S6978-2011 Actions

• Jul 18, 2012: SIGNED CHAP.237
• Jul 6, 2012: DELIVERED TO GOVERNOR
• Jun 20, 2012: returned to senate
• Jun 20, 2012: passed assembly
• Jun 20, 2012: ordered to third reading cal.677
• Jun 20, 2012: substituted for a10160
• May 31, 2012: referred to insurance
• May 31, 2012: DELIVERED TO ASSEMBLY
• May 31, 2012: PASSED SENATE
• May 23, 2012: ADVANCED TO THIRD READING
• May 22, 2012: 2ND REPORT CAL.
• May 21, 2012: 1ST REPORT CAL.842
• Apr 18, 2012: REFERRED TO INSURANCE

S6978-2011 Meetings

S6978-2011 Calendars

S6978-2011 Votes

S6978-2011 Memo

BILL NUMBER:S6978

TITLE OF BILL:

An act
to amend the insurance law, in relation to workers' compensation rate
service organizations; and to amend chapter 11 of the laws of 2008,
amending the workers' compensation law, the insurance law, the volunteer
ambulance workers' benefit law and the volunteer firefighters' benefit
law, relating to rates for workers' compensation insurance and setting
forth conditions for a workers' compensation rate service organization,
in relation to the effectiveness thereof

PURPOSE OF THE BILL:

This bill would: (1) extend the time in which a rate service
organization ("RSO") may file loss costs or other statistical
information, including rating plans, with the Department of Financial
Services ("Department") from June 2, 2013 to June 2, 2018; (2) extend
the requirement that an RSO have public members as part of its
governing structure from June 2, 2013 to June 2, 2018; and (3)
provide for the temporary continuation in office of certain
publicly-appointed incumbent members of the governing body of an RSO
whose term has expired.

SUMMARY OF PROVISIONS:

Section 1 of this bill would amend Insurance Law � 2305(e) to
authorize an extension of the mandatory yearly loss cost filing with
the Department by RSOs beyond June 2, 2013 and until June 2, 2018.

Section 2 of this bill would amend Insurance Law � 2313(s) to permit
RSOs to file with the Department loss costs or other statistical
information, including rating plans, beyond June 2, 2013 and until
June 2, 2018.

Section 3 of this bill would amend Insurance Law � 2313(t)(1) to
provide for the temporary continuation in office of certain appointed
members of the governing body of an RSO whose term has expired until
such member's successor has been duly appointed and approved,
provided that the appointing entity appoints a successor member
within 120 days of the expiration of the term of office.

Section 4 of this bill would amend � 16 of Chapter 11 of the Laws of
2008 to provide for
the extension of Insurance Law � 2313(t), which requires an RSO to
have public members as part of its governing structure and is
otherwise set to expire on June 2, 2013, until June 2, 2018.

Section 5 of this bill would provide for an immediate effective date.

EXISTING LAW:

At present, the ability of an RSO to file loss costs with the
Department and the requirement that an RSO have a governing structure
that includes public and insurer members will sunset on June 2, 2013,
and certain appointed members of the RSO's governing body must vacate
their offices after two years if not reappointed.

STATEMENT IN SUPPORT:

In January 2008, the Legislature enacted legislation to reform New
York's workers' compensation system. See Chapter 11
of the Laws of
2008. That legislation established a new method for setting workers'
compensation rates in New York, in which RSOs file "loss costs" with
the Department, and set forth certain governance structure
requirements for an RSO licensed in New York for workers' compensation.

This bill would permit RSOs to continue to file loss costs or other
statistical information, including rating plans, with the Department
beyond the current June 2, 2013 expiration date and until June 2,
2018. Since the enactment of the prior 2008 legislation, it has
become clear that the data collection and analysis services provided
by RSOs, such as the New York Compensation Insurance Rating Board
("CIRB"), are vital and essential to the health of New York's
workers' compensation insurance market. Foreclosing the ability of an
entity such as the CIRB to collect industry-wide data and calculate
loss costs would isolate the New York workers' compensation market
from the rest of the country and could have significant negative
effects on insurer solvency, insurance availability and competition.

Also, the bill would extend the requirement that RSOs have public
members as part of their board of governors, underwriting and
actuarial committees. This structure has proven beneficial to the
RSO, the industry and the stakeholders of the workers' compensation
system.
The bill also addresses the possibility of vacancies in the membership
of an RSO's governing body that could prove disruptive of RSO work.
In order to avoid the possibility that a public member could lose its
representation on the governing body of an RSO as a result of the
expiration of its appointee's two-year term and delay in his or her
replacement, this bill would provide for the temporary continuation
in office of an incumbent appointee whose term has expired until a
new appointment is made and approved, provided that the appointing
entity appoints a successor member within 120 days of the expiration
of the term of office.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE:

This bill would take effect immediately.

