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SECTION 54
The insurance contract
Workers' Compensation (WKC) CHAPTER 67, ARTICLE 4
§ 54. The insurance contract. 1. Right of recourse to the insurance
carrier. Every policy of insurance covering the liability of the
employer for compensation shall be issued by one or more stock
companies, mutual corporations or reciprocal insurers authorized to
transact workers' compensation insurance in this state. In the case of a
policy with multiple insurers, such insurers shall share one hundred
percent of the liabilities by subscription, and one of the insurers
shall serve as the lead insurer for notice and cancellation purposes.
Such a policy shall contain a provision setting forth the right of the
chair to enforce in the name of the people of the state of New York for
the benefit of the person entitled to the compensation insured by the
policy either by filing a separate application or by making the
insurance carrier a party to the original application, the liability of
the insurance carrier in whole or in part for the payment of such
compensation; provided, however, that payment in whole or in part of
such compensation by either the employer or the insurance carrier shall
to the extent thereof be a bar to the recovery against the other of the
amount so paid.

2. Knowledge and jurisdiction of the employer extended to cover the
insurance carrier. Every such policy shall contain a provision that, as
between the employee and the insurance carrier, the notice to or
knowledge of the occurrence of the injury on the part of the employer
shall be deemed notice or knowledge, as the case may be, on the part of
the insurance carrier, or if more than one insurer, the lead carrier;
that jurisdiction of the employer shall, for the purpose of this
chapter, be jurisdiction of the lead insurance carrier and that such
insurance carrier shall in all things be bound by and subject to the
orders, findings, decisions or awards rendered against the employer for
the payment of compensation under the provisions of this chapter.

3. Insolvency of employer does not release the insurance carrier.
Every such policy shall contain a provision to the effect that the
insolvency or bankruptcy of the employer shall not relieve the insurance
carrier from the payment of compensation for injuries or death sustained
by an employee during the life of such policy.

4. Limitation of indemnity agreements. Every contract or agreement of
an employer the purpose of which is to indemnify him from loss or damage
on account of the injury of an employee by accidental means, or on
account of the negligence of such employer or his officer, agent or
servant, shall be absolutely void unless it shall also cover liability
for the payment of the compensation and for the payment into the special
funds provided for by this chapter. Every such contract or agreement of
insurance issued by an insurance carrier covering the liability of an
employer for the payment of the compensation and for the payment into
the special funds provided by this chapter shall be deemed to include
all employees of the employer employed at or in connection with the
business of the employer carried on, maintained, or operated at the
location or locations set forth in such contract or agreement and
employees for whose injuries a contractor may become liable under the
provisions of section fifty-six of this chapter. Any employee or
employees or class of employees not enumerated in section three,
subdivision one, group one to seventeen inclusive, of this chapter,
employed by a municipal corporation or political subdivision of the
state, may by the terms of the contract or agreement be expressly
excluded therefrom.

5. (a) Cancellation and termination of insurance contracts. No
contract of insurance issued by an insurance carrier against liability
arising under this chapter shall be cancelled within the time limited in
such contract for its expiration unless notice is given as required by
this section. When cancellation is due to non-payment of premiums and
assessments, such cancellation shall not be effective until at least ten
days after a notice of cancellation of such contract, on a date
specified in such notice, shall be filed in the office of the chair and
also served on the employer. When cancellation is due to any reason
other than non-payment of premiums and assessments, such cancellation
shall not be effective until at least thirty days after a notice of
cancellation of such contract, on a date specified in such notice, shall
be filed in the office of the chair and also served on the employer;
provided, however, in either case, that if the employer has secured
insurance with another insurance carrier which becomes effective prior
to the expiration of the time stated in such notice, the cancellation
shall be effective as of the date of such other coverage. No insurer
shall refuse to renew any policy insuring against liability arising
under this chapter unless at least thirty days prior to its expiration
notice of intention not to renew has been filed in the office of the
chair and also served on the employer.

Such notice shall be served on the employer by delivering it to him,
her or it or by sending it by mail, by certified or registered letter,
return receipt requested, addressed to the employer at his, her or its
last known place of business; provided that, if the employer be a
partnership, then such notice may be so given to any of one of the
partners, and if the employer be a corporation then the notice may be
given to any agent or officer of the corporation upon whom legal process
may be served; and further provided that an employer may designate any
person or entity at any address to receive such notice including the
designation of one person or entity to receive notice on behalf of
multiple entities insured under one insurance policy and that service of
notice at the address so designated upon the person or entity so
designated by delivery or by mail, by certified or registered letter,
return receipt requested, shall satisfy the notice requirement of this
section. Provided, however, the right to cancellation of a policy of
insurance in the state fund shall be exercised only for non-payment of
premiums and assessments or as provided in section ninety-four of this
chapter.

The provisions of this subdivision 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.

In the event such cancellation or termination notice is not filed with
the chair within the required time period, the chair shall impose a
penalty in the amount of up to five hundred dollars for each ten-day
period the insurance carrier or state insurance fund failed to file the
notification. All penalties collected pursuant to this subdivision shall
be deposited in the uninsured employers' fund.

(b) Conditional renewal for carriers under common control. A contract
of insurance shall remain in full force and effect subject to the same
rates as the expiring contract of insurance rates, unless written notice
is mailed or delivered by the insurance carrier to the employer, at the
address shown on the policy, and to such employer's authorized agent or
broker, indicating the insurance carrier's intention to condition
renewal upon issuance of a policy that supersedes a policy previously
issued by another insurance carrier under common control that will
result in an increased premium in excess of ten percent (exclusive of
any premium increase generated as a result of increased loss costs filed
and approved in accordance with subsection (e) of section two thousand
three hundred five of the insurance law, increased exposure units, or as
a result of experience rating, contractor credit adjustment program,
merit rating, retrospective rating or audit or removal or reduction of a
drug free credit, managed care credit, or deductible. Such notice shall
be mailed or delivered at least thirty days in advance of the expiration
date of the policy, and shall set forth the amount of the premium
increase (or, where such amount cannot reasonably be determined as of
the time the notice is provided due to failure of the policyholder to
provide to the insurance carrier the information necessary to determine
the premium, a reasonable estimate of the premium increase based upon
the information available to the insurance carrier at that time).
Nothing in this subdivision shall require the insurance carrier to
provide such notice when the employer, an agent or broker authorized by
the employer, or another insurance carrier of the employer has mailed or
delivered written notice that the policy has been replaced or is no
longer desired.

5-a. Issuance, amendment, endorsement or reinstatement of insurance
contracts. a. Any insurance carrier or the state insurance fund who
issues, reinstates, amends or endorses any contract of insurance or
rider thereto covering the liability of an employer for compensation
under this chapter shall file notification in the office of the chair
within thirty days after such issuance, reinstatement, amendment, or
endorsement of the contract. Such notice shall be filed in the manner
and form prescribed by the chair.

b. In the event notice required under this subdivision is not filed
with the chair within the thirty-day time period, or notice is not
provided by a group self-insured trust pursuant to regulation
promulgated by the board regarding notification of the trust's
commencement or termination of coverage for any employer, the chair may
impose a penalty of up to five hundred dollars for each ten-day period
the insurance carrier or state insurance fund or group self-insurance
trust failed to file the notification. All penalties collected pursuant
to this subdivision shall be deposited in the uninsured employers' fund.

c. The provisions of this subdivision shall not apply with respect to
insurance 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.

6. a. Insurance of officers of corporations. Every executive officer
of a corporation shall be deemed to be included in the compensation
insurance contract or covered under a certificate of self-insurance
unless that person is an unsalaried executive officer of a
not-for-profit corporation or unincorporated association and such
corporation or association elects to exclude that person from the
coverage of this chapter. Such election to exclude such person shall be
made in writing on a form prescribed by the chair and filed with the
insurance carrier. Such election shall be effective with respect to all
of the policies issued to the corporation or association by such
insurance carrier as long as it shall continuously insure the
corporation or association, provided that written notice of the
continuation of the election to exclude any or all executive officers is
given to the corporation or association with each renewal notice of the
policy. If such election is revoked, it shall be in writing on a form
prescribed by the chair, and shall be filed with the chair and the
insurance carrier. Such revocation shall not be effective until thirty
days after such filing. Any executive officer whose corporation or
association files an election not to be included under this chapter
shall be deemed not to be an employee within the intent of this chapter;
however, if not excluded, such officers and their dependents shall be
entitled to compensation as provided by this chapter.

