senate Bill S6978

Signed By Governor
2011-2012 Legislative Session

Extends the effectiveness of certain provisions of law relating to workers' compensation rate service organizations

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Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 18, 2012 signed chap.237
Jul 06, 2012 delivered to governor
Jun 20, 2012 returned to senate
passed assembly
ordered to third reading cal.677
substituted for a10160
May 31, 2012 referred to insurance
delivered to assembly
passed senate
May 23, 2012 advanced to third reading
May 22, 2012 2nd report cal.
May 21, 2012 1st report cal.842
Apr 18, 2012 referred to insurance

Votes

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S6978 - Bill Details

See Assembly Version of this Bill:
A10160
Law Section:
Insurance Law
Laws Affected:
Amd §§2305 & 2313, Ins L; amd §16, Chap 11 of 2008

S6978 - Bill Texts

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Extends the effectiveness of certain provisions of law relating to workers' compensation rate service organizations from June 2, 2013 until June 2, 2018.

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BILL NUMBER:S6978

TITLE OF BILL:

An act
to amend the insurance law, in relation to workers' compensation rate
service organizations; and to amend chapter 11 of the laws of 2008,
amending the workers' compensation law, the insurance law, the volunteer
ambulance workers' benefit law and the volunteer firefighters' benefit
law, relating to rates for workers' compensation insurance and setting
forth conditions for a workers' compensation rate service organization,
in relation to the effectiveness thereof

PURPOSE OF THE BILL:

This bill would: (1) extend the time in which a rate service
organization ("RSO") may file loss costs or other statistical
information, including rating plans, with the Department of Financial
Services ("Department") from June 2, 2013 to June 2, 2018; (2) extend
the requirement that an RSO have public members as part of its
governing structure from June 2, 2013 to June 2, 2018; and (3)
provide for the temporary continuation in office of certain
publicly-appointed incumbent members of the governing body of an RSO
whose term has expired.

SUMMARY OF PROVISIONS:

Section 1 of this bill would amend Insurance Law § 2305(e) to
authorize an extension of the mandatory yearly loss cost filing with
the Department by RSOs beyond June 2, 2013 and until June 2, 2018.

Section 2 of this bill would amend Insurance Law § 2313(s) to permit
RSOs to file with the Department loss costs or other statistical
information, including rating plans, beyond June 2, 2013 and until
June 2, 2018.

Section 3 of this bill would amend Insurance Law § 2313(t)(1) to
provide for the temporary continuation in office of certain appointed
members of the governing body of an RSO whose term has expired until
such member's successor has been duly appointed and approved,
provided that the appointing entity appoints a successor member
within 120 days of the expiration of the term of office.

Section 4 of this bill would amend § 16 of Chapter 11 of the Laws of
2008 to provide for
the extension of Insurance Law § 2313(t), which requires an RSO to
have public members as part of its governing structure and is
otherwise set to expire on June 2, 2013, until June 2, 2018.

Section 5 of this bill would provide for an immediate effective date.

EXISTING LAW:

At present, the ability of an RSO to file loss costs with the
Department and the requirement that an RSO have a governing structure
that includes public and insurer members will sunset on June 2, 2013,
and certain appointed members of the RSO's governing body must vacate
their offices after two years if not reappointed.

STATEMENT IN SUPPORT:

In January 2008, the Legislature enacted legislation to reform New
York's workers' compensation system. See Chapter 11
of the Laws of
2008. That legislation established a new method for setting workers'
compensation rates in New York, in which RSOs file "loss costs" with
the Department, and set forth certain governance structure
requirements for an RSO licensed in New York for workers' compensation.

This bill would permit RSOs to continue to file loss costs or other
statistical information, including rating plans, with the Department
beyond the current June 2, 2013 expiration date and until June 2,
2018. Since the enactment of the prior 2008 legislation, it has
become clear that the data collection and analysis services provided
by RSOs, such as the New York Compensation Insurance Rating Board
("CIRB"), are vital and essential to the health of New York's
workers' compensation insurance market. Foreclosing the ability of an
entity such as the CIRB to collect industry-wide data and calculate
loss costs would isolate the New York workers' compensation market
from the rest of the country and could have significant negative
effects on insurer solvency, insurance availability and competition.

Also, the bill would extend the requirement that RSOs have public
members as part of their board of governors, underwriting and
actuarial committees. This structure has proven beneficial to the
RSO, the industry and the stakeholders of the workers' compensation
system.
The bill also addresses the possibility of vacancies in the membership
of an RSO's governing body that could prove disruptive of RSO work.
In order to avoid the possibility that a public member could lose its
representation on the governing body of an RSO as a result of the
expiration of its appointee's two-year term and delay in his or her
replacement, this bill would provide for the temporary continuation
in office of an incumbent appointee whose term has expired until a
new appointment is made and approved, provided that the appointing
entity appoints a successor member within 120 days of the expiration
of the term of office.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE:

This bill would take effect immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6978

                            I N  S E N A T E

                             April 18, 2012
                               ___________

Introduced  by Sen. SEWARD -- (at request of the Department of Financial
  Services) -- read twice and ordered printed, and when  printed  to  be
  committed to the Committee on Insurance

