N.Y. WKC Law § 50 — New York Code / Act WKC / Article 4 / Section 50
Security for payment of compensation
Status: in_force

§ 50. Security for payment of compensation. An employer shall secure\ncompensation to his employees in one or more of the following ways:\n  1. By insuring and keeping insured the payment of such compensation in\nthe state fund, or\n  2. By insuring and keeping insured the payment of such compensation\nwith any stock corporation, mutual corporation or reciprocal insurer\nauthorized to transact the business of workers' compensation insurance\nin this state through a policy issued under the law of this state.\n  3. By furnishing satisfactory proof to the chair of his financial\nability to pay such compensation for himself, or to pay such\ncompensation on behalf of a group of employers in accordance with\nsubdivision ten of this section, in which case the chair shall require\nthe deposit with the chair of such securities as the chair may deem\nnecessary of the kind prescribed in subdivisions one, two, three, four\nand five, and subparagraph (a) of paragraph three of subdivision seven\nof section two hundred thirty-five of the banking law, or the deposit of\ncash, or the filing of irrevocable letters of credit issued by a\nqualified banking institution as defined by rules promulgated by the\nchair or the filing of a bond of a surety company authorized to transact\nbusiness in this state, in an amount to be determined by the chair, or\nthe posting and filing as aforesaid of a combination of such securities,\ncash, irrevocable letters of credit and surety bond in an amount to be\ndetermined by the chair, to secure his liability to pay the compensation\nprovided in this chapter. Any such surety bond must be approved as to\nform by the chair. If an employer or group of employers posts and files\na combination of securities, cash, irrevocable letters of credit and\nsurety bond as aforesaid, and if it becomes necessary to use the same to\npay the compensation provided in this chapter, the chair shall first use\nsuch securities or cash or irrevocable letters of credit and, when the\nfull amount thereof has been exhausted, he shall then require the surety\nto pay forthwith to the chair all or any part of the penal sum of the\nbond for that purpose. The chair may also require an agreement on the\npart of the employer or group of employers to pay any awards commuted\nunder section twenty-seven of this chapter, into the special fund of the\nstate fund, as a condition of his being allowed to remain uninsured\npursuant to this section. The chair shall have the authority to deny the\napplication of an employer or group of employers to pay such\ncompensation for himself or to revoke his consent furnished, under this\nsection at any time, for good cause shown. The employer or group of\nemployers qualifying under this subdivision shall be known as a\nself-insurer.\n  If for any reason the status of an employer or group of employers\nunder this subdivision is terminated, the securities or the surety bond,\nor the securities, cash, or irrevocable letters of credit and surety\nbond, on deposit referred to herein shall remain in the custody of the\nchair for such time as the chair may deem proper and warranted under the\ncircumstances. In lieu thereof, and at the discretion of the chair, the\nemployer, his or her heirs or assigns or others carrying on or\nliquidating such business, may execute an assumption of workers'\ncompensation liability insurance policy as described herein. Separately,\nthe chair may execute an assumption of workers' compensation liability\ninsurance policy as described herein on behalf of the special funds\ncreated under the provisions of subdivisions eight and nine of section\nfifteen and section twenty-five-a of this chapter, and notwithstanding\nany provision to the contrary the chair may execute an assumption of\nworkers' compensation liability insurance policy on behalf of the\nuninsured employers' fund. An assumption of workers' compensation\nliability policy referred to herein shall secure such further and future\ncontingent liability as may directly or indirectly arise from prior\ninjuries to workers and be incurred by reason of any change in condition\nof such workers warranting the board making subsequent awards for\npayment of additional compensation. Such policy shall be in a form\napproved by the superintendent of financial services and issued by the\nstate fund or any insurance company licensed to issue this class of\ninsurance in this state or, upon application by the chair, any other\ninsurance company deemed by the superintendent of financial services to\nbe an acceptable issuer. In the event that such policy is issued by an\ninsurance company other than the state fund, then said policy shall be\ndeemed of the kind specified in paragraph fifteen of subsection (a) of\nsection one thousand one hundred thirteen of the insurance law and\ncovered by the workers' compensation security fund as created and\ngoverned by article six-A of this chapter. It shall only be issued for a\nsingle complete premium payment in advance and in an amount deemed\nacceptable by the chair and the superintendent of financial services. In\nlieu of the applicable premium charge ordinarily required to be imposed\nby a carrier, said premium shall include a surcharge in an amount to be\ndetermined by the chair to: (i) satisfy all assessment liability due and\nowing to the board and/or the chair under this chapter; and (ii) satisfy\nall future assessment liability under this section, and which surcharge\nshall be adjusted from time to time to reflect any changes to the\nassessment of group self-insured employers, including any changes\nenacted by the chapter of the laws of two thousand eleven amending\nsections fifteen and one hundred fifty-one of this chapter. Said\nsurcharge shall be payable to the board simultaneous to the execution of\nthe assumption of workers' compensation liability insurance policy.\nHowever, the payment of said surcharge does not relieve the carrier from\nany other liability, including liability owed to the superintendent of\nfinancial services pursuant to article six-A of this chapter. When\nissued such policy shall be non-cancellable without recourse for any\ncause during the continuance of the liability secured and so covered.\n  3-a. Group self-insurance. (1) Definitions. As used in this chapter\nthe term "employers" shall include: (a) employers with related activity\nin a given industry which shall include municipal corporations as that\nterm is defined in sections two and six-n of the general municipal law,\nemploying persons who perform work in connection with the given\nindustry, (b) an incorporated or unincorporated association or\nassociations consisting exclusively of such employers provided they\nemploy persons who perform such related work in the given industry, and\n(c) a combination of employers as described in subparagraph (a) hereof\nand an association or associations of employers as described in\nsubparagraph (b) hereof.\n  (2) (a) Any group consisting exclusively of such employers may adopt a\nplan for self-insurance, as a group, for the payment of compensation\nunder this chapter to their employees, except that no new groups may\nadopt such a plan, and no group not composed solely of public entities\nset forth in subparagraph (a-1) of this paragraph may insure any\nliabilities for any employers on and after January first, two thousand\ntwelve, except as provided for in paragraph ten of this subdivision.\nUnder such plan the group shall assume the liability of all the\nemployers within the group and pay all compensation for which the said\nemployers are liable under this chapter, except that in the case of\npublic group self-insurers as defined in subparagraph (a-1) of this\nparagraph no proof of financial ability or deposit of securities or cash\nneed be made in compliance with this subdivision. The group qualifying\nunder this subdivision shall be known as a group self-insurer and the\nemployers participating therein and covered thereby shall be known as\nmembers.\n  (a-1) Any group consisting exclusively of public corporations as\ndefined in section sixty-six of the general construction law, county\nself-insurance plans established under article five of this chapter,\nboards of cooperative educational services and consortia established by\nboards of cooperative educational services, and any other entity defined\nas a public entity under paragraph fifty-one of subsection (a) of\nsection one hundred seven of the insurance law except the state of New\nYork, may adopt a plan for self-insurance, as a group, for the payment\nof compensation under this chapter to their employees. Such a group\nshall be known as a "public group self-insurer". A county self-insurance\nplan established under article five of this chapter is not itself a\npublic group self-insurer and is not itself subject to the requirements\nof this section, but may join a public group self-insurer and, if it\ndoes so, shall assume all of the obligations of its participants to the\npublic group self-insurer. A public group self-insurer shall comply with\nall of the requirements of this subdivision, including any obligations\nimposed upon a group administrator, but is not required to secure the\nservices of a group administrator or obtain a license authorizing it to\nact as a group self-insurer administrator, to furnish satisfactory proof\nto the chair of its financial ability to pay compensation from its\nrevenues, their source and assurance of continuance, to pay a license\nfee, or to deposit securities, post a bond or provide other security,\nexcept as specifically provided in this subdivision.\n  (b) Where such plan is adopted the group self-insurer shall furnish\nsatisfactory proof to the chair of its financial ability to pay such\ncompensation for the members in the industry covered by it, its\nrevenues, their source and assurance of continuance. The chair shall\nrequire the deposit with the chair of such securities as may be deemed\nnecessary of the kind prescribed in subdivisions one, two, three, four\nand five, and subparagraph (a) of paragraph three of subdivision seven\nof section two hundred thirty-five of the banking law or the deposit of\ncash or the filing of irrevocable letters of credit issued by a\nqualified banking institution as defined by rules promulgated by the\nchair or the filing of a bond of a surety company authorized to transact\nbusiness in this state, in an amount to be determined to secure its\nliability to pay the compensation of each employer as above provided.\nSuch surety bond must be approved as to form by the chair. The chair\nshall require each group self-insurer to provide regular reports no less\nthan annually, which shall include but not be limited to audited\nfinancial statements, actuarial opinions and payroll information\ncontaining proof that it is fully funded. Such reports shall also\ninclude a contribution year analysis detailing contributions and\nexpenses associated with each specific contribution year. For purposes\nof this paragraph, proof that a group self-insurer is fully funded shall\nat a minimum include proof of unrestricted cash and investments\npermitted by regulation of the chair of at least one hundred percent of\nthe total liabilities, including the estimate presented in the actuarial\nopinion submitted by the group self-insurer in accordance with this\nchapter. The chair by regulation, may set further financial standards\nfor group self-insurers. Any group self-insurer that fails to show that\nit is fully funded shall be deemed underfunded, and must submit a plan\nfor achieving fully funded status which may include a deficit assessment\non members of such group self-insurer which shall be subject to approval\nor modification by the chair. The amount of such under-funding, as\nmeasured by the actuarial opinion or assumption of loss policy quotation\nsubmitted by the group, shall be considered unfunded claims as set forth\nin subdivision two of section sixteen hundred eighty-q of the public\nauthorities law as added by section 35 of Part GG of chapter 57 of the\nlaws of 2013.\n  (c) The chair shall evaluate, no less than once every three years, a\ngroup self-insurer's compliance with the financial and regulatory\nrequirements for self-insurance. The chair may engage any qualified\nperson or organization to assist with such evaluation and any costs\nincurred by the chair shall be borne by the group self-insurer under\nexamination. Failure to submit to such independent review or to pay such\ncosts, upon demand of the chair, shall be sufficient grounds to\nterminate coverage of the group self-insurer.\n  (d) The chair may require reports to be prepared by an auditor,\nactuary or other consultant, selected by the board or, at the chair's\ndiscretion, by the group self-insurer from a list which shall be\npre-approved by the chair to determine whether the group self-insurer\nmeets the financial criteria for self-insurance. All actuaries so\nselected shall be fellows or associates of the casualty actuarial\nsociety.\n  (e) The chair may also require that any and all agreements, contracts\nand other pertinent documents relating to the organization of the\nmembers in the group self-insurer shall be filed with the chair.\n  (f) The chair shall have the authority to revoke consent furnished\nunder this section at any time for good cause shown.\n  (g) Prior to the requested effective date of the participating\nagreement, a group self-insurer shall notify the chair on a prescribed\nform of a new group self-insurer member and file (1) a member\napplication and (2) a copy of the properly executed prescribed\nparticipation agreement wherein the member acknowledges their joint and\nseveral obligation for their period of membership. The board shall, on a\nform promulgated by the chair, provide notice of the member's rights and\nresponsibilities as a group self-insurer member, including the member's\nassumption of joint and several liability, and require the member to\nreturn a signed copy to the chair as a condition of membership.\n  (h) Any member terminating membership in a group self-insurer after\nless than four years in such group self-insurer, and any member in a\ngroup self-insurer that has defaulted, shall be precluded from obtaining\nprospective coverage from any group self-insurer for a period of at\nleast three years from the effective date of termination.\n  (3) A member's participation in a group self-insurer shall not relieve\nit of its liability for compensation prescribed by this chapter except\nby the payment thereof by the group self-insurer or by itself. Each\nmember shall be responsible, jointly and severally, for all liabilities\nof the group self-insurer provided for by this chapter occurring during\nits respective period of membership, and such liability shall attach to\nany recipient of a conveyance of assets made in violation of subdivision\n(a) of section two hundred seventy-four of the debtor and creditor law.\nAs between the employee and the group self-insurer, notice to or\nknowledge of the occurrence of the injury on the part of the member\nshall be deemed notice or knowledge, as the case may be, on the part of\nthe group self-insurer; jurisdiction of the member shall, for the\npurpose of this chapter, be jurisdiction of the group self-insurer and\nsuch group self-insurer shall in all things be bound by and subject to\nthe orders, findings, decisions or awards rendered against the\nparticipating member for the payment of compensation under the\nprovisions of this chapter. The insolvency or bankruptcy of a\nparticipating member shall not relieve the group self-insurer from the\npayment of compensation for injuries or death sustained by an employee\nduring the time the member was a participant in such group self-insurer.\nNotice of termination of a participating member shall not be effective\nuntil at least ten days after notice of such termination, on a\nprescribed form, has been either filed in the office of the chair or\nsent by certified or registered letter, return receipt requested, and\nalso served in like manner upon the member. In the event such\ntermination is due to a member's failure to pay required contributions,\nsuch member's termination shall not be rescinded more than three times.\n  (3-a) If the chair determines that a public group self-insurer has\nbecome insolvent, the chair shall pay the compensation and benefits that\nwould otherwise have been required to be paid by the members of the\npublic group self-insurer from administration expenses as provided in\nsection one hundred fifty-one of this chapter upon audit and warrant of\nthe comptroller and upon vouchers approved by the chair, which payments\nshall be considered expenses of administration. For purposes of this\nparagraph, a public group self-insurer is insolvent when the value of\nthe public group self-insurer's assets is less than the total costs of\nthe workers' compensation liabilities that it is anticipated the public\ngroup self-insurer will be required to pay within the succeeding six\nmonths or that the compensation and benefits provided by this chapter\nmay be unpaid by reason of the default of a public group self-insurer.\nUpon the insolvency of a public group self-insurer, each member shall\nassume responsibility for the continued administration and payment of\nall claims against it, provided however that the public group\nself-insurer shall, within thirty days, turn its assets over to the\nchair and the chair shall assume the administration and cost of the\nclaims of the public group self-insurer for a period not to exceed one\nyear. During the period of chair administration of claims, each member\nof the public group self-insurer shall secure the services of a licensed\nclaims administrator and the chair shall segregate the claims\nobligations of the insolvent public group self-insurer by member, and,\nif necessary segregate an adequate claim reserve for any claims of\ndefunct or insolvent members of the insolvent public group self-insurer.\nNot later than one year from the assumption of the administration of the\nclaims of the public group self-insurer, each member of the insolvent\npublic group self-insurer shall resume administration of its own claims\nand the chair shall return to each member whatever pro rata share of the\npublic group self-insurer's assets remain after the period of chair\nadministration. The chair shall be reimbursed for any payment made under\nthis paragraph by the public group self-insurer itself and, if the\npublic group self-insurer is unable to reimburse the chair fully for\npayments made by the chair, then by the member of the public group\nself-insurer against which the claim is asserted. Further, nothing\nherein shall preclude the chair from directing that an underfunded\npublic group self-insurer levy an assessment on its members as part of a\nplan for achieving fully funded status which may include a deficit\nassessment on members of such group self-insurer which shall be subject\nto approval or modification by the chair. No member shall be liable for\nany obligations of the public group self-insurer or any obligations of\nany member of the public group self-insurer. The chair shall require any\nmember that has pending claims but has failed to secure the services of\na licensed claims administrator to resume administration of the claims\nto pay to the chair any expenses the chair incurs in administering and\npaying those claims.\n  (4) Each group self-insurer, in its application for self-insurance,\nshall set forth the names and addresses of each of its officers,\ndirectors, trustees, third party administrator and group administrator.\nNotice of any change in the officers, directors, trustees, third party\nadministrator or group administrator shall be given to the chair within\nten days thereof. No officer, director, trustee, employee, third party\nadministrator or group administrator of the group self-insurer may\nrepresent or participate directly or indirectly on behalf of an injured\nworker or his dependents in any workers' compensation proceeding. All\nemployees of members participating in group self-insurance shall be and\nare deemed to be included under the group self-insurance plan.