S6978-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         6978
 I N  SENATE
 April 18, 2012
 
 Introduced  by Sen. SEWARD -- (at request of the Department of Financial
 Services) -- read twice and ordered printed, and when  printed  to  be
 committed to the Committee on Insurance
 AN  ACT to amend the insurance law, in relation to workers' compensation
 rate service organizations; and to amend chapter 11  of  the  laws  of
 2008,  amending  the workers' compensation law, the insurance law, the
 volunteer ambulance workers' benefit law and the volunteer  firefight
 ers'  benefit  law, relating to rates for workers' compensation insur
 ance and setting forth conditions for  a  workers'  compensation  rate
 service organization, in relation to the effectiveness thereof
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. Subsection (e) of section 2305 of  the  insurance  law,  as
 amended  by  chapter  11  of  the  laws  of  2008, is amended to read as
 follows:

 (e) The superintendent: (1) by regulation may, in lieu of the  waiting
 period  set  forth  in  subsection (b) of this section, require workers'
 compensation insurance rate filings to be specifically  approved  before
 they  become  effective;  and  (2) shall hold a public hearing if a rate
 service organization makes a loss cost filing for workers'  compensation
 that  is  an  increase  of  seven percent or more over the approved loss
 costs from the prior year. Until June second,  two  thousand  [thirteen]
 EIGHTEEN,  a  rate  service organization for workers' compensation shall
 make a loss cost filing every year on or  before  June  first,  or  such
 earlier date as is set by the superintendent.
 

S  2.  Subsection (s) of section 2313 of the insurance law, as amended
 by chapter 11 of the laws of 2008, is amended to read as follows:

 (s) Notwithstanding any other  provision  of  this  article,  no  rate
 service  organization may file rates for workers' compensation insurance
 after February first, two thousand eight, but a rate  service  organiza
 tion  may  file  loss  costs or other statistical information, including
 rating plans, until  June  second,  two  thousand  [thirteen]  EIGHTEEN.
 Notwithstanding  subsection  (j)  of this section, any such rate service
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD14623-05-2
 
       S. 6978                             2
 organization shall nonetheless be required to be  licensed  pursuant  to
 this section.
 

S  3.  Paragraph  1 of subsection (t) of section 2313 of the insurance
 law, as added by chapter 11 of the laws of 2008, is amended to  read  as
 follows:

 (1)  The governing body of a workers' compensation rate service organ
 ization shall be comprised of nine voting members.  Four  members  shall
 represent  insurers  authorized to write workers' compensation insurance
 in this state, and shall be selected in such manner as is determined  by
 the  members of the rate service organization. One member of the govern
 ing body shall be a representative of the state  insurance  fund.  [The]
 EACH OF THE remaining four members of the governing body shall serve for
 [terms]  A  TERM  of two years AND UNTIL HIS OR HER SUCCESSOR SHALL HAVE
 BEEN  APPOINTED  AND  APPROVED,  PROVIDED  THAT  THE  APPOINTING  ENTITY
 APPOINTS  A SUCCESSOR MEMBER WITHIN ONE HUNDRED TWENTY DAYS OF THE EXPI
 RATION OF THE TERM OF OFFICE, and shall not be employed by, or serve  as
 [officers]  AN OFFICER or [directors] DIRECTOR of, [insurers] AN INSURER
 authorized to write workers' compensation insurance in  this  state,  or
 any  parent,  subsidiary,  or  affiliate thereof. One such member of the
 governing body shall be appointed by the superintendent. The other three
 such members shall be appointed subject to the approval  of  the  super
 intendent  by  the following: [(i)] (A) the workers' compensation board;
 [(ii)] (B) the Business Council of New York State, Inc.; and [(iii)] (C)
 the American Federation of Labor - Congress of Industrial  Organizations
 of  New York State. Any vacancy on the governing body shall be filled in
 the same manner as the initial appointment.  The  governing  body  shall
 select  a chief executive officer who shall serve at the pleasure of the
 governing body and whose terms and conditions  of  employment  shall  be
 approved  by the governing body. No restriction in this subsection shall
 apply if compliance is  prevented  by  the  failure  of  any  appointing
 authority  to  make  an appointment, or of the superintendent to approve
 such appointment.
 

S 4.

Section 16 of chapter 11 of the laws of 2008 amending  the  work
 ers'  compensation law, the insurance law, the volunteer ambulance work
 ers' benefit law and the volunteer firefighters' benefit  law,  relating
 to  rates  for  workers' compensation insurance and setting forth condi
 tions for a workers' compensation rate service organization, is  amended
 to read as follows:

 

S  16.  This act shall take effect February 1, 2008; provided that the
 amendments to paragraph 2 of subsection  (a)  of  section  2316  of  the
 insurance  law  made  by section eleven of this act shall take effect on
 the same date that section 68 of chapter 6 of the  laws  of  2007  takes
 effect;  provided  further  that  the  amendments to section 2316 of the
 insurance law made by section eleven of this act shall  not  affect  the
 expiration of such section pursuant to section 2342 of the insurance law
 and shall be deemed expired therewith; and provided further that section
 ten of this act shall expire and be deemed repealed June 2, [2013] 2018.
 

S  5.  This act shall take effect immediately; provided, however, that
 the amendments to paragraph 1 of subsection (t) of section 2313  of  the
 insurance  law  made  by  section three of this act shall not affect the
 repeal of such subsection and shall be deemed repealed therewith.

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