insurance company than to a
typical state agency. Martin Minkiowtiz, PRACTICE COMMENTARIES, N.Y.
Work. Comp. Section 76 (McKinney 1994) Despite the fact that SW was
intended to be treated a s a private insurance company, it is not
licensed by the New York State DFS, not is it subject to the
Department's oversight and regulation. As a result, SW policyholders
are put at a disadvantage when compared to policyholders of private
workers' compensation insurers. If a ST policyholder has a dispute
with SIF regarding an unfair insurance practice, they have no recourse
other than to bring the matter up with SIF. In contract, policyholders
of private carriers may appeal to the DFS if they have a dispute with
their insurer. SIF policyholders have reported various unfair
practices which have gone unchecked. One common complaint is that SIP
takes retaliatory actions against policyholders who seek to move their
business from SIF to another coverage provider. Policyholders have
reported aggressive and unfair tactics, such as SW suddenly revising
audits and questioning classifications in an effort to charge a
departing customer a higher premium. Additionally, private insurance
carriers who must be licensed by the DFS and subject to insurance law
are also placed at a competitive disadvantage compared to the SIF
which is not subject to the same rules and regulations.  To rectify
these inequities, the bill would place SIF on an even footing with
other insurers providing workers' compensation insurance by removing
SIFs exemption from licensing and other insurance requirements. The
bill would also insert the Superintendent of DFS, as opposed to the
Commissioner of Labor, as the appropriate person to approve the rules
adopted by the commissioners of SIF for the conduct of its business.
These rules of conduct include those pertaining to the issuance of
policies and their terms and conditions, the fixing of premium rates,
record keep, payroll audits, billing and collection of premiums,
inspection of risks and setting standards of safety and the adjustment
and payment of claims and awards.

The bill would remove a requirement placed upon policyholders of ST
that does not apply to policyholders of private insurers. Currently,
SIF policyholders that want to cancel their policy with SIF because
they have found other coverage must provide ST with 30 days advance
written notice. During this notice period, policyholders report that
SIF employs aggressive and retaliatory tactics in an effort to retain
the business. It is simply unfair to require policyholders of the SIF
to provide more notice than is required of policyholders of private
carriers.

The bill also provides that the purpose of the fund be expanded to
provide for an appropriate commission schedule to pay license brokers
for services provided to their clients who obtain coverage through the
fund.

 LEGISLATIVE HISTORY :

2015-16 S.254/A.2904;
2014 S.6755/A.9797;
2012 S.3836
2009-10 S.1662;
2007-08 S.7673;

 FISCAL IMPLICATIONS :

TBD

 EFFECTIVE DATE :
This act shall take effect on the ninetieth day after it shall have
become law.

2017-S4558A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4558--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 17, 2017
                                ___________
 
 Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Insurance  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the insurance law, in relation to removing the exemption
   of  the state insurance fund from licensing and other requirements; to
   amend the workers' compensation law,  in  relation  to  requiring  the
   superintendent  of insurance to approve the rules adopted by the state
   insurance fund for the conduct of its business; to amend the  workers'
   compensation  law, in relation to the requirement for policyholders to
   provide 30 days notice to withdraw from the state insurance fund;  and
   to  permit  the  state insurance fund to compensate licensed insurance
   brokers for services provided to clients insured by the fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  1108  of  the  insurance  law, subsection (c) as
 amended by section 38 of part SS of chapter 54  of  the  laws  of  2016,
 subsection (j) as added by section 2 of part R of chapter 56 of the laws
 of  2010,  subsection  (k)  as added by chapter 181 of the laws of 2012,
 subsection (k) as  added  by  chapter  246  of  the  laws  of  2012  and
 subsection  (n)  as added by chapter 454 of the laws of 2014, is amended
 to read as follows:
   § 1108. Insurers exempt from licensing  and  other  requirements.  The
 following  insurers, their officers, agents, representatives and employ-
 ees shall be exempt from licensing and other requirements imposed by the
 provisions of this chapter (except article seventy-four hereof)  to  the
 extent specified below:
   (a)  Any  charitable  annuity society which complies with the require-
 ments of section one thousand one hundred ten of this  article,  to  the
 extent therein stated.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09688-03-7

 S. 4558--A                          2
 
   (b)  Any  fraternal  benefit  society, membership corporation or other
 organization exempted under the provisions of article forty-five of this
 chapter, to the extent therein stated.
   (c)  [The  state  insurance  fund  of  this  state,  except  as to the
 provisions of subsection (d) of section two thousand three hundred thir-
 ty-nine, section three thousand one hundred ten, subsection  (a),  para-
 graph  one  of  subsection  (b),  paragraph  three of subsection (c) and
 subsection (d) of section three thousand two hundred one, sections three
 thousand two hundred two, three thousand two hundred  four,  subsections
 (a)  through  (d)  of  section  three  thousand  two hundred twenty-one,
 subsections (b) and (c) of section four  thousand  two  hundred  twenty-
 four,  section  four thousand two hundred twenty-six and subsections (a)
 and (b), (g) through (j), and (n) of section four thousand  two  hundred
 thirty-five  of  this  chapter  and  except  as  otherwise  specifically
 provided by the laws of this state.
   (d)] Any corporate trustee or board of trustees acting pursuant to the
 banking law in relation to the fund for insurance of deposits in savings
 banks or the fund for insurance of shares of savings  and  loan  associ-
 ations.
   [(e)]  (D)  Any  corporation,  organized  under the laws of any state,
 solely to provide gratuitously for support or  relief  of  the  priests,
 clergy  or ministers of any religious denomination, or their dependents,
 is exempt from all provisions of this  chapter,  except  that  any  such
 corporation,  created  by  special  act  of incorporation of this state,
 which by the provisions of such act is subject  to  the  requirement  of
 examination  by, and making annual reports to, the superintendent, shall
 be subject to the provisions of article three of this  chapter  relating
 to examinations and statements or reports by insurers.
   [(f)]  (E)  Any retirement system or pension fund that was doing busi-
 ness on January first, nineteen hundred forty under the  education  law,
 the civil service law, the mental hygiene law, any special act of incor-
 poration  of this state, or any municipal charter adopted under the laws
 of this state, exclusively for the benefit of the members of such system
 or fund or for all or any classes of the employees of this state or  any
 municipality  thereof, shall be exempt from the provisions of this chap-
 ter, except that if the law under which such system or fund  was  organ-
 ized subjects it to examination by, and the making of annual reports to,
 the  superintendent,  such  system  or  fund  shall  be  subject  to the
 provisions of article three of this chapter relating to examinations and
 statements or reports by insurers.
   [(g)] (F) Any membership corporation or voluntary  association  organ-
 ized  and  operating  in  this  state  prior  to January first, nineteen
 hundred thirty-nine and its members may act as indemnitors of a licensed
 property/casualty insurance company in respect to surety bonds or  poli-
 cies  of  insurance  required  to  be  filed by such members pursuant to
 section three hundred seventy of the vehicle and  traffic  law  and  are
 exempted  from  the  requirement  of having an insurer's license; but no
 such membership corporation or association shall become a surety on  any
 such bond or otherwise do an insurance business.
   [(h)]  (G) Any relief department or pension plan of any common carrier
 subject to the the Railroad Retirement Act of 1974  (45  U.S.C.  §  31),
 whose  privileges  and  membership  are  confined to employees or former
 employees of such carrier or its affiliated or subsidiary companies,  or
 to  any  association  of such common carriers which administers any such
 department or plan.

 S. 4558--A                          3
 
   [(i)] (H) Every blood credit system established by a city, pursuant to
 section twenty-one-d of the general city law.
   [(j)]  (I)  Any  group of employers authorized by the workers' compen-
 sation board to provide workers' compensation benefits for the employees
 of all member employers pursuant to subdivision three-a of section fifty
 of the workers' compensation law.
   [(k)] (J) A charitable bail organization holding a certificate  issued
 by  the  superintendent  pursuant  to section six thousand eight hundred
 five of this chapter.
   (k) An institution of higher education, as defined in paragraph two of
 subsection (a) of section one thousand one hundred twenty-four  of  this
 article, that has a certificate of authority from the superintendent and
 complies with the requirements of section one thousand one hundred twen-
 ty-four of this article, to the extent therein stated.
   [(n)]  (L) A resolution facility established pursuant to section seven
 thousand seven hundred nineteen of this chapter.
   § 2. Paragraph 2 of subsection (a) of section 4522  of  the  insurance
 law is amended to read as follows:
   (2)  Organizations  which limit their membership to the employees of a
 particular city or town, or of  a  designated  business  corporation  or
 firm,  or  of one or more business corporations or firms having business
 interests in common, except as otherwise provided  in  subsection  [(f)]
 (E)  of section one thousand one hundred eight of this chapter. Any such
 organization which limits its membership to the employees  of  a  corpo-
 ration  having  more than five thousand employees may provide for hospi-
 tal, surgical and medical benefits for the employee, his or her  spouse,
 and his or her child or children not over eighteen years of age.
   §  3. Section 83 of the workers' compensation law, as amended by chap-
 ter 34 of the laws of 2010, is amended to read as follows:
   § 83. Rules. The [commissioner] COMMISSIONERS shall  adopt  rules  for
 the conduct of the business of the state fund, and may from time to time
 alter, amend or repeal any rule therefore adopted. At least six affirma-
 tive votes shall be required for the adoption of any rule, or the amend-
 ment  or  repeal  of  any  rule. No rule, and no resolution proposing to
 alter, amend or repeal any rule, shall be effective unless  approved  by
 the  [commissioner  of  labor. If the commissioner of labor fails to act
 upon any such rule or resolution within thirty days after it is communi-
 cated to him or her, such rule or resolution shall  be  deemed  to  have
 been approved] SUPERINTENDENT OF FINANCIAL SERVICES.
   The  rules  of  the commissioners shall provide for the conduct of the
 business of the state insurance fund, including the issuance of policies
 and their terms and conditions, the fixing of premium rates, the keeping
 of records, auditing of payrolls, and  the  billing  and  collection  of
 premiums therefor, the inspection of risks and the setting of the stand-
 ards of safety, the adjustment and payment of claims and awards, and the
 investigation  of  all matters relating thereto, the medical examination
 of persons claiming compensation and the furnishing and  supervision  of
 medical  and  surgical treatment to persons injured as set forth in this
 chapter, the conduct of the legal business of the fund and the  enforce-
 ment  of  the  subrogated  rights of the fund against third parties, the
 investment of the surplus and reserves of the fund, THE COMPENSATION  OF
 INSURANCE PRODUCERS THROUGH COMMISSIONS, and the collection and analysis
 of statistics of payrolls, premiums, losses and expenses and the actuar-
 ial consideration thereof.

