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SECTION 26-A
Procedure and payment of compensation in claims against uninsured defaulting employers
Workers' Compensation (WKC) CHAPTER 67, ARTICLE 2
§ 26-a. Procedure and payment of compensation in claims against
uninsured defaulting employers. 1. (a) Notwithstanding any other
provision of this chapter, when a claim for compensation is filed by an
employee, or in case of death by the employee's dependents, and the
employer has failed to secure the payment of compensation in accordance
with section fifty of this chapter, to make deposit of security in
accordance with section twenty-six of this chapter and to make payment
of compensation into the fund created under this section according to
the terms of any award including, without limitation, awards made
pursuant to subdivision five of section thirteen-g, subdivision two of
section thirteen-f, subdivision five of section thirteen-k, subdivision
five of section thirteen-l and subdivision six of section thirteen-m of
this article, payment of the award shall be promptly made from the fund
created under this section in accordance with the terms thereof and the
provisions of subdivision three of this section. The employer shall be
liable with the fund for payment of the award. Where the employer is a
corporation the president, secretary and treasurer thereof shall also be
personally, jointly and severally liable with the corporation for
payment of the award. The employer shall pay the award into the fund, in
accordance with the time limitations contained in section twenty-five of
this article.

(b) No such award, however, for any service specified in subdivision
five of section thirteen-a of this article requiring advance
authorization of the employer in accordance with the provisions of such
subdivision, shall be payable from the fund unless advance authorization
therefor was secured from the representative of the fund or is
determined by the board to be necessary. Notwithstanding any other
provision under this section, awards made pursuant to section fourteen-a
of this article shall not be the liability of the fund and shall not be
payable therefrom nor shall payment of the present value of benefits be
required to be paid into the aggregate trust fund pursuant to section
twenty-seven of this article in any case in which the uninsured
employers' fund is liable.

2. Uninsured employers' fund. (a) There is hereby created a fund
which shall be known as the "uninsured employers' fund" to provide for
the payment of awards against uninsured employers in accordance with the
provisions of this section and shall be available only for the purposes
stated in this subdivision, and the assets thereof shall not at any time
be appropriated or directed to any other use or purpose, except as set
forth in section fifty-a of this chapter.

(b) For the purpose of establishing and maintaining this fund, the
board, upon rendering a decision with respect to any claim for
compensation under this chapter that the employer liable therefor has
failed to secure the payment of compensation with respect thereto in
accordance with section fifty of this chapter, shall impose an
assessment in the sum of one thousand dollars for each ten day period of
non-compliance or a sum not in excess of two times the amount of the
cost of compensation for its payroll for the period of such failure
against the employer and direct its payment into the fund in connection
with each such claim wherein injury shall have occurred on or after the
first of May, nineteen hundred fifty-nine, or in death cases where death
as the result of injury shall have occurred on or after said date.

(c) If the employer shall fail to pay these assessments into the fund
within ten days after date of mailing of notice thereof to him or her,
such default shall constitute a default in payment of compensation due
pursuant to the provisions of section twenty-six of this article and
judgment therefor shall be entered in accordance therewith, all other
provisions of said section to be deemed applicable with respect thereto,
except to the extent that said provisions may be clearly inconsistent
with the provisions of this section. All sums collected from an
uninsured employer with respect to any claim for compensation referred
to in this section but not payable from the fund, except fines collected
from such employer pursuant to section fifty-two of this chapter whether
such collection is made prior or subsequent to entry of judgment against
such employer, shall be deemed in payment of an applicable first in
satisfaction of any compensation and benefits due from such employer
with respect to such claim and security demand, if any, in connection
therewith and only when such obligations are satisfied in full shall the
balance of said sums collected, if any, be deemed payment in
satisfaction of and applicable to the assessments above prescribed in
this section.

(d) All sums recovered from uninsured employers on judgments entered
for failure to pay assessments as hereinbefore provided and for failure
to pay compensation and benefits which were paid from the fund herein
created, shall upon such recovery be paid into said fund.

(e) All awards made on or after July first, nineteen hundred
sixty-nine for every case of injury causing death for which there are no
persons entitled to compensation, and where there are persons entitled
to compensation but the total amount of such compensation is less than
two or five thousand dollars as the case may be exclusive of funeral
benefits, pursuant to the provisions of subdivision three of section
twenty-five-a of this article shall be paid into the uninsured
employers' fund.

