New York Codes, Rules and Regulations
Title 12 - DEPARTMENT OF LABOR
Chapter V - Workers' Compensation
Subchapter B - Self-insurers
Part 317 - Group Self-insurance
Section 317.4 - Application requirements for authorization of new employer groups

Universal Citation: 12 NY Comp Codes Rules and Regs ยง 317.4

Current through Register Vol. 46, No. 12, March 20, 2024

(a) Any group of employers seeking initial authorization to operate as a group self-insurer in accordance with subdivision (3-a) of section 50 of the Workers' Compensation Law shall satisfy the qualifications set forth in section 317.3 of this Part and shall submit an application to the chair as prescribed below. This application shall contain:

(1) a current payroll report filed by classification code for each participating employer of the employer group for the preceding annual fiscal period. Such payroll shall only include amounts paid to workers in New York State who are covered by the self-insured group;

(2) a description of the safety program, if any, proposed for the employer group;

(3) applications for participation duly executed by each employer participating in the group in a form prescribed by the chair;

(4) copies of the following items, certified by the group's board of trustees and group administrator:
(i) the bylaws of the group self-insurer which shall provide for all of the prescribed terms as set forth in section 317.12 of this Part;

(ii) a list of the names and addresses of all trustees, specifically identifying voting trustees. At least two-thirds of the voting trustees shall be officers, partners, members or employees of group members;

(iii) a list of the names and addresses of each of the officers, directors and general managers of the group administrator;

(iv) a description of the group's organization for the administration of claims as well as the duly executed contract between the board of trustees, the group administrator and the claims administrator; and

(v) any duly executed contract between the board of trustees and either an attorney-at-law licensed to practice in New York State or a representative of self-insured employers licensed by the Workers' Compensation Board pursuant to subdivision (3-b) or (3-c) of section 50 of the Workers' Compensation Law, pertaining to the representation of group members before the Workers' Compensation Board;

(5) with the exception of groups consisting exclusively of municipal corporations:
(i) the trust agreement, with language prescribed by the chair and in a form approved by the chair, which must be shared with all prospective members of the group and which must be signed by each of the trustees of the group;

(ii) the participation agreement, with language prescribed by the chair and in a form approved by the chair, which must be shared with all prospective members of the group and which must be individually executed by each member of the group, and which shall include an acknowledgment that the prospective member has been provided a copy of the trust agreement and has reviewed that agreement, specifically the provisions related to joint and several liability, the methodology utilized to determine member contributions, the annual adjustment to contributions, and to membership terms;

(6) documentation from the group administrator consisting of:
(i) evidence of experience in the administration of group insurance or group self-insurance programs or other relevant experience such as that of an attorney-at-law, a certified public accountant, or a qualified actuary who has experience in providing professional services to such groups;

(ii) two professional references associated with recent group administration services or other relevant experience; and

(iii) if incorporated in New York, a certificate of incorporation or, if not incorporated or incorporated in a state other than New York, proof of an actual place of business in New York, within the meaning of section 308 of the Civil Practice Law and Rules;

(7) a properly executed application from as prescribed by the chair, whereby the group self-insurer acknowledges its commitment:
(i) to pay to or on behalf of injured employees and to the dependents of deceased employees all compensation and medical benefits as required by the provisions of the Workers' Compensation Law;

(ii) to pay annually its proportionate share of the expense of administration or other expenses or assessments as provided by the Workers' Compensation Law;

(iii) to pay any awards commuted pursuant to section 27 of the Workers' Compensation Law into the aggregate trust fund, if required by the chair;

(iv) to permit the chair's authorized representatives access to the premises and to audit relevant records of the group administrator, the trustees of the employer group, and/or any individual member of the employer group for the purpose of examining operations and records;

(v) to notify the chair, in writing, within 10 days of the election, resignation or removal of any member of the board of trustees;

(vi) to notify the chair, in writing, within 10 days of the hiring of any new independent law firm, or third party administrator licensed by the Workers' Compensation Board pursuant to subdivision (3-b) or (3-d) of section 50 of the Workers' Compensation Law, to represent the group before the board, and to file with the chair a properly executed and certified copy of the contract or service agreement;

(vii) to notify the chair, in writing, within 10 days of the appointment of any new group administrator and to file with the chair a properly executed and certified copy of the contract or the service agreement, as well as documentation from the new group administrator as required by subdivision (a) of this section;

(viii) to produce full, truthful and timely reports as required by the chair in section 317.19 of this Part; and

(ix) to notify the chair and all group members, in writing, within 10 days of any alteration, modification or amendment to terms of the group's trust document, participation agreement or bylaws;

(8) with the exception of groups consisting exclusively of municipal corporations, groups shall:
(i) deposit with the chair and maintain securities, cash, surety bond or irrevocable letters of credit, in a form and an amount as determined by the chair in accordance with section 317.5 of this Part;

(ii) maintain excess insurance as defined in section 317.2(f) of this Part; and

(iii) have each group member execute a participation agreement as prescribed by this section.

(b) Groups which do not consist exclusively of municipal corporations shall also be required to submit:

(1) a description of the nature of the group members' business activities and evidence that they perform related activities and evidence that they perform related activities in a given industry in accordance with section 317.3(a) of this Part;

(2) an actuarial feasibility study directed and certified by an independent qualified actuary; and

(3) a report identifying the projected rate of contribution and assessments to be paid by each member for the first year of the group's operation, and the manner in which such contributions and assessments were calculated. Such report shall be closely reviewed by the chair for purposes of determining the adequacy, consistency and rationality of the projected contributions.

(c) If, upon examination of the application and supporting documentation, the chair is satisfied as to the ability of the employer group to make payment of all claims and to fulfill all other obligations, authorization to operate as a group self-insurer may be granted subject to the conditions set forth in this Part.

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