NY Gen Mun L § 6-N (2021)
2021 New York Laws GMU - General Municipal Article 2 - General Municipal Finances 6-N - Insurance Reserve Fund.

§  6-n. Insurance reserve fund. 1. a. "Municipal corporation," as used in this section, shall mean  a  municipal  corporation,  as  defined  in section  two  of this chapter, school district, except a school district in a city with a population of one hundred twenty-five thousand or more, board of cooperative educational services,  fire  district,  a  district corporation  and  a  special improvement district governed by a separate board of commissioners.   b. "Judgments", "actions" and "claims", as used in this section, shall mean  those  judgments,  actions  and  claims  against   the   municipal corporation   that   arise  out  of  those  kinds  of  risks  for  which expenditures may be made pursuant to subdivision two of this section.   2. (a) The governing board of any municipal corporation may  establish a  reserve  fund  to  be  known  as the insurance reserve fund. Upon the creation of the fund, the municipality may make  expenditures  from  the fund  for  any  loss,  claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance, except those kinds of risks for which insurance is  authorized  pursuant to  paragraph  one,  two,  three, fifteen, sixteen, seventeen, eighteen, twenty-two or twenty-three of subsection (a) of section one thousand one hundred thirteen of the insurance  law,  or  for  payments  in  lieu  of contributions under article eighteen of the labor law; provided however, that  no  municipality  shall make an expenditure from such fund for any loss, claim, action or judgment for which the municipal corporation  has established  a  reserve fund under any other provision of law; provided, further that the Scarsdale union free school  district,  the  Mamaroneck union free school district, the Minisink Valley central school district, the  Vernon  Verona  Sherrill  central  school district, the Ithaca city school  district,  the  Kenmore-Town  of  Tonawanda  union  free  school district,  the Bedford central school district, the Grand Island central school district, the Tonawanda city school district, the  enlarged  city school district of Middletown, the Frontier central school district, the Owego Apalachin central school district the Maine-Endwell central school district  the  Binghamton city school district, and the Depew union free school district, and the  Liverpool  central  school  district  and  the Carmel  central school district may establish insurance reserve funds in compliance with this section and article seventy-four of  the  education law  and  such school districts may make expenditures in compliance with this section and article seventy-four of the  education  law  from  such reserve  fund  for  any  loss,  claim,  action or judgment for which the school districts are authorized or  required  to  purchase  or  maintain insurance  for  the  kinds  of  risks  for which insurance is authorized pursuant to paragraph three of subsection (a) of  section  one  thousand one hundred thirteen of the insurance law.  (b)  Notwithstanding any other provision of law to the contrary, where a municipal corporation has previously established a reserve fund  under another  provision  of law for a type of risk for which expenditures may be  made  under  paragraph  (a)  of  this  subdivision,  the   municipal corporation  may, by resolution, discontinue such other reserve fund and transfer any unexpended balance to the reserve  fund  established  under this  section;  provided,  however,  that  to the extent such unexpended balance is subject to any liabilities incurred or  accrued  against  the other reserve fund, any unexpended balances so transferred shall only be used  for  such  incurred  or  accrued liabilities including expenses in connection therewith. Prior to the discontinuance of the  other  reserve fund,  the  fiscal and legal officers of the municipal corporation shall certify to the governing board thereof the amount that may be  necessary to satisfy all liabilities incurred or accrued against it.   3. There may be paid into such fund:    a. Such amounts as may be provided by budgetary appropriations;   b.  Amounts  from  any  other  fund  authorized  by  this  chapter  by resolution subject to permissive referendum; and   c. Such other funds as may be legally appropriated.   4. The amount paid into such fund during any  fiscal  year  shall  not exceed  the  greater of thirty-three thousand dollars or five per centum of the total budget for such fiscal year.   5. The moneys in such fund shall  be  deposited  and  secured  in  the manner  provided by section ten of this article. The governing board, or the chief fiscal officer of such municipal corporation, if the governing board shall delegate such duty to him, may invest  the  moneys  in  such fund  in  the  manner  provided  by  section eleven of this article. Any interest earned or capital gain realized on the money  so  deposited  or invested shall accrue to and become part of such fund.   6.  