(f) As promptly as practicable after July first, nineteen hundred
ninety-one and annually thereafter as soon as practicable after January
first in each succeeding year, the chair shall ascertain the condition
of the uninsured employers' fund. The chair shall transfer to the fund
out of the moneys collected pursuant to subdivision two of section one
hundred fifty-one of this chapter an amount which will raise the net
cash assets of the fund to the level of either the amount spent by the
fund in the prior year, or the amount estimated to be expended by the
fund in the succeeding year, whichever is greater, except that such
requirement shall not apply between August first, two thousand eight and
August first, two thousand fifteen to the extent that section fifty-a of
this chapter permits the fund to be at a different level.

3. The commissioner of taxation and finance shall be the custodian of
the uninsured employers' fund and shall invest any surplus moneys
thereof in securities which constitute legal investments for savings
banks under the laws of this state and in interest bearing certificates
of deposit of a bank or trust company located and authorized to do
business in this state or of a national bank located in this state
secured by a pledge of direct obligations of the United States or of the
state of New York, or in accordance with the provisions of section
ninety-eight-a of the state finance law, in an amount equal to the
amount of such certificates of deposit, and may sell any of the
securities or certificates of deposit in which such fund is invested, if
necessary for the proper administration or in the best interest of such
fund. Disbursements from such fund as provided by this section shall be
paid by the commissioner of taxation and finance upon vouchers signed by
the chairman.

The commissioner of taxation and finance, as custodian of such fund,
as soon as practicable after August first, nineteen hundred sixty-two
and annually thereafter, shall furnish to the chairman of the board a
statement of the fund, setting forth the balance of moneys in the said
fund as of the time of the preceding statement, the income of the fund,
a summary of payments out of the fund on account of compensation ordered
to be paid therefrom by the board, medical and other expenses, and all
other charges against the fund in the interim and setting forth the
balance of the fund remaining to its credit as of the end of the period
being reported. Such statement shall be open to public inspection in the
office of the chairman, and a copy thereof shall be transmitted by the
chairman to the superintendent of financial services. The superintendent
of financial services may examine into the condition of such fund at any
time on his own initiative or on request of the chairman. He shall
verify the receipts and disbursements of the fund, and shall ascertain
the liability of the fund upon all cases in which awards of compensation
have been made and charged against said fund and shall render a report
of such facts to the chairman. Such report shall also be open to public
inspection in the office of the chairman.

4. Upon notice to the representative of the fund, the board, if in its
discretion it deems the interests of the fund will be best served
thereby, may compromise the amount for which judgment has been entered
against an employer pursuant to this section and the judgment entered
may be modified accordingly. Such compromise shall be effective without
the necessity of obtaining the approval of any other state official
thereto, but shall not reduce the amount of benefits payable to or on
behalf of any claimant under this section.

5. The chairman of the workmen's compensation board shall appoint an
employee of the board who is an attorney at law duly admitted to
practice in the state of New York to serve as the representative of the
fund created under this section and shall assign to assist him in the
discharge of his duties as such representative under the provisions of
this section, such other employees of the board as the chairman deems
necessary for this purpose. Such representative may apply to the
chairman for authority to hire such medical and other experts and to
defray the expense thereof and of such witnesses as are necessary to a
proper defense of the claim within an amount in the discretion of the
chairman and, if authorized, such amount shall be a charge against said
fund. The representative of the fund may appear for and represent the
interest of the fund in any case in court involving the rights of the
fund against another not in the same employ as the employee who received
benefits under this chapter and whose injury or death was caused by the
negligence or wrong of such other.

6. Whenever it appears, in a claim for benefits under this chapter,
that the employer may have failed to secure the payment of compensation
in accordance with section fifty of this chapter, the fund shall be
given notice of all proceedings in the claim. In such event, the
provisions of this chapter with respect to procedure, the right to be
heard and the right to apply to the board for review of a referee's
decision and to appeal to the courts shall be reserved to the claimant,
to the uninsured employer, and to the fund. Upon the application of the
representative of the fund for a modification or rescission or review of
an award, the board may review any award, decision or order and, on such
review, may affirm, reverse, or modify any decision or award as the law
and the facts may require, or take such other action as may be in the
interest of justice. An appeal to the appellate division of the supreme
court, third department, or to the court of appeals shall not operate as
a stay of the payments by the uninsured employer or by the fund of the
compensation required by the terms of the award or of the payment of the
doctor's bills found to be fair and reasonable. Where such award is
reduced or rescinded upon appeal, the uninsured employer or the fund,
whichever made payment, shall be entitled to reimbursement in a sum
equal to the compensation in dispute paid by such party to the
respondent pending adjudication of the appeal, and, if the claim for
workers' compensation is disallowed, to a sum equal to the amount of the
doctor's bills paid by such party pending adjudication of the appeal.
Such reimbursement shall be paid from administration expenses as
provided in section one hundred fifty-one of this chapter upon vouchers
approved by the chair. To the extent of any reimbursement to the fund,
the uninsured employer shall be entitled to reimbursement from the fund
for payments made into the fund in accordance with subdivision one of
this section.