 S. 4558--A                          4
 
   §  4. Subdivision a of section 94 of the workers' compensation law, as
 amended by chapter 635 of the laws  of  1996,  is  amended  to  read  as
 follows:
   a.  Any  employer may, upon complying with subdivision two or three of
 section fifty of this chapter, withdraw from the fund by turning in  his
 insurance  contract  for  cancellation,  [provided  he has given written
 notice to the fund of his intention to withdraw  not  less  than  thirty
 days  before the effective date of such cancellation] ALONG WITH WRITTEN
 NOTICE OF THE EFFECTIVE DATE OF THE CANCELLATION. Upon receipt  of  such
 notice  the  fund shall[, at least ten days prior to the effective date]
 file in the office of the chairman a notice of such cancellation date.
   [In no event shall the insurance contract be deemed cancelled until at
 least ten days after the date of such filing, any earlier date mentioned
 in the notice to the contrary notwithstanding.]
   If an employer withdraws from the fund upon complying with subdivision
 two of section fifty of this chapter, the new  insurance  contract  with
 the stock corporation, mutual corporation or reciprocal insurer shall be
 deemed  not  to  take  effect  until the cancellation of such employer's
 contract with the state insurance fund has become effective.
   § 5. Subdivision 1 of section 89 of the workers' compensation law,  as
 amended  by  chapter  135  of  the  laws  of 1998, is amended to read as
 follows:
   1. Employments and employees in the state fund shall be  divided  into
 such  groups and classes as shall be equitable based upon differences of
 industry or hazard for the purpose of  establishing  premium  rates  for
 workers'  compensation insurance, and for such purpose a system of merit
 rating may be employed which shall take account of the  peculiar  hazard
 of each individual risk.  Such premiums in the state fund shall be fixed
 at  the  lowest  possible  rates  consistent  with  the maintenance of a
 solvent fund and of reasonable reserves and surplus, NOTWITHSTANDING THE
 PAYMENT OF BROKER COMMISSION ARRANGEMENTS AS PROVIDED FOR IN THIS  ARTI-
 CLE.
   §  6.  Subdivision 5 of section 76 of the workers' compensation law is
 renumbered subdivision 6 and a new subdivision 5 is  added  to  read  as
 follows:
   5.  THE  PURPOSES  OF  SUCH  STATE  INSURANCE  FUND ARE HEREBY FURTHER
 ENLARGED TO PERMIT IT TO COMPENSATE LICENSED INSURANCE BROKERS  FOR  THE
 SERVICES  THEY PROVIDE THEIR CLIENTS WHO ARE INSURED IN THE FUND THROUGH
 THE PAYMENT OF COMMISSIONS. THE COMMISSIONERS  OF  THE  STATE  INSURANCE
 FUND  ARE HEREBY AUTHORIZED AND DIRECTED TO ESTABLISH, WITHIN THE EXIST-
 ING RATE STRUCTURE, A FACTOR TO COMPENSATE LICENSED INSURANCE  PRODUCERS
 FOR  THE  SERVICES PROVIDED TO THEIR CLIENTS WHO OBTAIN COVERAGE THROUGH
 THE FUND.
   § 7. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.

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