S T A T E O F N E W Y O R K
________________________________________________________________________
1952
2019-2020 Regular Sessions
I N A S S E M B L Y
January 18, 2019
___________
Introduced by M. of A. MAGNARELLI -- read once and referred to the
Committee on Labor
AN ACT to amend the general municipal law, the workers' compensation
law, the insurance law, the volunteer firefighters' benefit law, and
the volunteer ambulance workers' benefit law, in relation to partic-
ipation in a public group self-insurer
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph b of subdivision 2 of section 119-o of the gener-
al municipal law, as amended by chapter 681 of the laws of 1961, is
amended to read as follows:
b. The manner of employing, engaging, compensating, transferring or
discharging necessary personnel, subject, however, to the provisions of
the civil service law where applicable; the making of employer's
contributions for retirement, social security, health insurance, work-
men's compensation, VOLUNTEER FIREFIGHTER AND VOLUNTEER AMBULANCE WORKER
BENEFITS, INCLUDING PARTICIPATION IN A PUBLIC GROUP SELF-INSURER, and
other similar benefits; the approval of attendances at conventions,
conferences and schools for public officials and the approval and
payment of travel and other expenses incurred in the performance of
official duties; the bonding of designated officers and employees; the
filing of oaths of office and resignations consistent with general laws
applicable thereto; provisions that for specific purposes designated
officers or employees of the joint service or a joint water, sewage or
drainage project shall be deemed those of a specified participating
corporation or district; and provisions that personnel assigned to a
joint service or a joint water, sewage or drainage project shall possess
the same powers, duties, immunities and privileges they would ordinarily
possess (1) if they performed their duties only in the corporation or
district by which they are employed or (2) if they were employed by the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01895-01-9
A. 1952 2
corporation or district in which they are required to perform their
duties.
§ 2. Paragraph 1, subparagraphs (a), (b) and (h) of paragraph 2,
subparagraph (a) and item e of subparagraph (d) of paragraph 5 and
subparagraph (a) of paragraph 6 of subdivision 3-a of section 50 of the
workers' compensation law, paragraph 1, subparagraph (a) and item e of
subparagraph (d) of paragraph 5 and subparagraph (a) of paragraph 6 as
amended by chapter 139 of the laws of 2008, subparagraphs (a) and (h) of
paragraph 2 as amended by section 4 of part G of chapter 57 of the laws
of 2011, and subparagraph (b) of paragraph 2 as amended by section 1-a
of subpart E of part NNN of chapter 59 of the laws of 2017, are amended
to read as follows:
(1) Definitions. As used in this chapter the term "employers" shall
include: (a) employers with related activity in a given industry [which
shall include municipal corporations as that term is defined in sections
two and six-n of the general municipal law,] employing persons who
perform work in connection with the given industry, (b) an incorporated
or unincorporated association or associations consisting exclusively of
such employers provided they employ persons who perform such related
work in the given industry, and (c) a combination of employers as
described in subparagraph (a) hereof and an association or associations
of employers as described in subparagraph (b) hereof.
(a) Any group consisting exclusively of such employers may adopt a
plan for self-insurance, as a group, for the payment of compensation
under this chapter to their employees, except that no new groups may
adopt such a plan, and no group not composed solely of public entities
set forth in [paragraph a of] subdivision [four] THREE-F of this section
may insure any liabilities for any employers on and after January first,
two thousand twelve, except as provided for in paragraph ten of this
subdivision. Under such plan the group shall assume the liability of all
the employers within the group and pay all compensation for which the
said employers are liable under this chapter[, except that in the case
of municipal corporations as herein defined no proof of financial abili-
ty or deposit of securities or cash need be made in compliance with this
subdivision]. The group qualifying under this subdivision shall be known
as a group self-insurer and the employers participating therein and
covered thereby shall be known as members.