7. All the rights, powers, and benefits of the employer under section
twenty-nine of this chapter shall become the rights, powers and benefits
of the fund in any case in which the fund has paid or is paying
compensation to an injured employee or his dependents under this
section. If the employer has also paid compensation to or on behalf of
the injured employee or his dependents in such case any recovery by the
fund pursuant to subdivision one of section twenty-nine shall first be
applied to repayment of any awards paid by the fund to or on behalf of
the injured employee or his dependents in such case, the balance then
applied to any outstanding unsatisfied demand for security in said case
and assessments imposed against the employer pursuant to the provisions
of this section, the remainder, if any, to be returned to the employer.
If the employer has also paid compensation to or on behalf of the
injured employee or his dependents in such case, that portion, if any,
of a recovery by the fund pursuant to subdivision two of section
twenty-nine which is in excess of the total amount of compensation
awarded to or on behalf of such injured employee or his dependents and
the reasonable and necessary expenditures incurred in effecting such
recovery shall be apportioned between the injured employee or his
dependents and the fund in the manner provided in said subdivision two.
The balance of said recovery shall first be applied to reimburse the
fund for its reasonable and necessary expenditures in effecting such
recovery and the remainder shall be applied to repayment of any award
paid by the fund to or on behalf of the injured employee or his
dependents in such case. If there still remains a balance it shall first
be applied to the outstanding unsatisfied demand for security, if any,
in said case and assessments, if any, imposed against the employer
pursuant to the provisions of this section; the remainder, if any, to be
returned to the employer.

7-a. Notwithstanding any other provision of section twenty-nine of
this article to the contrary, a compromise by the claimant of his or her
cause of action as set forth in said section twenty-nine of this
article, in an amount less than the sum paid to or on behalf of the
claimant from the uninsured employers' fund, shall be made only with the
written consent of the chair.

8. The provisions of this section with respect to the liability of the
uninsured employers' fund to pay awards against uninsured defaulting
employers shall apply only to claims wherein the injury shall occur on
or after the first day of October, nineteen hundred sixty-two, or
wherein death shall occur as the result of an injury sustained on or
after the aforesaid first day of October.

9. The chairman may make reasonable regulations for the processing and
payment of compensation out of the uninsured employers' fund.

10. The liability of the chairman, the commissioner of taxation and
finance, the fund and the state of New York with respect to payment of
any compensation, benefits, expenses, fees or disbursements properly
chargeable against the uninsured employers' fund shall be limited to the
assets in said fund and they shall not otherwise in any way or manner be
liable for the making of any such payment.

11. All assessments payable pursuant to the provisions of this section
shall be liens against the assets of the employer liable therefor
without limit of amount, subordinate, however, to claims for unpaid
wages and prior recorded liens.

12. Whenever the term employer is used in this section it shall be
deemed to include without limitation a contractor liable for the payment
of compensation pursuant to section fifty-six of the workmen's
compensation law.

13. Notwithstanding any other provision of this chapter, in any case
of injury or death to the president, secretary, treasurer or any other
officer charged with the obligation of obtaining workers' compensation
insurance, of a corporation, any awards of compensation or medical
expenses payable to or on behalf of such officer or to his surviving
spouse, children and dependents as defined by section sixteen of this
article made against the corporation as an uninsured employer solely
because of the injury or death of such officer, shall in no event be the
liability of the uninsured employers' fund and shall not be payable
therefrom.

14. Notwithstanding any other provision of this chapter, in any case
of injury or death to a self-employed person or to a partner of a
partnership as defined in section ten of the partnership law, any awards
of compensation or medical expenses payable to or on behalf of such
self-employed person or partner of a partnership or to his surviving
spouse, children and dependents as defined by section sixteen of this
article made against the self-employed person or partnership as an
uninsured employer solely because of the injury or death of such
self-employed person or partner, shall in no event be the liability of
the uninsured employers' fund and shall not be payable therefrom.