S T A T E O F N E W Y O R K
________________________________________________________________________
11613
I N A S S E M B L Y
July 1, 2010
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. John) --
read once and referred to the Committee on Labor
AN ACT to amend the workers' compensation law, in relation to active
self-insurers
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The opening paragraph of subparagraph 4 of paragraph (h) of
subdivision 8 of section 15 of the workers' compensation law, as amended
by section 1 of part QQ of chapter 56 of the laws of 2009, is amended to
read as follows:
As soon as practicable after May first in the year nineteen hundred
fifty-eight, and annually thereafter as soon as practicable after Janu-
ary first in each succeeding year, the chair of the board shall assess
upon and collect from all self-insurers, except group self-insurers, the
state insurance fund, all insurance carriers and ALL ACTIVE group self-
insurers, (A) a sum equal to one hundred fifty per centum of the total
disbursements made from the special disability fund during the preceding
calendar year (not including any disbursements made on account of antic-
ipated liabilities or waiver agreements funded by bond proceeds and
related earnings), less the amount of the net assets in such fund as of
December thirty-first of said preceding calendar year, and (B) a sum
sufficient to cover debt service, and associated costs (the "debt
service assessment") to be paid during the calendar year by the dormito-
ry authority, as calculated in accordance with subparagraph five of this
paragraph. Such assessments shall be allocated to (i) self-insurers
except group self-insurers and the state insurance fund based upon the
proportion that the total compensation payments made by all self-insur-
ers except group self-insurers and the state insurance fund bore to the
total compensation payments made by all self-insurers except group self-
insurers, the state insurance fund, all insurance carriers and ALL
ACTIVE group self-insurers, (ii) insurance carriers based upon the
proportion that the total compensation payments made by all insurance
carriers bore to the total compensation payments by all self-insurers
except group self-insurers, the state insurance fund and all insurance
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17979-01-0
A. 11613 2
carriers and ALL ACTIVE group self-insurers during the fiscal year which
ended within said preceding calendar year, and (iii) ALL ACTIVE group
self-insurers based upon the proportion that the total compensation
payments made by all ACTIVE group self-insurers bore to the total
compensation payments made by all self-insurers (EXCEPT INACTIVE GROUP
SELF-INSURERS), the state insurance fund and all insurance carriers
during the fiscal year which ended within said preceding calendar year.
Insurance carriers [and], self-insurers AND ACTIVE GROUP SELF-INSURERS
shall be liable for all such assessments regardless of the date on which
they came into existence, or whether they have made any claim for
reimbursement from the special disability fund. The portion of such sum
allocated to self-insurers except group self-insurers and the state
insurance fund that shall be collected from each self-insurer except a
group self-insurer and the state insurance fund shall be a sum equal to
the proportion of the amount which the total compensation payments of
each such self-insurer except a group self-insurer or the state insur-
ance fund bore to the total compensation payments made by all self-in-
surers except group self-insurers and the state insurance fund during
the fiscal year which ended within said preceding calendar year. The
portion of such sum allocated to insurance carriers that shall be
collected from each insurance carrier shall be a sum equal to that
proportion of the amount which the total standard premium by each such
insurance carrier bore to the total standard premium reported by all
insurance carriers during the calendar year which ended within said
preceding fiscal year. The portion of such sum allocated to ACTIVE group
self-insurers that shall be collected from each ACTIVE GROUP self-insur-
er shall be a sum equal to that proportion of the amount which the pure
premium calculation for each such ACTIVE group self-insurer bore to the
total pure premium calculation for all ACTIVE group self-insurers for
the calendar year which ended within the preceding state fiscal year.
The payments from the debt service assessment, unless otherwise set
forth in the special disability fund financing agreement, are hereby
pledged therefor and shall be deemed the first monies received on
account of assessments in each year. For the purposes of this paragraph,
"standard premium" shall mean the premium as defined for the purposes of
this assessment by the superintendent of insurance, in consultation with
the chair of the board and the workers' compensation rating board. For
purposes of this paragraph "pure premium calculation" means the New York
state annual payroll as of December thirty-first of the preceding year
by class code for each employer member of [a] AN ACTIVE group self-in-
surer multiplied by the applicable loss cost for each class code as
determined by the workers' compensation rating board in effect on Decem-
ber thirty-first of the preceding year, and for [a group or] AN individ-
ual self-insurer who has ceased to self-insure shall be based on payroll
at the time the group or individual self-insurer ceased to self-insure
reduced by a factor reflecting the reduction in the [group or] individ-
ual self-insurer's self-insurance liabilities since ceasing to self-in-
sure. An INDIVIDUAL employer who has ceased to be a self-insurer [or a
group that ceases to be licensed as a group self-insurer] shall continue
to be liable for any assessments into said fund on account of any
compensation payments made by him or her on his or her account during
such fiscal year, and the security fund, created under the provisions of
section one hundred seven of this chapter, shall, in the event of the
insolvency of any insurance company, be liable for any assessments that
would have been made against such company except for its insolvency. No
assessment shall be payable from the aggregate trust fund, created under
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the provisions of section twenty-seven of this article, but such fund
shall continue to be liable for all compensation that shall be payable
under any award or order of the board, the commuted value of which has
been paid into such fund. Such assessments when collected shall be
deposited with the commissioner of taxation and finance for the benefit
of such fund. Unless otherwise provided, such assessments, shall not
constitute an element of loss for the purpose of establishing rates for
compensation insurance but shall for the purpose of collection be treat-
ed as separate costs by carriers. All insurance carriers and the state
insurance fund, shall collect such assessments, from their policyholders
through a surcharge based on premiums in accordance with rules set forth
by the superintendent of insurance in consultation with the New York
workers' compensation rating board and the chair of the board. Such
surcharge shall be considered as part of premium for purposes prescribed
by law including, but not limited to, computing premium tax, reporting
to the superintendent of insurance pursuant to section ninety-nine of
this chapter and section three hundred seven of the insurance law,
determining the limitation of expenditures for the administration of the
state insurance fund pursuant to section eighty-eight of this chapter
and the cancellation by an insurance carrier, including the state insur-
ance fund, of a policy for non-payment of premium. The provisions of
this paragraph shall not apply with respect to policies containing
coverage pursuant to subsection (j) of section three thousand four
hundred twenty of the insurance law relating to every policy providing
comprehensive personal liability insurance on a one, two, three or four
family owner-occupied dwelling. The state insurance fund shall, notify
its insureds that such assessments, shall be, for the purpose of recoup-
ment, treated as separate costs, respectively for the purpose of premi-
ums billed on or after October first, nineteen hundred ninety-four.
