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A10078 Summary:

COSPNSRGottfried, Simon, Gandolfo
Amd §93, Work Comp L
Provides for the issuance of policies by the state insurance fund to an employer under certain conditions where a balance is due on a prior policy issued by such fund to such employer.
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A10078 Actions:

04/29/2022referred to labor
05/11/2022reported referred to rules
05/17/2022rules report cal.256
05/17/2022ordered to third reading rules cal.256
05/25/2022substituted by s9096
 05/23/2022PASSED SENATE
 05/23/2022referred to labor
 05/25/2022substituted for a10078
 05/25/2022ordered to third reading rules cal.256
 05/25/2022passed assembly
 05/25/2022returned to senate
 06/30/2022SIGNED CHAP.349
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A10078 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Fernandez
  TITLE OF BILL: An act to amend the workers' compensation law, in relation to the issu- ance of policies by the state insurance fund where a balance is due on a prior policy issued by such fund   PURPOSE OF THE BILL: This bill would provide authority to the New York State Insurance Fund ("NYSIF") to issue a policy to a former policyholder with an unpaid balance due on a prior policy.   SUMMARY OF PROVISIONS: Section 1 of the bill would amend subdivisions (b) and (c) of the Work- ers' Compensation Law ("WCL") § 93 to permit NYSIF to issue a new policy to a former NYSIF policyholder whose policy was cancelled with an unpaid balance due, or to a business entity with similar ownership or control to the former policyholder, provided certain conditions are met and to allow payment of the balance on the old policy by installments under the new policy. Section 2 of the bill would provide for an immediate effective date.   JUSTIFICATION: NYSIF was established in 1914 as part of the original enactment of the New York State Workers' Compensation Law. NYSIF's mission is to guaran- tee the availability of workers' compensation insurance at the lowest possible cost to New York employers and to provide timely, appropriate indemnity and medical payments to injured workers, while maintaining a solvent fund. NYSIF is a self-supporting insurance carrier that competes with private insurers in the workers' compensation and disability benefits markets. Operating income is derived solely from insurance premiums and invest- ments. NYSIF is the largest provider of workers' compensation insurance in New York State. Three-quarters of NYSIF's 150,000 policyholders are small businesses, and many of these policyholders are minority and women-owned businesses. Since inception, NYSIF has fulfilled the dual roles for which it was created: to compete with other carriers to ensure a fair marketplace and to be a guaranteed source of coverage for employers who cannot secure coverage elsewhere. By statute, NYSIF has an obligation to charge premi- ums as low as possible, consistent with the maintenance of a solvent fund and reasonable reserves and surplus. Antiquated statutory provisions that govern NYSIF threaten NYSIF's ability to fulfill its mission. The current statutory framework impedes NYSIF from effectively responding to market events, such as the COVID-19 pandemic, which has created economic hardship for many New York businesses and hindered their ability to maintain workers' compensation coverage. This bill would allow NYSIF to more effectively fulfill its mission of being a guaranteed source of coverage that is convenient and affordable to New York businesses. NYSIF would be given authority under this proposal to issue a policy under WCL § 93 (b) to a former policyholder that has a balance due on a prior policy allowing that balance to be paid off by installments as an obligation under the new policy. Similarly, a business entity related by ownership or-control-which may also be denied a new policy until an unpaid balance on a prior policy is paid under WCL § 9 tC),` would also be eligible for the same treatment as former policyholders under this bill. This would allow NYSIF to help NYSIF provide coverage for struggl- ing businesses and securing workers' compensation coverage for their employees. The number of employers that apply for a policy that are currently inel- igible for insurance with NYSIF under WCL § 93 is sizable as the follow- ing data illustrates: In the year 2020, 3,775 NYSIF new business applications were immediately ineligible for coverage because the applicant owed a balance on a prior policy. If NYSIF were to have written all 3,775 policies, the total additional estimated premium of those new policies would have been $75,721,238. For the first three quarters of 2021 (as of 9/30/21), 4,167 applicants were immediately ineligible for a new policy with NYSIF due to a balance owed on a prior policy. This represents 3,259 unique attempts at placing coverage with a total estimated annual premium on the new policies, of $51,420,047.   PRIOR LEGISLATIVE HISTORY: This is a new proposal.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediate upon being signed into law.
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A10078 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                     April 29, 2022
        Introduced  by  M. of A. FERNANDEZ -- (at request of the State Insurance
          Fund) -- read once and referred to the Committee on Labor
        AN ACT to amend the workers' compensation law, in relation to the  issu-
          ance of policies by the state insurance fund where a balance is due on
          a prior policy issued by such fund
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Subdivisions b and c of section 93 of the workers'  compen-
     2  sation  law,  as  amended  by section 24 of part GG of chapter 57 of the
     3  laws of 2013, are amended to read as follows:
     4    b. An employer, whose policy of insurance has been  cancelled  by  the
     5  state insurance fund for non-payment of premium and assessments or with-
     6  draws  pursuant to section ninety-four of this article, is ineligible to
     7  contract for a subsequent policy of insurance with the  state  insurance
     8  fund  while  the  billed  premium on the cancelled policy remains uncol-
     9  lected. However, the state insurance fund shall have discretion to issue
    10  a new policy to such employer by consenting to a payment  plan  for  the
    11  employer  to  pay  off the balance on the prior policy provided that (1)
    12  any required payroll audit or self-audit has been completed at the  time
    13  the  new  policy  is issued, (2) the employer's prior payment and policy
    14  history meet the state insurance fund's underwriting standards,  (3) the
    15  employer has demonstrated the ability to pay the deposit premium on  the
    16  new  policy  and  the  first installment of the balance due on the prior
    17  cancelled policy prior to issuance of the  new  policy,  and  (4)    the
    18  employer  has  demonstrated  the ability to pay the overdue balance from
    19  the prior cancelled policy by installments as determined  by  the  state
    20  insurance  fund  together  with payments on the new policy within twelve
    21  months from the date the new policy is issued. If an employer is  issued
    22  a  new  policy  pursuant  to  this  subdivision,  such employer shall be
    23  required to make the final payment on such overdue balance within twelve
    24  months from the date the new policy is issued.  If the employer defaults
    25  on payment for either the new policy or the balance due from  the  prior
    26  cancelled  policy,  the employer's new policy is subject to cancellation
    27  for non-payment of premium as provided under this chapter.  If  the  new
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 10078                            2

     1  policy  issued  pursuant  to this subdivision is cancelled, the employer
     2  shall be ineligible for an additional policy until all amounts due  from
     3  all prior cancelled policies have been paid.
     4    c. The state insurance fund shall not be required to write a policy of
     5  insurance  for any employer which is owned or controlled or the majority
     6  interest of which is owned or controlled, directly or indirectly, by any
     7  person  who  directly  or  indirectly  owns  or  controls  or  owned  or
     8  controlled  at  the time of cancellation an employer whose former policy
     9  of insurance with the state insurance fund was cancelled for non-payment
    10  of premium and assessments or withdraws pursuant to section  ninety-four
    11  of  this article or who is or was at the time of cancellation the presi-
    12  dent, vice-president, secretary or treasurer of such an  employer  until
    13  the  billed premium on the cancelled policy is paid. The state insurance
    14  fund shall have discretion to write a policy to such an  employer  using
    15  the  same  terms  as  applicable  to  writing a policy of insurance to a
    16  former policyholder that owes a balance on a prior  policy  as  provided
    17  under subdivision b of this section.
    18    For  purposes of this subdivision, "person" shall include individuals,
    19  partnerships, corporations, and other associations.
    20    § 2. This act shall take effect immediately.
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