(b) Where such plan is adopted the group self-insurer, EXCEPT A GROUP
COMPOSED SOLELY OF PUBLIC ENTITIES SET FORTH IN SUBDIVISION THREE-F OF
THIS SECTION, shall furnish satisfactory proof to the chair of its
financial ability to pay such compensation for the members in the indus-
try covered by it, its revenues, their source and assurance of contin-
uance. The chair shall require the deposit with the chair of such secu-
rities as may be deemed necessary of the kind prescribed in subdivisions
one, two, three, four and five, and subparagraph (a) of paragraph three
of subdivision seven of section two hundred thirty-five of the banking
law or the deposit of cash or the filing of irrevocable letters of cred-
it issued by a qualified banking institution as defined by rules promul-
gated by the chair or the filing of a bond of a surety company author-
ized to transact business in this state, in an amount to be determined
to secure its liability to pay the compensation of each employer as
above provided. Such surety bond must be approved as to form by the
chair. The chair shall require each group self-insurer to provide regu-
lar reports no less than annually, which shall include but not be limit-
ed to audited financial statements, actuarial opinions and payroll
information containing proof that it is fully funded. Such reports shall
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also include a contribution year analysis detailing contributions and
expenses associated with each specific contribution year. For purposes
of this paragraph, proof that a group self-insurer is fully funded shall
at a minimum include proof of unrestricted cash and investments permit-
ted by regulation of the chair of at least one hundred percent of the
total liabilities, including the estimate presented in the actuarial
opinion submitted by the group self-insurer in accordance with this
chapter. The chair by regulation, may set further financial standards
for group self-insurers. Any group self-insurer that fails to show that
it is fully funded shall be deemed underfunded, and must submit a plan
for achieving fully funded status which may include a deficit assessment
on members of such group self-insurer which shall be subject to approval
or modification by the chair. The amount of such under-funding, as meas-
ured by the actuarial opinion or assumption of loss policy quotation
submitted by the group, shall be considered unfunded claims as set forth
in subdivision two of section sixteen hundred eighty-q of the public
authorities law as added by section [35] THIRTY-FIVE of Part GG of chap-
ter [57] FIFTY-SEVEN of the laws of [2013] TWO THOUSAND THIRTEEN.
[(h) Any member terminating membership in a group self-insurer after
less than four years in such group self-insurer, and any member in a
group self-insurer that has defaulted, shall be precluded from obtaining
prospective coverage from any group self-insurer for a period of at
least three years from the effective date of termination.]
(a) Each PRIVATE group self-insurer shall, AND EACH GROUP SELF-INSURER
MAY, secure the services of a group administrator to be responsible for
assisting the group self-insurer in complying with the provisions of
this section and the rules and regulations promulgated hereunder, and
for coordinating services including but not limited to claims process-
ing, loss control, legal, accounting and actuarial services. No person,
firm or corporation shall coordinate such services or otherwise carry
out the tasks of a group administrator as provided in this subdivision
or in the regulations issued pursuant thereto on behalf of a group self-
insurer unless such person shall have obtained from the chair a license
authorizing it to act as a group self-insurer administrator, which
license may be revoked for good cause. The chair shall promulgate regu-
lations setting forth any additional qualifications for such license,
governing the conduct and compensation of group self-insurer administra-
tors, and setting a license fee in an amount not less than five thousand
dollars per year for such license for each group self-insurer the admin-
istrator administers. Each administrator shall post a bond in the amount
of five hundred thousand dollars for each group self-insurer adminis-
tered or such other amount as may be set by the chair based on the cost
and availability of such bond, from which the chair may recover any
recoveries or penalties against the administrator under this section.
Nothing in this section shall relieve the trustees of a group self-in-
surer of any fiduciary obligation they hold to the other members of such
group self-insurer.
e. the number and amount of rate deviations provided to members during
the prior year and whether the recipient of any such deviation was a
trustee, PROVIDED THAT THE APPLICATION OF RATING FACTORS IN A MANNER
CONSISTENT WITH THE FILED RATING PLAN IS NOT A DEVIATION WHICH MUST BE
REPORTED UNDER THIS SUBDIVISION; and
(a) Group self-insurers must file with the board, as soon as practica-
ble but no later than sixty days prior to the start of the fund year a
rating plan which is supported by an actuarial rate study prepared by an
independent, qualified actuary that is a fellow or associate of the
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casualty actuarial society, that clearly identifies the actuary's indi-
cated rate assumptions therein. The rating plan must apply consistently
to all members, and must provide for a common renewal date for all
PRIVATE group self-insurer members. The rates filed can be adjusted
based on an experience modification calculated for every member in
accordance with the experience rating plan promulgated by the workers'
compensation rating board. Experience modification formulas must be
applied identically to all members. Other rate deviations may be permis-
sible provided a plan has been approved by the board. Such deviations
shall not be in excess of ten percent of the actuary's indicated rate
unless otherwise approved by the board for a fully funded group self-in-
surer, and shall in no event result in amounts less than the actuary's
overall indicated rate. The chair by regulation may set further rate
plan and actuarial reporting standards.