\n  (5) (a) Each group self-insurer shall secure the services of a group\nadministrator to be responsible for assisting the group self-insurer in\ncomplying with the provisions of this section and the rules and\nregulations promulgated hereunder, and for coordinating services\nincluding but not limited to claims processing, loss control, legal,\naccounting and actuarial services. No person, firm or corporation shall\ncoordinate such services or otherwise carry out the tasks of a group\nadministrator as provided in this subdivision or in the regulations\nissued pursuant thereto on behalf of a group self-insurer unless such\nperson shall have obtained from the chair a license authorizing it to\nact as a group self-insurer administrator, which license may be revoked\nfor good cause. The chair shall promulgate regulations setting forth any\nadditional qualifications for such license, governing the conduct and\ncompensation of group self-insurer administrators, and setting a license\nfee in an amount not less than five thousand dollars per year for such\nlicense for each group self-insurer the administrator administers. Each\nadministrator shall post a bond in the amount of five hundred thousand\ndollars for each group self-insurer administered or such other amount as\nmay be set by the chair based on the cost and availability of such bond,\nfrom which the chair may recover any recoveries or penalties against the\nadministrator under this section. Nothing in this section shall relieve\nthe trustees of a group self-insurer of any fiduciary obligation they\nhold to the other members of such group self-insurer.\n  (b) A group administrator that knowingly and with intent to mislead\nmakes a material misrepresentation of a material fact in soliciting\nmembers in a group self-insurer shall be guilty of a class E felony.\nAdditionally, the chair may impose a civil penalty of up to ten thousand\ndollars for each such violation.\n  (c) A group administrator, actuary or accountant that knowingly makes\na material misrepresentation of a material fact concerning the financial\nstatus of any group self-insurer to the chair or board, or in its annual\nreport to members of the group self-insurer, shall be guilty of a class\nE felony. The chair may impose a civil penalty of up to twenty thousand\ndollars for each such violation. A second and subsequent violation of\nthis paragraph shall be a class D felony. The chair may recover in a\ncivil action any damages resulting from such misrepresentations,\nincluding the value of any amount assessed against any entities that are\nnot members of the defaulted self-insurer that resulted from any such\nmisrepresentation.\n  (d) (1) A group administrator shall provide an annual written report\nto all members of the group self-insurer and to the board which shall\ninclude:\n  a. the members of the group self-insurer;\n  b. the group administrator and trustees;\n  c. the results of the most recent financial audit;\n  d. the percentage of total liabilities held by the self-insurer in\nunrestricted cash and investments permitted by regulation as determined\nin accordance with subparagraph (b) of paragraph two of this\nsubdivision;\n  e. the number and amount of rate deviations provided to members during\nthe prior year and whether the recipient of any such deviation was a\ntrustee; and\n  f. such other information as the chair may direct.\n  The group administrator shall provide a copy of the most recent\nfinancial audit to any group self-insurer member upon written request.\n  (2) The chair shall make available to the public, on its website and\nin writing upon request:\n  a. the identity of all group self-insurers that have provided workers'\ncompensation under this subdivision in the prior three years;\n  b. the group administrator of each such group self-insurer;\n  c. the financial condition of all group self-insurers as determined by\nthe board in the last financial audit and the board's regulatory\ndefinition of assets; and\n  d. such other information as the chair may direct, but which shall not\ninclude any confidential or proprietary information.\n  The board may direct the disclosure of any non-proprietary information\nregarding any group self-insurer, including whether a member is a member\nthereof, to any claimant upon a showing of need.\n  (e) (1) The chair may condition the issuance or continuation of a\nlicense under this subdivision upon the presentation by a group\nadministrator of such information as the board requests, at any time\nchosen by the chair or at regular intervals, including but not limited\nto the annual financial statements of the group administrator detailing\nthe compensation the administrator and its substantially owned\naffiliated entities, as defined in section two of this chapter, have\nreceived or shall receive from the group self-insurer or its members,\nand the method by which such compensation has been or will be\ncalculated. The chair may issue regulations governing the method of\ncalculating compensation which a group administrator may receive,\nincluding restrictions on the process by which such compensation may be\nset.\n  (2) The chair may revoke the license of any group administrator that\nreceives compensation in violation of such regulations, and may impose a\npenalty of up to two times any compensation so received.\n  (f) (1) No officer or director of, or person holding five percent or\nmore ownership interest in, a group administrator shall within two years\nof serving in such capacity or holding such ownership interest, serve in\nany capacity or hold any ownership interest in a workers' compensation\ncarrier that provides or solicits the provision of compensation under\nthis title for any employer that is or was a member of such group\nself-insurer. No officer or director of, or person holding five percent\nor more ownership interest in a group administrator shall serve in such\ncapacity or hold such ownership interest in a carrier that provides or\nsolicits excess coverage for any group self-insurer administered by such\nadministrator.\n  (2) The chair may impose a civil penalty of up to ten thousand dollars\nfor each violation of this paragraph.\n  (g) Each group self-insurer shall submit to the chair copies of any\nagreement or contract with an entity that serves or will serve as its\ngroup administrator, accountant, actuary or third party administrator at\nleast thirty days prior to becoming effective, and the effectiveness of\nsuch contract shall be conditioned on the absence of an objection by the\nboard during the thirty day period. Contracts that shall be subject to\nsuch objection shall include any contract in violation of regulation;\nand any contract that does not provide reasonable cancellation or\nrenewal terms, including any contract that requires an affirmative act\nby the trustees of the group self-insurer to prevent automatic renewal,\nor that does not permit cancellation for negligence, violation of law,\nor other good cause.\n  (6) (a) Group self-insurers must file with the board, as soon as\npracticable but no later than sixty days prior to the start of the fund\nyear a rating plan which is supported by an actuarial rate study\nprepared by an independent, qualified actuary that is a fellow or\nassociate of the casualty actuarial society, that clearly identifies the\nactuary's indicated rate assumptions therein. The rating plan must apply\nconsistently to all members, and must provide for a common renewal date\nfor all group self-insurer members. The rates filed can be adjusted\nbased on an experience modification calculated for every member in\naccordance with the experience rating plan promulgated by the workers'\ncompensation rating board. Experience modification formulas must be\napplied identically to all members. Other rate deviations may be\npermissible provided a plan has been approved by the board. Such\ndeviations shall not be in excess of ten percent of the actuary's\nindicated rate unless otherwise approved by the board for a fully funded\ngroup self-insurer, and shall in no event result in amounts less than\nthe actuary's overall indicated rate. The chair by regulation may set\nfurther rate plan and actuarial reporting standards.\n  (b) If the chair has cause to believe that a group self-insurer's\ncontribution rates including experience modifications do not conform to\nthe requirements of this part then he or she may require the submission\nof a report identifying the contributions paid by each of the members\nfor the preceding year, the projected contributions for each group\nself-insurer member for the current fiscal year, and the manner in which\nsuch contributions were calculated. If, after review by the chair, the\ngroup self-insurer's contribution rates are deemed to be detrimental to\nits solvency, the chair may mandate that the group self-insurer modify\nsuch rates as the chair directs. The chair may impose a penalty of up to\nfive thousand dollars for each violation of this subparagraph. A group\nself-insurer's failure to adhere to the rating structure determined by\nthe board shall constitute good cause for termination.\n  (7) (a) If for any reason, the status of a group self-insurer under\nthis subdivision is terminated, including by operation of law on and\nafter January first, two thousand twelve, the securities or cash or the\nsurety bond on deposit referred to herein shall remain in the custody of\nthe chair for such time as the chair may deem proper and warranted. In\nlieu thereof, and at the discretion of the chair, the group\nself-insurer, its heirs or assigns or others carrying on or liquidating\nsuch group self-insurer, including the chair on the group self-insurer's\nbehalf, may execute an assumption of workers' compensation liability\ninsurance policy securing such further and future contingent liability\nas may arise from prior injuries to workers and be incurred by reason of\nany change in the condition of such workers warranting the board making\nsubsequent awards for payment of additional compensation. Such policy\nshall be in a form approved by the superintendent of financial services\nand issued by the state fund or any insurance company licensed to issue\nthis class of insurance in this state. In the event that such policy is\nissued by an insurance company other than the state fund, then said\npolicy shall be deemed of the kind specified in paragraph fifteen of\nsubsection (a) of section one thousand one hundred thirteen of the\ninsurance law and covered by the workers' compensation security fund as\ncreated and governed by article six-A of this chapter. It shall only be\nissued for a single complete premium payment in advance by the group\nself-insurer and in an amount deemed acceptable by the chair and the\nsuperintendent of financial services.  In lieu of the applicable premium\ncharge ordinarily required to be imposed by a carrier, said premium\nshall include a surcharge in an amount to be determined by the chair to:\n(i) satisfy all assessment liability due and owing to the board and/or\nthe chair under this chapter; and (ii) satisfy all future assessment\nliability under this section, and which surcharge shall be adjusted from\ntime to time to reflect any changes to the assessment of group\nself-insured employers, including any changes enacted by the chapter of\nthe laws of two thousand eleven amending sections fifteen and one\nhundred fifty-one of this chapter. Said surcharge shall be payable to\nthe board simultaneous to the execution of the assumption of workers'\ncompensation liability insurance policy. However, the payment of said\nsurcharge does not relieve the carrier from any other liability,\nincluding liability owed to the superintendent of financial services\npursuant to article six-A of this chapter. When issued such policy shall\nbe noncancellable without recourse for any cause during the continuance\nof the liability secured and so covered.\n  (b) The chair shall levy an interim assessment on the members of a\ndefaulted group self-insurer within one hundred twenty days of such\ndefault or of the effective date of the chapter of the laws of two\nthousand eight which amended this subdivision, whichever is later, and\nagainst the members of any other terminated group self-insurer when\nnecessary, for such an amount as he or she determines to be necessary to\ndischarge all liabilities of the group self-insurer, including the\nreasonable cost of liquidation such as claims administration costs,\nactuarial and accounting services, and the value of future assessments\non members of such group self-insurer as they are known at the time of\nthe assessment. The chair may impose subsequent and further deficit\nassessments, or return funds to members, to adjust the moneys collected\nto reflect the time of participation, and percent of group self-insurer\nliabilities for such time. The time limitations included in the first\nsentence of this subparagraph do not apply to the imposition of any\nsubsequent and further deficit assessments that exceed the interim\nassessment made by the chair against members of a defaulted group\ninsurer or members of any other terminated group self-insurer.\nNotwithstanding any such action by the chair, each member of the group\nself-insurer shall remain jointly and severally responsible for all\nliabilities provided by this chapter including but not limited to\noutstanding and estimated future liabilities and assessments. Further,\nseparate and apart from, and in addition to a member's joint and several\nliability and notwithstanding any payments made by any other members of\nthe group self-insurer pursuant to this subparagraph, in the event that\na member neglects or fails to pay an assessment levied pursuant to this\nsubparagraph, the member shall be deemed in default in the payment of\ncompensation. Such defaulting member is subject to the enforcement\nprovisions of section twenty-six of this chapter for the payment of all\ncompensation relative to awards due and owing on claims filed by the\nemployees of such member that have neither been paid by the member or\nthe group self-insurer. Nothing in this paragraph shall prevent the\nchair from offering payment plans or settling claims against members of\nany group self-insurer as necessary to facilitate collection.\n  (c) Upon the assumption of the assets and liabilities of a group\nself-insurer by the chair or his or her designee pursuant to regulation\nof the chair, all records, documents and files of whatever nature,\npertaining to the group self-insurer, be they in the possession of the\ngroup self-insurer or a third party, and all remaining assets of the\ngroup self-insurer, shall become the property of the chair. All\ncustodians of such records and/or funds shall turn over to the chair or\nhis designee all such original records upon demand.\n  (8) All the provisions of this chapter relating to self-insurance and\nthe rules and regulations promulgated thereunder shall be deemed\napplicable to group self-insurance. The chair shall implement the\nprovisions of this subdivision by promulgating rules and regulations but\nno such rules or regulations shall be necessary for any provision of\nthis subdivision to be effective. The chair may impose a civil penalty\nof up to ten thousand dollars for each violation against any group\nself-insurer that violates any provision of this subdivision or of any\nregulation issued pursuant thereto for which a civil penalty is not\nspecified.\n  (10) (a) A non-municipal group of employers may make application to\nthe chair to qualify jointly as a self-insurer, provided:\n  (1) The members of the group secure the services of an administrator,\nwho shall carry out the responsibilities of such an administrator as set\nforth in subdivision five of this section, and who shall be subject to\nthe restrictions and penalties applicable to an administrator under this\nsection;\n  (2) The members of the group, through the administrator, (a) jointly\ndeposit sufficient securities in accordance with subdivision three of\nthis section or in a trust governed in accordance with Part 126 of title\n11 of the New York code of rules and regulations to secure the liability\nof the members of the group to pay for all existing claims obligations,\nprovided such deposit shall be made by November first, two thousand\neleven, (b) jointly deposit sufficient securities in accordance with\nsubdivision three of this section or in a trust governed in accordance\nwith Part 126 of title 11 of the New York code of rules and regulations\nto secure all anticipated present and future claims of the members of\nthe group, by November first, two thousand fourteen, provided annual\ndeposits are made in accordance with a schedule set by the chair on or\nbefore November first of each year, and provided that the deposit shall\nbe deemed an asset of the group for the purpose of determining its\nfunding status, and (c) by November first, two thousand eleven and\nthereafter, shall maintain funds sufficient for all other liabilities\nbesides claims in a trust governed in accordance with Part 126 of title\n11 of the New York code of rules and regulations, of which the board\nshall be the sole beneficiary, and the terms of the trust agreement, and\nthe trustee, shall be approved by the chair in his or her sole\ndiscretion, and provided that any group self-insurer that does not hold\nsuch funds in a trust that meets the terms of this paragraph shall post\nthem with the board;\n  (3) The group has been authorized by the chair to self-insure in\naccordance with this subdivision prior to the effective date of this\nparagraph;\n  (4) The group's members or participant employers either (a) are\nparties to collective bargaining agreements with the same unions; or (b)\nfall within a limited number of payroll classifications, as set by the\nchair, after giving due consideration to the risks associated with any\ngroup of employers self-insuring. However, employers that were active\nprior to the effective date of this section and whose classification\ncodes do not meet the limitations on payroll classification codes or are\nnot parties to collective bargaining agreements with the same unions\nwill be permitted to remain in the trust provided (a) they continue to\nmeet the other terms and conditions of the trust; and (b) any new\nmembers shall be subject to the limitations on the number of payroll\nclassifications; and provided further, the chair shall revoke such\npermission in the event the trust violates paragraph six of this\nsubdivision relating to filing of a rating plan;\n  (5) The group was fully funded for three out of the previous five\nyears and at least ninety percent funded for one other year out of the\nprevious five years, as determined by the chair following a financial\nreview, and the group self-insurer has sufficient funds to meet its\nliabilities;\n  (6) The group has a safety program acceptable to the chair; and\n  (7) The group is subject to such other limitations and requirements of\nthis subdivision unless waived by the chair and to regulations of the\nchair.\n  (b) The members of any such group shall enter into an agreement among\nthemselves and with the group's administrator which shall, at a minimum:\n  (1) Indicate that each of the members of the group is jointly and\nseverally liable for any liabilities of the group; and\n  (2) Provide for the collection of additional funds from group members\nin the event the deposit with the board is insufficient to meet the\nliabilities of the group.\n  (11) Former group self-insurer. Any group self-insurer that has ceased\nto self-insure, or has ceased to self-insure any new liabilities after\nJanuary first, two thousand twelve in accordance with paragraph two of\nthis subdivision, shall remain subject to all the provisions of this\nsubdivision and the regulations issued pursuant thereto and any\nassessments provided for by this section until such time as the group\nself-insurer no longer possesses any liabilities.\n  (12) Any non-municipal group of employers authorized to self-insure\nunder paragraph ten of this section on or after January first, two\nthousand twelve shall be deemed a "private self-insurer" for purposes of\nthe assessments set forth in sections fifteen and one hundred fifty-one\nof this chapter.\n  3-b. (a) Except as provided in subdivision three-d of this section, no\nperson, firm or corporation, other than an attorney and\ncounsellor-at-law, shall solicit the business of representing, or engage\nin representing self-insurers or group self-insurers, as defined in\nsubdivisions three and three-a of this section, before the board or any\nofficer, agent or employee of the board assigned to conduct any hearing,\ninvestigation or inquiry relative to a claim for compensation or\nbenefits under this chapter, unless he or she shall be a citizen of the\nUnited States or a noncitizen lawfully admitted for permanent residence\nin the United States, or a corporation organized under the laws of the\nstate of New York, and shall have obtained from the board a license\nauthorizing him or her to appear in matters or proceedings before the\nboard. Such license shall be issued by the board in accordance with the\nrules established by it. Any person, firm or corporation violating the\naforesaid provisions shall be guilty of a misdemeanor. The chair may\nimpose a civil penalty of up to one thousand dollars for each violation\nagainst any representative licensed in accordance with this section that\nviolates any provision of this section or of any regulation issued\npursuant thereto, in addition to any other sanctions provided for under\nthis chapter.