2023 New York Laws › WKC - Workers' Compensation › Article 4 - Security for Compensation › 50 - Security for Payment of Compensation.

§  50.  Security for payment of compensation. An employer shall secure
compensation to his employees in one or more of the following ways:
1. By insuring and keeping insured the payment of such compensation in
the state fund, or
2. By insuring and keeping insured the payment  of  such  compensation
with  any  stock  corporation,  mutual corporation or reciprocal insurer
authorized to transact the business of workers'  compensation  insurance
in this state through a policy issued under the law of this state.
3.  By  furnishing  satisfactory  proof  to the chair of his financial
ability  to  pay  such  compensation  for  himself,  or  to   pay   such
compensation  on  behalf  of  a  group  of  employers in accordance with
subdivision ten of this section, in which case the chair  shall  require
the  deposit  with  the  chair  of such securities as the chair may deem
necessary of the kind prescribed in subdivisions one, two,  three,  four
and  five,  and subparagraph (a) of paragraph three of subdivision seven
of section two hundred thirty-five of the banking law, or the deposit of
cash, or the filing  of  irrevocable  letters  of  credit  issued  by  a
qualified  banking  institution  as  defined by rules promulgated by the
chair or the filing of a bond of a surety company authorized to transact
business in this state, in an amount to be determined by the  chair,  or
the posting and filing as aforesaid of a combination of such securities,
cash,  irrevocable  letters of credit and surety bond in an amount to be
determined by the chair, to secure his liability to pay the compensation
provided in this chapter. Any such surety bond must be  approved  as  to
form  by the chair. If an employer or group of employers posts and files
a combination of securities, cash, irrevocable  letters  of  credit  and
surety bond as aforesaid, and if it becomes necessary to use the same to
pay the compensation provided in this chapter, the chair shall first use
such  securities  or cash or irrevocable letters of credit and, when the
full amount thereof has been exhausted, he shall then require the surety
to pay forthwith to the chair all or any part of the penal  sum  of  the
bond  for  that  purpose. The chair may also require an agreement on the
part of the employer or group of employers to pay  any  awards  commuted
under section twenty-seven of this chapter, into the special fund of the
state  fund,  as  a  condition  of his being allowed to remain uninsured
pursuant to this section. The chair shall have the authority to deny the
application  of  an  employer  or  group  of  employers  to   pay   such
compensation  for himself or to revoke his consent furnished, under this
section at any time, for good cause shown.  The  employer  or  group  of
employers  qualifying  under  this  subdivision  shall  be  known  as  a
self-insurer.
If for any reason the status of an  employer  or  group  of  employers
under this subdivision is terminated, the securities or the surety bond,
or  the  securities,  cash,  or irrevocable letters of credit and surety
bond, on deposit referred to herein shall remain in the custody  of  the
chair for such time as the chair may deem proper and warranted under the
circumstances.  In lieu thereof, and at the discretion of the chair, the
employer, his  or  her  heirs  or  assigns  or  others  carrying  on  or
liquidating  such  business,  may  execute  an  assumption  of  workers'
compensation liability insurance policy as described herein. Separately,
the chair may execute an assumption of workers'  compensation  liability
insurance  policy  as  described  herein  on behalf of the special funds
created under the provisions of subdivisions eight and nine  of  section
fifteen  and  section twenty-five-a of this chapter, and notwithstanding
any provision to the contrary the chair may  execute  an  assumption  of
workers'  compensation  liability  insurance  policy  on  behalf  of the
uninsured  employers'  fund.  An  assumption  of  workers'  compensation
liability policy referred to herein shall secure such further and future

contingent  liability  as  may  directly  or indirectly arise from prior
injuries to workers and be incurred by reason of any change in condition
of such workers  warranting  the  board  making  subsequent  awards  for
payment  of  additional  compensation.  Such  policy  shall be in a form
approved by the superintendent of financial services and issued  by  the
state  fund  or  any  insurance  company licensed to issue this class of
insurance in this state or, upon application by  the  chair,  any  other
insurance  company deemed by the superintendent of financial services to
be an acceptable issuer. In the event that such policy is issued  by  an
insurance  company  other than the state fund, then said policy shall be
deemed of the kind specified in paragraph fifteen of subsection  (a)  of
section  one  thousand  one  hundred  thirteen  of the insurance law and
covered by the  workers'  compensation  security  fund  as  created  and
governed by article six-A of this chapter. It shall only be issued for a
single  complete  premium  payment  in  advance  and in an amount deemed
acceptable by the chair and the superintendent of financial services. In
lieu of the applicable premium charge ordinarily required to be  imposed
by  a carrier, said premium shall include a surcharge in an amount to be
determined by the chair to: (i) satisfy all assessment liability due and
owing to the board and/or the chair under this chapter; and (ii) satisfy
all future assessment liability under this section, and which  surcharge
shall  be  adjusted  from  time  to  time  to reflect any changes to the
assessment  of  group  self-insured  employers,  including  any  changes
enacted  by  the  chapter  of  the  laws of two thousand eleven amending
sections fifteen  and  one  hundred  fifty-one  of  this  chapter.  Said
surcharge shall be payable to the board simultaneous to the execution of
the  assumption  of  workers'  compensation  liability insurance policy.
However, the payment of said surcharge does not relieve the carrier from
any other liability, including liability owed to the  superintendent  of
financial  services  pursuant  to  article  six-A  of this chapter. When
issued such policy shall be non-cancellable  without  recourse  for  any
cause during the continuance of the liability secured and so covered.
3-a.  Group  self-insurance.  (1) Definitions. As used in this chapter
the term "employers" shall include: (a) employers with related  activity
in  a  given industry which shall include municipal corporations as that
term is defined in sections two and six-n of the general municipal  law,
employing  persons  who  perform  work  in  connection  with  the  given
industry,  (b)  an  incorporated  or   unincorporated   association   or
associations  consisting  exclusively  of  such  employers provided they
employ persons who perform such related work in the given industry,  and
(c)  a  combination of employers as described in subparagraph (a) hereof
and  an  association  or  associations  of  employers  as  described  in
subparagraph (b) hereof.
(2) (a) Any group consisting exclusively of such employers may adopt a
plan  for  self-insurance,  as  a group, for the payment of compensation
under this chapter to their employees, except that  no  new  groups  may
adopt  such  a plan, and no group not composed solely of public entities
set forth in  subparagraph  (a-1)  of  this  paragraph  may  insure  any
liabilities  for  any employers on and after January first, two thousand
twelve, except as provided for in paragraph  ten  of  this  subdivision.
Under  such  plan  the  group  shall  assume  the  liability  of all the
employers within the group and pay all compensation for which  the  said
employers  are  liable  under  this  chapter, except that in the case of
public group self-insurers as defined  in  subparagraph  (a-1)  of  this
paragraph no proof of financial ability or deposit of securities or cash
need  be  made in compliance with this subdivision. The group qualifying
under this subdivision shall be known as a group  self-insurer  and  the

employers  participating  therein  and covered thereby shall be known as
members.
(a-1)  Any  group  consisting  exclusively  of  public corporations as
defined in section sixty-six of the  general  construction  law,  county
self-insurance  plans  established  under  article five of this chapter,
boards of cooperative educational services and consortia established  by
boards of cooperative educational services, and any other entity defined
as  a  public  entity  under  paragraph  fifty-one  of subsection (a) of
section one hundred seven of the insurance law except the state  of  New
York,  may  adopt a plan for self-insurance, as a group, for the payment
of compensation under this chapter to  their  employees.  Such  a  group
shall be known as a "public group self-insurer". A county self-insurance
plan  established  under  article  five  of this chapter is not itself a
public group self-insurer and is not itself subject to the  requirements
of  this  section,  but  may join a public group self-insurer and, if it
does so, shall assume all of the obligations of its participants to  the
public group self-insurer. A public group self-insurer shall comply with
all  of  the requirements of this subdivision, including any obligations
imposed upon a group administrator, but is not required  to  secure  the
services  of a group administrator or obtain a license authorizing it to
act as a group self-insurer administrator, to furnish satisfactory proof
to the chair of its financial  ability  to  pay  compensation  from  its
revenues,  their  source  and assurance of continuance, to pay a license
fee, or to deposit securities, post a bond or  provide  other  security,
except as specifically provided in this subdivision.
(b)  Where  such  plan is adopted the group self-insurer shall furnish
satisfactory proof to the chair of its financial  ability  to  pay  such
compensation  for  the  members  in  the  industry  covered  by  it, its
revenues, their source and assurance of  continuance.  The  chair  shall
require  the  deposit with the chair of such securities as may be deemed
necessary of the kind prescribed in subdivisions one, two,  three,  four
and  five,  and subparagraph (a) of paragraph three of subdivision seven
of section two hundred thirty-five of the banking law or the deposit  of
cash  or  the  filing  of  irrevocable  letters  of  credit  issued by a
qualified banking institution as defined by  rules  promulgated  by  the
chair or the filing of a bond of a surety company authorized to transact
business  in  this  state,  in  an amount to be determined to secure its
liability to pay the compensation of each employer  as  above  provided.
Such  surety  bond  must  be approved as to form by the chair. The chair
shall require each group self-insurer to provide regular reports no less
than annually, which  shall  include  but  not  be  limited  to  audited
financial   statements,   actuarial  opinions  and  payroll  information
containing proof that it  is  fully  funded.  Such  reports  shall  also
include   a  contribution  year  analysis  detailing  contributions  and
expenses associated with each specific contribution year.  For  purposes
of this paragraph, proof that a group self-insurer is fully funded shall
at  a  minimum  include  proof  of  unrestricted  cash  and  investments
permitted by regulation of the chair of at least one hundred percent  of
the total liabilities, including the estimate presented in the actuarial
opinion  submitted  by  the  group  self-insurer in accordance with this
chapter. The chair by regulation, may set  further  financial  standards
for  group self-insurers. Any group self-insurer that fails to show that
it is fully funded shall be deemed underfunded, and must submit  a  plan
for achieving fully funded status which may include a deficit assessment
on members of such group self-insurer which shall be subject to approval
or  modification  by  the  chair.  The  amount of such under-funding, as
measured by the actuarial opinion or assumption of loss policy quotation
submitted by the group, shall be considered unfunded claims as set forth