b. An executive officer of any corporation who at all times during the
period involved owns all of the issued and outstanding stock of the
corporation and holds all of the offices pursuant to paragraph (e) of
section seven hundred fifteen of the business corporation law and who is
the executive officer of a corporation having other persons who are
employees required to be covered under this chapter shall be deemed to
be included in the compensation insurance contract or covered under a
certificate of self-insurance unless the officer elects to be excluded
from the coverage of this chapter. Such election shall be made by the
corporation filing a notice that the corporation elects to exclude the
executive officer of such corporation named in the notice from coverage
of this chapter. Such election shall be filed with the insurance carrier
or the chair in the case of self-insurance upon a form prescribed by the
chair of the workers' compensation board. Such election shall be
effective with respect to all policies issued to such corporation by
such insurance carrier as long as it shall continuously insure the
corporation and shall be final and binding upon the executive officer
named in the notice until revoked by the corporation in accordance with
paragraph a of this subdivision.

(c) An executive officer of any corporation who at all times during
the period involved owns all of the issued and outstanding stock of the
corporation and holds all of the offices pursuant to paragraph (e) of
section seven hundred fifteen of the business corporation law and who is
the executive officer of a corporation that has no other persons who are
employees required to be covered under this chapter shall be deemed to
be excluded from coverage under this chapter unless such officer elects
to be covered. Such coverage may be effected by obtaining an insurance
policy or in the case of self-insurance by the corporation submitting a
form prescribed by the chair of the workers' compensation board, giving
notice that the corporation elects to bring the executive officer of
such corporation named in the notice within the coverage of this
chapter.

d. Any two executive officers of a corporation who at all times during
the period involved between them own all of the issued and outstanding
stock of the corporation and hold all such offices, provided, however
that each officer must own at least one share of stock, who are the
executive officers of such corporation having other persons who are
employees required to be covered under this chapter shall be deemed to
be included in the compensation insurance contract or covered under a
certificate of self-insurance unless one or both the officers elect to
be excluded from the coverage of this chapter. Such election shall be
made by any such corporation filing a form prescribed by the chair of
the workers' compensation board with the insurance carrier or the chair
in the case of self-insurance giving notice that the corporation elects
to exclude one or both of the executive officers of such corporation
named in the notice from the coverage of this chapter. Such election
shall be effective with respect to all policies issued to such
corporation by such insurance carrier as long as it shall continuously
insure the corporation and shall be final and binding upon the executive
officers as named in the notice until revoked by the corporation. If
such election is revoked, it shall be in writing on a form prescribed by
the chair and shall be filed with the chair and the insurance carrier.
Such revocation shall not be effective until thirty days after such
filing.

e. Any two executive officers of a corporation who at all times during
the period involved between them own all of the issued and outstanding
stock of such corporation and hold all such offices, provided, however
that each officer must own at least one share of stock, who are the
executive officers of such corporation that has no other persons who are
employees required to be covered under this chapter shall be deemed to
be excluded from coverage under this chapter unless one or both officers
elect to be covered. Such coverage may be effected by obtaining an
insurance policy or, in the case of self-insurance, by the corporation
submitting a form prescribed by the chair of the workers' compensation
board, giving notice that the corporation elects to bring one or both
executive officers of such corporation named in the notice within
coverage of this chapter.

f. Notwithstanding the provisions of paragraph a of this subdivision
or any other provision of this chapter, any executive officer of a
religious, charitable or educational corporation and the officers of a
municipal corporation, and officers of any post or chapter of
organizations of veterans of any war of the United States may be brought
within the coverage of the insurance contract as if they were employees
by any such corporation filing with the insurance carrier, upon a form
prescribed by the chair of the workers' compensation board, a notice
that the corporation elects to bring one or more executive officers of
such corporation named in the notice within the coverage of this
chapter. Such election shall be effective with respect to all policies
issued to such corporation by such insurance carrier as long as it shall
continuously insure the corporation. If such election is revoked, it
shall be in writing on a form prescribed by the chair and filed with the
chair and with the insurance carrier and a copy thereof furnished to
each officer as to whom such revocation is applicable, upon a form
prescribed by the chair. Such revocation shall not be effective until
thirty days after such filing. The estimation of the wage values of
executive officers within the coverage of the insurance contract shall
be reasonable and separately stated and added to the valuation of the
payrolls upon which the premium is computed.

