N.Y. Workers' Compensation Law § 50: Security for payment of compensation

§ 50. Security for payment of compensation. An employer shall secure

compensation to his employees in one or more of the following ways:

1. By insuring and keeping insured the payment of such compensation in

the state fund, or

2. By insuring and keeping insured the payment of such compensation

with any stock corporation, mutual corporation or reciprocal insurer

authorized to transact the business of workers' compensation insurance

in this state through a policy issued under the law of this state.

3. By furnishing satisfactory proof to the chair of his financial

ability to pay such compensation for himself, or to pay such

compensation on behalf of a group of employers in accordance with

subdivision ten of this section, in which case the chair shall require

the deposit with the chair of such securities as the chair may deem

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 credit issued by a

qualified banking institution as defined by rules promulgated by the

chair or the filing of a bond of a surety company authorized to transact

business in this state, in an amount to be determined by the chair, or

the posting and filing as aforesaid of a combination of such securities,

cash, irrevocable letters of credit and surety bond in an amount to be

determined by the chair, to secure his liability to pay the compensation

provided in this chapter. Any such surety bond must be approved as to

form by the chair. If an employer or group of employers posts and files

a combination of securities, cash, irrevocable letters of credit and

surety bond as aforesaid, and if it becomes necessary to use the same to

pay the compensation provided in this chapter, the chair shall first use

such securities or cash or irrevocable letters of credit and, when the

full amount thereof has been exhausted, he shall then require the surety

to pay forthwith to the chair all or any part of the penal sum of the

bond for that purpose. The chair may also require an agreement on the

part of the employer or group of employers to pay any awards commuted

under section twenty-seven of this chapter, into the special fund of the

state fund, as a condition of his being allowed to remain uninsured

pursuant to this section. The chair shall have the authority to deny the

application of an employer or group of employers to pay such

compensation for himself or to revoke his consent furnished, under this

section at any time, for good cause shown. The employer or group of

employers qualifying under this subdivision shall be known as a

self-insurer.

If for any reason the status of an employer or group of employers

under this subdivision is terminated, the securities or the surety bond,

or the securities, cash, or irrevocable letters of credit and surety

bond, on deposit referred to herein shall remain in the custody of the

chair for such time as the chair may deem proper and warranted under the

circumstances. In lieu thereof, and at the discretion of the chair, the

employer, his or her heirs or assigns or others carrying on or

liquidating such business, may execute an assumption of workers'

compensation liability insurance policy as described herein. Separately,

the chair may execute an assumption of workers' compensation liability

insurance policy as described herein on behalf of the special funds

created under the provisions of subdivisions eight and nine of section

fifteen and section twenty-five-a of this chapter, and notwithstanding

any provision to the contrary the chair may execute an assumption of

workers' compensation liability insurance policy on behalf of the

uninsured employers' fund. An assumption of workers' compensation

liability policy referred to herein shall secure such further and future

contingent liability as may directly or indirectly arise from prior

injuries to workers and be incurred by reason of any change in condition

of such workers warranting the board making subsequent awards for

payment of additional compensation. Such policy shall be in a form

approved by the superintendent of financial services and issued by the

state fund or any insurance company licensed to issue this class of

insurance in this state or, upon application by the chair, any other

insurance company deemed by the superintendent of financial services to

be an acceptable issuer. In the event that such policy is issued by an

insurance company other than the state fund, then said policy shall be

deemed of the kind specified in paragraph fifteen of subsection (a) of

section one thousand one hundred thirteen of the insurance law and

covered by the workers' compensation security fund as created and

governed by article six-A of this chapter. It shall only be issued for a

single complete premium payment in advance and in an amount deemed

acceptable by the chair and the superintendent of financial services. In

lieu of the applicable premium charge ordinarily required to be imposed

by a carrier, said premium shall include a surcharge in an amount to be

determined by the chair to: (i) satisfy all assessment liability due and

owing to the board and/or the chair under this chapter; and (ii) satisfy

all future assessment liability under this section, and which surcharge

shall be adjusted from time to time to reflect any changes to the

assessment of group self-insured employers, including any changes

enacted by the chapter of the laws of two thousand eleven amending

sections fifteen and one hundred fifty-one of this chapter. Said

surcharge shall be payable to the board simultaneous to the execution of

the assumption of workers' compensation liability insurance policy.

However, the payment of said surcharge does not relieve the carrier from

any other liability, including liability owed to the superintendent of

financial services pursuant to article six-A of this chapter. When

issued such policy shall be non-cancellable without recourse for any

cause during the continuance of the liability secured and so covered.

3-a. Group self-insurance. (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.

(2) (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 subparagraph (a-1) of this paragraph 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

public group self-insurers as defined in subparagraph (a-1) of this

paragraph no proof of financial ability 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.

(a-1) Any group consisting exclusively of public corporations as

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, and any other entity defined

as a public entity under paragraph fifty-one of subsection (a) of

section one hundred seven of the insurance law except the state of New

York, may adopt a plan for self-insurance, as a group, for the payment

of compensation under this chapter to their employees. Such a group

shall be known as a "public group self-insurer". A county self-insurance

plan established under article five of this chapter 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. A public group self-insurer shall comply with

all of the requirements of this subdivision, including any obligations

imposed upon a group administrator, but is not required to secure the

services of a group administrator or obtain a license authorizing it to

act as a group self-insurer administrator, to furnish satisfactory proof

to the chair of its financial ability to pay compensation from its

revenues, their source and assurance of continuance, to pay a license

fee, or to deposit securities, post a bond or provide other security,

except as specifically provided in this subdivision.

(b) Where such plan is adopted the group self-insurer shall furnish

satisfactory proof to the chair of its financial ability to pay such

compensation for the members in the industry covered by it, its

revenues, their source and assurance of continuance. The chair shall

require the deposit with the chair of such securities 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 credit issued by a

qualified banking institution as defined by rules promulgated by the

chair or the filing of a bond of a surety company authorized 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 regular reports no less

than annually, which shall include but not be limited to audited

financial statements, actuarial opinions and payroll information

containing proof that it is fully funded. Such reports shall 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

permitted 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

measured 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 of Part GG of chapter 57 of the

laws of 2013.

(c) The chair shall evaluate, no less than once every three years, a

group self-insurer's compliance with the financial and regulatory

requirements for self-insurance. The chair may engage any qualified

person or organization to assist with such evaluation and any costs

incurred by the chair shall be borne by the group self-insurer under

examination. Failure to submit to such independent review or to pay such

costs, upon demand of the chair, shall be sufficient grounds to

terminate coverage of the group self-insurer.

(d) The chair may require reports to be prepared by an auditor,

actuary or other consultant, selected by the board or, at the chair's

discretion, by the group self-insurer from a list which shall be

pre-approved by the chair to determine whether the group self-insurer

meets the financial criteria for self-insurance. All actuaries so

selected shall be fellows or associates of the casualty actuarial

society.

(e) The chair may also require that any and all agreements, contracts

and other pertinent documents relating to the organization of the

members in the group self-insurer shall be filed with the chair.

(f) The chair shall have the authority to revoke consent furnished

under this section at any time for good cause shown.

(g) Prior to the requested effective date of the participating

agreement, a group self-insurer shall notify the chair on a prescribed

form of a new group self-insurer member and file (1) a member

application and (2) a copy of the properly executed prescribed

participation agreement wherein the member acknowledges their joint and

several obligation for their period of membership. The board shall, on a

form promulgated by the chair, provide notice of the member's rights and

responsibilities as a group self-insurer member, including the member's

assumption of joint and several liability, and require the member to

return a signed copy to the chair as a condition of membership.

(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.

(3) A member's participation in a group self-insurer shall not relieve

it of its liability for compensation prescribed by this chapter except

by the payment thereof by the group self-insurer or by itself. Each

member shall be responsible, jointly and severally, for all liabilities

of the group self-insurer provided for by this chapter occurring during

its respective period of membership, and such liability shall attach to

any recipient of a conveyance of assets made in violation of subdivision

(a) of section two hundred seventy-four of the debtor and creditor law.

As between the employee and the group self-insurer, notice to or

knowledge of the occurrence of the injury on the part of the member

shall be deemed notice or knowledge, as the case may be, on the part of

the group self-insurer; jurisdiction of the member shall, for the

purpose of this chapter, be jurisdiction of the group self-insurer and

such group self-insurer shall in all things be bound by and subject to

the orders, findings, decisions or awards rendered against the

participating member for the payment of compensation under the

provisions of this chapter. The insolvency or bankruptcy of a

participating member shall not relieve the group self-insurer from the

payment of compensation for injuries or death sustained by an employee

during the time the member was a participant in such group self-insurer.

Notice of termination of a participating member shall not be effective

until at least ten days after notice of such termination, on a

prescribed form, has been either filed in the office of the chair or

sent by certified or registered letter, return receipt requested, and

also served in like manner upon the member. In the event such

termination is due to a member's failure to pay required contributions,

such member's termination shall not be rescinded more than three times.

(3-a) If the chair determines that a public group self-insurer has

become insolvent, the chair shall pay the compensation and benefits that

would otherwise have been required to be paid by the members of the

public group self-insurer from administration 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. For purposes of this

paragraph, a public group self-insurer is insolvent when 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 will be required to pay within the succeeding six

months or that the compensation and benefits provided by this chapter

may be unpaid by reason of the default of a public group self-insurer.

Upon the insolvency of a public group self-insurer, each member shall

assume responsibility for the continued administration and payment of

all claims against it, provided however that the public group

self-insurer shall, within thirty days, turn its assets over to the

chair and the chair shall assume the administration and cost of the

claims of the public group self-insurer for a period not to exceed one

year. During the period of chair administration of claims, each member

of the public group self-insurer shall secure the services of a licensed

claims administrator and the chair shall segregate the claims

obligations of the insolvent public group self-insurer by member, and,

if necessary segregate an adequate claim reserve for any claims of

defunct or insolvent members of the insolvent public group self-insurer.

Not later than one year from the assumption of the administration of the

claims of the public group self-insurer, each member of the insolvent

public group self-insurer shall resume administration of its own claims

and the chair shall return to each member whatever pro rata share of the

public group self-insurer's assets remain after the period of chair

administration. The chair shall be reimbursed for any payment made under

this paragraph by the public group self-insurer itself and, if the

public group self-insurer is unable to reimburse the chair fully for

payments made by the chair, then by the member of the public group

self-insurer against which the claim is asserted. Further, nothing

herein shall preclude the chair from directing that an underfunded

public group self-insurer levy an assessment on its members as part of 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. No member shall be liable for

any obligations of the public group self-insurer or any obligations of

any member of the public group self-insurer. The chair shall require any

member that has pending claims but has failed to secure the services of

a licensed claims administrator to resume administration of the claims

to pay to the chair any expenses the chair incurs in administering and

paying those claims.

(4) Each group self-insurer, in its application for self-insurance,

shall set forth the names and addresses of each of its officers,

directors, trustees, third party administrator and group administrator.

Notice of any change in the officers, directors, trustees, third party

administrator or group administrator shall be given to the chair within

ten days thereof. No officer, director, trustee, employee, third party

administrator or group administrator of the group self-insurer may

represent or participate directly or indirectly on behalf of an injured

worker or his dependents in any workers' compensation proceeding. All

employees of members participating in group self-insurance shall be and

are deemed to be included under the group self-insurance plan.

(5) (a) Each group self-insurer shall 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 processing, 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 regulations setting forth any

additional qualifications for such license, governing the conduct and

compensation of group self-insurer administrators, 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 administrator administers. Each

administrator shall post a bond in the amount of five hundred thousand

dollars for each group self-insurer administered 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-insurer of any fiduciary obligation they

hold to the other members of such group self-insurer.

(b) A group administrator that knowingly and with intent to mislead

makes a material misrepresentation of a material fact in soliciting

members in a group self-insurer shall be guilty of a class E felony.

Additionally, the chair may impose a civil penalty of up to ten thousand

dollars for each such violation.

(c) A group administrator, actuary or accountant that knowingly makes

a material misrepresentation of a material fact concerning the financial

status of any group self-insurer to the chair or board, or in its annual

report to members of the group self-insurer, shall be guilty of a class

E felony. The chair may impose a civil penalty of up to twenty thousand

dollars for each such violation. A second and subsequent violation of

this paragraph shall be a class D felony. The chair may recover in a

civil action any damages resulting from such misrepresentations,

including the value of any amount assessed against any entities that are

not members of the defaulted self-insurer that resulted from any such

misrepresentation.

(d) (1) A group administrator shall provide an annual written report

to all members of the group self-insurer and to the board which shall

include:

a. the members of the group self-insurer;

b. the group administrator and trustees;

c. the results of the most recent financial audit;

d. the percentage of total liabilities held by the self-insurer in

unrestricted cash and investments permitted by regulation as determined

in accordance with subparagraph (b) of paragraph two of this

subdivision;

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; and

f. such other information as the chair may direct.

The group administrator shall provide a copy of the most recent

financial audit to any group self-insurer member upon written request.

(2) The chair shall make available to the public, on its website and

in writing upon request:

a. the identity of all group self-insurers that have provided workers'

compensation under this subdivision in the prior three years;

b. the group administrator of each such group self-insurer;

c. the financial condition of all group self-insurers as determined by

the board in the last financial audit and the board's regulatory

definition of assets; and

d. such other information as the chair may direct, but which shall not

include any confidential or proprietary information.

The board may direct the disclosure of any non-proprietary information

regarding any group self-insurer, including whether a member is a member

thereof, to any claimant upon a showing of need.

(e) (1) The chair may condition the issuance or continuation of a

license under this subdivision upon the presentation by a group

administrator of such information as the board requests, at any time

chosen by the chair or at regular intervals, including but not limited

to the annual financial statements of the group administrator detailing

the compensation the administrator and its substantially owned

affiliated entities, as defined in section two of this chapter, have

received or shall receive from the group self-insurer or its members,

and the method by which such compensation has been or will be

calculated. The chair may issue regulations governing the method of

calculating compensation which a group administrator may receive,

including restrictions on the process by which such compensation may be

set.

