Bill S7322-2013

Relates to expenditures from the insurance reserve fund established by the Scarsdale union free school district

Relates to expenditures from the insurance reserve fund established by the Scarsdale union free school district.

Details

Actions

  • Jun 20, 2014: SUBSTITUTED BY A2327A
  • Jun 10, 2014: ADVANCED TO THIRD READING
  • Jun 9, 2014: 2ND REPORT CAL.
  • Jun 3, 2014: 1ST REPORT CAL.1169
  • May 12, 2014: REFERRED TO LOCAL GOVERNMENT

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Local Government - Jun 3, 2014
Ayes (9): Martins, Ball, Boyle, Marchione, Ritchie, Valesky, Gipson, Latimer, O'Brien

Memo

BILL NUMBER:S7322              REVISED 5/13/14

TITLE OF BILL: An act to amend the general municipal law, in relation to authorizing the establishment of an insurance reserve fund by the Scarsdale union free school district and detailing what expenditures may be made from such fund

PURPOSE OR GENERAL IDEA OF THE BILL: To allow the Scarsdale union free school district to maintain a separate health insurance reserve fund and make expenditures from the health insurance fund to support its self-funded health insurance program

SUMMARY OF PROVISIONS:

Section 1. This section amends paragraph (a) of subdivision 2 of section 6-n of the general municipal law, as amended by chapter 350 of the laws of 1988, to provide that the Scarsdale union free school district may make expenditures from an insurance reserve fund for any loss, claim, action or judgment for which the school district is authorized or required to purchase or maintain insurance for the kinds of risks for which insurance is authorized pursuant to paragraph three of subsection (a) of section one thousand one hundred thirteen of the insurance law.

Section 2. Provides the effective date.

JUSTIFICATION: The law currently authorizes municipal corporations to purchase a health insurance plan or to self-insure to provide health insurance for their officers and employees, and retired officers and employees. Further, section 6-n of the general municipal law authorizes municipal corporations to establish and make expenditures from an insurance reserve fund for any loss, claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance. However, section 6-n exempts certain kinds of risks enumerated in the insurance law, including accident and health insurance, from the types of risks for which the municipality may make such expenditures. In this way, section 6-n of the general municipal law prohibits municipal corporations from making expenditures from insurance reserve funds in relation to self-funded health insurance programs.

However, there is an anomaly in the law because section 4706 of the insurance law recognizes the stabilizing benefits of maintaining a reserve fund by requiring such a fund where three or more municipal corporations join together to form a municipal cooperative health benefit plan. This legislation recognizes that the same rationale makes a health insurance reserve fund beneficial in the context of a single municipal corporation that self-insures, in the particular case of the Scarsdale union free school district.

The bill allows the school district to maintain such a reserve fund and make expenditures from such reserve fund for any loss, claim, action or judgment for which such school district is authorized or required to purchase or maintain insurance. In so doing, the school district and its taxpayers may obtain the significant stabilizing benefits of maintaining a reserve fund, and avoid the financial burden that would result when a municipal corporation or school district

wishing to self-insure could not do so because of the large year-to-year variations in claims against a self-funded health insurance program.

LEGISLATIVE HISTORY: Similar to S.7528, 2012 referred to local government. Similar to A.10414, 2012 passed Assembly.

FISCAL IMPLICATIONS: None to the State.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 7322 IN SENATE May 12, 2014 ___________
Introduced by Sen. STEWART-COUSINS -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the general municipal law, in relation to authorizing the establishment of an insurance reserve fund by the Scarsdale union free school district and detailing what expenditures may be made from such fund THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (a) of subdivision 2 of section 6-n of the gener- al municipal law, as amended by chapter 350 of the laws of 1988, is amended to read as follows: (a) The governing board of any municipal corporation may establish a reserve fund to be known as the insurance reserve fund. Upon the creation of the fund, the municipality may make expenditures from the fund for any loss, claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance, except those kinds of risks for which insurance is authorized pursuant to paragraph one, two, three, fifteen, sixteen, seventeen, eighteen, twenty-two or twenty-three of subsection (a) of section one thousand one hundred thirteen of the insurance law, or for payments in lieu of contributions under article eighteen of the labor law; provided however, that no municipality shall make an expenditure from such fund for any loss, claim, action or judgment for which the municipal corporation has established a reserve fund under any other provision of law; PROVIDED, FURTHER THAT IN THE CASE OF THE SCARSDALE UNION FREE SCHOOL DISTRICT, AN INSURANCE RESERVE FUND MAY BE ESTABLISHED AND SUCH SCHOOL DISTRICT MAY MAKE EXPENDITURES FROM SUCH RESERVE FUND FOR ANY LOSS, CLAIM, ACTION OR JUDGMENT FOR WHICH THE SCHOOL DISTRICT IS AUTHORIZED OR REQUIRED TO PURCHASE OR MAINTAIN INSURANCE FOR THE KINDS OF RISKS FOR WHICH INSUR- ANCE IS AUTHORIZED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF THE INSURANCE LAW. S 2. This act shall take effect immediately.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus