12 CRR-NY 317.5NY-CRR
12 CRR-NY 317.5
12 CRR-NY 317.5
(a) Group self-insurers shall deposit with the chair securities, cash, surety bonds and/or irrevocable letters of credits, in an aggregate amount as determined by the chair, but not less than:
(1) the combined annual payroll of the group members multiplied by the current manual rates promulgated by the New York compensation insurance rating board; or
(2) one and one-half times the group self-insurers' retention as specified on the certificate of excess insurance filed with the chair which limits the liability of a group on a specific, per occurrence basis with respect to claims; but
(3) in no event shall such security amount be less than the product of the statutory maximum weekly compensation rate for total disability multiplied by 52, multiplied by 30.
(b) The amount of a group self-insurer's security will be reevaluated annually following the receipt and review of the annual financial and other reports required in section 317.19 of this Part, and such security deposits may be adjusted at the direction of the chair.
(c) The group self-insurer's security deposit shall be in a form prescribed herein:
(1) The applicant shall deposit with the chair securities of the kind specified in subdivisions (1), (2), (3), (4) and (5), and paragraph (a) of subdivision (7), of section 235 of the Banking Law. Such securities shall be registered in the name of “Chair, Workers' Compensation Board, State of New York.” Interest paid on securities on deposit will be regularly remitted to the group self-insurer for whose account they are deposited, so long as such group self-insurer complies with this Part and the provisions of the Workers' Compensation Law, and is not in default in the payment of compensation, assessments or other obligation under the Workers' Compensation Law.
(2) A cash deposit may be made in lieu of securities, surety bond or letters of credit. Such cash deposit will be deposited in an interest-bearing account in the name of “Chair, Workers' Compensation Board, State of New York” and shall be in an account authorized by the Comptroller of the State of New York. Such cash deposit is to be by certified check. Interest paid on the cash deposit will be regularly remitted to the group self-insurer for whose account it is deposited so long as such group self-insurer complies with the provisions of the Workers' Compensation Law and is not in default in the payment of compensation, assessments or other obligation under the Workers' Compensation Law.
(3) Surety bonds accepted in lieu of securities, cash, or letters of credit shall be undertaken and enforced in the name of the “Chair, Workers' Compensation Board, State of New York” and shall be in form approved by the chair and issued by a company authorized by the superintendent of insurance to write business as a surety in the State of New York.
(4) A letter of credit must comply with all requirements set forth in Regulation 133 of the New York State Insurance Department, codified as Part 79 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York, except that:
(i) the beneficiary shall be the Chair, Workers' Compensation Board, State of New York;
(ii) the evergreen clause shall provide for at least 60 days' written notice to the chair of the Workers' Compensation Board prior to the expiration date for nonrenewal;
(iii) a bank, to be a qualified bank, may in lieu of a determination by the Securities Evaluation Office of the National Association of Insurance Commissioners for purposes of section 79.1(e)(3) of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York, have either a long-term debt rating equal to Baa/BBB or better by Moody's or Standard & Poor's or the equivalent thereto from any other securities rating service, and/or a short-term debt rating of P2/A2 from Moody's or Standard & Poor's or the equivalent thereto from any other securities rating service;
(iv) the letter of credit shall additionally provide that any legal proceedings with respect thereto be subject to the jurisdiction of the courts of the State of New York; and
(v) the form and content thereof shall be acceptable to the chair.
(d) The security held by the chair pursuant to subdivision (a) of this section shall not be included in the calculation of the group self-insurer's trust assets for purposes of determining the financial condition of the group.
(e) The chair may draw upon any security deposits made pursuant to subdivision (a) of this section:
(1) to satisfy any claims, liabilities, obligations, expenses or assessments of a group self-insurer; or
(2) when a group self-insurer shall have failed to renew or replace a letter(s) of credit within 30 days prior to the expiration date of such letters or to substitute its deposit with cash, securities or a surety bond of equal value.
The chair will provide the group self-insurer with notice prior to drawing upon any security deposits.
(f) Upon receipt of a notice of cancellation of a surety bond or nonrenewal of letter(s) of credit filed by a group self-insurer with the chair, the chair may make demand upon the group self-insurer to deposit with the chair within 10 days after demand securities or cash, or to file or reinstate irrevocable letters of credit, or post or reinstate a surety bond in an amount determined in accordance with subdivision (a) of this section. If the group self-insurer fails to comply with such demand in the manner and amount demanded, and within the time period required, the privilege of group self-insurance may be revoked.
(g) If for any reason the status of a group self-insurer is terminated or revoked, the securities or surety bond on deposit shall remain in the custody of the chair, and the irrevocable letter of credit shall remain in force, for a period of at least 26 months. At the expiration of such time, or such further period as the chair may deem proper and warranted, the group self-insurer may apply to the chair for the return of the securities or cash deposited or permission not to renew the letters of credit. The chair may accept the group self-insurer's release policy as specified in paragraph (5) of subdivision (3-a) of section 50 of the Workers' Compensation Law in an amount to be determined by the chair and in a form approved by the superintendent of insurance. Upon acceptance of such policy, the securities or cash of the group self-insurer on deposit with the chair shall be returned to the group self-insurer, or the chair notify the group self-insurer that the letters of credit need not be renewed.
(h) The provisions of this Subpart shall not apply to groups consisting exclusively of municipal corporations.
12 CRR-NY 317.5
Current through June 30, 2021
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