§ 3. Paragraph (g) of subdivision 3-e of section 50 of the workers'
compensation law, as added by chapter 729 of the laws of 1993, is
amended and a new subdivision 3-f is added to read as follows:
(g) The state insurance fund, any other insurer or any group self-in-
surer for municipal corporations as defined in subdivision [three-a]
THREE-F of this section may, at its option, offer a deductible in an
amount specified in paragraph (c) of this subdivision to any policyhold-
er who is not otherwise eligible for a deductible under this subdivi-
sion.
3-F. (1) ANY GROUP CONSISTING EXCLUSIVELY OF MUNICIPAL CORPORATIONS
AND PUBLIC CORPORATIONS AS SUCH TERMS ARE DEFINED IN SECTION SIXTY-SIX
OF THE GENERAL CONSTRUCTION LAW, COUNTY SELF-INSURANCE PLANS ESTABLISHED
UNDER ARTICLE FIVE OF THIS CHAPTER, BOARDS OF COOPERATIVE EDUCATIONAL
SERVICES AND CONSORTIA ESTABLISHED BY BOARDS OF COOPERATIVE EDUCATIONAL
SERVICES MAY ADOPT A PLAN FOR SELF-INSURANCE, AS A GROUP, FOR THE
PAYMENT OF COMPENSATION UNDER THIS CHAPTER TO THEIR EMPLOYEES. SUCH
GROUP SHALL BE KNOWN AS A "PUBLIC GROUP SELF-INSURER". ALL OTHER GROUPS
ESTABLISHED UNDER THIS SECTION ARE "PRIVATE GROUP SELF-INSURERS". A
COUNTY SELF-INSURANCE PLAN ESTABLISHED UNDER ARTICLE FIVE OF THIS CHAP-
TER IS NOT ITSELF A PUBLIC GROUP SELF-INSURER, AND IS NOT ITSELF SUBJECT
TO THE REQUIREMENTS OF THIS SECTION, BUT MAY JOIN A PUBLIC GROUP SELF-
INSURER AND, IF IT DOES SO, SHALL ASSUME ALL OF THE OBLIGATIONS OF ITS
PARTICIPANTS TO THE PUBLIC GROUP SELF-INSURER. NO ENTITY WHICH IS NOT A
MUNICIPAL CORPORATION AS DEFINED IN SECTION SIXTY-SIX OF THE GENERAL
CONSTRUCTION LAW, A COUNTY SELF-INSURANCE PLAN ESTABLISHED UNDER ARTICLE
FIVE OF THIS CHAPTER, OR A CONSORTIUM ESTABLISHED BY A BOARD OF COOPER-
ATIVE EDUCATIONAL SERVICES, MAY JOIN A PUBLIC GROUP SELF-INSURER UNLESS
IT MAY LEVY TAXES OR IS OTHERWISE DIRECTLY CAPABLE OF GENERATING REVENUE
IN THE EVENT OF A FUNDING DEFICIENCY WITHIN THE PUBLIC GROUP SELF-INSUR-
ER, OR ITS OBLIGATIONS ARE GUARANTEED BY ANOTHER MEMBER WHICH IS SUCH A
MUNICIPAL CORPORATION. A PUBLIC GROUP SELF-INSURER SHALL COMPLY WITH ALL
OF THE REQUIREMENTS OF SUBDIVISION THREE-A OF THIS SECTION; INCLUDING
ANY OBLIGATIONS IMPOSED BY SUCH SUBDIVISION UPON A GROUP ADMINISTRATOR,
BUT SHALL NOT BE REQUIRED TO OBTAIN A LICENSE AUTHORIZING IT TO ACT AS A
GROUP SELF-INSURER ADMINISTRATOR, TO PAY A LICENSE FEE OR TO POST A
BOND. NO PROOF OF FINANCIAL ABILITY TO PAY THE COMPENSATION PROVIDED FOR
BY THIS CHAPTER OR DEPOSIT OF SECURITIES SHALL BE REQUIRED OF A PUBLIC
GROUP SELF-INSURER AND, IN LIEU THEREOF, THE LIABILITY OF THE PUBLIC
GROUP SELF-INSURER'S MEMBERS SHALL SERVE AS THE SECURITY REQUIRED UNDER
PARAGRAPH TWO OF SUBDIVISION THREE-A OF THIS SECTION. THE CHAIR SHALL
IMPLEMENT THE PROVISIONS OF THIS SUBDIVISION BY PROMULGATING RULES AND
A. 1952 5
REGULATIONS, BUT NO SUCH RULES AND REGULATIONS SHALL BE NECESSARY FOR
ANY PROVISIONS OF THIS SUBDIVISION TO BE EFFECTIVE.
