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

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.