NY Ins L § 4413 (2021)
2021 New York Laws ISC - Insurance Article 44 - Employee Welfare Funds 4413 - Prohibitions.

§  4413. Prohibitions. (a) The trustees of every employee welfare fund shall be responsible in a fiduciary capacity for  all  assets  received, managed  or  disbursed  by  them, or under their authority, on behalf of such fund.  (b)  (1)  No  such  fund  and  no  employer  or   labor   organization representing  any  employees  eligible for employee benefits thereunder, and no trustee or other officer or employee of any such  fund,  employer or  labor  organization shall receive, directly or indirectly, any thing of value from any insurance company, insurance agent,  insurance  broker or any hospital, surgical, dental or medical service plan, in connection with  the  solicitation,  sale,  service or administration of a contract providing employee benefits for  such  fund.  No  such  employer,  labor organization,  trustee,  officer  or employee shall receive any thing of value from such fund, or which is charged against  such  fund  or  would otherwise be payable to such fund, either directly or indirectly, except that  any  such  person may receive any employee benefits to which he is otherwise entitled, and any such trustee or other officer or employee of a fund, may receive from such fund reasonable compensation for necessary services and expenses rendered or incurred by him in connection with his official duties as such. Nothing in this  subsection  shall  affect  the payment of any dividend or rate credit or other adjustment due under the terms of any insurance or annuity contract.  (2)  No  insurance  company,  insurance  agent  or  insurance  broker, hospital, surgical, dental or medical service plan,  shall  directly  or indirectly, pay any commission, make any loan or give any thing of value to  any  employee  welfare fund or to any employer or labor organization representing any employees eligible for employee benefits thereunder  or to  any  trustee or other officer or employee of any such fund, employer or labor  organization,  in  connection  with  the  solicitation,  sale, service  or administration of a contract providing employee benefits for such fund.  (3) The superintendent may, after notice and a hearing,  prohibit  the trustees  of  an  employee  welfare  fund from employing or retaining or continuing to employ  or  retain  any  person  upon  finding  that  such employment  or retention involves a conflict of interest which is not in the best interests of the fund or adversely  affects  the  interests  of covered employees.  (4)  The  superintendent  may,  by  regulation or order, and upon such terms  and  conditions  as  he  requires,  authorize  or   approve   any transaction or transactions otherwise prohibited by this subsection upon his finding that the transaction or transactions promote or will promote the best interests of the relevant employee welfare funds, and do not or will not adversely affect the interests of the covered employees.  (c)  (1)  No  person  who  has been convicted by a court of the United States or by a court of any state or territory thereof of a  felony,  or of  any  crime  or  offense involving fraudulent or dishonest practices, shall  serve,  be  appointed,  designated  or  employed  as  a  trustee, administrator,  officer,  agent or employee of any employee welfare fund (other  than  an  employee  performing  non-discretionary  clerical   or building  maintenance duties exclusively) during or for five years after such conviction or the suspension of sentence therefor or from the  date of  his  unrevoked  release  from  custody  by  parole,  commutation  or termination of sentence, whichever event occurs later, unless  prior  to the  expiration  of  said  five  year  period  the conviction is finally reversed by a court of competent jurisdiction or he  has  been  pardoned therefor  by the governor or other appropriate authority of the state or jurisdiction in which he was convicted or he has received a  certificate of relief from disabilities or a certificate of good conduct pursuant to  the  provisions  of  article  twenty-three  of  the correction law which specifically removes the disability herein provided.  (2)  If  the  superintendent, after notice and a hearing, finds that a person has been  or  is  currently  serving,  appointed,  designated  or employed  in  violation  of  the provisions of this subsection, he shall enter an order removing such person from his position and directing that such person shall be disabled from service, appointment, designation  or employment  in  any of the capacities hereinabove described for a period of five years following the entry of such order. The superintendent may, in addition, impose the penalties provided in  subsection  (e)  of  this section for the wilful violation hereof.  (d)  (1)  No insurance company shall pay any dividend or retrospective rate credit on any covering  policy  except  by  check  payable  to  the affected employee welfare fund or by credit memo forwarded to such fund.  (2)  No  employee  welfare  fund  shall  pay any premium on a covering policy except by check payable to the insurance company directly.  (3) No political contributions shall be made directly or indirectly by or from any employee welfare fund.  (e)  The  superintendent  may  impose  a  penalty  of  not  to  exceed twenty-five  hundred dollars upon any trustee or other officer, agent or employee of any employee welfare fund subject to  this  article  or  may remove   such  trustee,  officer,  agent  or  employee  from  office  or employment, or both such penalty and removal,  if  after  notice  and  a hearing  he  shall  find  that he has wilfully failed to comply with the requirements of this article.  (f) In any case where, after notice and a hearing, the  superintendent finds  that any employee welfare fund has been depleted by reason of any wrongful or negligent act or omission of  a  trustee  or  of  any  other person,  he may transmit a copy of his findings to the attorney general. The attorney general may bring an action in the name of  the  people  of the  state,  or  intervene  in  an  action brought by or on behalf of an employee, to recover the monies of the  fund  for  the  benefit  of  the employees and other persons as may have an interest in the fund.  (g)  (1)  Any  person  who  wilfully violates or causes or induces the violation of any provision of this  article  or  any  regulation  issued under it shall be in violation of the provisions of this chapter.  (2)  Any  person  who  makes  a false statement or representation of a material fact, knowing it  to  be  false,  or  who  knowingly  fails  to disclose  a material fact in any registration, examination, statement or report required under this article or the regulations  thereunder  shall be guilty of a misdemeanor.  (3) Any person who makes a false entry in any book, record, report, or statement  required  by this article or any regulation thereunder, to be kept by him for any employee welfare fund,  with  intent  to  injure  or defraud  such  fund or any beneficiary thereunder, or to deceive any one authorized or entitled to examine the affairs of  such  fund,  shall  be guilty of a misdemeanor.  (4)  Nothing  in  paragraph  two  or three of this subsection shall be construed in any manner to limit the effect of paragraph one hereof.