N.Y. Workers' Compensation Law § 27: Depositing future payments in the aggregate trust fund

§ 27. Depositing future payments in the aggregate trust fund. 1. All

payments made into the fund pursuant to the provisions of this section

shall constitute an indivisible and aggregate trust fund except as

hereinafter provided.

2. If an award under this chapter requires payment of death benefits

or other compensation by an insurance carrier or employer in periodical

payments, the board may, in its discretion, at any time, any provision

of this chapter to the contrary notwithstanding, compute and permit or

require to be paid into the aggregate trust fund an amount equal to the

present value of all unpaid death benefits or other compensation in

cases in which awards are made for total permanent or permanent partial

disability for a period of one hundred and four weeks or more, for which

liability exists, together with such additional sum as the board may

deem necessary for a proportionate payment of expenses of administering

the fund so created, including the cost of the actuarial computation by

or on behalf of the board of the present value of the award, and for the

purposes of this section such cases shall be known as discretionary type

cases. If any such award made on or after July first, nineteen hundred

thirty-five, requires payment for total permanent disability resulting

from the loss of both hands, or both arms, or both feet, or both legs,

or both eyes, or of any two thereof, or for permanent partial disability

resulting from loss of an arm, leg, hand, foot or eye, or of death

benefits by an insurance carrier which is a stock corporation or mutual

association, or if any such award made on or after July first, two

thousand seven requires payment for permanent partial disability under

paragraph w of subdivision three of section fifteen of this article by

an insurance carrier which is a stock corporation or mutual association,

which for the purposes of this section shall be known as mandatory type

cases, the board shall immediately compute the present value thereof and

require payment of such amount into the aggregate trust fund, together

with such additional sum as the board may deem necessary for a

proportionate payment of expenses of administering such trust fund

including the cost of the actuarial computation by or on behalf of the

board of the present value of the award provided, however, that where an

employer or his insurance carrier is found to be entitled to

reimbursement from the special disability fund of subdivision eight of

section fifteen, the computation of the present value of the award and

the requirement for payment of such amount into the said trust fund

shall not be mandatory and such cases shall be deemed to be

discretionary type cases; further provided that where an employee

entitled to compensation under this chapter be injured or killed by the

negligence or wrong of another not in the same employ, the computation

of the present value and the requirement for payment of such amount into

the said trust fund shall be held in abeyance until (1) six months have

elapsed from the award of compensation, or in any event not more than

one year after the date of the accident, if the injured employee, or in

case of death, his personal representatives, spouse, parents, dependents

or next of kin, or anyone otherwise entitled to recover damages at

common law or otherwise, on account of such injury or death, have failed

to commence such action, (2) the termination of any such action brought

by the injured employee, or in case of death, his personal

representatives, spouse, parents, dependents or next of kin, or anyone

otherwise entitled to recover damages, at common law or otherwise, on

account of such injury or death, under the provisions of section

twenty-nine of this article.

3. Upon payment by an employer or insurance carrier into the aggregate

trust fund of an amount equal to the present value of all unpaid death

benefits or other compensation under any such award together with such

additional sum as the board may deem necessary for a proportionate

payment of expenses of administering such trust fund including the cost

of the actuarial computation by or on behalf of the board of the present

value of the award, such employer or insurance carrier shall be

discharged from any further liability for payment of such death benefits

or other compensation, and payment of the same as provided by this

chapter shall be assumed by the fund so created.