The  chief fiscal officer shall account for this fund separate and apart from all other funds of the municipal corporation. Such accounting shall show: the source, date and amount of each sum paid into the  fund; the interest earned by such fund; capital gains or losses resulting from the  sale  of investments of this fund; the order, purpose thereof, date and amount of each payment from this  fund;  the  assets  of  the  fund, indicating  cash balance and a schedule of investments. The chief fiscal officer, within sixty days of the end of each fiscal year, shall furnish a detailed report of the operation and condition of  this  fund  to  the governing  board.  The  chief  fiscal officer shall also keep a separate account for each kind of risk funded pursuant to subdivision two of this section.   7. Notwithstanding any provision of law  to  the  contrary,  municipal corporations  shall  not  have the power to enter into agreements, among themselves or one for the other, to pool their reserve fund  established pursuant  to  subdivision  two  of  this  section  for  the  payment  of judgments, actions and claims.   8. Any action  or  claim  shall  be  compromised  or  settled  by  the governing  board,  officer  or  employee  of  the  municipal corporation authorized to settle or compromise actions or claims on  behalf  of  the municipal corporation.   9. An expenditure may be made from this fund for the payment of all or part of the cost, including interest, of:   a. Judgments;   b.  Actions  that  have been compromised or settled and that have been approved by the court in which the action or proceeding is pending;   c. Claims that have been settled or compromised  and  that  have  been approved  by  a justice of the supreme court of the judicial district in which the municipal corporation is located;   d. The uninsured  portion  of  any  loss  to  property  owned  by  the municipal  corporation  if  such  loss  arises  out  of  a  kind of risk described in subdivision two of this section.   e. Expert or professional services rendered  in  connection  with  the investigation, adjustment or settlement of claims, actions or judgments.   10. The order of the court or the justice approving such settlement or compromise  may  be granted upon motion of the body, officer or employee of the municipal corporation  authorized  to  do  so,  supported  by  an affidavit  setting  forth  the  cause  of  action  or  claim against the municipal corporation and also such other information which, in  its  or his   opinion,  will  enable  the  court  or  justice  to  arrive  at  a determination that such compromise or settlement is just, reasonable and to the interest of the municipal  corporation.  Such  body,  officer  or employee  may  also present the affidavit of other persons in support of such motion. The court or the justice, in order  to  arrive  at  such  a  determination,  may  require  such  body, officer or employee to present additional information by a supplementary affidavit or affidavits or may require  other  persons  to  present  additional  information  by  their affidavits.   11. Notwithstanding subdivisions eight and nine of this section or any other  provision  of  law  to  the  contrary,  the governing body of any municipal corporation may,  without  judicial  approval,  compromise  or settle  any action or claim and make an expenditure from this fund where the amount of such settlement or compromise does not exceed  twenty-five thousand dollars.   12.  The  members  of  the  governing  board  shall  be  guilty  of  a misdemeanor if they:   a. Authorize a withdrawal from this fund for  any  purpose  except  as provided in this section; or   b.  Expend any money withdrawn from this fund for a purpose other than as provided in this section.   13. If,  after  the  establishment  of  such  fund,  the  municipality determines  that  such fund is no longer needed, the moneys remaining in such fund may be transferred to any other reserve fund of the  municipal corporation authorized by this chapter that is comprised of moneys which were  raised  on  the  same  tax  base as the moneys in the reserve fund established under this section or section thirty-six  hundred  fifty-one of  the  education  law, only to the extent that the moneys in this fund shall exceed the sum sufficient  to  pay  all  liabilities  incurred  or accrued against it. Prior to the discontinuance of such fund, the fiscal and  legal  officers  of such municipal corporation shall certify to the governing board thereof the amount that may be necessary  to  retain  in such  fund to satisfy all liabilities incurred or accrued against it and such sum shall be retained in the fund for payment of  such  amounts  or until later certified that such funds are no longer needed.