\n  (b) The board, in its rules, may provide for the issuance of licenses\nto persons, firms or corporations, upon such proof of character and\nfitness as it may deem necessary, without annual license fee, and for\nthe giving of a bond running to the people of the state of New York,\nconditioned upon the faithful performance of all duties required of such\nperson, firm or corporation, and in an amount to be fixed by the board\nin its rules. Such bond shall be approved by the board as to form and\nsufficiency and shall be filed with it.\n  (c) There shall be maintained in each office of the board a registry\nor list of all persons to whom licenses have been issued, as provided\nherein, which list shall be corrected as often as licenses are issued or\nrevoked. Absence of record of the license issued, as herein provided,\nshall be prima facie evidence that a person, firm or corporation is not\nlicensed to represent self-insurers.\n  (d) Any such license may be revoked by the board for cause after a\nhearing before it.\n  (e) No license shall be issued hereunder for a period longer than\nthree years from the date of its issuance. The provisions of this\nsection shall not apply to a regular employee of a self-insured employer\nor to the state insurance fund acting in accordance with an insuring\nagreement with the state as authorized pursuant to the provisions of\nsection eighty-eight-c of this chapter.\n  3-c. Notwithstanding any provision in this chapter or in any general,\nspecial or local law contained, all cash and securities deposited with\nthe chairman by an employer who is a party or a wholly owned subsidiary\nof a party to a plan heretofore or hereafter adopted under article seven\nof the public service law by the transit commission-- metropolitan\ndivision of the department of public service, and who is, or at the time\nof the consummation of such plan was, a self-insurer under this chapter,\nmay be withdrawn upon, or at any time after, the consummation of such\nplan as hereinafter provided. All cash and securities deposited by any\nsuch employer with and held by the chairman may be withdrawn upon, or at\nany time after, the consummation of such plan where any city which is a\nparty thereto and which is a self-insurer under this chapter assumes all\nliabilities of or claims against such employer under this chapter, as\nfollows: (a), where such plan provides that such city shall acquire, or\nthat such employer or his assigns shall retain, all the right and\ninterest of such employer in the deposited cash and securities, the\nchairman shall surrender and deliver such cash and securities to such\ncity or to such employer or his assigns, as the case may be, upon its\ndemand, and (b), where such plan provides that such city and such\nemployer, or his assigns, shall each retain some right and interest in\nsuch cash and securities, the chairman shall surrender and deliver such\ncash and securities to such city and to such employer or his assigns\nupon their joint demand as shall be specified therein.\n  3-d. The state insurance fund, an insurance company duly authorized or\nlicensed to write workers' compensation insurance in this state, a\nsubsidiary or an affiliate of such an insurance company, or a licensed\nor authorized adjusting company or association may apply for a license\nfrom the board to solicit the business of representing and engage in\nrepresenting self-insurers, as defined in subdivision three of this\nsection, before the board or any officer, agent or employee of the board\nassigned to conduct any hearing, investigation or inquiry relative to a\nclaim for compensation or benefits under this chapter. Any corporation\nformed solely for the purpose of engaging in the activities described by\nthis subdivision shall be formed under the laws of the state of New\nYork.\n  The state insurance fund, an insurance company, its subsidiary or\naffiliate, or such adjusting company or association shall designate\nthose employees who are to appear in matters or proceedings before the\nboard on behalf of self-insurers. Such employees shall obtain an\nauthorization from the board. Upon application to the board for such\nauthorization all such employees who, on the effective date of this\nsubdivision, have been appearing in matters or proceedings before the\nboard on behalf of insurers for a period of at least two years shall\nautomatically receive a temporary authorization from the board. Such\ntemporary authorization shall remain in effect until the applicant\nemployee has been granted or denied final authorization by the board.\nThe board in its rules shall provide for the issuance of authorizations\nto such employees and other designated employees. If the board, in its\nrules, provides for the issuance of authorization to persons, firms or\ncorporations under subdivision three-b of this section upon such proof\nof character and fitness as it may deem necessary, the same proof of\ncharacter and fitness shall be required for an authorization issued\nunder this subdivision.\n  The state insurance fund, an insurance company duly authorized or\nlicensed to write workers' compensation insurance in this state, a\nsubsidiary or an affiliate of such an insurance company, or a licensed\nor authorized adjusting company or association shall apply to the board\nfor the issuance of a license upon such proof of character and fitness\nas the board may deem necessary. Such proof of character and fitness\nshall be the same as that required by the board of persons, firms or\ncorporations under subdivision three-b of this section. If the board\ncharges a fee for a license issued under subdivision three-b of this\nsection, the same amount shall be charged for a license issued under\nthis subdivision. If the board requires for the giving of a bond running\nto the people of the state of New York, conditioned upon the faithful\nperformance of all duties required of such person, firm, or corporation\nlicensed under subdivision three-b of this section, the same shall be\nrequired for a license under this subdivision. Such bond shall be\napproved by the board as to form and sufficiency and shall be filed with\nit. All license and authorization fees collected under the provisions of\nthis subdivision shall be paid into the state treasury. Any person,\ninsurance company, its subsidiary or affiliate, or adjusting company or\nassociation which violates the aforesaid provisions of this paragraph\nshall be guilty of a misdemeanor.\n  There shall be maintained in each office of the board a registry list\nof all persons to whom authorizations and licenses have been issued as\nprovided herein, which list shall be corrected as often as\nauthorizations and licenses are issued or revoked. Absence of record of\nthe authorization or license issued, as herein provided, shall be prima\nfacie evidence that a person, firm or corporation is not authorized or\nlicensed to represent self-insurers. Any such authorization or license\nmay be revoked by the board for cause after a hearing before it. No\nauthorization or license shall be issued hereunder for a period longer\nthan three years from the date of its issuance.\n  The board shall make rules pertaining to when conflicts of interest\narise in individual cases which shall apply to those who are licensed or\nauthorized to represent self-insurers under subdivision three-b of this\nsection or under this subdivision.\n  The provisions of article twenty-four of the insurance law, insofar as\napplicable, shall apply to the state insurance fund, insurance\ncompanies, their subsidiaries and affiliates or adjusting companies or\nassociations in their activities representing self-insurers before the\nboard.\n  3-e. (a) The state insurance fund and any other insurer that issues\npolicies of workers' compensation insurance shall offer at the option of\nthe policyholder a deductible for benefits payable under a workers'\ncompensation policy with an annual premium of twelve thousand dollars or\nmore, if in the opinion of the state insurance fund or such other\ninsurer the policyholder meets the eligibility requirements of paragraph\n(b) of this subdivision.\n  (b) A policyholder is eligible for a policy deductible for any renewal\nperiod of the policy if such policyholder has paid the entire billed\npremium on the policy for all policy periods within forty-five days of\neach billing for the past three years. A policyholder will continue to\nbe eligible for a deductible provided that no part of any premium is\nmore than forty-five days overdue from the date billed or reimbursement\nfor any deductible amount is unpaid by the policyholder to such insurer.\nThe state insurance fund or any other insurer that has issued a policy\nwith a deductible may revoke the policyholder's entitlement to a\ndeductible if the policyholder fails to reimburse any deductible\namounts, or pay any billed premium, within forty-five days after such\nreimbursement or premium payment has become due. Upon such revocation of\na policyholder's entitlement to a deductible, the policyholder shall be\nentitled to cancel such policy and such policyholder will forfeit\neligibility for entitlement to a deductible as provided above.\n  (c) Deductibles shall be offered by the state insurance fund or any\nother insurer in writing to eligible policyholders at the beginning of\npolicy periods, in the amounts of one hundred dollars, two hundred\ndollars, three hundred dollars, four hundred dollars and five hundred\ndollars, and thereafter, in increments of five hundred dollars up to a\nmaximum of two thousand five hundred dollars per occurrence. The\neligible policyholder shall select, in writing, only one deductible\namount which shall be binding on such policyholder throughout the policy\nperiod.