(2) The chair may revoke the license of any group administrator that

receives compensation in violation of such regulations, and may impose a

penalty of up to two times any compensation so received.

(f) (1) No officer or director of, or person holding five percent or

more ownership interest in, a group administrator shall within two years

of serving in such capacity or holding such ownership interest, serve in

any capacity or hold any ownership interest in a workers' compensation

carrier that provides or solicits the provision of compensation under

this title for any employer that is or was a member of such group

self-insurer. No officer or director of, or person holding five percent

or more ownership interest in a group administrator shall serve in such

capacity or hold such ownership interest in a carrier that provides or

solicits excess coverage for any group self-insurer administered by such

administrator.

(2) The chair may impose a civil penalty of up to ten thousand dollars

for each violation of this paragraph.

(g) Each group self-insurer shall submit to the chair copies of any

agreement or contract with an entity that serves or will serve as its

group administrator, accountant, actuary or third party administrator at

least thirty days prior to becoming effective, and the effectiveness of

such contract shall be conditioned on the absence of an objection by the

board during the thirty day period. Contracts that shall be subject to

such objection shall include any contract in violation of regulation;

and any contract that does not provide reasonable cancellation or

renewal terms, including any contract that requires an affirmative act

by the trustees of the group self-insurer to prevent automatic renewal,

or that does not permit cancellation for negligence, violation of law,

or other good cause.

(6) (a) Group self-insurers must file with the board, as soon as

practicable 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 casualty actuarial society, that clearly identifies the

actuary's indicated rate assumptions therein. The rating plan must apply

consistently to all members, and must provide for a common renewal date

for all 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

permissible 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-insurer, 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.

(b) If the chair has cause to believe that a group self-insurer's

contribution rates including experience modifications do not conform to

the requirements of this part then he or she may require the submission

of a report identifying the contributions paid by each of the members

for the preceding year, the projected contributions for each group

self-insurer member for the current fiscal year, and the manner in which

such contributions were calculated. If, after review by the chair, the

group self-insurer's contribution rates are deemed to be detrimental to

its solvency, the chair may mandate that the group self-insurer modify

such rates as the chair directs. The chair may impose a penalty of up to

five thousand dollars for each violation of this subparagraph. A group

self-insurer's failure to adhere to the rating structure determined by

the board shall constitute good cause for termination.

(7) (a) If for any reason, the status of a group self-insurer under

this subdivision is terminated, including by operation of law on and

after January first, two thousand twelve, the securities or cash or the

surety bond on deposit referred to herein shall remain in the custody of

the chair for such time as the chair may deem proper and warranted. In

lieu thereof, and at the discretion of the chair, the group

self-insurer, its heirs or assigns or others carrying on or liquidating

such group self-insurer, including the chair on the group self-insurer's

behalf, may execute an assumption of workers' compensation liability

insurance policy securing such further and future contingent liability

as may arise from prior injuries to workers and be incurred by reason of

any change in the condition of such workers warranting the board making

subsequent awards for payment of additional compensation. Such policy

shall be in a form approved by the superintendent of financial services

and issued by the state fund or any insurance company licensed to issue

this class of insurance in this state. In the event that such policy is

issued by an insurance company other than the state fund, then said

policy shall be deemed of the kind specified in paragraph fifteen of

subsection (a) of section one thousand one hundred thirteen of the

insurance law and covered by the workers' compensation security fund as

created and governed by article six-A of this chapter. It shall only be

issued for a single complete premium payment in advance by the group

self-insurer and in an amount deemed acceptable by the chair and the

superintendent of financial services. In lieu of the applicable premium

charge ordinarily required to be imposed by a carrier, said premium

shall include a surcharge in an amount to be determined by the chair to:

(i) satisfy all assessment liability due and owing to the board and/or

the chair under this chapter; and (ii) satisfy all future assessment

liability under this section, and which surcharge shall be adjusted from

time to time to reflect any changes to the assessment of group

self-insured employers, including any changes enacted by the chapter of

the laws of two thousand eleven amending sections fifteen and one

hundred fifty-one of this chapter. Said surcharge shall be payable to

the board simultaneous to the execution of the assumption of workers'

compensation liability insurance policy. However, the payment of said

surcharge does not relieve the carrier from any other liability,

including liability owed to the superintendent of financial services

pursuant to article six-A of this chapter. When issued such policy shall

be noncancellable without recourse for any cause during the continuance

of the liability secured and so covered.

(b) The chair shall levy an interim assessment on the members of a

defaulted group self-insurer within one hundred twenty days of such

default or of the effective date of the chapter of the laws of two

thousand eight which amended this subdivision, whichever is later, and

against the members of any other terminated group self-insurer when

necessary, for such an amount as he or she determines to be necessary to

discharge all liabilities of the group self-insurer, including the

reasonable cost of liquidation such as claims administration costs,

actuarial and accounting services, and the value of future assessments

on members of such group self-insurer as they are known at the time of

the assessment. The chair may impose subsequent and further deficit

assessments, or return funds to members, to adjust the moneys collected

to reflect the time of participation, and percent of group self-insurer

liabilities for such time. The time limitations included in the first

sentence of this subparagraph do not apply to the imposition of any

subsequent and further deficit assessments that exceed the interim

assessment made by the chair against members of a defaulted group

insurer or members of any other terminated group self-insurer.

Notwithstanding any such action by the chair, each member of the group

self-insurer shall remain jointly and severally responsible for all

liabilities provided by this chapter including but not limited to

outstanding and estimated future liabilities and assessments. Further,

separate and apart from, and in addition to a member's joint and several

liability and notwithstanding any payments made by any other members of

the group self-insurer pursuant to this subparagraph, in the event that

a member neglects or fails to pay an assessment levied pursuant to this

subparagraph, the member shall be deemed in default in the payment of

compensation. Such defaulting member is subject to the enforcement

provisions of section twenty-six of this chapter for the payment of all

compensation relative to awards due and owing on claims filed by the

employees of such member that have neither been paid by the member or

the group self-insurer. Nothing in this paragraph shall prevent the

chair from offering payment plans or settling claims against members of

any group self-insurer as necessary to facilitate collection.

(c) Upon the assumption of the assets and liabilities of a group

self-insurer by the chair or his or her designee pursuant to regulation

of the chair, all records, documents and files of whatever nature,

pertaining to the group self-insurer, be they in the possession of the

group self-insurer or a third party, and all remaining assets of the

group self-insurer, shall become the property of the chair. All

custodians of such records and/or funds shall turn over to the chair or

his designee all such original records upon demand.

(8) All the provisions of this chapter relating to self-insurance and

the rules and regulations promulgated thereunder shall be deemed

applicable to group self-insurance. The chair shall implement the

provisions of this subdivision by promulgating rules and regulations but

no such rules or regulations shall be necessary for any provision of

this subdivision to be effective. The chair may impose a civil penalty

of up to ten thousand dollars for each violation against any group

self-insurer that violates any provision of this subdivision or of any

regulation issued pursuant thereto for which a civil penalty is not

specified.

