2023 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, the Candor central
school district, the Cleveland Hill  union  free  school  district,  the
Depew union free school district, the Liverpool central school district,
the  Auburn  enlarged  city  school  district, the Carmel central school
district, and  the  Canastota  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.