\n  (d) If the policyholder selects a deductible under paragraph (c) of\nthis subdivision, workers' compensation benefits payable under the\npolicy shall be paid by the state insurance fund or other insurer liable\nunder the policy to the person or provider entitled to such benefits\nwithout regard to any deductible applied to such policy. Upon payment of\nbenefits on a claim up to or exceeding the deductible amount, the state\ninsurance fund or other insurer shall be entitled to bill the\npolicyholder for reimbursement up to the deductible amount. A\npolicyholder's failure to pay billed deductible reimbursement amounts to\nthe state insurance fund or other insurer under this paragraph shall be\ntreated in the same manner as non-payment of premium and render the\npolicy cancelable in accordance with the provisions of subdivision five\nof section fifty-four of this article. The deductibles paid by the\ninsured employer during any one year period of the policy of insurance\nshall not exceed the annual premium for such policy of insurance.\n  (e) Premium reductions, in accordance with methodology approved by the\nsuperintendent of financial services shall be applied to any policy\nwritten with a deductible. Such premium reductions shall be determined\nbefore the application of any experience modification premium surcharge\nor premium discount.\n  (f) The New York workers' compensation rating board shall file for\nappropriate premium discounts subject to the approval of the\nsuperintendent of financial services.\n  (g) The state insurance fund and any other insurer may, at its option,\noffer a deductible in an amount specified in paragraph (c) of this\nsubdivision to any policyholder who is not otherwise eligible for a\ndeductible under this subdivision. A public group self-insurer may offer\na deductible in accordance with paragraph (h) of this subdivision.\n  (h) A public group self-insurer which has been providing workers'\ncompensation and employers' liability coverage for not less than five\nyears and is operated as a self-administered not-for-profit corporation\ngoverned by a board not less than two-thirds of the members of which are\nrepresentatives of members of the public group self-insurer, and all of\nthe officers of which are representatives of members of the public group\nself-insurer may, upon a determination by the chair that the methodology\nused by the public group self-insurer in creating its deductible rating\nplan is supported by an actuarial analysis prepared by an independent,\nqualified actuary who is a member of the casualty actuarial society that\nclearly identifies the actuary's rate assumptions, and subject to\nunderwriting by the public group self-insurer, offer as part of the\npolicy or by endorsement, deductibles optional to the member, not\nsubject to the foregoing monetary limits, consistent with the following:\n  (1) claimants' rights are properly protected, and claimants' benefits\nare paid without regard to any such deductible;\n  (2) appropriate premium reductions reflect the type and level of any\ndeductible approved by the chair and selected by the member;\n  (3) premium reductions for deductibles are determined before\napplication of any experience modification, premium surcharge, or\npremium discount;\n  (4) recognition is given to member's characteristics, including size,\nfinancial capabilities, nature of activities, and number of employees;\n  (5) if the member selects a deductible, the member is liable to the\npublic group self-insurer for the deductible amount in regard to\nbenefits paid for compensable claims;\n  (6) the public group self-insurer pays all of the deductible amount,\napplicable to a compensable claim, to the person or provider entitled to\nbenefits and then seeks reimbursement from the member for the applicable\ndeductible amount;\n  (7) a failure by the member to reimburse deductible amounts to the\npublic group self-insurer is treated in the same manner as nonpayment of\nthe member's contribution;\n  (8) the public group self-insurer shall be fully-funded as defined in\nsubparagraph (b) of paragraph two of subdivision three-a of this section\nand if, after offering deductible policies, the public group\nself-insurer ceases to be fully funded as so defined, the public group\nself-insurer may not permit any new member to elect the deductible\noption until the public group self-insurer becomes fully funded;\n  (9) the public group self-insurer may add no more than seven new\ndeductible members in any one contribution year;\n  (10) the aggregate contributions for all new members selecting the\ndeductible option in any one year may not exceed ten percent of the\ntotal contributions of all of the public group self-insurer's members\nfor the immediately prior year;\n  (11) if the member was self-insured prior to joining the public group\nself-insurer, the member's deductible amount during the member's first\nyear of membership in the public group self-insurer may not exceed the\namount of the member's reinsurance retention level immediately before\njoining the public group self-insurer;\n  (12) each member which has elected the deductible option shall: (i)\nmaintain in a dedicated account held by the public group self-insurer an\namount actuarially determined to be sufficient to pay the portion of\neach compensation claim that is within the deductible amount for the\nsucceeding three months; and (ii) maintain in its own dedicated reserve\naccount or in its own undesignated fund balance, the\nactuarially-determined amount that the member will be required to pay\nfor all of the member's claims below the deductible amount; and\n  (13) the public group self-insurer shall provide to all members of the\npublic group self-insurer an annual statement identifying the\ncontributions provided by and the reserves attributable to the members\nwhich have elected a deductible and must provide to each member of the\npublic group self-insurer which has elected the deductible option an\nannual actuarial analysis of the member's open claims, stating the\namounts the public group self-insurer anticipates that the member will\nbe required to pay for the life of each claim.\n  4. a. A county, city, village, town, school district, fire district or\nother political subdivision of the state may secure compensation to its\nemployees in accordance with subdivision one, two or three-a of this\nsection, and a public corporation as defined in subdivision one of\nsection sixty of this chapter may also secure such compensation in\naccordance with article five of this chapter. If compensation is not so\nsecured, a county, city, village, town, school district, fire district\nor other political subdivision shall be deemed to have elected to secure\ncompensation pursuant to subdivision three of this section and, in such\ncase, no proof of financial ability or deposit of securities or cash\nneed be made in compliance with such subdivision. All other requirements\nprescribed by this chapter for employers so electing shall be complied\nwith and notice of such election shall be filed with the chair. For\nfailure to file such notice of election, prescribed in form by the\nchair, within ten days after the election was made, the treasurer or\nother financial officer shall be liable to pay to the chair the sum of\none hundred dollars as a penalty, to be transferred to the state\ntreasury.\n  b. The treasurer or other fiscal officer of a self-insuring county,\ncity, village, town, school district, fire district or other political\nsubdivision shall, upon presentation of an award of compensation\nforthwith begin payment of it to the person entitled thereto in\naccordance with this chapter.\n  c. The governing board of a county, city, village, town, school\ndistrict, fire district or other political subdivision may authorize the\ntreasurer or other fiscal officer of such municipal corporation,\ndistrict or political subdivision, as the case may be, to pay the\ncompensation provided for in this chapter to the person entitled thereto\nwithout waiting for an award in any case in the manner provided in\nsection twenty-five of this chapter. The amount of such compensation\npayable prior to an award pursuant to such authorization shall\nconstitute a settled claim within the meaning of the local finance law.\n  d. A contract of insurance issued to a county or a town in accordance\nwith subdivision one or two of this section and in force on or after the\nfirst day of March, nineteen hundred sixty-three, in relation to fire\ndistricts and on or after the first day of January, in the year in which\nthis paragraph as hereby amended becomes effective in relation to\nambulance districts shall contain a provision reading as follows: "This\ncontract does not provide (1) any coverage under the Workers'\nCompensation Law or the Volunteer Firefighters' Benefit Law or the\nVolunteer Ambulance Workers' Benefit Law for which any fire district or\nambulance district would be liable under such laws, (2) any workers'\ncompensation benefits for fire or ambulance district officers and\nemployees for which any fire district or ambulance district would be\nliable under the Workers' Compensation Law, or (3) any volunteer\nfirefighters' or ambulance workers' benefits for any volunteer\nfirefighters or volunteer ambulance workers under the Volunteer\nFirefighters' Benefit Law or the Volunteer Ambulance Workers' Benefit\nLaw".\n  e. If for any reason the status of a county, city, village, town,\nschool district, fire district or other political subdivision of state\nis terminated, at the discretion of the chair, the county, city,\nvillage, town, school district, fire district or other political\nsubdivision of state, may execute an assumption of workers' compensation\nliability insurance policy securing such further and future contingent\nliability as may arise from prior injuries to workers and be incurred by\nreason of any change in the condition of such workers warranting the\nboard making subsequent awards for payment of additional compensation.\nSuch policy shall be in a form approved by the superintendent of\nfinancial services and shall be issued by the state fund or any\ninsurance company licensed to issue this class of policy in this state.\nIn the event that such policy is issued by an insurance company other\nthan the state fund, then said policy shall be deemed to be insurance of\nthe kind specified in paragraph fifteen of subsection (a) of section one\nthousand one hundred thirteen of the insurance law and covered by the\nworkers' compensation security fund as created and governed by article\nsix-A of this chapter.  