g. The executive officers brought within the coverage of the insurance
contract, and the dependents of any such executive officers, including
executive officers of religious, charitable or educational corporations
and officers of municipal corporations, and officers of any post or
chapter of organizations of veterans of any war of the United States
that have elected to bring their officers within the coverage of the
policy, shall have the same rights and remedies as any employee and
shall be entitled to compensation and medical care as provided by this
chapter, and the insurance carrier shall be liable therefor and for
payments into the special funds provided in this chapter as in the case
of an employee. The executive officers who may be brought within the
coverage of an insurance contract shall include an officer of a
corporation who at all times during the period involved between them
owns all of the issued and outstanding stock of the corporation and
holds all of the offices pursuant to paragraph (e) of section seven
hundred fifteen of the business corporation law or two executive
officers of a corporation who at all times during the period involved
between them own all of the issued and outstanding stock of such
corporation and hold all such offices and who is the executive officer
or who are the executive officers of a corporation that has no other
persons who are employees required to be covered under this chapter.

h. Any officer or officers, elective or appointive, of a municipal
corporation or other political subdivision of the state complying with
the provisions of group nineteen of subdivision one of section three of
this chapter shall be deemed executive officers subject to the
provisions of this subdivision.

6-a. Insurance contracts with fire or ambulance districts.
Notwithstanding any other provision of this section or of this chapter,
any insurance contract to secure workers' compensation for a fire or
ambulance district pursuant to subdivision one or subdivision two of
section fifty of this chapter issued to take effect on or after July
first, nineteen hundred sixty, in relation to a fire district and
January first, in the year next succeeding the year in which this
subdivision as hereby amended becomes effective, in relation to an
ambulance district or any such contract renewed to continue in effect on
or after such dates, shall provide workers' compensation coverage for
all fire or ambulance district officers, whether elective or appointive,
and all fire or ambulance district employees, whether or not they are
compensated for their services, unless the board of fire or ambulance
commissioners of the fire district or ambulance district by resolution
elects not to provide such coverage for any one or more of such officers
or employees, or class thereof. Such election not to provide such
coverage shall be effective with respect to all such insurance contracts
thereafter issued to such fire or ambulance district by any insurance
carrier until revoked in whole or in part by resolution of the board of
fire or ambulance commissioners of the fire or ambulance district. Such
election not to provide such coverage shall not become effective until
thirty days after a copy of such resolution has been filed with the
chairman of the workers' compensation board and with the insurance
carrier and a copy thereof is furnished to each officer and employee as
to whom such revocation is applicable. The chairman of the workers'
compensation board shall prescribe the form of such resolution. The
provisions of this subdivision shall not be applicable in cases where
the injury arises out of and in the course of duty as a volunteer
firefighter or a volunteer ambulance worker or as a civil defense
volunteer and where the computation of benefits would be made under the
provisions of the volunteer firefighters' benefit law or the volunteer
ambulance workers' benefit law or under article ten of this chapter.