(2) A PUBLIC GROUP SELF-INSURER AS DEFINED IN PARAGRAPH ONE OF THIS
SUBDIVISION MAY OFFER, AS PART OF THE AGREEMENT OR BY ENDORSEMENT,
DEDUCTIBLES OPTIONAL TO THE MEMBER FOR BENEFITS PAYABLE UNDER THE AGREE-
MENT, UPON A DETERMINATION BY THE CHAIR THAT THE PLAN IS SUPPORTED BY AN
ACTUARIAL ANALYSIS PREPARED BY AN INDEPENDENT, QUALIFIED ACTUARY WHO IS
A MEMBER OF THE CASUALTY ACTUARIAL SOCIETY THAT CLEARLY IDENTIFIES THE
ACTUARY'S INDICATED DEDUCTIBLE CREDIT AND RATE ASSUMPTIONS, AND SUBJECT
TO UNDERWRITING BY THE PUBLIC GROUP SELF-INSURER, CONSISTENT WITH THE
FOLLOWING STANDARDS OR FACTORS:
(A) CLAIMANTS' RIGHTS ARE PROPERLY PROTECTED AND CLAIMANTS' BENEFITS
ARE PAID WITHOUT REGARD TO ANY SUCH DEDUCTIBLE;
(B) APPROPRIATE PREMIUM REDUCTIONS REFLECT THE TYPE AND LEVEL OF ANY
DEDUCTIBLE APPROVED BY THE CHAIRMAN AND SELECTED BY THE MEMBER;
(C) PREMIUM REDUCTIONS FOR DEDUCTIBLES ARE DETERMINED BEFORE APPLICA-
TION OF ANY EXPERIENCE MODIFICATION, PREMIUM SURCHARGE, OR PREMIUM
DISCOUNT;
(D) RECOGNITION IS GIVEN TO MEMBER CHARACTERISTICS, INCLUDING SIZE,
FINANCIAL CAPABILITIES, NATURE OF ACTIVITIES, AND NUMBER OF EMPLOYEES;
(E) IF THE MEMBER SELECTS A DEDUCTIBLE, THE MEMBER IS LIABLE TO THE
PUBLIC GROUP SELF-INSURER FOR THE DEDUCTIBLE AMOUNT IN REGARD TO BENE-
FITS PAID FOR COMPENSABLE CLAIMS;
(F) THE PUBLIC GROUP SELF-INSURER PAYS ALL OF THE DEDUCTIBLE AMOUNT,
APPLICABLE TO A COMPENSABLE CLAIM, TO THE PERSON OR PROVIDER ENTITLED TO
BENEFITS AND REQUIRES THE MEMBER TO PAY TO IT IN ADVANCE AN AMOUNT ACTU-
ARIALLY DETERMINED TO BE SUFFICIENT TO PAY THE PORTION OF THE COMPEN-
SATION CLAIM THAT IS WITHIN THE DEDUCTIBLE AMOUNT AS THOSE PAYMENTS
BECOME DUE; PROVIDED THAT SUCH PERIODIC PAYMENTS SHALL BE PAID TO THE
PUBLIC GROUP SELF-INSURER IN INTERVALS OF NO GREATER OF SIX MONTHS; AND
(G) FAILURE TO REIMBURSE DEDUCTIBLE AMOUNTS BY THE MEMBER TO THE
PUBLIC GROUP SELF-INSURER IS TREATED UNDER THE COVERAGE AGREEMENT IN THE
SAME MANNER AS NONPAYMENT OF CONTRIBUTIONS.