It shall only be issued for a single complete\npremium payment in advance by the county, city, village, town, school\ndistrict, fire district or other political subdivision of state and in\nan amount deemed acceptable by the chair and the superintendent of\nfinancial services. In lieu of the applicable premium charge ordinarily\nrequired to be imposed by a carrier, said premium shall include a\nsurcharge in an amount to be determined by the chair to satisfy all\nassessment liability due and owing to the board and/or the chair under\nthis chapter. Said surcharge shall be payable to the board simultaneous\nto the execution of the assumption of workers' compensation liability\ninsurance policy. However, the payment of said surcharge does not\nrelieve the carrier from any other liability, including liability owed\nto the superintendent of financial services pursuant to article six-A of\nthis chapter. When issued such policy shall be non-cancellable without\nrecourse for any cause during the continuance of the liability secured\nand so covered.\n  5. Self-insurance. "Self-insurance," as used herein, shall be deemed\nto be the system of securing compensation as provided in subdivisions\nthree, three-a and four of this section, and article five of this\nchapter.\n  a. The chair shall administer all matters relating to self-insurance\nunder this chapter. All penalties set forth in subdivisions three and\nthree-a of this section shall be paid into the fund for uninsured\nemployers provided for in section twenty-six-a of this chapter.\n  b. Advisory committee for individual self-insurance. (1) To advise the\nchair, there shall be an advisory committee for individual\nself-insurance, which shall be called the advisory committee for\nself-insurance and consist of the chair and ten additional members\nappointed by the chair. Three of such members shall be named from the\nmanufacturing and trade group of self-insurance, three from the\ntransportation, public utilities and construction group, and one member\nshall be a self-insurer selected at large by the chairman, who shall be\nvice-chairman of the advisory committee. The chair shall be chair of the\nadvisory committee; the secretary of the board shall act as secretary of\nthe advisory committee. Any member appointed to such advisory committee\nshall be a self-insurer or an officer of a self-insurer or a person who\non account of his or her employment or affiliation can be classed as a\nmanagement representative of a self-insurer. The members of the advisory\ncommittee for self-insurance in office at the time this subdivision\ntakes effect, shall be and they are hereby continued in office as such\nfor the remainder of the terms for which they were appointed\nrespectively.\n  The members of the advisory committee for self-insurance next\nappointed, except to fill a vacancy created otherwise than by expiration\nof term, shall be appointed for terms of three years, except that of the\nthree additional members to be appointed after May first, two thousand\neight, one such member shall be appointed for an initial term of one\nyear, one such member shall be appointed for an initial term of two\nyears, and one such member shall be appointed for an initial term of\nthree years. No member shall be appointed to the advisory committee for\nindividual self-insurance if he or she has been convicted of a crime\nunder this chapter or has been subject to criminal or civil penalties\nunder this subdivision. Vacancies shall be filled for the unexpired term\nby appointment by the chair. Members shall continue in office until\ntheir successors are appointed; in the event that no appointment is made\nwithin three months after a vacancy exists or after the expiration of\nthe term of a member, the remaining members may fill the vacancy by a\nmajority vote. If a member shall be absent from two consecutive regular\nmeetings without adequate excuse his or her place may be declared vacant\nby the chair. Members of such advisory committee shall serve without\npay, but shall be entitled to their reasonable and necessary traveling\nand other expenses incurred in connection with their duties. Regular\nmeetings of the advisory committee shall be held twice a year, on dates\nto be fixed by the chair. In addition, special meetings shall be held if\ncalled by the chair or any five members of the committee. Such advisory\ncommittee shall have access to all self-insurance records except those\nrestricted by the chair or those whose disclosure is restricted under\nsection one hundred ten-a of this chapter, and shall have the power to\nrequire the presence before it of any employee of the board or any\nself-insurer as reasonable and related to matters within the purview of\nthe committee. Information obtained by members of the advisory committee\nshall be deemed confidential unless disclosed by order of the committee.\nIt shall be the duty of the advisory committee to advise the chair on\nall matters relating to self-insurance, particularly in respect to rules\ngoverning self-insurance, the deposit or withdrawal of securities, the\nstandards for permitting employers to self-insure under this section,\nthe appropriate amount of security or payments that self-insured\nemployers must provide, and on such other matters as the chair shall\nrequest. The chair shall detail to such advisory committee such\nstenographic or other assistance as may be necessary. Minutes shall be\nkept of the meetings of the advisory committee and shall be provided\nwithin forty-five days of such meeting to the governor and legislature,\nincluding the chairs of the assembly and senate committees on insurance\nand labor.\n  c. (1) The chair and the department of audit and control as soon as\npracticable after May first, nineteen hundred sixty, and annually\nthereafter, as soon as practicable after April first in each succeeding\nyear, shall ascertain the total amount of net expenses, including (a)\nadministrative expenses, which shall include the direct costs of\npersonal services, the cost of maintenance and operation, the cost of\nretirement contributions made and workers' compensation premiums paid by\nthe State for or on account of personnel, rentals for space occupied in\nstate owned or state leased buildings, and (b) all direct or indirect\ncosts incurred by the board during the preceding fiscal year in carrying\nout the provisions of subdivision three and three-a of this section.\nSuch expenses shall be adjusted annually to reflect any change in\ncircumstances, and shall be assessed against all private self-insured\nemployers, including for this purpose active and terminated group\nself-insurers, active individual self-insured employers, and individual\nself-insured employers who have ceased to exercise the privilege of\nself-insurance.\n  (2) Such expenses shall be assessed against all self-insurers\nincluding for this purpose employers who have ceased to exercise the\nprivilege of self-insurance. The basis of apportionment of the\nassessment against each self-insurer shall be a sum equal to that\nproportion of the amount which the indemnity payment for each\nself-insurer bore to the total indemnity payments for all self-insurers\nfor the calendar year which ended within the preceding state fiscal\nyear. All such assessments when collected shall be deposited into a fund\nwhich shall be used to reimburse the appropriations theretofore made by\nthe state for the payment of the expenses of administering this chapter.\n  (3) Pure premium for assessments made prior to January first, two\nthousand nine against individual and group self-insurers who ceased to\nself-insure shall be based on payroll at the time the individual or\ngroup self-insurer has ceased to self-insure, reduced by a factor\nreflecting the reduction in the group or individual self-insurer's\nself-insurance liabilities since ceasing to self-insure.\n  d. The chair may from time to time request the superintendent of\nfinancial services for assistance, and the superintendent of financial\nservices is hereby authorized to render such assistance upon request of\nthe chair, as may be necessary to insure the financial ability of such\ngroup self-insurers to pay all liabilities provided by this chapter.\n  e. Notwithstanding the provisions of paragraph c of this subdivision,\nthe chair shall require that partial payments for expenses of the fiscal\nyear beginning April first, nineteen hundred eighty-three, and for each\nfiscal year thereafter shall be made on March tenth of the preceding\nfiscal year and on June tenth, September tenth, and December tenth of\neach year, or on such other dates as the director of the budget may\nprescribe, by each self-insurer. Provided, however, that the payment due\nMarch tenth, nineteen hundred eighty-three for the fiscal year beginning\nApril first, nineteen hundred eighty-three shall not be required to be\npaid until June tenth, nineteen hundred eighty-three. Each such payment\nshall be a sum equal to twenty-five per centum of the annual expenses\nassessed upon each self-insurer, as estimated by the chair. The balance\nof assessments for the fiscal year beginning April first, nineteen\nhundred seventy-three and each fiscal year thereafter, shall be paid\nupon determination of the actual amount due in accordance with the\nprovisions of paragraph c of this subdivision. Any overpayment of annual\nassessments resulting from the requirements of this paragraph shall be\nrefunded or at the option of the chair shall be applied as a credit\nagainst the assessment of the succeeding fiscal year. The requirements\nof this subdivision shall not apply to those self-insurers whose\nestimated annual assessment for the fiscal year is less than one hundred\ndollars and such self-insurers shall make a single payment of the\nestimated annual assessment on or before September thirtieth of the\nfiscal year.\n  f. Whenever the chair shall determine that the compensation and\nbenefits provided by this chapter may be unpaid by reason of the default\nof an insolvent private self-insured employer, including a private group\nself-insurer, the chair shall pay such compensation and benefits from\nadministration expenses as provided in section one hundred fifty-one of\nthis chapter upon audit and warrant of the comptroller upon vouchers\napproved by the chair. Such payments shall be considered expenses of\nadministration. The chair shall be reimbursed therefor from the surety\nbond, cash or securities held or, if such surety bond, securities or\ncash is insufficient, by the employer, its receiver, liquidator,\nrehabilitator or trustee in bankruptcy. All moneys reimbursed to the\nchair or recovered by the chair in an action or proceeding to secure\nsuch reimbursement shall forthwith be applied as a credit against the\nexpenses on which the assessment levied upon all private self-insured\nemployers, in accordance with paragraphs c and e of this subdivision, is\ncalculated.