4. In the event of a review or appeal of any such award the value of

which has not been paid into the aggregate trust fund, if the amount of

award is modified or changed, the employer or insurance carrier shall

pay directly to the claimant compensation due to the date as of which

the present value of future benefits is payable into such fund, and to

the said fund the present value of future benefits, but if the original

award is affirmed, the employer or insurance carrier shall pay to such

fund the present value of the award computed as of the effective date of

the original award and simple interest on such amount at the industry

standard rate, as determined by the superintendent of financial services

by regulation, computed from the date of the original award to the date

that payment is made into such fund, plus simple interest at the rate

provided in section five thousand four of the civil practice law and

rules, on past due payments of compensation to the date of the

affirmance of such award, which past due payment and interest shall be

made directly to the claimant. The foregoing provision shall apply in

the event of such review or appeal regardless of whether the widow or

widower or other parties in interest have died or the widow or widower

remarried subsequent to the date as of which the present value of the

original award was computed. If any award, the present value of which

has been paid into the aggregate trust fund, is subsequently modified or

changed by the board for any reason other than because of subsequent

death or remarriage, the amount equal to the present value of the unpaid

death benefits or other compensation at the effective date of such

modification or change shall be computed on the basis both of the

original award and of the modified or changed award. If such amount is

greater on the basis of the original award, the difference shall be paid

by said trust fund to the employer or insurance carrier minus the cost,

if any, of the actuarial computation made by or on behalf of the board.

If such amount is greater on the basis of the modified or changed award,

the difference shall be paid to said trust fund by such employer or

insurance carrier in addition to the cost, if any, of the actuarial

computation made by or on behalf of the board. In the case of an

accident, occurring on or subsequent to July first, nineteen hundred

thirty-nine, where the present value of an award for permanent total or

permanent partial disability other than award for a definite number of

weeks has been paid into the aggregate trust fund, if an award is made

for death resulting from the injury causing the said disability, the

employer or insurance carrier which paid the present value of said

disability award into such fund shall be entitled to the difference

between the amount paid into such fund and the sum disbursed from such

fund to the injured employee prior to his or her death, plus simple

interest on such difference at the industry standard rate. In the case

of an accident occurring on or subsequent to July first, nineteen

hundred thirty-nine, where the present value of an award for permanent

partial disability for a definite number of weeks has been paid into the

aggregate trust fund, if the injured employee dies prior to the end of

such definite number of weeks, the employer or insurance carrier which

made the said payment into such fund shall be entitled to the present

value of the unexpended disability benefits not payable to beneficiaries

computed on the basis of annuities certain with interest at the industry

standard rate, minus however the cost, if any, of the actuarial

computation made by or on behalf of the board. In the case of a claim

for the death of an employee resulting from an accident occurring on or

subsequent to January first, two thousand one, the present value of an

award paid into the aggregate trust fund shall be calculated based on

the assumption that any child while under the age of twenty-three years

will be enrolled and attending as a full time student in an accredited

educational institution and would thereby be entitled to benefits for

all periods while under the age of twenty-three years. After all such

children reach the age of twenty-three, the aggregate trust fund shall

refund to the carrier which paid such present value into such fund the

portion of such present value representing benefits for which such

children were not actually entitled because they were not enrolled and

attending as a full time student in an accredited educational

institution plus simple interest on such difference at the industry

standard rate.