(3) WHENEVER THE CHAIR DETERMINES THAT A PUBLIC GROUP SELF-INSURER HAS
BECOME INSOLVENT OR THAT THE COMPENSATION AND BENEFITS PROVIDED BY THIS
CHAPTER MAY BE UNPAID BY REASON OF THE DEFAULT OF A PUBLIC GROUP SELF-
INSURER, THE CHAIR SHALL PAY SUCH COMPENSATION AND BENEFITS FROM ADMIN-
ISTRATION EXPENSES AS PROVIDED IN SECTION ONE HUNDRED FIFTY-ONE OF THIS
CHAPTER UPON AUDIT AND WARRANT OF THE COMPTROLLER AND UPON VOUCHERS
APPROVED BY THE CHAIR, WHICH PAYMENTS SHALL BE CONSIDERED EXPENSES OF
ADMINISTRATION. AS USED IN THIS PARAGRAPH, INSOLVENT MEANS THE VALUE OF
THE PUBLIC GROUP SELF-INSURER'S ASSETS IS LESS THAN THE TOTAL COSTS OF
THE WORKERS' COMPENSATION LIABILITIES THAT IT IS ANTICIPATED THE PUBLIC
GROUP SELF-INSURER IS REQUIRED TO PAY WITHIN THE SUCCEEDING SIX MONTHS.
UPON THE INSOLVENCY OF A PUBLIC GROUP SELF-INSURER, EACH MEMBER SHALL
ASSUME RESPONSIBILITY FOR THE CLAIMS AGAINST IT. THE CHAIR SHALL BE
REIMBURSED FOR ANY PAYMENT MADE UNDER THIS PARAGRAPH FIRST BY THE PUBLIC
GROUP SELF-INSURER ITSELF AND IF THE PUBLIC GROUP SELF-INSURER IS UNABLE
TO FULLY REIMBURSE THE CHAIR FOR PAYMENTS MADE BY THE CHAIR THEN SECOND
BY THE MEMBER OF THE PUBLIC GROUP SELF-INSURER AGAINST WHICH THE CLAIM
IS ASSERTED. IF THE CHAIR IS UNABLE TO OBTAIN REIMBURSEMENT FROM THAT
MEMBER, THE CHAIR MAKE SEEK REIMBURSEMENT FROM ANY OTHER MEMBER OF THE
PUBLIC GROUP SELF-INSURER. ANY MEMBER WHICH REIMBURSES THE CHAIR FOR
PAYMENTS MADE UNDER THIS PARAGRAPH WITH RESPECT TO CLAIMS AGAINST ANY
OTHER MEMBER MAY RECOVER THOSE PAYMENTS FROM THE MEMBER WHOSE CLAIMS
WERE PAID BY THE CHAIR. NOTHING HEREIN SHALL PRECLUDE THE CHAIR FROM
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DIRECTING THAT AN UNDERFUNDED PUBLIC GROUP SELF-INSURER LEVY AN ASSESS-
MENT ON ITS MEMBERS AS PART OF A PLAN IMPLEMENTED PURSUANT TO SUBPARA-
GRAPH (B) OF PARAGRAPH TWO OF SUBDIVISION THREE-A OF THIS SECTION.