S 2. Paragraphs (b) and (c) of subdivision 2 of section 151 of the
workers' compensation law, paragraph (b) as amended by section 2 of part
QQ of chapter 56 of the laws of 2009 and paragraph (c) as amended by
chapter 6 of the laws of 2007, are amended to read as follows:
(b) An itemized statement of the expenses so ascertained shall be open
to public inspection in the office of the board for thirty days after
notice to the state insurance fund, all insurance carriers and all self-
insurers including ALL ACTIVE group self-insurers affected thereby,
before the board shall make an assessment for such expenses. The chair
shall assess upon and collect a proportion of such expenses as herein-
after provided from each insurance carrier, the state insurance fund and
each self-insurer including ALL ACTIVE group self-insurers. The assess-
ment for such expenses shall be allocated to (i) self-insurers except
group self-insurers and the state insurance fund based upon the propor-
tion that the total compensation payments made by all self-insurers
except group self-insurers and the state insurance fund in such year
bore to the total compensation payments made by all self-insurers except
group self-insurers, the state insurance fund, all insurance carriers
and ALL ACTIVE group self-insurers and (ii) insurance carriers based
upon the proportion that the total compensation payments made by all
insurance carriers in such year bore to the total compensation payments
by all self-insurers, the state insurance fund and all insurance carri-
ers, and (iii) ACTIVE group self-insurers based upon the proportion that
the total compensation payments made by all ACTIVE group self-insurers
in such year bore to the total compensation payments made by all self-
insurers (EXCEPT INACTIVE GROUP SELF-INSURERS), the state insurance fund
and all insurance carriers. The portion of the assessment for such
A. 11613 4
expenses allocated to self-insurers except group self-insurers and the
state insurance fund that shall be collected from each self-insurer
except group self-insurers and the state insurance fund shall be a sum
equal to the proportion of the amount which the total compensation
payments of each such self-insurer except a group self-insurer or the
state insurance fund in such year bore to the total compensation
payments made by all self-insurers except group self-insurers and the
state insurance fund. The portion of the assessment for such expenses
allocated to insurance carriers that shall be collected from each such
insurance carrier shall be a sum equal to that proportion of the amount
which the total standard premium by each such insurance carrier bore to
the total standard premium reported by all insurance carriers for the
calendar year which ended with the state fiscal year. The portion of
such sum allocated to ACTIVE group self-insurers that shall be collected
from each ACTIVE group self-insurer shall be a sum equal to that propor-
tion of the amount which the pure premium calculation for each such
group self-insurer bore to the total pure premium calculation for all
group self-insurers for the calendar year which ended within the state
fiscal year. The amounts so secured shall be used for the payment of the
expenses of administering this chapter. Pure premium for assessments
against individual [and group self-insurers] who ceased to self-insure
shall be based on payroll at the time the individual [or group self-in-
surer] 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.
For purposes of this paragraph, "standard premium" shall mean the
premium as defined for the purposes of this assessment by the super-
intendent of insurance, in consultation with the chair of the board and
the workers' compensation rating board. For purposes of this paragraph
"pure premium calculation" means the New York state annual payroll as of
December thirty-first of the preceding year by class code for each
employer member of [a] AN ACTIVE group self-insurer multiplied by the
applicable rate for each class code as determined by the workers'
compensation rating board in effect on December thirty-first of the
preceding year. The amounts so secured shall be used for the payment of
the expenses of administering this chapter.
For the purposes of this paragraph, the term "insurance carrier" shall
include only stock corporations, mutual corporations and reciprocal
insurers authorized to transact the business of workers' compensation
insurance in this state and the term "self-insurer" shall include any
employer or group of employers permitted to pay compensation directly
under the provisions of subdivision three, three-a or four of section
fifty of this chapter.
(c) Assessments for the special disability fund, the fund for reopened
cases and for the operations of the board shall not constitute elements
of loss but shall for collection purposes be treated as separate costs
by carriers. All ACTIVE group self-insurers shall collect such assess-
ments from their employer members in a fair and equitable manner. All
insurance carriers, including the state insurance fund, shall collect
such assessments from their policyholders through a surcharge based on
premium in accordance with rules set forth by the New York workers'
compensation rating board, as approved by the superintendent of insur-
ance. Such surcharge shall be considered as part of premium for purposes
prescribed by law including, but not limited to, computing premium tax,
reporting to the superintendent of insurance pursuant to section nine-
ty-nine of this chapter and section three hundred seven of the insurance
A. 11613 5
law, determining the limitation of expenditures for the administration
of the state insurance fund pursuant to section eighty-eight of this
chapter and the cancellation by an insurance carrier, including the
state insurance fund, of a policy for non-payment of premium.
S 3. This act shall take effect January 1, 2011, and shall apply to
any assessment cycle beginning on and after such date.