in subdivision two of section sixteen hundred  eighty-q  of  the  public
authorities  law  as added by section 35 of Part GG of chapter 57 of the
laws of 2013.
(c)  The  chair shall evaluate, no less than once every three years, a
group  self-insurer's  compliance  with  the  financial  and  regulatory
requirements  for  self-insurance.  The  chair  may engage any qualified
person or organization to assist with  such  evaluation  and  any  costs
incurred  by  the  chair  shall be borne by the group self-insurer under
examination. Failure to submit to such independent review or to pay such
costs, upon  demand  of  the  chair,  shall  be  sufficient  grounds  to
terminate coverage of the group self-insurer.
(d)  The  chair  may  require  reports  to  be prepared by an auditor,
actuary or other consultant, selected by the board or,  at  the  chair's
discretion,  by  the  group  self-insurer  from  a  list  which shall be
pre-approved by the chair to determine whether  the  group  self-insurer
meets  the  financial  criteria  for  self-insurance.  All  actuaries so
selected shall be  fellows  or  associates  of  the  casualty  actuarial
society.
(e)  The chair may also require that any and all agreements, contracts
and other pertinent  documents  relating  to  the  organization  of  the
members in the group self-insurer shall be filed with the chair.
(f)  The  chair  shall  have the authority to revoke consent furnished
under this section at any time for good cause shown.
(g) Prior  to  the  requested  effective  date  of  the  participating
agreement,  a  group self-insurer shall notify the chair on a prescribed
form  of  a  new  group  self-insurer  member  and  file  (1)  a  member
application   and  (2)  a  copy  of  the  properly  executed  prescribed
participation agreement wherein the member acknowledges their joint  and
several obligation for their period of membership. The board shall, on a
form promulgated by the chair, provide notice of the member's rights and
responsibilities  as a group self-insurer member, including the member's
assumption of joint and several liability, and  require  the  member  to
return a signed copy to the chair as a condition of membership.
(h)  Any  member  terminating membership in a group self-insurer after
less than four years in such group self-insurer, and  any  member  in  a
group self-insurer that has defaulted, shall be precluded from obtaining
prospective  coverage  from  any  group  self-insurer for a period of at
least three years from the effective date of termination.
(3) A member's participation in a group self-insurer shall not relieve
it of its liability for compensation prescribed by this  chapter  except
by  the  payment  thereof  by  the group self-insurer or by itself. Each
member shall be responsible, jointly and severally, for all  liabilities
of  the group self-insurer provided for by this chapter occurring during
its respective period of membership, and such liability shall attach  to
any recipient of a conveyance of assets made in violation of subdivision
(a)  of section two hundred seventy-four of the debtor and creditor law.
As between the  employee  and  the  group  self-insurer,  notice  to  or
knowledge  of  the  occurrence  of  the injury on the part of the member
shall be deemed notice or knowledge, as the case may be, on the part  of
the  group  self-insurer;  jurisdiction  of  the  member  shall, for the
purpose of this chapter, be jurisdiction of the group  self-insurer  and
such  group  self-insurer shall in all things be bound by and subject to
the  orders,  findings,  decisions  or  awards  rendered   against   the
participating   member   for  the  payment  of  compensation  under  the
provisions  of  this  chapter.  The  insolvency  or  bankruptcy   of   a
participating  member  shall not relieve the group self-insurer from the
payment of compensation for injuries or death sustained by  an  employee
during the time the member was a participant in such group self-insurer.

Notice  of  termination of a participating member shall not be effective
until at  least  ten  days  after  notice  of  such  termination,  on  a
prescribed  form,  has  been  either filed in the office of the chair or
sent  by  certified  or registered letter, return receipt requested, and
also  served  in  like  manner  upon  the  member.  In  the  event  such
termination  is due to a member's failure to pay required contributions,
such member's termination shall not be rescinded more than three times.
(3-a) If the chair determines that a  public  group  self-insurer  has
become insolvent, the chair shall pay the compensation and benefits that
would  otherwise  have  been  required  to be paid by the members of the
public group self-insurer from administration expenses  as  provided  in
section  one hundred fifty-one of this chapter upon audit and warrant of
the comptroller and upon vouchers approved by the chair, which  payments
shall  be  considered  expenses  of administration. For purposes of this
paragraph, a public group self-insurer is insolvent when  the  value  of
the  public  group self-insurer's assets is less than the total costs of
the workers' compensation liabilities that it is anticipated the  public
group  self-insurer  will  be  required to pay within the succeeding six
months or that the compensation and benefits provided  by  this  chapter
may  be  unpaid by reason of the default of a public group self-insurer.
Upon the insolvency of a public group self-insurer,  each  member  shall
assume  responsibility  for  the continued administration and payment of
all  claims  against  it,  provided  however  that  the   public   group
self-insurer  shall,  within  thirty  days,  turn its assets over to the
chair and the chair shall assume the  administration  and  cost  of  the
claims  of  the public group self-insurer for a period not to exceed one
year. During the period of chair administration of claims,  each  member
of the public group self-insurer shall secure the services of a licensed
claims   administrator   and   the  chair  shall  segregate  the  claims
obligations of the insolvent public group self-insurer by  member,  and,
if  necessary  segregate  an  adequate  claim  reserve for any claims of
defunct or insolvent members of the insolvent public group self-insurer.
Not later than one year from the assumption of the administration of the
claims of the public group self-insurer, each member  of  the  insolvent
public  group self-insurer shall resume administration of its own claims
and the chair shall return to each member whatever pro rata share of the
public group self-insurer's assets remain  after  the  period  of  chair
administration. The chair shall be reimbursed for any payment made under
this  paragraph  by  the  public  group  self-insurer itself and, if the
public group self-insurer is unable to reimburse  the  chair  fully  for
payments  made  by  the  chair,  then  by the member of the public group
self-insurer against which  the  claim  is  asserted.  Further,  nothing
herein  shall  preclude  the  chair  from  directing that an underfunded
public group self-insurer levy an assessment on its members as part of a
plan for achieving fully funded  status  which  may  include  a  deficit
assessment  on members of such group self-insurer which shall be subject
to approval or modification by the chair. No member shall be liable  for
any  obligations  of the public group self-insurer or any obligations of
any member of the public group self-insurer. The chair shall require any
member that has pending claims but has failed to secure the services  of
a  licensed  claims administrator to resume administration of the claims
to pay to the chair any expenses the chair incurs in  administering  and
paying those claims.
(4)  Each  group  self-insurer, in its application for self-insurance,
shall set forth the  names  and  addresses  of  each  of  its  officers,
directors,  trustees, third party administrator and group administrator.
Notice of any change in the officers, directors, trustees,  third  party
administrator  or group administrator shall be given to the chair within