§ 4. The opening paragraph of section 3443 of the insurance law, as
added by chapter 924 of the laws of 1990, is amended to read as follows:
An insurer issuing a workers' compensation and employers' liability
insurance policy, [and a group self-insurer for municipal corporations
as defined in subdivision three-a of section fifty of the workers'
compensation law,] may offer, as part of the policy or by endorsement,
deductibles optional to the policyholder for benefits payable under the
policy, subject to approval by the superintendent and subject to under-
writing by the insurer, consistent with the following standards or
factors:
§ 5. Subdivision 9 of section 30 of the volunteer firefighters' bene-
fit law, as amended by chapter 61 of the laws of 1989, is amended to
read as follows:
9. Insurance authorized to be purchased pursuant to subdivision eight
of this section may be secured from the state fund or any stock corpo-
ration, mutual corporation or reciprocal insurer authorized to transact
the business of workers' compensation in this state. If such insurance
is not secured, the political subdivision liable shall be deemed to have
elected to be a self-insurer unless it is a participant in a county plan
of self-insurance or its liability for benefits under this chapter is
covered by a town's participation in a county plan of self-insurance as
provided in subdivision three of section sixty-three of the workers'
compensation law, OR IS A PARTICIPANT IN A GROUP SELF-INSURANCE PLAN
CONSISTING SOLELY OF MUNICIPAL CORPORATIONS AS PROVIDED IN SUBDIVISION
THREE-F OF SECTION FIFTY OF THE WORKERS' COMPENSATION LAW. Every such
self-insurer shall file with the chair of the workers' compensation
board a notice of such election prescribed in form by such chair. For
failure to file such notice within ten days after such election is made,
the treasurer or other fiscal officer of such political subdivision
shall be liable to pay to the chair of the workers' compensation board
the sum of one hundred dollars as a penalty, to be transferred to the
state treasury. A notice of election to be a self-insurer for compen-
sation and benefits to volunteer firefighters under the provisions of
the workers' compensation law and the general municipal law in effect
prior to March first, nineteen hundred fifty-seven, which was filed
prior to such date pursuant to the provisions of subdivision four of
section fifty of the workers' compensation law as in effect prior to
such date shall be deemed to be a notice of election filed under this
section unless the chair of the workers' compensation board is notified
to the contrary. The provisions of subdivision five of section fifty of
the workers' compensation law shall be applicable to such self-insurers.
§ 6. Subdivision 8 of section 30 of the volunteer ambulance workers'
benefit law, as amended by chapter 61 of the laws of 1989, is amended to
read as follows:
8. Insurance authorized to be purchased pursuant to subdivision seven
of this section may be secured from the state fund or any stock corpo-
ration, mutual corporation, group self-insurers or reciprocal insurer
authorized to transact the business of workers' compensation in this
state. If such insurance is not secured, the political subdivision
liable shall be deemed to have elected to be a self-insurer unless it is
a participant in a county plan of self-insurance or its liability for
benefits under this chapter is covered by a town's participation in a
county plan of self-insurance as provided in subdivision nine of section
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sixty-three of the workers' compensation law, OR IS A PARTICIPANT IN A
GROUP-INSURANCE PLAN CONSISTING SOLELY OF MUNICIPAL CORPORATIONS AS
PROVIDED IN SUBDIVISIONS THREE-F OF SECTION FIFTY OF THE WORKERS'
COMPENSATION LAW. Every such self-insurer shall file with the chair of
the workers' compensation board a notice of such election prescribed in
form by such chair. For failure to file such notice within ten days
after such election is made, the treasurer or other fiscal officer of
such political subdivision shall be liable to pay to the chair of the
workers' compensation board the sum of one hundred dollars as a penalty,
to be transferred to the state treasury. A notice of election to be a
self-insurer for compensation and benefits to volunteer ambulance work-
ers under the provisions of the workers' compensation law and the gener-
al municipal law in effect prior to March first, in the year of enact-
ment of this chapter, which was filed prior to such date pursuant to the
provisions of subdivision four of section fifty of the workers' compen-
sation law as in effect prior to such date shall be deemed to be a
notice of election filed under this section unless the chair of the
workers' compensation board is notified to the contrary. The provisions
of subdivision five of section fifty of the workers' compensation law
shall be applicable to such self-insurers.
§ 7. This act shall take effect January 1, 2021; provided however,
that subdivision 3-f of section 50 of the workers' compensation law, as
added by section three of this act, shall take effect immediately.