N.Y. ISC Law § 4413 — New York Code / Act ISC / Article 44 / Section 4413
Prohibitions
Status: in_force

§ 4413. Prohibitions. (a) The trustees of every employee welfare fund\nshall be responsible in a fiduciary capacity for all assets received,\nmanaged or disbursed by them, or under their authority, on behalf of\nsuch fund.\n  (b) (1) No such fund and no employer or labor organization\nrepresenting any employees eligible for employee benefits thereunder,\nand no trustee or other officer or employee of any such fund, employer\nor labor organization shall receive, directly or indirectly, any thing\nof value from any insurance company, insurance agent, insurance broker\nor any hospital, surgical, dental or medical service plan, in connection\nwith the solicitation, sale, service or administration of a contract\nproviding employee benefits for such fund. No such employer, labor\norganization, trustee, officer or employee shall receive any thing of\nvalue from such fund, or which is charged against such fund or would\notherwise be payable to such fund, either directly or indirectly, except\nthat any such person may receive any employee benefits to which he is\notherwise entitled, and any such trustee or other officer or employee of\na fund, may receive from such fund reasonable compensation for necessary\nservices and expenses rendered or incurred by him in connection with his\nofficial duties as such. Nothing in this subsection shall affect the\npayment of any dividend or rate credit or other adjustment due under the\nterms of any insurance or annuity contract.\n  (2) No insurance company, insurance agent or insurance broker,\nhospital, surgical, dental or medical service plan, shall directly or\nindirectly, pay any commission, make any loan or give any thing of value\nto any employee welfare fund or to any employer or labor organization\nrepresenting any employees eligible for employee benefits thereunder or\nto any trustee or other officer or employee of any such fund, employer\nor labor organization, in connection with the solicitation, sale,\nservice or administration of a contract providing employee benefits for\nsuch fund.\n  (3) The superintendent may, after notice and a hearing, prohibit the\ntrustees of an employee welfare fund from employing or retaining or\ncontinuing to employ or retain any person upon finding that such\nemployment or retention involves a conflict of interest which is not in\nthe best interests of the fund or adversely affects the interests of\ncovered employees.\n  (4) The superintendent may, by regulation or order, and upon such\nterms and conditions as he requires, authorize or approve any\ntransaction or transactions otherwise prohibited by this subsection upon\nhis finding that the transaction or transactions promote or will promote\nthe best interests of the relevant employee welfare funds, and do not or\nwill not adversely affect the interests of the covered employees.\n  (c) (1) No person who has been convicted by a court of the United\nStates or by a court of any state or territory thereof of a felony, or\nof any crime or offense involving fraudulent or dishonest practices,\nshall serve, be appointed, designated or employed as a trustee,\nadministrator, officer, agent or employee of any employee welfare fund\n(other than an employee performing non-discretionary clerical or\nbuilding maintenance duties exclusively) during or for five years after\nsuch conviction or the suspension of sentence therefor or from the date\nof his unrevoked release from custody by parole, commutation or\ntermination of sentence, whichever event occurs later, unless prior to\nthe expiration of said five year period the conviction is finally\nreversed by a court of competent jurisdiction or he has been pardoned\ntherefor by the governor or other appropriate authority of the state or\njurisdiction in which he was convicted or he has received a certificate\nof relief from disabilities or a certificate of good conduct pursuant to\nthe provisions of article twenty-three of the correction law which\nspecifically removes the disability herein provided.\n  (2) If the superintendent, after notice and a hearing, finds that a\nperson has been or is currently serving, appointed, designated or\nemployed in violation of the provisions of this subsection, he shall\nenter an order removing such person from his position and directing that\nsuch person shall be disabled from service, appointment, designation or\nemployment in any of the capacities hereinabove described for a period\nof five years following the entry of such order. The superintendent may,\nin addition, impose the penalties provided in subsection (e) of this\nsection for the wilful violation hereof.\n  (d) (1) No insurance company shall pay any dividend or retrospective\nrate credit on any covering policy except by check payable to the\naffected employee welfare fund or by credit memo forwarded to such fund.\n  (2) No employee welfare fund shall pay any premium on a covering\npolicy except by check payable to the insurance company directly.\n  (3) No political contributions shall be made directly or indirectly by\nor from any employee welfare fund.\n  (e) The superintendent may impose a penalty of not to exceed\ntwenty-five hundred dollars upon any trustee or other officer, agent or\nemployee of any employee welfare fund subject to this article or may\nremove such trustee, officer, agent or employee from office or\nemployment, or both such penalty and removal, if after notice and a\nhearing he shall find that he has wilfully failed to comply with the\nrequirements of this article.\n  (f) In any case where, after notice and a hearing, the superintendent\nfinds that any employee welfare fund has been depleted by reason of any\nwrongful or negligent act or omission of a trustee or of any other\nperson, he may transmit a copy of his findings to the attorney general.\nThe attorney general may bring an action in the name of the people of\nthe state, or intervene in an action brought by or on behalf of an\nemployee, to recover the monies of the fund for the benefit of the\nemployees and other persons as may have an interest in the fund.\n  (g) (1) Any person who wilfully violates or causes or induces the\nviolation of any provision of this article or any regulation issued\nunder it shall be in violation of the provisions of this chapter.\n  (2) Any person who makes a false statement or representation of a\nmaterial fact, knowing it to be false, or who knowingly fails to\ndisclose a material fact in any registration, examination, statement or\nreport required under this article or the regulations thereunder shall\nbe guilty of a misdemeanor.\n  (3) Any person who makes a false entry in any book, record, report, or\nstatement required by this article or any regulation thereunder, to be\nkept by him for any employee welfare fund, with intent to injure or\ndefraud such fund or any beneficiary thereunder, or to deceive any one\nauthorized or entitled to examine the affairs of such fund, shall be\nguilty of a misdemeanor.\n  (4) Nothing in paragraph two or three of this subsection shall be\nconstrued in any manner to limit the effect of paragraph one hereof.\n