(10) (a) A non-municipal group of employers may make application to

the chair to qualify jointly as a self-insurer, provided:

(1) The members of the group secure the services of an administrator,

who shall carry out the responsibilities of such an administrator as set

forth in subdivision five of this section, and who shall be subject to

the restrictions and penalties applicable to an administrator under this

section;

(2) The members of the group, through the administrator, (a) jointly

deposit sufficient securities in accordance with subdivision three of

this section or in a trust governed in accordance with Part 126 of title

11 of the New York code of rules and regulations to secure the liability

of the members of the group to pay for all existing claims obligations,

provided such deposit shall be made by November first, two thousand

eleven, (b) jointly deposit sufficient securities in accordance with

subdivision three of this section or in a trust governed in accordance

with Part 126 of title 11 of the New York code of rules and regulations

to secure all anticipated present and future claims of the members of

the group, by November first, two thousand fourteen, provided annual

deposits are made in accordance with a schedule set by the chair on or

before November first of each year, and provided that the deposit shall

be deemed an asset of the group for the purpose of determining its

funding status, and (c) by November first, two thousand eleven and

thereafter, shall maintain funds sufficient for all other liabilities

besides claims in a trust governed in accordance with Part 126 of title

11 of the New York code of rules and regulations, of which the board

shall be the sole beneficiary, and the terms of the trust agreement, and

the trustee, shall be approved by the chair in his or her sole

discretion, and provided that any group self-insurer that does not hold

such funds in a trust that meets the terms of this paragraph shall post

them with the board;

(3) The group has been authorized by the chair to self-insure in

accordance with this subdivision prior to the effective date of this

paragraph;

(4) The group's members or participant employers either (a) are

parties to collective bargaining agreements with the same unions; or (b)

fall within a limited number of payroll classifications, as set by the

chair, after giving due consideration to the risks associated with any

group of employers self-insuring. However, employers that were active

prior to the effective date of this section and whose classification

codes do not meet the limitations on payroll classification codes or are

not parties to collective bargaining agreements with the same unions

will be permitted to remain in the trust provided (a) they continue to

meet the other terms and conditions of the trust; and (b) any new

members shall be subject to the limitations on the number of payroll

classifications; and provided further, the chair shall revoke such

permission in the event the trust violates paragraph six of this

subdivision relating to filing of a rating plan;

(5) The group was fully funded for three out of the previous five

years and at least ninety percent funded for one other year out of the

previous five years, as determined by the chair following a financial

review, and the group self-insurer has sufficient funds to meet its

liabilities;

(6) The group has a safety program acceptable to the chair; and

(7) The group is subject to such other limitations and requirements of

this subdivision unless waived by the chair and to regulations of the

chair.

(b) The members of any such group shall enter into an agreement among

themselves and with the group's administrator which shall, at a minimum:

(1) Indicate that each of the members of the group is jointly and

severally liable for any liabilities of the group; and

(2) Provide for the collection of additional funds from group members

in the event the deposit with the board is insufficient to meet the

liabilities of the group.

(11) Former group self-insurer. Any group self-insurer that has ceased

to self-insure, or has ceased to self-insure any new liabilities after

January first, two thousand twelve in accordance with paragraph two of

this subdivision, shall remain subject to all the provisions of this

subdivision and the regulations issued pursuant thereto and any

assessments provided for by this section until such time as the group

self-insurer no longer possesses any liabilities.

(12) Any non-municipal group of employers authorized to self-insure

under paragraph ten of this section on or after January first, two

thousand twelve shall be deemed a "private self-insurer" for purposes of

the assessments set forth in sections fifteen and one hundred fifty-one

of this chapter.

3-b. (a) Except as provided in subdivision three-d of this section, no

person, firm or corporation, other than an attorney and

counsellor-at-law, shall solicit the business of representing, or engage

in representing self-insurers or group self-insurers, as defined in

subdivisions three and three-a of this section, before the board or any

officer, agent or employee of the board assigned to conduct any hearing,

investigation or inquiry relative to a claim for compensation or

benefits under this chapter, unless he or she shall be a citizen of the

United States or a noncitizen lawfully admitted for permanent residence

in the United States, or a corporation organized under the laws of the

state of New York, and shall have obtained from the board a license

authorizing him or her to appear in matters or proceedings before the

board. Such license shall be issued by the board in accordance with the

rules established by it. Any person, firm or corporation violating the

aforesaid provisions shall be guilty of a misdemeanor. The chair may

impose a civil penalty of up to one thousand dollars for each violation

against any representative licensed in accordance with this section that

violates any provision of this section or of any regulation issued

pursuant thereto, in addition to any other sanctions provided for under

this chapter.

(b) The board, in its rules, may provide for the issuance of licenses

to persons, firms or corporations, upon such proof of character and

fitness as it may deem necessary, without annual license fee, and for

the giving of a bond running to the people of the state of New York,

conditioned upon the faithful performance of all duties required of such

person, firm or corporation, and in an amount to be fixed by the board

in its rules. Such bond shall be approved by the board as to form and

sufficiency and shall be filed with it.

(c) There shall be maintained in each office of the board a registry

or list of all persons to whom licenses have been issued, as provided

herein, which list shall be corrected as often as licenses are issued or

revoked. Absence of record of the license issued, as herein provided,

shall be prima facie evidence that a person, firm or corporation is not

licensed to represent self-insurers.

(d) Any such license may be revoked by the board for cause after a

hearing before it.

(e) No license shall be issued hereunder for a period longer than

three years from the date of its issuance. The provisions of this

section shall not apply to a regular employee of a self-insured employer

or to the state insurance fund acting in accordance with an insuring

agreement with the state as authorized pursuant to the provisions of

section eighty-eight-c of this chapter.

3-c. Notwithstanding any provision in this chapter or in any general,

special or local law contained, all cash and securities deposited with

the chairman by an employer who is a party or a wholly owned subsidiary

of a party to a plan heretofore or hereafter adopted under article seven

of the public service law by the transit commission-- metropolitan

division of the department of public service, and who is, or at the time

of the consummation of such plan was, a self-insurer under this chapter,

may be withdrawn upon, or at any time after, the consummation of such

plan as hereinafter provided. All cash and securities deposited by any

such employer with and held by the chairman may be withdrawn upon, or at

any time after, the consummation of such plan where any city which is a

party thereto and which is a self-insurer under this chapter assumes all

liabilities of or claims against such employer under this chapter, as

follows: (a), where such plan provides that such city shall acquire, or

that such employer or his assigns shall retain, all the right and

interest of such employer in the deposited cash and securities, the

chairman shall surrender and deliver such cash and securities to such

city or to such employer or his assigns, as the case may be, upon its

demand, and (b), where such plan provides that such city and such

employer, or his assigns, shall each retain some right and interest in

such cash and securities, the chairman shall surrender and deliver such

cash and securities to such city and to such employer or his assigns

upon their joint demand as shall be specified therein.

