Bill S6978-2011

Extends the effectiveness of certain provisions of law relating to workers' compensation rate service organizations

Extends the effectiveness of certain provisions of law relating to workers' compensation rate service organizations from June 2, 2013 until June 2, 2018.

Details

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

Votes

VOTE: COMMITTEE VOTE: - Insurance - May 21, 2012
Ayes (17): Seward, Flanagan, Golden, Grisanti, Lanza, Larkin, LaValle, Martins, Saland, Young, Breslin, Diaz, Espaillat, Kennedy, Parker, Smith, Stavisky
Ayes W/R (1): Peralta

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.


Text

STATE OF NEW YORK ________________________________________________________________________ 6978 IN 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
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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