ten days thereof. No officer, director, trustee, employee,  third  party
administrator  or  group  administrator  of  the  group self-insurer may
represent or participate directly or indirectly on behalf of an  injured
worker  or  his  dependents in any workers' compensation proceeding. All
employees of members participating in group self-insurance shall be  and
are deemed to be included under the group self-insurance plan.
(5)  (a)  Each group self-insurer shall secure the services of a group
administrator to be responsible for assisting the group self-insurer  in
complying  with  the  provisions  of  this  section  and  the  rules and
regulations  promulgated  hereunder,  and  for   coordinating   services
including  but  not  limited  to claims processing, loss control, legal,
accounting and actuarial services. No person, firm or corporation  shall
coordinate  such  services  or  otherwise carry out the tasks of a group
administrator as provided in this  subdivision  or  in  the  regulations
issued  pursuant  thereto  on behalf of a group self-insurer unless such
person shall have obtained from the chair a license  authorizing  it  to
act  as a group self-insurer administrator, which license may be revoked
for good cause. The chair shall promulgate regulations setting forth any
additional qualifications for such license, governing  the  conduct  and
compensation of group self-insurer administrators, and setting a license
fee  in  an amount not less than five thousand dollars per year for such
license for each group self-insurer the administrator administers.  Each
administrator  shall  post a bond in the amount of five hundred thousand
dollars for each group self-insurer administered or such other amount as
may be set by the chair based on the cost and availability of such bond,
from which the chair may recover any recoveries or penalties against the
administrator under this section. Nothing in this section shall  relieve
the  trustees  of  a group self-insurer of any fiduciary obligation they
hold to the other members of such group self-insurer.
(b) A group administrator that knowingly and with  intent  to  mislead
makes  a  material  misrepresentation  of  a material fact in soliciting
members in a group self-insurer shall be guilty of  a  class  E  felony.
Additionally, the chair may impose a civil penalty of up to ten thousand
dollars for each such violation.
(c)  A group administrator, actuary or accountant that knowingly makes
a material misrepresentation of a material fact concerning the financial
status of any group self-insurer to the chair or board, or in its annual
report to members of the group self-insurer, shall be guilty of a  class
E  felony. The chair may impose a civil penalty of up to twenty thousand
dollars for each such violation. A second and  subsequent  violation  of
this  paragraph  shall  be  a class D felony. The chair may recover in a
civil  action  any  damages  resulting  from  such   misrepresentations,
including the value of any amount assessed against any entities that are
not  members  of  the defaulted self-insurer that resulted from any such
misrepresentation.
(d) (1) A group administrator shall provide an annual  written  report
to  all  members  of the group self-insurer and to the board which shall
include:
a. the members of the group self-insurer;
b. the group administrator and trustees;
c. the results of the most recent financial audit;
d. the percentage of total liabilities held  by  the  self-insurer  in
unrestricted  cash and investments permitted by regulation as determined
in  accordance  with  subparagraph  (b)  of  paragraph   two   of   this
subdivision;
e. the number and amount of rate deviations provided to members during
the  prior  year  and  whether the recipient of any such deviation was a
trustee; and
f. such other information as the chair may direct.
The  group  administrator  shall  provide  a  copy  of the most recent
financial audit to any group self-insurer member upon written request.
(2) The chair shall make available to the public, on its  website  and
in writing upon request:
a. the identity of all group self-insurers that have provided workers'
compensation under this subdivision in the prior three years;
b. the group administrator of each such group self-insurer;
c. the financial condition of all group self-insurers as determined by
the  board  in  the  last  financial  audit  and  the board's regulatory
definition of assets; and
d. such other information as the chair may direct, but which shall not
include any confidential or proprietary information.
The board may direct the disclosure of any non-proprietary information
regarding any group self-insurer, including whether a member is a member
thereof, to any claimant upon a showing of need.
(e) (1) The chair may condition the  issuance  or  continuation  of  a
license  under  this  subdivision  upon  the  presentation  by  a  group
administrator of such information as the board  requests,  at  any  time
chosen  by  the chair or at regular intervals, including but not limited
to the annual financial statements of the group administrator  detailing
the   compensation   the   administrator  and  its  substantially  owned
affiliated entities, as defined in section two  of  this  chapter,  have
received  or  shall  receive from the group self-insurer or its members,
and  the  method  by  which  such  compensation  has  been  or  will  be
calculated.  The  chair  may  issue  regulations governing the method of
calculating  compensation  which  a  group  administrator  may  receive,
including  restrictions on the process by which such compensation may be
set.
(2) The chair may revoke the license of any group  administrator  that
receives compensation in violation of such regulations, and may impose a
penalty of up to two times any compensation so received.
(f)  (1)  No officer or director of, or person holding five percent or
more ownership interest in, a group administrator shall within two years
of serving in such capacity or holding such ownership interest, serve in
any capacity or hold any ownership interest in a  workers'  compensation
carrier  that  provides  or solicits the provision of compensation under
this title for any employer that is  or  was  a  member  of  such  group
self-insurer.  No officer or director of, or person holding five percent
or more ownership interest in a group administrator shall serve in  such
capacity  or  hold such ownership interest in a carrier that provides or
solicits excess coverage for any group self-insurer administered by such
administrator.
(2) The chair may impose a civil penalty of up to ten thousand dollars
for each violation of this paragraph.
(g) Each group self-insurer shall submit to the chair  copies  of  any
agreement  or  contract  with an entity that serves or will serve as its
group administrator, accountant, actuary or third party administrator at
least thirty days prior to becoming effective, and the effectiveness  of
such contract shall be conditioned on the absence of an objection by the
board  during  the thirty day period. Contracts that shall be subject to
such objection shall include any contract in  violation  of  regulation;
and  any  contract  that  does  not  provide  reasonable cancellation or
renewal terms, including any contract that requires an  affirmative  act
by  the trustees of the group self-insurer to prevent automatic renewal,
or that does not permit cancellation for negligence, violation  of  law,
or other good cause.
(6)  (a)  Group  self-insurers  must  file  with the board, as soon as
practicable but no later than sixty days prior to the start of the  fund
year  a  rating  plan  which  is  supported  by  an actuarial rate study
prepared by an independent,  qualified  actuary  that  is  a  fellow  or
associate of the casualty actuarial society, that clearly identifies the
actuary's indicated rate assumptions therein. The rating plan must apply
consistently  to all members, and must provide for a common renewal date
for all group self-insurer members. The  rates  filed  can  be  adjusted
based  on  an  experience  modification  calculated  for every member in
accordance with the experience rating plan promulgated by  the  workers'
compensation  rating  board.  Experience  modification  formulas must be
applied identically  to  all  members.  Other  rate  deviations  may  be
permissible  provided  a  plan  has  been  approved  by  the board. Such
deviations shall not be in  excess  of  ten  percent  of  the  actuary's
indicated rate unless otherwise approved by the board for a fully funded
group  self-insurer,  and  shall in no event result in amounts less than
the actuary's overall indicated rate. The chair by  regulation  may  set
further rate plan and actuarial reporting standards.
(b)  If  the  chair  has  cause to believe that a group self-insurer's
contribution rates including experience modifications do not conform  to
the  requirements of this part then he or she may require the submission
of a report identifying the contributions paid by each  of  the  members
for  the  preceding  year,  the  projected  contributions for each group
self-insurer member for the current fiscal year, and the manner in which
such contributions were calculated. If, after review by the  chair,  the
group  self-insurer's contribution rates are deemed to be detrimental to
its solvency, the chair may mandate that the group  self-insurer  modify
such rates as the chair directs. The chair may impose a penalty of up to
five  thousand  dollars for each violation of this subparagraph. A group
self-insurer's failure to adhere to the rating structure  determined  by
the board shall constitute good cause for termination.
(7)  (a)  If  for any reason, the status of a group self-insurer under
this subdivision is terminated, including by operation  of  law  on  and
after  January first, two thousand twelve, the securities or cash or the
surety bond on deposit referred to herein shall remain in the custody of
the chair for such time as the chair may deem proper and  warranted.  In
lieu   thereof,   and   at  the  discretion  of  the  chair,  the  group
self-insurer, its heirs or assigns or others carrying on or  liquidating
such group self-insurer, including the chair on the group self-insurer's
behalf,  may  execute  an  assumption of workers' compensation liability
insurance policy securing such further and future  contingent  liability
as may arise from prior injuries to workers and be incurred by reason of
any  change in the condition of such workers warranting the board making
subsequent awards for payment of additional  compensation.  Such  policy
shall  be in a form approved by the superintendent of financial services
and issued by the state fund or any insurance company licensed to  issue
this  class of insurance in this state. In the event that such policy is
issued by an insurance company other than  the  state  fund,  then  said
policy  shall  be  deemed  of the kind specified in paragraph fifteen of
subsection (a) of section one  thousand  one  hundred  thirteen  of  the
insurance  law and covered by the workers' compensation security fund as
created and governed by article six-A of this chapter. It shall only  be
issued  for  a  single  complete premium payment in advance by the group
self-insurer and in an amount deemed acceptable by  the  chair  and  the
superintendent of financial services.  In lieu of the applicable premium
charge  ordinarily  required  to  be  imposed by a carrier, said premium
shall include a surcharge in an amount to be determined by the chair to:
(i) satisfy all assessment liability due and owing to the  board  and/or

