N.Y. Insurance Law § 4708: Contingent liability

§ 4708. Contingent liability. (a) The municipal cooperation agreement

and the plan document delivered to each participating municipal

corporation shall provide that every municipal corporation participating

in the municipal cooperative health benefit plan shall be liable in the

event of an order issued pursuant to subsection (b) of this section for

an assessment, in addition to the amount of premium equivalent paid or

payable.

(b) If the municipal cooperative health benefit plan does not have

admitted assets, as defined in section one hundred seven of this

chapter, at least equal to the aggregate of its liabilities, reserves

and minimum surplus required by this article, the governing board of

such plan shall, within thirty days thereafter, order an assessment for

the amount that will provide sufficient funds to remove such impairment

and collect from each municipal corporation a pro rata share of such

assessed amount.

(c) Every municipal corporation that participated in the municipal

cooperative health benefit plan at any time during the two-year period

prior to the issuing of an assessment order by the plan's governing

board shall, if notified of such assessment, pay its pro rata share of

such assessment within ninety days after the issuance of that assessment

order.

(d) A municipal corporation's pro rata share of any assessment shall

be determined by applying the ratio of the total assessment to the total

contributions or premium equivalents earned during the period covered by

the assessment on all municipal corporations subject to assessment to

the contribution or premium equivalent earned during such period

attributable to such municipal corporation.

(e) The contingent liability of municipal corporations for additional

premium equivalents or assessments shall not be included as an asset in

the financial statements of the municipal cooperative health benefit

plan.