\n  g. Whenever the chair shall determine that the compensation and\nbenefits provided by this chapter may be unpaid by reason of the default\nof an insolvent private self-insured employer, including a private group\nself-insurer, the chair shall levy an assessment against all private\nself-insured employers, including private group self-insurers, in\naccordance with paragraphs c and e of this subdivision to assure prompt\npayment of such compensation and benefits. Whenever compensation and\nbenefits are unpaid by reason of such default, the chair shall promptly\npay such compensation and benefits from administration expenses as\nprovided in section one hundred fifty-one of this chapter upon audit and\nwarrant of the comptroller upon vouchers approved by the chair. Nothing\nin this paragraph shall preclude the chair from recovering the moneys it\nexpends from its administrative expenses against the defaulted\nindividual self-insurer, or the members of the defaulted group\nself-insurer, as otherwise permitted by this chapter.\n  6. Any policy of insurance purchased pursuant to the provisions of\nthis subdivision six as in effect prior to the first day of March,\nnineteen hundred fifty-seven, shall be cancelled prior to, or as of, the\ntwenty-eighth day of February, nineteen hundred fifty-seven.\n  The cost of such insurance shall be apportioned by the clerk of the\nboard of supervisors of the county to each such city, village, fire\ndistrict, fire protection district, fire alarm district, and territory\noutside such municipal corporations and districts, in the proportion\nthat the agreed population bears to the entire population of the group.\nRefunds, dividends and discounts in relation to such insurance shall be\ndistributed or credited according to the same apportionment. Upon\nnotification by the clerk of the board of supervisors, the chief fiscal\nofficer of each such city, village or fire district shall pay to the\ncounty treasurer, from moneys available or made available, the amount\napportioned to such city, village or district. Upon like notification,\nthe supervisor of each town in which a fire protection district or fire\nalarm district is located in whole or in part, or in which outside\nterritory is located, shall pay to the county treasurer the amount\napportioned for such district, in whole or in part, or territory, as the\ncase may be, using moneys raised or made available for the purposes of\nfire protection in such district or outside territory, or if there be no\nsuch moneys or insufficient moneys, using funds of the town available or\nmade available, which funds shall be a charge upon such district or\nterritory for which the town shall be reimbursed. The county treasurer\nshall pay the cost of such insurance with such moneys, or if any\napportioned share has not been paid, the county treasurer shall advance\nthe amount necessary from moneys of the general fund upon resolution of\nthe board of supervisors. Any such advance shall be repaid as soon as\nmoneys are available therefor. If any apportioned share remains unpaid,\nthe county may recover the same by action at law. If any member of the\ngroup shall fail to pay its apportioned share within thirty days after\nnotice that such amount has become due and payable, the chairman of the\nboard of supervisors may terminate the participation of such member in\nthe group by notice by mail to such member on a date specified in the\nnotice, and a copy of such notice shall be filed by the chairman of the\nboard of supervisors with the insurance carrier, who shall notify the\nchairman of the workmen's compensation board of the termination of\ncoverage in the same manner as provided for cancellation of policy under\nsubdivision five of section fifty-four of this chapter.\n  If any participating fire protection district or fire alarm district\nincludes territory in more than one town, whether or not in more than\none county, the amount of cost of insurance, refund, dividend or\ndiscount apportioned to such district shall be apportioned in the\nproportion that the population of the district within each such town\nbears to the population of the entire district. The figure used for\npopulation in such case shall be the one stated in the agreement.\n  7. Any policy of insurance purchased pursuant to the provisions of\nthis subdivision seven as in effect prior to the first day of March,\nnineteen hundred fifty-seven, shall be cancelled prior to, or as of, the\nclose of the twenty-eighth day of February, nineteen hundred\nfifty-seven. The cost of such insurance shall be a town charge and shall\nbe levied and collected in the same manner as other town charges only in\nthe territory of such town outside of any villages and fire districts\nnot covered by such a policy.\n  8. The requirements of section ten of this chapter regarding the\nprovision of workers' compensation insurance as to owners and trainers\ngoverned by the racing, pari-mutuel wagering and breeding law who are\nemployers under section two of this chapter are satisfied in full by\ncompliance with the requirements imposed upon owners and trainers by\nsection two hundred twenty-one of the racing, pari-mutuel wagering and\nbreeding law, provided that in the event double compensation, death\nbenefits, or awards are payable with respect to an injured employee\nunder section fourteen-a of this chapter, the owner or trainer for whom\nthe injured jockey, apprentice jockey or exercise person licensed under\narticle two or four of the racing, pari-mutuel wagering and breeding\nlaw, and at the election of the New York Jockey Injury Compensation\nFund, Inc., with the approval of the New York state gaming commission,\nemployee of a licensed trainer or owner, is performing services as a\njockey, apprentice jockey or exercise person so licensed at the time of\nthe accident or, if approved by the New York state gaming commission, an\nemployee of a licensed trainer or owner shall bear the sole\nresponsibility for the amount payable pursuant to such section\nfourteen-a in excess of the amount otherwise payable under this chapter,\nunless there shall be a failure of the responsible owner or trainer to\npay such award within the time provided under this chapter. In the event\nof such failure to pay and the board requires the fund to pay the award\non behalf of such owner or trainer who has been found to have violated\nsection fourteen-a of this chapter, the fund shall be entitled to an\naward against such owner or trainer for the amount so paid which shall\nbe collected in the same manner as an award of compensation. Coverage\ndirectly procured by any owner or trainer for the purpose of satisfying\nthe requirements of this chapter with respect to employees of the owner\nor trainer shall not include coverage on any jockey, apprentice jockey\nor exercise person licensed under article two or four of the racing,\npari-mutuel wagering and breeding law, and at the election of the New\nYork Jockey Injury Compensation Fund, Inc., with the approval of the New\nYork state gaming commission, any employee of a licensed trainer or\nowner, to the extent that such jockey, apprentice jockey, exercise\nperson or, if approved by the New York state gaming commission, employee\nof a licensed trainer or owner is also covered under coverage procured\nby The New York Jockey Injury Compensation Fund, Inc. pursuant to the\nrequirements of section two hundred twenty-one of the racing,\npari-mutuel wagering and breeding law, and to that extent, coverage\nprocured by the fund pursuant to the requirements of the racing,\npari-mutuel wagering and breeding law shall be considered primary.\n  9. The requirements of sections ten and eleven of this chapter\nregarding the securing and provision of workers' compensation benefits\nas to a central dispatch facility, as defined in article six-F of the\nexecutive law, are satisfied in full by compliance with the requirements\nimposed upon such central dispatch facility by such article. Insurance\ncoverage directly procured by any central dispatch facility for the\npurpose of satisfying the requirements of this chapter with respect to\nemployees of the central dispatch facility shall not include coverage of\nany black car operator to the extent that the black car operator is also\ncovered under coverage secured by the New York black car operators'\ninjury compensation fund, inc. pursuant to the requirements of article\nsix-F of the executive law, and to that extent, coverage secured by the\nfund pursuant to the requirements of article six-F of the executive law\nshall be considered primary.\n  10. An individual self-insured employer or group self-insurer who\nfails to file or maintain the security deposit required by the chair\nwill be deemed to have failed to secure compensation for the amount not\ndeposited, and shall be liable for all penalties for such failure\nprovided for under this title.\n  11. If at any time an individual self-insured employer or member of a\ngroup self-insurer intentionally and materially understates or conceals\npayroll, or intentionally and materially misrepresents or conceals\nemployee duties or if the employer intentionally or materially misstates\npayroll or claims information for the purposes of determining employer\ncontributions as provided for under subdivisions three and three-a of\nthis section, such employer shall be deemed to have failed to secure\ncompensation and shall be subject to sanctions applicable under section\nfifty-two of this article in addition to any other sanctions available\nunder law.\n  12. The chair, with the approval of the director of the budget, may\nrequest the issuance of bonds by the dormitory authority for one or more\nof the purposes authorized by section sixteen hundred eighty-q of the\npublic authorities law and by a self-insured bond financing agreement\nauthorized by section fifty-c of this article. The net proceeds of such\nbonds shall be deposited into the self-insurer offset fund or as\notherwise provided by the applicable self-insured bond financing\nagreement.\n