5. All computations made by the board shall be upon the basis of the

survivorship annuitants table of mortality, the remarriage tables of the

Dutch Royal Insurance Institution and interest at three and one-half per

centum per annum on claims based on accidents occurring up to and

including June thirtieth, nineteen hundred thirty-nine, at three per

centum per annum on claims based on accidents occurring from July first,

nineteen hundred thirty-nine up to and including August thirty-first,

nineteen hundred eighty-three, at six per centum per annum on claims

based on accidents occurring from September first, nineteen hundred

eighty-three up to and including December thirty-first, two thousand and

at the industry standard rate on claims based on accidents occurring

thereafter, except (a) that computations of present values of death

benefits required to be paid into the aggregate trust fund by an

insurance carrier which is a stock corporation or a mutual association

shall be based, in the case of a dependent parent, grandparent, blind or

physically disabled child or spouse, upon said table of mortality

disregarding possible change in or termination of dependency, with

interest at three and one-half per centum per annum on claims based on

accidents occurring up to and including June thirtieth, nineteen hundred

thirty-nine, at three per centum per annum on claims based on accidents

occurring from July first, nineteen hundred thirty-nine up to and

including August thirty-first, nineteen hundred eighty-three, at six per

centum per annum on claims based on accidents occurring from September

first, nineteen hundred eighty-three up to and including December

thirty-first, two thousand and at the industry standard rate on claims

based on accidents occurring thereafter and (b) that computations of

present values of permanent partial disability benefits awarded for a

definite number of weeks shall be on the basis of annuities certain with

interest at three and one-half per centum per annum on claims based on

accidents occurring up to and including June thirtieth, nineteen hundred

thirty-nine, at three per centum per annum on claims based on accidents

occurring from July first, nineteen hundred thirty-nine up to and

including August thirty-first, nineteen hundred eighty-three, at six per

centum per annum on claims based on accidents occurring from September

first, nineteen hundred eighty-three up to and including December

thirty-first, two thousand and at the industry standard rate on claims

based on accidents occurring thereafter.

6. Such aggregate trust fund shall be kept separate and apart from all

other moneys of the state insurance fund, and shall not be liable for

any losses or expenses of administration of the state insurance fund

other than the expenses involved in the administration of such trust

fund including the cost, if any, of the actuarial computations made on

behalf of the board, nor shall the state insurance fund be charged with

the losses or expenses of the aggregate trust fund beyond the amount of

such trust fund. Any portion of such aggregate trust fund may, by order

of the commissioners of the state insurance fund, approved by the

superintendent of financial services, be invested in or loaned on the

pledge of the same securities as provided in section eighty-seven of

this chapter for the investment of the state insurance fund, and the

commissioners may, upon like approval of the superintendent of financial

services, also sell any such securities. Any securities belonging to the

aggregate trust fund may be loaned by the commissioners of the state

insurance fund, with the approval of the superintendent of financial

services, under a security loan agreement as provided by section

eighty-seven of this chapter for securities belonging to the state

insurance fund.

7. For the purpose of securing the solvency of the aggregate trust

fund, there shall be required, in addition to the payments hereinbefore

provided for, a payment on each award, as follows:

(a) In the mandatory type cases based on an accident occurring on or

subsequent to July first, nineteen hundred forty-one up to and including

June thirtieth, nineteen hundred forty-three an amount equal to six per

centum of the present value of each such case paid into such fund;

(b) In the mandatory type cases based on an accident occurring on or

subsequent to July first, nineteen hundred forty-three an amount equal

to ten per centum of the present value of each such case paid into such

fund;

(c) In the discretionary type cases based on an accident occurring up

to and including June thirtieth, nineteen hundred thirty-nine an amount

equal to sixteen per centum of the present value of each such case paid

into such fund;

(d) In the discretionary type cases based on an accident occurring on

or subsequent to July first, nineteen hundred thirty-nine an amount

equal to ten per centum of the present value of each such case paid into

such fund.

Such additional payments shall be required until the surplus of the

fund equals or exceeds one per centum of the total outstanding loss

reserves as shown by three successive annual reports of the fund to the

superintendent of financial services and such additional payment shall

be required as a payment upon each award based on an accident occurring

prior to July first next succeeding the third such annual report, but

not as a payment upon any award based on an accident occurring on or

after said July first; provided, however, that if and when the surplus

of the fund as shown by any annual report thereafter shall be less than

one per centum of the total outstanding loss reserves, then the

additional payments as provided in paragraphs (a), (b), (c) and (d) of

this subdivision shall be resumed and shall be payable upon any award

based on an accident occurring on or after July first next succeeding

the close of the year for which such annual report is made. Thereafter,

the suspension or resumption of additional payments as required by this

subdivision shall be governed by the foregoing provisions. Such loss

reserves shall be computed based upon the tables specified in

subdivision five of this section and interest at a standard to be

determined by the superintendent of financial services by regulation.

8. In the case of a claim concerning which the aggregate trust fund

enters a waiver agreement pursuant to section thirty-two of this

article, the insurance carrier, as defined in subdivision twelve of

section two of this chapter, which paid the present value of the award

for such claim, shall not be entitled to a refund of any portion of the

present value of such award.