Relates to consideration of an employer's loss experience in rate setting

BILL NUMBER:S1898

Title of bill

An act to amend the workers' compensation law and the insurance law, in relation to consideration of an employer's loss experience in rate setting; and to amend the workers' compensation law, in relation to liability for compensation

Purpose or general idea of bill

To protect businesses from drastic premium increases in their workers' compensation policies due to motor vehicle accidents and other injuries that were the fault of a third party.

Summary of specific provisions

Section 1: Amends subdivision 1 of section 89 of the Workers' Compensation Law to take into account "an employer's loss experience during the most recent rating plan period; provided, however that such loss experience shall not include payment on any claims where the injury was determined to be the fault of another party" for the purpose of classifying a business in order to establish premium rates.

Section 2: Amends subsection (a) of section 2304 of the Insurance Law to include that "consideration shall be given to each individual employer's loss experience during the most recent rating plan; provided, however that such loss experience shall not include consideration of payments on any claims where the injury was determined to be the fault of another party" in the making of rates.

Section 3: Amends subdivision 1 of section 10 of the Workers' Compensation Law to exempt employers from liability for compensation "where the injury was sustained in a motor vehicle accident which was determined to be the fault of a party other than the employee or the employer, to the extent that compensation can be obtained through the liability coverage of such person."

Section 4: Effective date.

Justification

Senator Bonacic's office received a complaint that employees at a small business were involved in two motor vehicle accidents in 2009 which were deemed to be the fault of the other parties involved. However, New York State law is such that both employees medical expenses and wages were covered through workers compensation rather than auto insurance coverage. This led to the workers compensation premium for the business to go from $14,000 to $42,000 per year for claims that were not the fault of the employees nor the employer.

Legislative history

S.3941 of 2014: Died in Senate Labor Committee S.3941 of 2013: Died in Senate Labor Committee S.7133 of 2010: Referred to Senate Labor Committee

Fiscal implications

Potential salutary effect on the New York State Insurance Fund through potential reduction in claims.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.