(a) There is hereby established a risk adjustment mechanism related to COVID-19 claims for disability benefits and family leave benefits paid pursuant to chapter 25 of the Laws of 2020. Such mechanism shall be subject to the requirements of this Part.

(b) All insurers, including the State Insurance Fund, that issued policies covering disability benefits or family leave benefits for any portion of the calendar year 2020 are members of the mechanism.

(c) The mechanism shall be comprised of two components. First, it shall offer immediate relief payments from the COVID-19 risk adjustment pool necessary to ensure payment of COVID-19 claims for insurers experiencing disproportionate adverse risk due to a high volume of claims relative to the insurer’s surplus. Second, it shall provide for the recoupment of 100 percent of COVID-19 claims paid through an adjustment to family leave benefits premiums in plan years 2021 and beyond.

(d) The superintendent may modify any of the requirements of this Part upon prior notice to any affected insurer within at least 24 hours, if the superintendent determines, in the superintendent’s sole discretion, that such modification is necessary to prevent insurers from experiencing disproportionate losses due to high utilization due to claims for disability and family leave benefits paid pursuant to chapter 25 of the Laws of 2020 or as necessary to prevent market disruption.