the  chair  under  this  chapter; and (ii) satisfy all future assessment
liability under this section, and which surcharge shall be adjusted from
time to  time  to  reflect  any  changes  to  the  assessment  of  group
self-insured  employers, including any changes enacted by the chapter of
the laws of two  thousand  eleven  amending  sections  fifteen  and  one
hundred  fifty-one  of  this chapter. Said surcharge shall be payable to
the board simultaneous to the execution of the  assumption  of  workers'
compensation  liability  insurance  policy. However, the payment of said
surcharge does  not  relieve  the  carrier  from  any  other  liability,
including  liability  owed  to  the superintendent of financial services
pursuant to article six-A of this chapter. When issued such policy shall
be noncancellable without recourse for any cause during the  continuance
of the liability secured and so covered.
(b)  The  chair  shall  levy an interim assessment on the members of a
defaulted group self-insurer within one  hundred  twenty  days  of  such
default  or  of  the  effective  date  of the chapter of the laws of two
thousand eight which amended this subdivision, whichever is  later,  and
against  the  members  of  any  other terminated group self-insurer when
necessary, for such an amount as he or she determines to be necessary to
discharge all liabilities  of  the  group  self-insurer,  including  the
reasonable  cost  of  liquidation  such  as claims administration costs,
actuarial and accounting services, and the value of  future  assessments
on  members  of such group self-insurer as they are known at the time of
the assessment. The chair may  impose  subsequent  and  further  deficit
assessments,  or return funds to members, to adjust the moneys collected
to reflect the time of participation, and percent of group  self-insurer
liabilities  for  such  time. The time limitations included in the first
sentence of this subparagraph do not apply  to  the  imposition  of  any
subsequent  and  further  deficit  assessments  that  exceed the interim
assessment made by the  chair  against  members  of  a  defaulted  group
insurer   or   members  of  any  other  terminated  group  self-insurer.
Notwithstanding any such action by the chair, each member of  the  group
self-insurer  shall  remain  jointly  and  severally responsible for all
liabilities provided by  this  chapter  including  but  not  limited  to
outstanding  and  estimated future liabilities and assessments. Further,
separate and apart from, and in addition to a member's joint and several
liability and notwithstanding any payments made by any other members  of
the  group self-insurer pursuant to this subparagraph, in the event that
a member neglects or fails to pay an assessment levied pursuant to  this
subparagraph,  the  member  shall be deemed in default in the payment of
compensation. Such defaulting  member  is  subject  to  the  enforcement
provisions  of section twenty-six of this chapter for the payment of all
compensation relative to awards due and owing on  claims  filed  by  the
employees  of  such  member that have neither been paid by the member or
the group self-insurer. Nothing in  this  paragraph  shall  prevent  the
chair  from offering payment plans or settling claims against members of
any group self-insurer as necessary to facilitate collection.
(c) Upon the assumption of the  assets  and  liabilities  of  a  group
self-insurer  by the chair or his or her designee pursuant to regulation
of the chair, all records,  documents  and  files  of  whatever  nature,
pertaining  to  the group self-insurer, be they in the possession of the
group self-insurer or a third party, and all  remaining  assets  of  the
group  self-insurer,  shall  become  the  property  of  the  chair.  All
custodians of such records and/or funds shall turn over to the chair  or
his designee all such original records upon demand.
(8)  All the provisions of this chapter relating to self-insurance and
the  rules  and  regulations  promulgated  thereunder  shall  be  deemed
applicable  to  group  self-insurance.  The  chair  shall  implement the

provisions of this subdivision by promulgating rules and regulations but
no such rules or regulations shall be necessary  for  any  provision  of
this  subdivision  to be effective. The chair may impose a civil penalty
of  up  to  ten  thousand  dollars  for each violation against any group
self-insurer that violates any provision of this subdivision or  of  any
regulation  issued  pursuant  thereto  for  which a civil penalty is not
specified.
(10) (a) A non-municipal group of employers may  make  application  to
the chair to qualify jointly as a self-insurer, provided:
(1)  The members of the group secure the services of an administrator,
who shall carry out the responsibilities of such an administrator as set
forth in subdivision five of this section, and who shall be  subject  to
the restrictions and penalties applicable to an administrator under this
section;
(2)  The  members of the group, through the administrator, (a) jointly
deposit sufficient securities in accordance with  subdivision  three  of
this section or in a trust governed in accordance with Part 126 of title
11 of the New York code of rules and regulations to secure the liability
of  the members of the group to pay for all existing claims obligations,
provided such deposit shall be made  by  November  first,  two  thousand
eleven,  (b)  jointly  deposit  sufficient securities in accordance with
subdivision three of this section or in a trust governed  in  accordance
with  Part 126 of title 11 of the New York code of rules and regulations
to secure all anticipated present and future claims of  the  members  of
the  group,  by  November  first, two thousand fourteen, provided annual
deposits are made in accordance with a schedule set by the chair  on  or
before  November first of each year, and provided that the deposit shall
be deemed an asset of the group  for  the  purpose  of  determining  its
funding  status,  and  (c)  by  November  first, two thousand eleven and
thereafter, shall maintain funds sufficient for  all  other  liabilities
besides  claims in a trust governed in accordance with Part 126 of title
11 of the New York code of rules and regulations,  of  which  the  board
shall be the sole beneficiary, and the terms of the trust agreement, and
the  trustee,  shall  be  approved  by  the  chair  in  his  or her sole
discretion, and provided that any group self-insurer that does not  hold
such  funds in a trust that meets the terms of this paragraph shall post
them with the board;
(3) The group has been authorized  by  the  chair  to  self-insure  in
accordance  with  this  subdivision  prior to the effective date of this
paragraph;
(4) The group's  members  or  participant  employers  either  (a)  are
parties to collective bargaining agreements with the same unions; or (b)
fall  within  a limited number of payroll classifications, as set by the
chair, after giving due consideration to the risks associated  with  any
group  of  employers  self-insuring. However, employers that were active
prior to the effective date of this  section  and  whose  classification
codes do not meet the limitations on payroll classification codes or are
not  parties  to  collective  bargaining agreements with the same unions
will be permitted to remain in the trust provided (a) they  continue  to
meet  the  other  terms  and  conditions  of  the trust; and (b) any new
members shall be subject to the limitations on  the  number  of  payroll
classifications;  and  provided  further,  the  chair  shall revoke such
permission in the  event  the  trust  violates  paragraph  six  of  this
subdivision relating to filing of a rating plan;
(5)  The  group  was  fully  funded for three out of the previous five
years and at least ninety percent funded for one other year out  of  the
previous  five  years,  as determined by the chair following a financial

review, and the group self-insurer has  sufficient  funds  to  meet  its
liabilities;
(6) The group has a safety program acceptable to the chair; and
(7) The group is subject to such other limitations and requirements of
this  subdivision  unless  waived by the chair and to regulations of the
chair.
(b) The members of any such group shall enter into an agreement  among
themselves and with the group's administrator which shall, at a minimum:
(1)  Indicate  that  each  of  the members of the group is jointly and
severally liable for any liabilities of the group; and
(2) Provide for the collection of additional funds from group  members
in  the  event  the  deposit  with the board is insufficient to meet the
liabilities of the group.
(11) Former group self-insurer. Any group self-insurer that has ceased
to self-insure, or has ceased to self-insure any new  liabilities  after
January  first,  two thousand twelve in accordance with paragraph two of
this subdivision, shall remain subject to all  the  provisions  of  this
subdivision   and  the  regulations  issued  pursuant  thereto  and  any
assessments provided for by this section until such time  as  the  group
self-insurer no longer possesses any liabilities.
(12)  Any  non-municipal  group of employers authorized to self-insure
under paragraph ten of this section  on  or  after  January  first,  two
thousand twelve shall be deemed a "private self-insurer" for purposes of
the  assessments set forth in sections fifteen and one hundred fifty-one
of this chapter.
3-b. (a) Except as provided in subdivision three-d of this section, no
person,   firm   or   corporation,   other   than   an   attorney    and
counsellor-at-law, shall solicit the business of representing, or engage
in  representing  self-insurers  or  group  self-insurers, as defined in
subdivisions three and three-a of this section, before the board or  any
officer, agent or employee of the board assigned to conduct any hearing,
investigation  or  inquiry  relative  to  a  claim  for  compensation or
benefits under this chapter, unless he or she shall be a citizen of  the
United  States or a noncitizen lawfully admitted for permanent residence
in the United States, or a corporation organized under the laws  of  the
state  of  New  York,  and  shall have obtained from the board a license
authorizing him or her to appear in matters or  proceedings  before  the
board.  Such license shall be issued by the board in accordance with the
rules established by it. Any person, firm or corporation  violating  the
aforesaid  provisions  shall  be  guilty of a misdemeanor. The chair may
impose a civil penalty of up to one thousand dollars for each  violation
against any representative licensed in accordance with this section that
violates  any  provision  of  this  section  or of any regulation issued
pursuant thereto, in addition to any other sanctions provided for  under
this chapter.
(b)  The board, in its rules, may provide for the issuance of licenses
to persons, firms or corporations, upon  such  proof  of  character  and
fitness  as  it  may deem necessary, without annual license fee, and for
the giving of a bond running to the people of the  state  of  New  York,
conditioned upon the faithful performance of all duties required of such
person,  firm  or corporation, and in an amount to be fixed by the board
in its rules. Such bond shall be approved by the board as  to  form  and
sufficiency and shall be filed with it.
(c)  There  shall be maintained in each office of the board a registry
or list of all persons to whom licenses have been  issued,  as  provided
herein, which list shall be corrected as often as licenses are issued or
revoked.  Absence  of  record of the license issued, as herein provided,

shall be prima facie evidence that a person, firm or corporation is  not
licensed to represent self-insurers.
(d)  Any  such  license  may be revoked by the board for cause after a
hearing before it.
(e) No license shall be issued hereunder  for  a  period  longer  than
three  years  from  the  date  of  its  issuance. The provisions of this
section shall not apply to a regular employee of a self-insured employer
or to the state insurance fund acting in  accordance  with  an  insuring
agreement  with  the  state  as authorized pursuant to the provisions of
section eighty-eight-c of this chapter.
3-c. Notwithstanding any provision in this chapter or in any  general,
special  or  local law contained, all cash and securities deposited with
the chairman by an employer who is a party or a wholly owned  subsidiary
of a party to a plan heretofore or hereafter adopted under article seven
of  the  public  service  law  by  the transit commission-- metropolitan
division of the department of public service, and who is, or at the time
of the consummation of such plan was, a self-insurer under this chapter,
may be withdrawn upon, or at any time after, the  consummation  of  such
plan  as  hereinafter provided. All cash and securities deposited by any
such employer with and held by the chairman may be withdrawn upon, or at
any time after, the consummation of such plan where any city which is  a
party thereto and which is a self-insurer under this chapter assumes all
liabilities  of  or  claims against such employer under this chapter, as
follows: (a), where such plan provides that such city shall acquire,  or
that  such  employer  or  his  assigns  shall  retain, all the right and
interest of such employer in the  deposited  cash  and  securities,  the
chairman  shall  surrender  and deliver such cash and securities to such
city or to such employer or his assigns, as the case may  be,  upon  its
demand,  and  (b),  where  such  plan  provides  that such city and such
employer, or his assigns, shall each retain some right and  interest  in
such  cash and securities, the chairman shall surrender and deliver such
cash and securities to such city and to such  employer  or  his  assigns
upon their joint demand as shall be specified therein.
3-d. The state insurance fund, an insurance company duly authorized or
licensed  to  write  workers'  compensation  insurance  in this state, a
subsidiary or an affiliate of such an insurance company, or  a  licensed
or  authorized  adjusting company or association may apply for a license
from the board to solicit the business of  representing  and  engage  in
representing  self-insurers,  as  defined  in  subdivision three of this
section, before the board or any officer, agent or employee of the board
assigned to conduct any hearing, investigation or inquiry relative to  a
claim  for  compensation or benefits under this chapter. Any corporation
formed solely for the purpose of engaging in the activities described by
this subdivision shall be formed under the laws  of  the  state  of  New
York.
The  state  insurance  fund,  an  insurance company, its subsidiary or
affiliate, or such adjusting  company  or  association  shall  designate
those  employees  who are to appear in matters or proceedings before the
board on  behalf  of  self-insurers.  Such  employees  shall  obtain  an
authorization  from  the  board.  Upon application to the board for such
authorization all such employees who, on  the  effective  date  of  this
subdivision,  have  been  appearing in matters or proceedings before the
board on behalf of insurers for a period of at  least  two  years  shall
automatically  receive  a  temporary  authorization from the board. Such
temporary authorization shall  remain  in  effect  until  the  applicant
employee  has  been  granted or denied final authorization by the board.
The board in its rules shall provide for the issuance of  authorizations
to  such  employees and other designated employees. If the board, in its

rules, provides for the issuance of authorization to persons,  firms  or
corporations  under  subdivision three-b of this section upon such proof
of character and fitness as it may deem necessary,  the  same  proof  of
character  and  fitness  shall  be  required for an authorization issued
under this subdivision.
The state insurance fund, an  insurance  company  duly  authorized  or
licensed  to  write  workers'  compensation  insurance  in this state, a
subsidiary or an affiliate of such an insurance company, or  a  licensed
or  authorized adjusting company or association shall apply to the board
for the issuance of a license upon such proof of character  and  fitness
as  the  board  may  deem necessary. Such proof of character and fitness
shall be the same as that required by the board  of  persons,  firms  or
corporations  under  subdivision  three-b  of this section. If the board
charges a fee for a license issued under  subdivision  three-b  of  this
section,  the  same  amount  shall be charged for a license issued under
this subdivision. If the board requires for the giving of a bond running
to the people of the state of New York, conditioned  upon  the  faithful
performance  of all duties required of such person, firm, or corporation
licensed under subdivision three-b of this section, the  same  shall  be
required  for  a  license  under  this  subdivision.  Such bond shall be
approved by the board as to form and sufficiency and shall be filed with
it. All license and authorization fees collected under the provisions of
this subdivision shall be paid into  the  state  treasury.  Any  person,
insurance  company, its subsidiary or affiliate, or adjusting company or
association which violates the aforesaid provisions  of  this  paragraph
shall be guilty of a misdemeanor.
There  shall be maintained in each office of the board a registry list
of all persons to whom authorizations and licenses have been  issued  as
provided   herein,   which   list   shall   be  corrected  as  often  as
authorizations and licenses are issued or revoked. Absence of record  of
the  authorization or license issued, as herein provided, shall be prima
facie evidence that a person, firm or corporation is not  authorized  or
licensed  to  represent self-insurers. Any such authorization or license
may be revoked by the board for cause after  a  hearing  before  it.  No
authorization  or  license shall be issued hereunder for a period longer
than three years from the date of its issuance.
The board shall make rules pertaining to when  conflicts  of  interest
arise in individual cases which shall apply to those who are licensed or
authorized  to represent self-insurers under subdivision three-b of this
section or under this subdivision.
The provisions of article twenty-four of the insurance law, insofar as
applicable,  shall  apply  to  the  state  insurance   fund,   insurance
companies,  their  subsidiaries and affiliates or adjusting companies or
associations in their activities representing self-insurers  before  the
board.
3-e.  (a)  The  state insurance fund and any other insurer that issues
policies of workers' compensation insurance shall offer at the option of
the policyholder a deductible for  benefits  payable  under  a  workers'
compensation policy with an annual premium of twelve thousand dollars or
more,  if  in  the  opinion  of  the  state insurance fund or such other
insurer the policyholder meets the eligibility requirements of paragraph
(b) of this subdivision.
(b) A policyholder is eligible for a policy deductible for any renewal
period of the policy if such policyholder has  paid  the  entire  billed
premium  on  the policy for all policy periods within forty-five days of
each billing for the past three years. A policyholder will  continue  to
be  eligible  for  a  deductible provided that no part of any premium is
more than forty-five days overdue from the date billed or  reimbursement

for any deductible amount is unpaid by the policyholder to such insurer.
The  state  insurance fund or any other insurer that has issued a policy
with a  deductible  may  revoke  the  policyholder's  entitlement  to  a
deductible  if  the  policyholder  fails  to  reimburse  any  deductible
amounts, or pay any billed premium, within forty-five  days  after  such
reimbursement or premium payment has become due. Upon such revocation of
a  policyholder's entitlement to a deductible, the policyholder shall be
entitled to cancel  such  policy  and  such  policyholder  will  forfeit
eligibility for entitlement to a deductible as provided above.
(c)  Deductibles  shall  be offered by the state insurance fund or any
other insurer in writing to eligible policyholders at the  beginning  of
policy  periods,  in  the  amounts  of  one hundred dollars, two hundred
dollars, three hundred dollars, four hundred dollars  and  five  hundred
dollars,  and  thereafter, in increments of five hundred dollars up to a
maximum of  two  thousand  five  hundred  dollars  per  occurrence.  The
eligible  policyholder  shall  select,  in  writing, only one deductible
amount which shall be binding on such policyholder throughout the policy
period.
(d) If the policyholder selects a deductible under  paragraph  (c)  of
this  subdivision,  workers'  compensation  benefits  payable  under the
policy shall be paid by the state insurance fund or other insurer liable
under the policy to the person or provider  entitled  to  such  benefits
without regard to any deductible applied to such policy. Upon payment of
benefits  on a claim up to or exceeding the deductible amount, the state
insurance  fund  or  other  insurer  shall  be  entitled  to  bill   the
policyholder   for   reimbursement   up  to  the  deductible  amount.  A
policyholder's failure to pay billed deductible reimbursement amounts to
the state insurance fund or other insurer under this paragraph shall  be
treated  in  the  same  manner  as non-payment of premium and render the
policy cancelable in accordance with the provisions of subdivision  five
of  section  fifty-four  of  this  article.  The deductibles paid by the
insured employer during any one year period of the policy  of  insurance
shall not exceed the annual premium for such policy of insurance.
(e) Premium reductions, in accordance with methodology approved by the
superintendent  of  financial  services  shall  be applied to any policy
written with a deductible. Such premium reductions shall  be  determined
before  the application of any experience modification premium surcharge
or premium discount.
(f) The New York workers' compensation rating  board  shall  file  for
appropriate   premium   discounts   subject   to  the  approval  of  the
superintendent of financial services.
(g) The state insurance fund and any other insurer may, at its option,
offer a deductible in an amount  specified  in  paragraph  (c)  of  this
subdivision  to  any  policyholder  who  is not otherwise eligible for a
deductible under this subdivision. A public group self-insurer may offer
a deductible in accordance with paragraph (h) of this subdivision.
(h) A public group self-insurer  which  has  been  providing  workers'
compensation  and  employers'  liability coverage for not less than five
years and is operated as a self-administered not-for-profit  corporation
governed by a board not less than two-thirds of the members of which are
representatives  of members of the public group self-insurer, and all of
the officers of which are representatives of members of the public group
self-insurer may, upon a determination by the chair that the methodology
used by the public group self-insurer in creating its deductible  rating
plan  is  supported by an actuarial analysis prepared by an independent,
qualified actuary who is a member of the casualty actuarial society that
clearly identifies  the  actuary's  rate  assumptions,  and  subject  to
underwriting  by  the  public  group  self-insurer, offer as part of the

policy or by  endorsement,  deductibles  optional  to  the  member,  not
subject to the foregoing monetary limits, consistent with the following:
(1)  claimants' rights are properly protected, and claimants' benefits
are paid without regard to any such deductible;
(2) appropriate premium reductions reflect the type and level  of  any
deductible approved by the chair and selected by the member;
(3)   premium   reductions   for  deductibles  are  determined  before
application  of  any  experience  modification,  premium  surcharge,  or
premium discount;
(4)  recognition is given to member's characteristics, including size,
financial capabilities, nature of activities, and number of employees;
(5) if the member selects a deductible, the member is  liable  to  the
public  group  self-insurer  for  the  deductible  amount  in  regard to
benefits paid for compensable claims;
(6) the public group self-insurer pays all of the  deductible  amount,
applicable to a compensable claim, to the person or provider entitled to
benefits and then seeks reimbursement from the member for the applicable
deductible amount;
(7)  a  failure  by  the member to reimburse deductible amounts to the
public group self-insurer is treated in the same manner as nonpayment of
the member's contribution;
(8) the public group self-insurer shall be fully-funded as defined  in
subparagraph (b) of paragraph two of subdivision three-a of this section
and   if,   after   offering   deductible  policies,  the  public  group
self-insurer ceases to be fully funded as so defined, the  public  group
self-insurer  may  not  permit  any  new  member to elect the deductible
option until the public group self-insurer becomes fully funded;
(9) the public group self-insurer may  add  no  more  than  seven  new
deductible members in any one contribution year;
(10)  the  aggregate  contributions  for all new members selecting the
deductible option in any one year may not  exceed  ten  percent  of  the
total  contributions  of  all of the public group self-insurer's members
for the immediately prior year;
(11) if the member was self-insured prior to joining the public  group
self-insurer,  the  member's deductible amount during the member's first
year of membership in the public group self-insurer may not  exceed  the
amount  of  the  member's reinsurance retention level immediately before
joining the public group self-insurer;
(12) each member which has elected the deductible  option  shall:  (i)
maintain in a dedicated account held by the public group self-insurer an
amount  actuarially  determined  to  be sufficient to pay the portion of
each compensation claim that is within the  deductible  amount  for  the
succeeding  three months; and (ii) maintain in its own dedicated reserve
account   or   in   its   own    undesignated    fund    balance,    the
actuarially-determined  amount  that  the member will be required to pay
for all of the member's claims below the deductible amount; and
(13) the public group self-insurer shall provide to all members of the
public  group  self-insurer  an   annual   statement   identifying   the
contributions  provided  by and the reserves attributable to the members
which have elected a deductible and must provide to each member  of  the
public  group  self-insurer  which  has elected the deductible option an
annual actuarial analysis of  the  member's  open  claims,  stating  the
amounts  the  public group self-insurer anticipates that the member will
be required to pay for the life of each claim.
4. a. A county, city, village, town, school district, fire district or
other political subdivision of the state may secure compensation to  its
employees  in  accordance  with  subdivision one, two or three-a of this
section, and a public corporation  as  defined  in  subdivision  one  of

section  sixty  of  this  chapter  may  also secure such compensation in
accordance with article five of this chapter. If compensation is not  so
secured,  a  county, city, village, town, school district, fire district
or other political subdivision shall be deemed to have elected to secure
compensation  pursuant to subdivision three of this section and, in such
case, no proof of financial ability or deposit  of  securities  or  cash
need be made in compliance with such subdivision. All other requirements
prescribed  by  this chapter for employers so electing shall be complied
with and notice of such election shall be  filed  with  the  chair.  For
failure  to  file  such  notice  of  election, prescribed in form by the
chair, within ten days after the election was  made,  the  treasurer  or
other  financial  officer shall be liable to pay to the chair the sum of
one hundred dollars as  a  penalty,  to  be  transferred  to  the  state
treasury.
b.  The  treasurer  or other fiscal officer of a self-insuring county,
city, village, town, school district, fire district or  other  political
subdivision  shall,  upon  presentation  of  an  award  of  compensation
forthwith begin  payment  of  it  to  the  person  entitled  thereto  in
accordance with this chapter.
c.  The  governing  board  of  a  county,  city, village, town, school
district, fire district or other political subdivision may authorize the
treasurer  or  other  fiscal  officer  of  such  municipal  corporation,
district  or  political  subdivision,  as  the  case  may be, to pay the
compensation provided for in this chapter to the person entitled thereto
without waiting for an award in any  case  in  the  manner  provided  in
section  twenty-five  of  this  chapter. The amount of such compensation
payable  prior  to  an  award  pursuant  to  such  authorization   shall
constitute a settled claim within the meaning of the local finance law.
d.  A contract of insurance issued to a county or a town in accordance
with subdivision one or two of this section and in force on or after the
first day of March, nineteen hundred sixty-three, in  relation  to  fire
districts and on or after the first day of January, in the year in which
this  paragraph  as  hereby  amended  becomes  effective  in relation to
ambulance districts shall contain a provision reading as follows:  "This
contract   does   not  provide  (1)  any  coverage  under  the  Workers'
Compensation Law or the  Volunteer  Firefighters'  Benefit  Law  or  the
Volunteer  Ambulance Workers' Benefit Law for which any fire district or
ambulance district would be liable under such  laws,  (2)  any  workers'
compensation  benefits  for  fire  or  ambulance  district  officers and
employees for which any fire district or  ambulance  district  would  be
liable  under  the  Workers'  Compensation  Law,  or  (3)  any volunteer
firefighters'  or  ambulance  workers'  benefits   for   any   volunteer
firefighters   or   volunteer  ambulance  workers  under  the  Volunteer
Firefighters' Benefit Law or the Volunteer  Ambulance  Workers'  Benefit
Law".
e.  If  for  any  reason  the status of a county, city, village, town,
school district, fire district or other political subdivision  of  state
is  terminated,  at  the  discretion  of  the  chair,  the county, city,
village,  town,  school  district,  fire  district  or  other  political
subdivision of state, may execute an assumption of workers' compensation
liability  insurance  policy securing such further and future contingent
liability as may arise from prior injuries to workers and be incurred by
reason of any change in the condition of  such  workers  warranting  the
board  making  subsequent awards for payment of additional compensation.
Such policy shall be  in  a  form  approved  by  the  superintendent  of
financial  services  and  shall  be  issued  by  the  state  fund or any
insurance company licensed to issue this class of policy in this  state.
In  the  event  that such policy is issued by an insurance company other

