(a) Applications for approval of compromises of third-party actions pursuant to subdivision 5 of section 29 of the Workers' Compensation Law must include all papers described therein, and a proposed order providing that the appropriate insuring body file an affidavit within a specified time consenting to or opposing the application. A copy of all such application papers shall be served on the insurance carrier that is liable for the payment of claims under the Workers' Compensation Law.

(b) If, prior to the return of the application, the court directs that the parties place their stipulation on the record, the transcript shall be filed as part of the papers. In such cases, the matter shall be marked settled subject to written consent of the insuring body, or the entry of an order pursuant to subdivision 5 of section 29 of the Workers' Compensation Law.

(c) On the return of the application, the court may hear the matter forthwith or schedule the matter for later hearing if affidavits in opposition to the compromise show that the amount is grossly inadequate in view of the injuries involved, the potential monetary recovery against the third party and the possible exposure of the insuring body to future claims by the plaintiff-petitioner arising out of the same accident.

(d) Nothing in this section shall preclude the insuring body from consenting to a reduction of its lien.