AN  ACT to amend the insurance law, in relation to workers' compensation
  rate service organizations; and to amend chapter 11  of  the  laws  of
  2008,  amending  the workers' compensation law, the insurance law, the
  volunteer ambulance workers' benefit law and the volunteer  firefight-
  ers'  benefit  law, relating to rates for workers' compensation insur-
  ance and setting forth conditions for  a  workers'  compensation  rate
  service organization, in relation to the effectiveness thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsection (e) of section 2305 of  the  insurance  law,  as
amended  by  chapter  11  of  the  laws  of  2008, is amended to read as
follows:
  (e) The superintendent: (1) by regulation may, in lieu of the  waiting
period  set  forth  in  subsection (b) of this section, require workers'
compensation insurance rate filings to be specifically  approved  before
they  become  effective;  and  (2) shall hold a public hearing if a rate
service organization makes a loss cost filing for workers'  compensation
that  is  an  increase  of  seven percent or more over the approved loss
costs from the prior year. Until June second,  two  thousand  [thirteen]
EIGHTEEN,  a  rate  service organization for workers' compensation shall
make a loss cost filing every year on or  before  June  first,  or  such
earlier date as is set by the superintendent.
  S  2.  Subsection (s) of section 2313 of the insurance law, as amended
by chapter 11 of the laws of 2008, is amended to read as follows:
  (s) Notwithstanding any other  provision  of  this  article,  no  rate
service  organization may file rates for workers' compensation insurance
after February first, two thousand eight, but a rate  service  organiza-
tion  may  file  loss  costs or other statistical information, including
rating plans, until  June  second,  two  thousand  [thirteen]  EIGHTEEN.
Notwithstanding  subsection  (j)  of this section, any such rate service

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14623-05-2

S. 6978                             2

organization shall nonetheless be required to be  licensed  pursuant  to
this section.
  S  3.  Paragraph  1 of subsection (t) of section 2313 of the insurance
law, as added by chapter 11 of the laws of 2008, is amended to  read  as
follows:
  (1)  The governing body of a workers' compensation rate service organ-
ization shall be comprised of nine voting members.  Four  members  shall
represent  insurers  authorized to write workers' compensation insurance
in this state, and shall be selected in such manner as is determined  by
the  members of the rate service organization. One member of the govern-
ing body shall be a representative of the state  insurance  fund.  [The]
EACH OF THE remaining four members of the governing body shall serve for
[terms]  A  TERM  of two years AND UNTIL HIS OR HER SUCCESSOR SHALL HAVE
BEEN  APPOINTED  AND  APPROVED,  PROVIDED  THAT  THE  APPOINTING  ENTITY
APPOINTS  A SUCCESSOR MEMBER WITHIN ONE HUNDRED TWENTY DAYS OF THE EXPI-
RATION OF THE TERM OF OFFICE, and shall not be employed by, or serve  as
[officers]  AN OFFICER or [directors] DIRECTOR of, [insurers] AN INSURER
authorized to write workers' compensation insurance in  this  state,  or
any  parent,  subsidiary,  or  affiliate thereof. One such member of the
governing body shall be appointed by the superintendent. The other three
such members shall be appointed subject to the approval  of  the  super-
intendent  by  the following: [(i)] (A) the workers' compensation board;
[(ii)] (B) the Business Council of New York State, Inc.; and [(iii)] (C)
the American Federation of Labor - Congress of Industrial  Organizations
of  New York State. Any vacancy on the governing body shall be filled in
the same manner as the initial appointment.  The  governing  body  shall
select  a chief executive officer who shall serve at the pleasure of the
governing body and whose terms and conditions  of  employment  shall  be
approved  by the governing body. No restriction in this subsection shall
apply if compliance is  prevented  by  the  failure  of  any  appointing
authority  to  make  an appointment, or of the superintendent to approve
such appointment.
  S 4. Section 16 of chapter 11 of the laws of 2008 amending  the  work-
ers'  compensation law, the insurance law, the volunteer ambulance work-
ers' benefit law and the volunteer firefighters' benefit  law,  relating
to  rates  for  workers' compensation insurance and setting forth condi-
tions for a workers' compensation rate service organization, is  amended
to read as follows:
  S  16.  This act shall take effect February 1, 2008; provided that the
amendments to paragraph 2 of subsection  (a)  of  section  2316  of  the
insurance  law  made  by section eleven of this act shall take effect on
the same date that section 68 of chapter 6 of the  laws  of  2007  takes
effect;  provided  further  that  the  amendments to section 2316 of the
insurance law made by section eleven of this act shall  not  affect  the
expiration of such section pursuant to section 2342 of the insurance law
and shall be deemed expired therewith; and provided further that section
ten of this act shall expire and be deemed repealed June 2, [2013] 2018.
  S  5.  This act shall take effect immediately; provided, however, that
the amendments to paragraph 1 of subsection (t) of section 2313  of  the
insurance  law  made  by  section three of this act shall not affect the
repeal of such subsection and shall be deemed repealed therewith.

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