than the state fund, then said policy shall be deemed to be insurance of
the kind specified in paragraph fifteen of subsection (a) of section one
thousand one hundred thirteen of the insurance law and  covered  by  the
workers'  compensation  security fund as created and governed by article
six-A of this chapter.  It shall only be issued for  a  single  complete
premium  payment  in  advance by the county, city, village, town, school
district, fire district or other political subdivision of state  and  in
an  amount  deemed  acceptable  by  the  chair and the superintendent of
financial services. In lieu of the applicable premium charge  ordinarily
required  to  be  imposed  by  a  carrier,  said premium shall include a
surcharge in an amount to be determined by  the  chair  to  satisfy  all
assessment  liability  due and owing to the board and/or the chair under
this chapter. Said surcharge shall be payable to the board  simultaneous
to  the  execution  of the assumption of workers' compensation liability
insurance policy. However,  the  payment  of  said  surcharge  does  not
relieve  the  carrier from any other liability, including liability owed
to the superintendent of financial services pursuant to article six-A of
this chapter. When issued such policy shall be  non-cancellable  without
recourse  for  any cause during the continuance of the liability secured
and so covered.
5. Self-insurance. "Self-insurance," as used herein, shall  be  deemed
to  be  the  system of securing compensation as provided in subdivisions
three, three-a and four of  this  section,  and  article  five  of  this
chapter.
a.  The  chair shall administer all matters relating to self-insurance
under this chapter. All penalties set forth in  subdivisions  three  and
three-a  of  this  section  shall  be  paid  into the fund for uninsured
employers provided for in section twenty-six-a of this chapter.
b. Advisory committee for individual self-insurance. (1) To advise the
chair,  there  shall   be   an   advisory   committee   for   individual
self-insurance,  which  shall  be  called  the  advisory  committee  for
self-insurance and consist of  the  chair  and  ten  additional  members
appointed  by  the  chair. Three of such members shall be named from the
manufacturing  and  trade  group  of  self-insurance,  three  from   the
transportation,  public utilities and construction group, and one member
shall be a self-insurer selected at large by the chairman, who shall  be
vice-chairman of the advisory committee. The chair shall be chair of the
advisory committee; the secretary of the board shall act as secretary of
the  advisory committee. Any member appointed to such advisory committee
shall be a self-insurer or an officer of a self-insurer or a person  who
on  account  of his or her employment or affiliation can be classed as a
management representative of a self-insurer. The members of the advisory
committee for self-insurance in office  at  the  time  this  subdivision
takes  effect,  shall be and they are hereby continued in office as such
for  the  remainder  of  the  terms  for  which  they   were   appointed
respectively.
The   members  of  the  advisory  committee  for  self-insurance  next
appointed, except to fill a vacancy created otherwise than by expiration
of term, shall be appointed for terms of three years, except that of the
three additional members to be appointed after May first,  two  thousand
eight,  one  such  member  shall be appointed for an initial term of one
year, one such member shall be appointed for  an  initial  term  of  two
years,  and  one  such  member shall be appointed for an initial term of
three years. No member shall be appointed to the advisory committee  for
individual  self-insurance  if  he  or she has been convicted of a crime
under this chapter or has been subject to criminal  or  civil  penalties
under this subdivision. Vacancies shall be filled for the unexpired term
by  appointment  by  the  chair.  Members shall continue in office until

their successors are appointed; in the event that no appointment is made
within three months after a vacancy exists or after  the  expiration  of
the  term  of  a member, the remaining members may fill the vacancy by a
majority  vote. If a member shall be absent from two consecutive regular
meetings without adequate excuse his or her place may be declared vacant
by the chair. Members of such advisory  committee  shall  serve  without
pay,  but  shall be entitled to their reasonable and necessary traveling
and other expenses incurred in connection  with  their  duties.  Regular
meetings  of the advisory committee shall be held twice a year, on dates
to be fixed by the chair. In addition, special meetings shall be held if
called by the chair or any five members of the committee. Such  advisory
committee  shall  have access to all self-insurance records except those
restricted by the chair or those whose disclosure  is  restricted  under
section  one  hundred ten-a of this chapter, and shall have the power to
require the presence before it of any  employee  of  the  board  or  any
self-insurer  as reasonable and related to matters within the purview of
the committee. Information obtained by members of the advisory committee
shall be deemed confidential unless disclosed by order of the committee.
It shall be the duty of the advisory committee to advise  the  chair  on
all matters relating to self-insurance, particularly in respect to rules
governing  self-insurance,  the deposit or withdrawal of securities, the
standards for permitting employers to self-insure  under  this  section,
the  appropriate  amount  of  security  or  payments  that  self-insured
employers must provide, and on such other matters  as  the  chair  shall
request.  The  chair  shall  detail  to  such  advisory  committee  such
stenographic or other assistance as may be necessary. Minutes  shall  be
kept  of  the  meetings  of the advisory committee and shall be provided
within forty-five days of such meeting to the governor and  legislature,
including  the chairs of the assembly and senate committees on insurance
and labor.
c. (1) The chair and the department of audit and control  as  soon  as
practicable  after  May  first,  nineteen  hundred  sixty,  and annually
thereafter, as soon as practicable after April first in each  succeeding
year,  shall  ascertain  the total amount of net expenses, including (a)
administrative  expenses,  which  shall  include  the  direct  costs  of
personal  services,  the  cost of maintenance and operation, the cost of
retirement contributions made and workers' compensation premiums paid by
the State for or on account of personnel, rentals for space occupied  in
state  owned  or  state leased buildings, and (b) all direct or indirect
costs incurred by the board during the preceding fiscal year in carrying
out the provisions of subdivision three and  three-a  of  this  section.
Such  expenses  shall  be  adjusted  annually  to  reflect any change in
circumstances, and shall be assessed against  all  private  self-insured
employers,  including  for  this  purpose  active  and  terminated group
self-insurers, active individual self-insured employers, and  individual
self-insured  employers  who  have  ceased  to exercise the privilege of
self-insurance.
(2)  Such  expenses  shall  be  assessed  against  all   self-insurers
including  for  this  purpose  employers who have ceased to exercise the
privilege  of  self-insurance.  The  basis  of  apportionment   of   the
assessment  against  each  self-insurer  shall  be  a  sum equal to that
proportion  of  the  amount  which  the  indemnity  payment   for   each
self-insurer  bore to the total indemnity payments for all self-insurers
for the calendar year which ended  within  the  preceding  state  fiscal
year. All such assessments when collected shall be deposited into a fund
which  shall be used to reimburse the appropriations theretofore made by
the state for the payment of the expenses of administering this chapter.
(3) Pure premium for assessments made  prior  to  January  first,  two
thousand  nine  against individual and group self-insurers who ceased to
self-insure shall be based on payroll at  the  time  the  individual  or
group  self-insurer  has  ceased  to  self-insure,  reduced  by a factor
reflecting  the  reduction  in  the  group  or individual self-insurer's
self-insurance liabilities since ceasing to self-insure.
d. The chair may from time  to  time  request  the  superintendent  of
financial  services  for assistance, and the superintendent of financial
services is hereby authorized to render such assistance upon request  of
the  chair,  as may be necessary to insure the financial ability of such
group self-insurers to pay all liabilities provided by this chapter.
e. Notwithstanding the provisions of paragraph c of this  subdivision,
the chair shall require that partial payments for expenses of the fiscal
year  beginning April first, nineteen hundred eighty-three, and for each
fiscal year thereafter shall be made on March  tenth  of  the  preceding
fiscal  year  and  on June tenth, September tenth, and December tenth of
each year, or on such other dates as the  director  of  the  budget  may
prescribe, by each self-insurer. Provided, however, that the payment due
March tenth, nineteen hundred eighty-three for the fiscal year beginning
April  first,  nineteen hundred eighty-three shall not be required to be
paid until June tenth, nineteen hundred eighty-three. Each such  payment
shall  be  a  sum equal to twenty-five per centum of the annual expenses
assessed upon each self-insurer, as estimated by the chair. The  balance
of  assessments  for  the  fiscal  year  beginning April first, nineteen
hundred seventy-three and each fiscal year  thereafter,  shall  be  paid
upon  determination  of  the  actual  amount  due in accordance with the
provisions of paragraph c of this subdivision. Any overpayment of annual
assessments resulting from the requirements of this paragraph  shall  be
refunded  or  at  the  option  of the chair shall be applied as a credit
against the assessment of the succeeding fiscal year.  The  requirements
of  this  subdivision  shall  not  apply  to  those  self-insurers whose
estimated annual assessment for the fiscal year is less than one hundred
dollars and such self-insurers  shall  make  a  single  payment  of  the
estimated  annual  assessment  on  or  before September thirtieth of the
fiscal year.
f. Whenever the  chair  shall  determine  that  the  compensation  and
benefits provided by this chapter may be unpaid by reason of the default
of an insolvent private self-insured employer, including a private group
self-insurer,  the  chair  shall pay such compensation and benefits from
administration expenses as provided in section one hundred fifty-one  of
this  chapter  upon  audit  and warrant of the comptroller upon vouchers
approved by the chair. Such payments shall  be  considered  expenses  of
administration.  The  chair shall be reimbursed therefor from the surety
bond, cash or securities held or, if such  surety  bond,  securities  or
cash  is  insufficient,  by  the  employer,  its  receiver,  liquidator,
rehabilitator or trustee in bankruptcy. All  moneys  reimbursed  to  the
chair  or  recovered  by  the chair in an action or proceeding to secure
such reimbursement shall forthwith be applied as a  credit  against  the
expenses  on  which  the assessment levied upon all private self-insured
employers, in accordance with paragraphs c and e of this subdivision, is
calculated.
g. Whenever the  chair  shall  determine  that  the  compensation  and
benefits provided by this chapter may be unpaid by reason of the default
of an insolvent private self-insured employer, including a private group
self-insurer,  the  chair  shall  levy an assessment against all private
self-insured  employers,  including  private  group  self-insurers,   in
accordance  with paragraphs c and e of this subdivision to assure prompt
payment of such compensation and  benefits.  Whenever  compensation  and

