Current through Register Vol. 46, No. 12, March 20, 2024
(a) Insolvent, in
the context of a determinati on by the Chair, or his or her designee, to levy
an assessment pursuant to the provi- sions of Workers' Compensation Law section
50(5)(g), shall mean the inability of a private group self-insurer, to pay its
outstanding lawful obligations under the Workers' Compensation Law as they
mature in the regular course of business, as may be shown by:
(1) the self-insurer being under-funded as
defined in Worker s' Compensation Law, section 50 (3-a); and
(2) the sum of the self-insurer's assets, as
defined by section
317.2(n)
of this Part, plus the available security deposit held by the Chair pursuant to
Workers' Compensation Law, section 50(3-a) and section 317.5 of this Part,
being less than the total cost of all of the self-insure rs anticipated
workers' compensation liabilities, as defined by section 31 7.2(o) of this
Part, that will accrue within the succeeding six months.
(b) The Chair shall levy an assessment
against all private gr oup self- insurers, pursuant to Workers' Compensation
Law, section 50(5)(g), when- ever he or she, or his or her designee, determines
that workers' compensa- tion benefits may be unpaid by reason of the default of
an insolvent private group self-insurer as defined in subdivision (a) of this
section.
(c) The group shall
continue for such time as may be necessary to accomplish the purpose for which
it was created, and so long as all requirements to maintain auth orization as
set forth in this Part continue to be met. Upon termination of the group's
status as a group self-insurer, the group will continue to ad minister the
workers' compensation liabilities incurred by the group. Such a group shall be
designated terminated
(1) In the event a
terminated group is deemed underfunded by t he Chair, the group remains subject
to provisions of this Part r elative to underfunded groups. In connection
therewith the group may be required to levy an assessment upon the group
members as part of an overall plan of dissolution designed to extinguish all of
the group's accru ed liabilities. Such plan should contemplate the execution of
an assumption of workers' compensation liability insurance policy securing the
grou p's contingent and future liability arising out of prior
workers'compensation claims.
(2)
As part of a plan of dissolution a terminated group may apply to the Chair for
financial assistance in meeting any unfunded claims obliga- tions as defined in
Workers' Compensation Law section 50 (3-a ). The unfunded claims liabilities
set forth in such plan shall be quantified based upon the quoted price for an
assumption of liability policy issued by an in- surance carrier authorized to
execute same. In no event shall the Chair be required to provide any group
qualifying under this section more than forty percent of the cost of an
assumption of workers' compen sation li- ability policy premium nor more than
fifty million dollars regardless of the percentage of the assumption of
workers' compensation liab ility policy premium. Subject to this maximum
threshold the Chair, in his or her discre- tion, may supply funding to the
group in the amount of such unf unded claims obligations provided the following
criteria have be en met by the group:
(i) The
group has submitted a dissolution plan setting forth the manner in which the
group shall wind down all of its remaining obliga- tions and operations
including, but not limited to, the execution of an as- sumption of
workers'compensation liability insurance policy, the issuance of releases of
joint and several liability and/or the return of funds to the employer members
of the group who supply the agreements set f orth in paragraph three below.
Said plan shall include the retainer of independent legal counsel for such
purpose and shall, to the extent that t he Board requires additional funds to
fully recoup any financial assistance provided hereunder, provide for the
remittance of funds from the group to the Board, from the members of the group
that do not supply the agreement s referenced in paragraph three below. The
Chair shall review said plan for reasonableness and approve said plan where
appropriate; and
(ii) The group
has levied an assessment on all of the group's members in an amount sufficient
to discharge the full value of the group's unfunded claims liability and all
other remaining liabilities of the group.
(3) In the event that a terminated group
meets the terms and co ndi- tions enumerated in paragraph two above, the group
shall pro vide, in a form acceptable to the Chair, signed and notarized
repayment agreements and confessions of judgment in favor of the workers'
compensation board from the former members of the group in the aggregate amount
o f the funds sought by the group. In connection therewith, if deeme d
necessary by the Chair, the group shall reconcile the previously levied
assessment to account for any members of the group that have been deemed una
ble to contribute to the group's liabilities and/or otherwise par ticipate in
the plan of dissolution.
(4) Upon
the receipt and approval of agreements referenced a bove, the Chair shall use
reasonable efforts to facilitate the group's execution of an assumption of
liability policy, including, where approp riate, releasing the security held by
the Chair on behalf of the group in furtherance of the execution of the
assumption of liability policy and providi ng the funding referenced in
paragraph two above to the assumption of liabi lity policy carrier. In
connection therewith, the group shall remain li able to provide all additional
funding for the execution of the assumption of liability policy including but
not limited to all required premium surcharges as set forth in Workers'
Compensation Law section 50 (3-a)(7)(a). In the ev ent that the assumption of
liability policy is ultimately disapproved by the superinten- dent of the
department of financial services or is not execute d for any other reason, the
Chair shall be under no obligation to provi de funding assistance to the
terminated group and shall retain the security held by the Chair on behalf of
the group, and the repayment agreements an d confes- sions of judgment
referenced in paragraph (3) above shall be deemed void and
unenforceable.
(d) Upon
failure on the part of the group to properly administer such liabilities, the
Chair shall assume the administration and final distribution of the group's
assets and liabilities.