3-d. The state insurance fund, an insurance company duly authorized or

licensed to write workers' compensation insurance in this state, a

subsidiary or an affiliate of such an insurance company, or a licensed

or authorized adjusting company or association may apply for a license

from the board to solicit the business of representing and engage in

representing self-insurers, as defined in subdivision three of this

section, before the board or any officer, agent or employee of the board

assigned to conduct any hearing, investigation or inquiry relative to a

claim for compensation or benefits under this chapter. Any corporation

formed solely for the purpose of engaging in the activities described by

this subdivision shall be formed under the laws of the state of New

York.

The state insurance fund, an insurance company, its subsidiary or

affiliate, or such adjusting company or association shall designate

those employees who are to appear in matters or proceedings before the

board on behalf of self-insurers. Such employees shall obtain an

authorization from the board. Upon application to the board for such

authorization all such employees who, on the effective date of this

subdivision, have been appearing in matters or proceedings before the

board on behalf of insurers for a period of at least two years shall

automatically receive a temporary authorization from the board. Such

temporary authorization shall remain in effect until the applicant

employee has been granted or denied final authorization by the board.

The board in its rules shall provide for the issuance of authorizations

to such employees and other designated employees. If the board, in its

rules, provides for the issuance of authorization to persons, firms or

corporations under subdivision three-b of this section upon such proof

of character and fitness as it may deem necessary, the same proof of

character and fitness shall be required for an authorization issued

under this subdivision.

The state insurance fund, an insurance company duly authorized or

licensed to write workers' compensation insurance in this state, a

subsidiary or an affiliate of such an insurance company, or a licensed

or authorized adjusting company or association shall apply to the board

for the issuance of a license upon such proof of character and fitness

as the board may deem necessary. Such proof of character and fitness

shall be the same as that required by the board of persons, firms or

corporations under subdivision three-b of this section. If the board

charges a fee for a license issued under subdivision three-b of this

section, the same amount shall be charged for a license issued under

this subdivision. If the board requires for the giving of a bond running

to the people of the state of New York, conditioned upon the faithful

performance of all duties required of such person, firm, or corporation

licensed under subdivision three-b of this section, the same shall be

required for a license under this subdivision. Such bond shall be

approved by the board as to form and sufficiency and shall be filed with

it. All license and authorization fees collected under the provisions of

this subdivision shall be paid into the state treasury. Any person,

insurance company, its subsidiary or affiliate, or adjusting company or

association which violates the aforesaid provisions of this paragraph

shall be guilty of a misdemeanor.

There shall be maintained in each office of the board a registry list

of all persons to whom authorizations and licenses have been issued as

provided herein, which list shall be corrected as often as

authorizations and licenses are issued or revoked. Absence of record of

the authorization or license issued, as herein provided, shall be prima

facie evidence that a person, firm or corporation is not authorized or

licensed to represent self-insurers. Any such authorization or license

may be revoked by the board for cause after a hearing before it. No

authorization or license shall be issued hereunder for a period longer

than three years from the date of its issuance.

The board shall make rules pertaining to when conflicts of interest

arise in individual cases which shall apply to those who are licensed or

authorized to represent self-insurers under subdivision three-b of this

section or under this subdivision.

The provisions of article twenty-four of the insurance law, insofar as

applicable, shall apply to the state insurance fund, insurance

companies, their subsidiaries and affiliates or adjusting companies or

associations in their activities representing self-insurers before the

board.

3-e. (a) The state insurance fund and any other insurer that issues

policies of workers' compensation insurance shall offer at the option of

the policyholder a deductible for benefits payable under a workers'

compensation policy with an annual premium of twelve thousand dollars or

more, if in the opinion of the state insurance fund or such other

insurer the policyholder meets the eligibility requirements of paragraph

(b) of this subdivision.

(b) A policyholder is eligible for a policy deductible for any renewal

period of the policy if such policyholder has paid the entire billed

premium on the policy for all policy periods within forty-five days of

each billing for the past three years. A policyholder will continue to

be eligible for a deductible provided that no part of any premium is

more than forty-five days overdue from the date billed or reimbursement

for any deductible amount is unpaid by the policyholder to such insurer.

The state insurance fund or any other insurer that has issued a policy

with a deductible may revoke the policyholder's entitlement to a

deductible if the policyholder fails to reimburse any deductible

amounts, or pay any billed premium, within forty-five days after such

reimbursement or premium payment has become due. Upon such revocation of

a policyholder's entitlement to a deductible, the policyholder shall be

entitled to cancel such policy and such policyholder will forfeit

eligibility for entitlement to a deductible as provided above.

(c) Deductibles shall be offered by the state insurance fund or any

other insurer in writing to eligible policyholders at the beginning of

policy periods, in the amounts of one hundred dollars, two hundred

dollars, three hundred dollars, four hundred dollars and five hundred

dollars, and thereafter, in increments of five hundred dollars up to a

maximum of two thousand five hundred dollars per occurrence. The

eligible policyholder shall select, in writing, only one deductible

amount which shall be binding on such policyholder throughout the policy

period.

(d) If the policyholder selects a deductible under paragraph (c) of

this subdivision, workers' compensation benefits payable under the

policy shall be paid by the state insurance fund or other insurer liable

under the policy to the person or provider entitled to such benefits

without regard to any deductible applied to such policy. Upon payment of

benefits on a claim up to or exceeding the deductible amount, the state

insurance fund or other insurer shall be entitled to bill the

policyholder for reimbursement up to the deductible amount. A

policyholder's failure to pay billed deductible reimbursement amounts to

the state insurance fund or other insurer under this paragraph shall be

treated in the same manner as non-payment of premium and render the

policy cancelable in accordance with the provisions of subdivision five

of section fifty-four of this article. The deductibles paid by the

insured employer during any one year period of the policy of insurance

shall not exceed the annual premium for such policy of insurance.

(e) Premium reductions, in accordance with methodology approved by the

superintendent of financial services shall be applied to any policy

written with a deductible. Such premium reductions shall be determined

before the application of any experience modification premium surcharge

or premium discount.

(f) The New York workers' compensation rating board shall file for

appropriate premium discounts subject to the approval of the

superintendent of financial services.

(g) The state insurance fund and any other insurer may, at its option,

offer a deductible in an amount specified in paragraph (c) of this

subdivision to any policyholder who is not otherwise eligible for a

deductible under this subdivision. A public group self-insurer may offer

a deductible in accordance with paragraph (h) of this subdivision.

