New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter V - Rates And Rating Organizations › Subchapter B - Commercial And Industrial Risks › Part 151 - Workers' Compensation Insurance › Subpart 151-4 - Reserves For Special Disability Fund Claims › Section 151-4.1 - Preamble

Current through Register Vol. 46, No. 28, July 10, 2024
The Special Disability Fund ("SDF") reimburses carriers
						and self-insured employers for all payments properly paid in accordance with
						Workers' Compensation Law sections 15(8) and 14(6). Specifically, where an
						employee with a "permanent physical impairment" incurs a subsequent disability
						as a result of a work-related injury or occupational disease that results in a
						permanent disability caused by both conditions combined, to a degree greater
						than what would have resulted from the second injury or occupational disease
						alone, the employer or carrier is reimbursed from the SDF for all benefits
						incurred after the first 260 weeks of disability. If the employee suffered the
						second injury before August 1, 1994, then the employer or carrier is reimbursed
						from the SDF for all benefits incurred after the first 104 weeks of the second
						injury. Further, if the second injury results in the employee's death, which
						would not have occurred except for the pre-existing permanent physical
						impairment, the employer or carrier is entitled to be reimbursed from the SDF
						for all benefits payable in excess of 260 weeks (or 104 weeks for accidents or
						disablements before August 1, 1994). The SDF funds its operations and claims
						payments by making annual assessments on insurers writing workers' compensation
						insurance in New York, self-insured employers (including political
						subdivisions), group self-insurers, and the State Insurance Fund. The
						combination of increasing requests for reimbursement from SDF, as well as the
						SDF's assessment funding mechanism, has resulted in a burden on New York State
						insurers and employers. In fact, assessments on insurers have increased by
						nearly 160 percent from 1999 to 2008, resulting in increased premium charges to
						employers. The Legislature enacted chapter 6 of the Laws of 2007, which amended
						Workers' Compensation Law section 15(8)(h), in order to close the SDF to claims
						for reimbursement for injuries or illnesses occurring on or after July 1, 2007,
						and to mandate that all claims for reimbursement be filed with the SDF prior to
						July 10, 2010. The legislation also amends Workers' Compensation Law section
						32(i) to permit the chair of the Workers' Compensation Board to procure one or
						more private entities to assume the liability for, and management,
						administration or settlement of all or a portion of the claims in the special
						disability fund. Furthermore, Workers' Compensation Law, section 32(i)(5)
						mandates that no carrier, self-insured employer, or the State Insurance Fund
						may assume the liability for, management, administration or settlement of any
						claims on which it holds reserves, beyond such reserves as are permitted by
						regulation of the Superintendent of Financial Services. This purpose of this
						Subpart is to ensure than an insurer, self-insured employer, or State Insurance
						Fund does not over-reserve for claims if it voluntarily assumes the liability
						for, or management, administration or settlement.