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Sponsors
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History
- Substituted by A9412
- Ordered to third reading cal.1938
- Committee discharged and committed to rules
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Relates to insurance reserve funds of certain school districts
Signed by Governor · Sponsor Anthony Brindisi
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the general municipal law and the education law, in relation to insurance reserve funds of certain school districts
Summary of provisions
Section 1. This section amends paragraph (a) of subdivision 2 of section 6-n of the general municipal law, as amended by chapter 350 of the laws of 1988, to provide that in the case of the Vernon Verona Sherill school district, an insurance reserve fund may be established and such school district may make expenditures from such reserve fund for any loss, claim, action or judgment for which the school district is authorized or required to purchase or maintain insurance for the kinds of risks for which insurance is authorized pursuant to paragraph three of subsection (a) of section one thousand one hundred thirteen of the insurance law.
Section 2. The education law is amended by adding a new section 3653.
Justification
The law currently authorizes municipal corporations to purchase a health insurance plan or to self-insure to provide health insurance for their officers and employees, and retired officers and employees. Further, section 6-n of the general municipal law authorizes municipal corporations to establish and make expenditures from an insurance reserve fund for any loss, claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance. However, section 6-n exempts certain kinds of risks enumerated in the insurance law, including accident and health insurance, from the types of risks for which the municipality may make such expenditures. In this way, section 6-n of the general municipal law prohibits municipal corporations from making expenditures from insurance reserve funds in relation to self-funded health insurance programs.
However, there is an anomaly in the law because section 4706 of the insurance law recognizes the stabilizing benefits of maintaining a reserve fund by requiring such a fund where three or more municipal corporations join together to form a municipal cooperative health benefit plan. This legislation recognizes that the same rationale makes a health insurance reserve fund beneficial in the context of a single municipal corporation that self-insures, in the particular case of the Vernon Verona Sherrill school district.
The bill allows the school district to maintain such a reserve fund and make expenditures from such reserve fund for any loss, claim, action or judgment for which such school district is authorized or required to purchase or maintain insurance. In so doing, the school district and its taxpayers may obtain the significant stabilizing benefits of maintaining a reserve fund, and avoid the financial burden that would result when a municipal corporation or school district wishing to self-insure could not do so because of the large year-to-year variations in claims against a self-funded health insurance program.
Legislative history
None.
Fiscal implications
None to the State.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.