(h) A public group self-insurer which has been providing workers'

compensation and employers' liability coverage for not less than five

years and is operated as a self-administered not-for-profit corporation

governed by a board not less than two-thirds of the members of which are

representatives of members of the public group self-insurer, and all of

the officers of which are representatives of members of the public group

self-insurer may, upon a determination by the chair that the methodology

used by the public group self-insurer in creating its deductible rating

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 rate assumptions, and subject to

underwriting by the public group self-insurer, offer as part of the

policy or by endorsement, deductibles optional to the member, not

subject to the foregoing monetary limits, consistent with the following:

(1) claimants' rights are properly protected, and claimants' benefits

are paid without regard to any such deductible;

(2) appropriate premium reductions reflect the type and level of any

deductible approved by the chair and selected by the member;

(3) premium reductions for deductibles are determined before

application of any experience modification, premium surcharge, or

premium discount;

(4) recognition is given to member's characteristics, including size,

financial capabilities, nature of activities, and number of employees;

(5) if the member selects a deductible, the member is liable to the

public group self-insurer for the deductible amount in regard to

benefits paid for compensable claims;

(6) 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 then seeks reimbursement from the member for the applicable

deductible amount;

(7) a failure by the member to reimburse deductible amounts to the

public group self-insurer is treated in the same manner as nonpayment of

the member's contribution;

(8) the public group self-insurer shall be fully-funded as defined in

subparagraph (b) of paragraph two of subdivision three-a of this section

and if, after offering deductible policies, the public group

self-insurer ceases to be fully funded as so defined, the public group

self-insurer may not permit any new member to elect the deductible

option until the public group self-insurer becomes fully funded;

(9) the public group self-insurer may add no more than seven new

deductible members in any one contribution year;

(10) the aggregate contributions for all new members selecting the

deductible option in any one year may not exceed ten percent of the

total contributions of all of the public group self-insurer's members

for the immediately prior year;

(11) if the member was self-insured prior to joining the public group

self-insurer, the member's deductible amount during the member's first

year of membership in the public group self-insurer may not exceed the

amount of the member's reinsurance retention level immediately before

joining the public group self-insurer;

(12) each member which has elected the deductible option shall: (i)

maintain in a dedicated account held by the public group self-insurer an

amount actuarially determined to be sufficient to pay the portion of

each compensation claim that is within the deductible amount for the

succeeding three months; and (ii) maintain in its own dedicated reserve

account or in its own undesignated fund balance, the

actuarially-determined amount that the member will be required to pay

for all of the member's claims below the deductible amount; and

(13) the public group self-insurer shall provide to all members of the

public group self-insurer an annual statement identifying the

contributions provided by and the reserves attributable to the members

which have elected a deductible and must provide to each member of the

public group self-insurer which has elected the deductible option an

annual actuarial analysis of the member's open claims, stating the

amounts the public group self-insurer anticipates that the member will

be required to pay for the life of each claim.

4. a. A county, city, village, town, school district, fire district or

other political subdivision of the state may secure compensation to its

employees in accordance with subdivision one, two or three-a of this

section, and a public corporation as defined in subdivision one of

section sixty of this chapter may also secure such compensation in

accordance with article five of this chapter. If compensation is not so

secured, a county, city, village, town, school district, fire district

or other political subdivision shall be deemed to have elected to secure

compensation pursuant to subdivision three of this section and, in such

case, no proof of financial ability or deposit of securities or cash

need be made in compliance with such subdivision. All other requirements

prescribed by this chapter for employers so electing shall be complied

with and notice of such election shall be filed with the chair. For

failure to file such notice of election, prescribed in form by the

chair, within ten days after the election was made, the treasurer or

other financial officer shall be liable to pay to the chair the sum of

one hundred dollars as a penalty, to be transferred to the state

treasury.

b. The treasurer or other fiscal officer of a self-insuring county,

city, village, town, school district, fire district or other political

subdivision shall, upon presentation of an award of compensation

forthwith begin payment of it to the person entitled thereto in

accordance with this chapter.

c. The governing board of a county, city, village, town, school

district, fire district or other political subdivision may authorize the

treasurer or other fiscal officer of such municipal corporation,

district or political subdivision, as the case may be, to pay the

compensation provided for in this chapter to the person entitled thereto

without waiting for an award in any case in the manner provided in

section twenty-five of this chapter. The amount of such compensation

payable prior to an award pursuant to such authorization shall

constitute a settled claim within the meaning of the local finance law.

d. A contract of insurance issued to a county or a town in accordance

with subdivision one or two of this section and in force on or after the

first day of March, nineteen hundred sixty-three, in relation to fire

districts and on or after the first day of January, in the year in which

this paragraph as hereby amended becomes effective in relation to

ambulance districts shall contain a provision reading as follows: "This

contract does not provide (1) any coverage under the Workers'

Compensation Law or the Volunteer Firefighters' Benefit Law or the

Volunteer Ambulance Workers' Benefit Law for which any fire district or

ambulance district would be liable under such laws, (2) any workers'

compensation benefits for fire or ambulance district officers and

employees for which any fire district or ambulance district would be

liable under the Workers' Compensation Law, or (3) any volunteer

firefighters' or ambulance workers' benefits for any volunteer

firefighters or volunteer ambulance workers under the Volunteer

Firefighters' Benefit Law or the Volunteer Ambulance Workers' Benefit

Law".

e. If for any reason the status of a county, city, village, town,

school district, fire district or other political subdivision of state

is terminated, at the discretion of the chair, the county, city,

village, town, school district, fire district or other political

subdivision of state, may execute an assumption of workers' compensation

liability insurance policy securing such further and future contingent

liability as may arise from prior injuries to workers and be incurred by

reason of any change in the condition of such workers warranting the

board making subsequent awards for payment of additional compensation.

Such policy shall be in a form approved by the superintendent of

financial services and shall be issued by the state fund or any

insurance company licensed to issue this class of policy in this state.

In the event that such policy is issued by an insurance company other

than the state fund, then said policy shall be deemed to be insurance of

the kind specified in paragraph fifteen of subsection (a) of section one

thousand one hundred thirteen of the insurance law and covered by the

workers' compensation security fund as created and governed by article

six-A of this chapter. It shall only be issued for a single complete

premium payment in advance by the county, city, village, town, school

district, fire district or other political subdivision of state and in

an amount deemed acceptable by the chair and the superintendent of

financial services. In lieu of the applicable premium charge ordinarily

required to be imposed by a carrier, said premium shall include a

surcharge in an amount to be determined by the chair to satisfy all

assessment liability due and owing to the board and/or the chair under

this chapter. Said surcharge shall be payable to the board simultaneous

to the execution of the assumption of workers' compensation liability

insurance policy. However, the payment of said surcharge does not

relieve the carrier from any other liability, including liability owed

to the superintendent of financial services pursuant to article six-A of

this chapter. When issued such policy shall be non-cancellable without

recourse for any cause during the continuance of the liability secured

and so covered.

5. Self-insurance. "Self-insurance," as used herein, shall be deemed

to be the system of securing compensation as provided in subdivisions

three, three-a and four of this section, and article five of this

chapter.

a. The chair shall administer all matters relating to self-insurance

under this chapter. All penalties set forth in subdivisions three and

three-a of this section shall be paid into the fund for uninsured

employers provided for in section twenty-six-a of this chapter.

b. Advisory committee for individual self-insurance. (1) To advise the

chair, there shall be an advisory committee for individual

self-insurance, which shall be called the advisory committee for

self-insurance and consist of the chair and ten additional members

appointed by the chair. Three of such members shall be named from the

manufacturing and trade group of self-insurance, three from the

transportation, public utilities and construction group, and one member

shall be a self-insurer selected at large by the chairman, who shall be

vice-chairman of the advisory committee. The chair shall be chair of the

advisory committee; the secretary of the board shall act as secretary of

the advisory committee. Any member appointed to such advisory committee

shall be a self-insurer or an officer of a self-insurer or a person who

on account of his or her employment or affiliation can be classed as a

management representative of a self-insurer. The members of the advisory

committee for self-insurance in office at the time this subdivision

takes effect, shall be and they are hereby continued in office as such

for the remainder of the terms for which they were appointed

respectively.