7. Limitation of the issuance of policies by a foreign insurance
company. No policy or contract of insurance issued by a foreign stock
corporation or mutual association authorized to transact the business of
workers' compensation insurance in this state, except a corporation
organized under the laws of a state or country outside of the United
States and domiciled in this state, covering or intended to cover the
liability of an employer to his employees under this chapter, shall be
accepted as a compliance with subdivision two of section fifty of this
chapter, unless such foreign stock corporation or mutual association
shall have filed with the superintendent of financial services a bond or
undertaking with good and sufficient sureties to the people of the state
of New York, and conditioned upon the payment in full of any and all
compensation and benefits as provided in this chapter to any and all
persons entitled thereto under any such policy or contract of insurance.
Such bond shall be approved as to form by the attorney-general and as to
sufficiency by the superintendent of financial services. The amount of
such bond shall be such sum as may reasonably represent twenty-five per
centum of the outstanding reserves for compensation losses on policies
issued by such foreign stock corporation or mutual association upon
risks located in the state of New York as determined by law or by the
requirements of the superintendent of financial services, provided,
however, that the amount of such bond shall in no case be less than
twenty-five thousand dollars nor more than one million dollars. Such
bond shall be renewed annually. Every such bond shall contain a
provision authorizing the attorney-general upon the certificate of the
superintendent of financial services that there has been default in the
payment of compensation for thirty days or that the bonded company has
become insolvent to enforce such bond in the name of the people of the
state of New York for the benefit of any and all persons entitled to the
compensation assured by any policy issued by such foreign stock
corporation or mutual association or otherwise entitled to any benefits
under such policy. In lieu of the bond required to be given hereunder
any such foreign stock corporation or mutual association may deposit
with the superintendent of financial services securities of the kind
prescribed in section one thousand three hundred eighteen of the
insurance law in an amount equal to twenty-five per centum of the
outstanding reserves for compensation losses on policies issued by such
foreign stock corporation or mutual association upon risks located in
the state of New York, but not less than twenty-five thousand dollars
nor more than one million dollars. In computing the amount of such
securities they shall be valued as determined by the superintendent of
financial services in valuing the assets of insurance companies. Such
securities shall be held by the superintendent of financial services as
a special deposit and as express security for the payment of such
compensation or benefits and may be sold by the said superintendent
without notice in the event that there has been default in the payment
of compensation for thirty days or that the depositing company has
become insolvent. The income thereon shall be collected by the
superintendent of financial services and, prior to any default in the
payment of such compensation or benefits, shall be paid over by him to
the stock corporation or mutual association depositing the same.

However, no such bond or undertaking shall be required to be filed
after July first, nineteen hundred thirty-eight, by any carrier making
payment to the stock or mutual funds respectively established by
sections one hundred seven and one hundred nine-d of this chapter.

8. A self-employed person, a partner of a partnership as defined in
section ten of the partnership law but not including a limited partner,
a partner of a registered limited liability partnership as defined in
section two of the partnership law, a member of a limited liability
company as defined in subdivision (m) of section one hundred two of the
limited liability company law or a member of a professional service
limited liability company as defined in subdivision (f) of section one
thousand two hundred one of the limited liability company law, having
other persons who are employees required to be covered under this
chapter may be included in the compensation insurance contract or
covered under a certificate of self-insurance. Such election shall be
made by any such partnership, sole proprietorship, registered limited
liability partnership, limited liability company or professional service
limited liability company filing with the insurance carrier or the chair
in the case of self-insurance upon a form prescribed by the chair, a
notice that the partnership, sole proprietorship, registered limited
liability partnership, limited liability company or professional service
limited liability company elects to include the partner, partners, the
self-employed person or member named in the notice in the coverage of
this chapter. Such election shall be effective with respect to all
policies issued to such partnership, sole proprietorship, registered
limited liability partnership, limited liability company or professional
service limited liability company by such insurance carrier as long as
it shall continuously insure the employees of the partnership, sole
proprietorship, registered limited liability partnership, limited
liability company or professional service limited liability company.
Such election shall be final and binding upon the partner, self-employed
person or member named in the notice until revoked by the partnership,
sole proprietorship, registered limited liability partnership, limited
liability company or professional service limited liability company. A
self-employed person, a partner of a partnership, a partner of a
registered limited liability partnership, a member of a limited
liability company or a member of a professional service limited
liability company having no other persons who are employees required to
be covered under this chapter shall be deemed to be excluded from
coverage under this chapter unless he or she elects to be covered. Such
coverage may be effected by obtaining an insurance policy.

The self-employed persons, partners of a partnership, partners of a
registered limited liability partnership, members of a limited liability
company or members of a professional service limited liability company
brought within the coverage of the insurance contract, and the
dependents of any such self-employed persons, partners of a partnership,
partners of a registered limited liability partnership, members of a
limited liability company or members of a professional service limited
liability company shall have the same rights and remedies as any
employee or his or her dependents and shall be entitled to compensation
and medical care as provided by this chapter, and the insurance carrier
shall be liable therefor and for payments into the special funds
provided in this chapter as in the case of an employee.