§ 4413. Prohibitions. (a) The trustees of every employee welfare fund
shall be responsible in a fiduciary capacity for all assets received,
managed or disbursed by them, or under their authority, on behalf of
such fund.

(b) (1) No such fund and no employer or labor organization
representing any employees eligible for employee benefits thereunder,
and no trustee or other officer or employee of any such fund, employer
or labor organization shall receive, directly or indirectly, any thing
of value from any insurance company, insurance agent, insurance broker
or any hospital, surgical, dental or medical service plan, in connection
with the solicitation, sale, service or administration of a contract
providing employee benefits for such fund. No such employer, labor
organization, trustee, officer or employee shall receive any thing of
value from such fund, or which is charged against such fund or would
otherwise be payable to such fund, either directly or indirectly, except
that any such person may receive any employee benefits to which he is
otherwise entitled, and any such trustee or other officer or employee of
a fund, may receive from such fund reasonable compensation for necessary
services and expenses rendered or incurred by him in connection with his
official duties as such. Nothing in this subsection shall affect the
payment of any dividend or rate credit or other adjustment due under the
terms of any insurance or annuity contract.

(2) No insurance company, insurance agent or insurance broker,
hospital, surgical, dental or medical service plan, shall directly or
indirectly, pay any commission, make any loan or give any thing of value
to any employee welfare fund or to any employer or labor organization
representing any employees eligible for employee benefits thereunder or
to any trustee or other officer or employee of any such fund, employer
or labor organization, in connection with the solicitation, sale,
service or administration of a contract providing employee benefits for
such fund.

(3) The superintendent may, after notice and a hearing, prohibit the
trustees of an employee welfare fund from employing or retaining or
continuing to employ or retain any person upon finding that such
employment or retention involves a conflict of interest which is not in
the best interests of the fund or adversely affects the interests of
covered employees.

(4) The superintendent may, by regulation or order, and upon such
terms and conditions as he requires, authorize or approve any
transaction or transactions otherwise prohibited by this subsection upon
his finding that the transaction or transactions promote or will promote
the best interests of the relevant employee welfare funds, and do not or
will not adversely affect the interests of the covered employees.

(c) (1) No person who has been convicted by a court of the United
States or by a court of any state or territory thereof of a felony, or
of any crime or offense involving fraudulent or dishonest practices,
shall serve, be appointed, designated or employed as a trustee,
administrator, officer, agent or employee of any employee welfare fund
(other than an employee performing non-discretionary clerical or
building maintenance duties exclusively) during or for five years after
such conviction or the suspension of sentence therefor or from the date
of his unrevoked release from custody by parole, commutation or
termination of sentence, whichever event occurs later, unless prior to
the expiration of said five year period the conviction is finally
reversed by a court of competent jurisdiction or he has been pardoned
therefor by the governor or other appropriate authority of the state or
jurisdiction in which he was convicted or he has received a certificate
of relief from disabilities or a certificate of good conduct pursuant to
the provisions of article twenty-three of the correction law which
specifically removes the disability herein provided.

(2) If the superintendent, after notice and a hearing, finds that a
person has been or is currently serving, appointed, designated or
employed in violation of the provisions of this subsection, he shall
enter an order removing such person from his position and directing that
such person shall be disabled from service, appointment, designation or
employment in any of the capacities hereinabove described for a period
of five years following the entry of such order. The superintendent may,
in addition, impose the penalties provided in subsection (e) of this
section for the wilful violation hereof.

(d) (1) No insurance company shall pay any dividend or retrospective
rate credit on any covering policy except by check payable to the
affected employee welfare fund or by credit memo forwarded to such fund.

(2) No employee welfare fund shall pay any premium on a covering
policy except by check payable to the insurance company directly.

(3) No political contributions shall be made directly or indirectly by
or from any employee welfare fund.

(e) The superintendent may impose a penalty of not to exceed
twenty-five hundred dollars upon any trustee or other officer, agent or
employee of any employee welfare fund subject to this article or may
remove such trustee, officer, agent or employee from office or
employment, or both such penalty and removal, if after notice and a
hearing he shall find that he has wilfully failed to comply with the
requirements of this article.

(f) In any case where, after notice and a hearing, the superintendent
finds that any employee welfare fund has been depleted by reason of any
wrongful or negligent act or omission of a trustee or of any other
person, he may transmit a copy of his findings to the attorney general.
The attorney general may bring an action in the name of the people of
the state, or intervene in an action brought by or on behalf of an
employee, to recover the monies of the fund for the benefit of the
employees and other persons as may have an interest in the fund.

(g) (1) Any person who wilfully violates or causes or induces the
violation of any provision of this article or any regulation issued
under it shall be in violation of the provisions of this chapter.

(2) Any person who makes a false statement or representation of a
material fact, knowing it to be false, or who knowingly fails to
disclose a material fact in any registration, examination, statement or
report required under this article or the regulations thereunder shall
be guilty of a misdemeanor.

(3) Any person who makes a false entry in any book, record, report, or
statement required by this article or any regulation thereunder, to be
kept by him for any employee welfare fund, with intent to injure or
defraud such fund or any beneficiary thereunder, or to deceive any one
authorized or entitled to examine the affairs of such fund, shall be
guilty of a misdemeanor.

(4) Nothing in paragraph two or three of this subsection shall be
construed in any manner to limit the effect of paragraph one hereof.