The members of the advisory committee for self-insurance next

appointed, except to fill a vacancy created otherwise than by expiration

of term, shall be appointed for terms of three years, except that of the

three additional members to be appointed after May first, two thousand

eight, one such member shall be appointed for an initial term of one

year, one such member shall be appointed for an initial term of two

years, and one such member shall be appointed for an initial term of

three years. No member shall be appointed to the advisory committee for

individual self-insurance if he or she has been convicted of a crime

under this chapter or has been subject to criminal or civil penalties

under this subdivision. Vacancies shall be filled for the unexpired term

by appointment by the chair. Members shall continue in office until

their successors are appointed; in the event that no appointment is made

within three months after a vacancy exists or after the expiration of

the term of a member, the remaining members may fill the vacancy by a

majority vote. If a member shall be absent from two consecutive regular

meetings without adequate excuse his or her place may be declared vacant

by the chair. Members of such advisory committee shall serve without

pay, but shall be entitled to their reasonable and necessary traveling

and other expenses incurred in connection with their duties. Regular

meetings of the advisory committee shall be held twice a year, on dates

to be fixed by the chair. In addition, special meetings shall be held if

called by the chair or any five members of the committee. Such advisory

committee shall have access to all self-insurance records except those

restricted by the chair or those whose disclosure is restricted under

section one hundred ten-a of this chapter, and shall have the power to

require the presence before it of any employee of the board or any

self-insurer as reasonable and related to matters within the purview of

the committee. Information obtained by members of the advisory committee

shall be deemed confidential unless disclosed by order of the committee.

It shall be the duty of the advisory committee to advise the chair on

all matters relating to self-insurance, particularly in respect to rules

governing self-insurance, the deposit or withdrawal of securities, the

standards for permitting employers to self-insure under this section,

the appropriate amount of security or payments that self-insured

employers must provide, and on such other matters as the chair shall

request. The chair shall detail to such advisory committee such

stenographic or other assistance as may be necessary. Minutes shall be

kept of the meetings of the advisory committee and shall be provided

within forty-five days of such meeting to the governor and legislature,

including the chairs of the assembly and senate committees on insurance

and labor.

c. (1) The chair and the department of audit and control as soon as

practicable after May first, nineteen hundred sixty, and annually

thereafter, as soon as practicable after April first in each succeeding

year, shall ascertain the total amount of net expenses, including (a)

administrative expenses, which shall include the direct costs of

personal services, the cost of maintenance and operation, the cost of

retirement contributions made and workers' compensation premiums paid by

the State for or on account of personnel, rentals for space occupied in

state owned or state leased buildings, and (b) all direct or indirect

costs incurred by the board during the preceding fiscal year in carrying

out the provisions of subdivision three and three-a of this section.

Such expenses shall be adjusted annually to reflect any change in

circumstances, and shall be assessed against all private self-insured

employers, including for this purpose active and terminated group

self-insurers, active individual self-insured employers, and individual

self-insured employers who have ceased to exercise the privilege of

self-insurance.

(2) Such expenses shall be assessed against all self-insurers

including for this purpose employers who have ceased to exercise the

privilege of self-insurance. The basis of apportionment of the

assessment against each self-insurer shall be a sum equal to that

proportion of the amount which the indemnity payment for each

self-insurer bore to the total indemnity payments for all self-insurers

for the calendar year which ended within the preceding state fiscal

year. All such assessments when collected shall be deposited into a fund

which shall be used to reimburse the appropriations theretofore made by

the state for the payment of the expenses of administering this chapter.

(3) Pure premium for assessments made prior to January first, two

thousand nine against individual and group self-insurers who ceased to

self-insure shall be based on payroll at the time the individual or

group self-insurer has ceased to self-insure, reduced by a factor

reflecting the reduction in the group or individual self-insurer's

self-insurance liabilities since ceasing to self-insure.

d. The chair may from time to time request the superintendent of

financial services for assistance, and the superintendent of financial

services is hereby authorized to render such assistance upon request of

the chair, as may be necessary to insure the financial ability of such

group self-insurers to pay all liabilities provided by this chapter.

e. Notwithstanding the provisions of paragraph c of this subdivision,

the chair shall require that partial payments for expenses of the fiscal

year beginning April first, nineteen hundred eighty-three, and for each

fiscal year thereafter shall be made on March tenth of the preceding

fiscal year and on June tenth, September tenth, and December tenth of

each year, or on such other dates as the director of the budget may

prescribe, by each self-insurer. Provided, however, that the payment due

March tenth, nineteen hundred eighty-three for the fiscal year beginning

April first, nineteen hundred eighty-three shall not be required to be

paid until June tenth, nineteen hundred eighty-three. Each such payment

shall be a sum equal to twenty-five per centum of the annual expenses

assessed upon each self-insurer, as estimated by the chair. The balance

of assessments for the fiscal year beginning April first, nineteen

hundred seventy-three and each fiscal year thereafter, shall be paid

upon determination of the actual amount due in accordance with the

provisions of paragraph c of this subdivision. Any overpayment of annual

assessments resulting from the requirements of this paragraph shall be

refunded or at the option of the chair shall be applied as a credit

against the assessment of the succeeding fiscal year. The requirements

of this subdivision shall not apply to those self-insurers whose

estimated annual assessment for the fiscal year is less than one hundred

dollars and such self-insurers shall make a single payment of the

estimated annual assessment on or before September thirtieth of the

fiscal year.

f. Whenever the chair shall determine that the compensation and

benefits provided by this chapter may be unpaid by reason of the default

of an insolvent private self-insured employer, including a private group

self-insurer, the chair shall pay such compensation and benefits from

administration expenses as provided in section one hundred fifty-one of

this chapter upon audit and warrant of the comptroller upon vouchers

approved by the chair. Such payments shall be considered expenses of

administration. The chair shall be reimbursed therefor from the surety

bond, cash or securities held or, if such surety bond, securities or

cash is insufficient, by the employer, its receiver, liquidator,

rehabilitator or trustee in bankruptcy. All moneys reimbursed to the

chair or recovered by the chair in an action or proceeding to secure

such reimbursement shall forthwith be applied as a credit against the

expenses on which the assessment levied upon all private self-insured

employers, in accordance with paragraphs c and e of this subdivision, is

calculated.

g. Whenever the chair shall determine that the compensation and

benefits provided by this chapter may be unpaid by reason of the default

of an insolvent private self-insured employer, including a private group

self-insurer, the chair shall levy an assessment against all private

self-insured employers, including private group self-insurers, in

accordance with paragraphs c and e of this subdivision to assure prompt

payment of such compensation and benefits. Whenever compensation and

benefits are unpaid by reason of such default, the chair shall promptly

pay such compensation and benefits from administration expenses as

provided in section one hundred fifty-one of this chapter upon audit and

warrant of the comptroller upon vouchers approved by the chair. Nothing

in this paragraph shall preclude the chair from recovering the moneys it

expends from its administrative expenses against the defaulted

individual self-insurer, or the members of the defaulted group

self-insurer, as otherwise permitted by this chapter.

