N.Y. Insurance Law § 5509: Stabilization reserve fund

§ 5509. Stabilization reserve fund. (a) The association shall

maintain a stabilization reserve fund. The fund shall be used for

payment to the association of any deficit, or for reimbursement to the

association's members for payment of any deficit arising out of the

operations of the association or for such other purposes as are provided

for in this section. Except in the case of a premium payment made

pursuant to subsection (c) of this section, a deficit shall exist

whenever the sum of the premiums collected by the association and the

investment income on policyholder supplied funds is exhausted in payment

of the association's administrative expenses, reserves for loss, reserve

for loss adjustment expenses, loss and loss adjustment expenses, and

taxes.

(b) Each qualified health care provider policyholder shall annually

pay to the association a stabilization reserve fund charge in an amount

equal to twenty percent of the annual premium charge until the net value

of the fund exceeds fifty million dollars. Thereafter, such charges

shall be made only when the net value of the fund is less than

twenty-five million dollars and shall continue annually until the net

value of the fund exceeds fifty million dollars. There shall be no

stabilization reserve fund charge payable or receivable in connection

with determining the actuarially appropriate amounts for the provision

of coverage to comply with the transfer requirements of subsections (c)

and (d) of section three thousand four hundred thirty-six and paragraphs

three and four of subsection (f) of section five thousand five hundred

four of this chapter. There shall be no stabilization reserve fund

charge payable if the net value of the fund is less than fifty million

dollars due to a transfer pursuant to subsections (c) and (d) of this

section.

(c) In addition to those purposes provided for in subsection (a) of

this section, the stabilization reserve fund shall also be used for the

payment of premiums for excess or equivalent excess coverage provided

pursuant to the program established by chapter two hundred sixty-six of

the laws of nineteen hundred eighty-six, as amended, for the period of

coverage between July first, two thousand and June thirtieth, two

thousand one.

(d) The association and such officers and directors thereof

responsible for the custody and investment of the stabilization reserve

fund shall transfer from such fund and deposit to the hospital excess

liability pool created pursuant to section eighteen of chapter two

hundred sixty-six of the laws of nineteen hundred eighty-six such

amounts as directed by the superintendent for the purchase of excess or

equivalent excess coverage for eligible participating physicians and

dentists for the policy year July first, two thousand to June thirtieth,

two thousand one, and the cost of administering the hospital excess

liability pool for such applicable policy year, pursuant to the program

established in chapter two hundred sixty-six of the laws of nineteen

hundred eighty-six, as amended, no later than July fifteenth, two

thousand.

Notwithstanding any other provision of law, no director, officer, or

employee of the association, nor the association, nor any public officer

or employee, nor any actuary, attorney, or advisor to the association or

to the superintendent shall incur or suffer any liability whatsoever to

any person by reason of actions taken pursuant to this section. Any

action which could have been brought against any of the persons or

parties or entities noted herein, but for the provisions of this

section, shall be brought against the state.

(e) Upon termination of the association and the discharge of all of

its liabilities any excess funds remaining in the stabilization reserve

fund shall be distributed to the policyholders of the association in an

equitable manner as set forth in the plan of operation.