benefits  are unpaid by reason of such default, the chair shall promptly
pay such compensation  and  benefits  from  administration  expenses  as
provided in section one hundred fifty-one of this chapter upon audit and
warrant  of the comptroller upon vouchers approved by the chair. Nothing
in this paragraph shall preclude the chair from recovering the moneys it
expends  from  its  administrative  expenses   against   the   defaulted
individual   self-insurer,   or  the  members  of  the  defaulted  group
self-insurer, as otherwise permitted by this chapter.
6. Any policy of insurance purchased pursuant  to  the  provisions  of
this  subdivision  six  as  in  effect  prior to the first day of March,
nineteen hundred fifty-seven, shall be cancelled prior to, or as of, the
twenty-eighth day of February, nineteen hundred fifty-seven.
The cost of such insurance shall be apportioned by the  clerk  of  the
board  of  supervisors  of  the  county to each such city, village, fire
district, fire protection district, fire alarm district,  and  territory
outside  such  municipal  corporations  and districts, in the proportion
that the agreed population bears to the entire population of the  group.
Refunds,  dividends and discounts in relation to such insurance shall be
distributed or  credited  according  to  the  same  apportionment.  Upon
notification  by the clerk of the board of supervisors, the chief fiscal
officer of each such city, village or fire district  shall  pay  to  the
county  treasurer,  from  moneys available or made available, the amount
apportioned to such city, village or district. Upon  like  notification,
the  supervisor of each town in which a fire protection district or fire
alarm district is located in whole or  in  part,  or  in  which  outside
territory  is  located,  shall  pay  to  the county treasurer the amount
apportioned for such district, in whole or in part, or territory, as the
case may be, using moneys raised or made available for the  purposes  of
fire protection in such district or outside territory, or if there be no
such moneys or insufficient moneys, using funds of the town available or
made  available,  which  funds  shall  be a charge upon such district or
territory for which the town shall be reimbursed. The  county  treasurer
shall  pay  the  cost  of  such  insurance  with  such moneys, or if any
apportioned share has not been paid, the county treasurer shall  advance
the  amount necessary from moneys of the general fund upon resolution of
the board of supervisors. Any such advance shall be repaid  as  soon  as
moneys  are available therefor. If any apportioned share remains unpaid,
the county may recover the same by action at law. If any member  of  the
group  shall  fail to pay its apportioned share within thirty days after
notice that such amount has become due and payable, the chairman of  the
board  of  supervisors may terminate the participation of such member in
the group by notice by mail to such member on a date  specified  in  the
notice,  and a copy of such notice shall be filed by the chairman of the
board of supervisors with the insurance carrier, who  shall  notify  the
chairman  of  the  workmen's  compensation  board  of the termination of
coverage in the same manner as provided for cancellation of policy under
subdivision five of section fifty-four of this chapter.
If any participating fire protection district or fire  alarm  district
includes  territory  in  more than one town, whether or not in more than
one county, the  amount  of  cost  of  insurance,  refund,  dividend  or
discount  apportioned  to  such  district  shall  be  apportioned in the
proportion that the population of the district  within  each  such  town
bears  to  the  population  of  the entire district. The figure used for
population in such case shall be the one stated in the agreement.
7. Any policy of insurance purchased pursuant  to  the  provisions  of
this  subdivision  seven  as  in effect prior to the first day of March,
nineteen hundred fifty-seven, shall be cancelled prior to, or as of, the
close  of  the  twenty-eighth  day   of   February,   nineteen   hundred

fifty-seven. The cost of such insurance shall be a town charge and shall
be levied and collected in the same manner as other town charges only in
the  territory  of  such town outside of any villages and fire districts
not covered by such a policy.
8.  The  requirements  of  section  ten  of this chapter regarding the
provision of workers' compensation insurance as to owners  and  trainers
governed  by  the  racing, pari-mutuel wagering and breeding law who are
employers under section two of this chapter are  satisfied  in  full  by
compliance  with  the  requirements  imposed upon owners and trainers by
section two hundred twenty-one of the racing, pari-mutuel  wagering  and
breeding  law,  provided  that  in  the event double compensation, death
benefits, or awards are payable with  respect  to  an  injured  employee
under  section fourteen-a of this chapter, the owner or trainer for whom
the injured jockey, apprentice jockey or exercise person licensed  under
article  two  or  four  of the racing, pari-mutuel wagering and breeding
law, and at the election of the  New  York  Jockey  Injury  Compensation
Fund,  Inc.,  with the approval of the New York state gaming commission,
employee of a licensed trainer or owner, is  performing  services  as  a
jockey,  apprentice jockey or exercise person so licensed at the time of
the accident or, if approved by the New York state gaming commission, an
employee  of  a  licensed  trainer  or  owner  shall   bear   the   sole
responsibility   for   the  amount  payable  pursuant  to  such  section
fourteen-a in excess of the amount otherwise payable under this chapter,
unless there shall be a failure of the responsible owner or  trainer  to
pay such award within the time provided under this chapter. In the event
of  such failure to pay and the board requires the fund to pay the award
on behalf of such owner or trainer who has been found to  have  violated
section  fourteen-a  of  this  chapter, the fund shall be entitled to an
award against such owner or trainer for the amount so paid  which  shall
be  collected  in  the same manner as an award of compensation. Coverage
directly procured by any owner or trainer for the purpose of  satisfying
the  requirements of this chapter with respect to employees of the owner
or trainer shall not include coverage on any jockey,  apprentice  jockey
or  exercise  person  licensed  under article two or four of the racing,
pari-mutuel wagering and breeding law, and at the election  of  the  New
York Jockey Injury Compensation Fund, Inc., with the approval of the New
York  state  gaming  commission,  any  employee of a licensed trainer or
owner, to the extent  that  such  jockey,  apprentice  jockey,  exercise
person or, if approved by the New York state gaming commission, employee
of  a  licensed trainer or owner is also covered under coverage procured
by The New York Jockey Injury Compensation Fund, Inc.  pursuant  to  the
requirements   of   section   two  hundred  twenty-one  of  the  racing,
pari-mutuel wagering and breeding law,  and  to  that  extent,  coverage
procured  by  the  fund  pursuant  to  the  requirements  of the racing,
pari-mutuel wagering and breeding law shall be considered primary.
9. The requirements  of  sections  ten  and  eleven  of  this  chapter
regarding  the  securing and provision of workers' compensation benefits
as to a central dispatch facility, as defined in article  six-F  of  the
executive law, are satisfied in full by compliance with the requirements
imposed  upon  such central dispatch facility by such article. Insurance
coverage directly procured by any  central  dispatch  facility  for  the
purpose  of  satisfying the requirements of this chapter with respect to
employees of the central dispatch facility shall not include coverage of
any black car operator to the extent that the black car operator is also
covered under coverage secured by the  New  York  black  car  operators'
injury  compensation  fund, inc. pursuant to the requirements of article
six-F of the executive law, and to that extent, coverage secured by  the

fund  pursuant to the requirements of article six-F of the executive law
shall be considered primary.
10.  An  individual  self-insured  employer  or group self-insurer who
fails to file or maintain the security deposit  required  by  the  chair
will  be deemed to have failed to secure compensation for the amount not
deposited, and shall be  liable  for  all  penalties  for  such  failure
provided for under this title.
11.  If at any time an individual self-insured employer or member of a
group self-insurer intentionally and materially understates or  conceals
payroll,  or  intentionally  and  materially  misrepresents  or conceals
employee duties or if the employer intentionally or materially misstates
payroll or claims information for the purposes of  determining  employer
contributions  as  provided  for under subdivisions three and three-a of
this section, such employer shall be deemed to  have  failed  to  secure
compensation  and shall be subject to sanctions applicable under section
fifty-two of this article in addition to any other  sanctions  available
under law.
12.  The  chair,  with the approval of the director of the budget, may
request the issuance of bonds by the dormitory authority for one or more
of the purposes authorized by section sixteen hundred  eighty-q  of  the
public  authorities  law  and by a self-insured bond financing agreement
authorized by section fifty-c of this article. The net proceeds of  such
bonds  shall  be  deposited  into  the  self-insurer  offset  fund or as
otherwise  provided  by  the  applicable  self-insured  bond   financing
agreement.