6. Any policy of insurance purchased pursuant to the provisions of

this subdivision six as in effect prior to the first day of March,

nineteen hundred fifty-seven, shall be cancelled prior to, or as of, the

twenty-eighth day of February, nineteen hundred fifty-seven.

The cost of such insurance shall be apportioned by the clerk of the

board of supervisors of the county to each such city, village, fire

district, fire protection district, fire alarm district, and territory

outside such municipal corporations and districts, in the proportion

that the agreed population bears to the entire population of the group.

Refunds, dividends and discounts in relation to such insurance shall be

distributed or credited according to the same apportionment. Upon

notification by the clerk of the board of supervisors, the chief fiscal

officer of each such city, village or fire district shall pay to the

county treasurer, from moneys available or made available, the amount

apportioned to such city, village or district. Upon like notification,

the supervisor of each town in which a fire protection district or fire

alarm district is located in whole or in part, or in which outside

territory is located, shall pay to the county treasurer the amount

apportioned for such district, in whole or in part, or territory, as the

case may be, using moneys raised or made available for the purposes of

fire protection in such district or outside territory, or if there be no

such moneys or insufficient moneys, using funds of the town available or

made available, which funds shall be a charge upon such district or

territory for which the town shall be reimbursed. The county treasurer

shall pay the cost of such insurance with such moneys, or if any

apportioned share has not been paid, the county treasurer shall advance

the amount necessary from moneys of the general fund upon resolution of

the board of supervisors. Any such advance shall be repaid as soon as

moneys are available therefor. If any apportioned share remains unpaid,

the county may recover the same by action at law. If any member of the

group shall fail to pay its apportioned share within thirty days after

notice that such amount has become due and payable, the chairman of the

board of supervisors may terminate the participation of such member in

the group by notice by mail to such member on a date specified in the

notice, and a copy of such notice shall be filed by the chairman of the

board of supervisors with the insurance carrier, who shall notify the

chairman of the workmen's compensation board of the termination of

coverage in the same manner as provided for cancellation of policy under

subdivision five of section fifty-four of this chapter.

If any participating fire protection district or fire alarm district

includes territory in more than one town, whether or not in more than

one county, the amount of cost of insurance, refund, dividend or

discount apportioned to such district shall be apportioned in the

proportion that the population of the district within each such town

bears to the population of the entire district. The figure used for

population in such case shall be the one stated in the agreement.

7. Any policy of insurance purchased pursuant to the provisions of

this subdivision seven as in effect prior to the first day of March,

nineteen hundred fifty-seven, shall be cancelled prior to, or as of, the

close of the twenty-eighth day of February, nineteen hundred

fifty-seven. The cost of such insurance shall be a town charge and shall

be levied and collected in the same manner as other town charges only in

the territory of such town outside of any villages and fire districts

not covered by such a policy.

8. The requirements of section ten of this chapter regarding the

provision of workers' compensation insurance as to owners and trainers

governed by the racing, pari-mutuel wagering and breeding law who are

employers under section two of this chapter are satisfied in full by

compliance with the requirements imposed upon owners and trainers by

section two hundred twenty-one of the racing, pari-mutuel wagering and

breeding law, provided that in the event double compensation, death

benefits, or awards are payable with respect to an injured employee

under section fourteen-a of this chapter, the owner or trainer for whom

the injured jockey, apprentice jockey or exercise person licensed under

article two or four of the racing, pari-mutuel wagering and breeding

law, and at the election of the New York Jockey Injury Compensation

Fund, Inc., with the approval of the New York state gaming commission,

employee of a licensed trainer or owner, is performing services as a

jockey, apprentice jockey or exercise person so licensed at the time of

the accident or, if approved by the New York state gaming commission, an

employee of a licensed trainer or owner shall bear the sole

responsibility for the amount payable pursuant to such section

fourteen-a in excess of the amount otherwise payable under this chapter,

unless there shall be a failure of the responsible owner or trainer to

pay such award within the time provided under this chapter. In the event

of such failure to pay and the board requires the fund to pay the award

on behalf of such owner or trainer who has been found to have violated

section fourteen-a of this chapter, the fund shall be entitled to an

award against such owner or trainer for the amount so paid which shall

be collected in the same manner as an award of compensation. Coverage

directly procured by any owner or trainer for the purpose of satisfying

the requirements of this chapter with respect to employees of the owner

or trainer shall not include coverage on any jockey, apprentice jockey

or exercise person licensed under article two or four of the racing,

pari-mutuel wagering and breeding law, and at the election of the New

York Jockey Injury Compensation Fund, Inc., with the approval of the New

York state gaming commission, any employee of a licensed trainer or

owner, to the extent that such jockey, apprentice jockey, exercise

person or, if approved by the New York state gaming commission, employee

of a licensed trainer or owner is also covered under coverage procured

by The New York Jockey Injury Compensation Fund, Inc. pursuant to the

requirements of section two hundred twenty-one of the racing,

pari-mutuel wagering and breeding law, and to that extent, coverage

procured by the fund pursuant to the requirements of the racing,

pari-mutuel wagering and breeding law shall be considered primary.

9. The requirements of sections ten and eleven of this chapter

regarding the securing and provision of workers' compensation benefits

as to a central dispatch facility, as defined in article six-F of the

executive law, are satisfied in full by compliance with the requirements

imposed upon such central dispatch facility by such article. Insurance

coverage directly procured by any central dispatch facility for the

purpose of satisfying the requirements of this chapter with respect to

employees of the central dispatch facility shall not include coverage of

any black car operator to the extent that the black car operator is also

covered under coverage secured by the New York black car operators'

injury compensation fund, inc. pursuant to the requirements of article

six-F of the executive law, and to that extent, coverage secured by the

fund pursuant to the requirements of article six-F of the executive law

shall be considered primary.

10. An individual self-insured employer or group self-insurer who

fails to file or maintain the security deposit required by the chair

will be deemed to have failed to secure compensation for the amount not

deposited, and shall be liable for all penalties for such failure

provided for under this title.

11. If at any time an individual self-insured employer or member of a

group self-insurer intentionally and materially understates or conceals

payroll, or intentionally and materially misrepresents or conceals

employee duties or if the employer intentionally or materially misstates

payroll or claims information for the purposes of determining employer

contributions as provided for under subdivisions three and three-a of

this section, such employer shall be deemed to have failed to secure

compensation and shall be subject to sanctions applicable under section

fifty-two of this article in addition to any other sanctions available

under law.

12. The chair, with the approval of the director of the budget, may

request the issuance of bonds by the dormitory authority for one or more

of the purposes authorized by section sixteen hundred eighty-q of the

public authorities law and by a self-insured bond financing agreement

authorized by section fifty-c of this article. The net proceeds of such

bonds shall be deposited into the self-insurer offset fund or as

otherwise provided by the applicable self-insured bond financing

agreement.