What's happening
This bill changes the process for employers withdrawing from the state insurance fund, allowing immediate cancellation when new coverage is secured.
Why it matters
Reduces administrative delays for employers. By allowing immediate cancellation of the state insurance fund policy when alternate coverage is secured, businesses can avoid overlapping insurance costs and streamline their transition to new insurers.
Encourages competitive insurance market. The change may incentivize more employers to shop for better or more tailored workers’ compensation coverage, knowing they can switch without a mandatory waiting period.
Minimizes risk of coverage gaps. The amendment requires employers to demonstrate that new insurance is in place before cancellation, helping ensure continuous coverage for employees and compliance with state law.
Simplifies compliance process for businesses. Eliminating the rigid 30-day notice period and the mandatory 10-day delay after filing makes the withdrawal process more predictable and manageable for employers, particularly those needing to make quick changes in coverage.
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Who cares
Headline styles
Require 30-Day Withdrawal Notice
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Reported and committed to finance
- Referred to labor
- Referred to labor
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.
Notice for Insurance Withdrawal
In Assembly Committee · Labor · Sponsor Kenneth Zebrowski
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
428
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sens. SEWARD, GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the workers' compensation law, in relation to the requirement for policyholders to provide 30-days notice to withdraw from the state insurance fund
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision a of section 94 of the workers' compensation law, as amended by chapter 635 of the laws of 1996, is amended to read as follows:
a. Any employer may, upon complying with subdivision two or three of section fifty of this chapter, withdraw from the fund by turning in his insurance contract for cancellation, provided he has given written notice to the fund of his intention to withdraw not less than thirty days before the effective date of such cancellation. Upon receipt of such notice the fund shall, at least ten days prior to the effective date file in the office of the chairman a notice of such cancellation date. In the event that an employer intends to withdraw from the fund and has secured insurance with another insurance carrier, the employer shall provide written notice to the fund which shall include their intention to withdraw, demonstration that the employer has secured a new insurance policy and the effective date of cancellation which shall be the date of when such other coverage becomes effective.
[In no event shall the insurance contract be deemed cancelled until at least ten days after the date of such filing, any earlier date mentioned in the notice to the contrary notwithstanding.]
If an employer withdraws from the fund upon complying with subdivision two of section fifty of this chapter, the new insurance contract with the stock corporation, mutual corporation or reciprocal insurer shall be
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04630-01-7
S. 428 2
deemed not to take effect until the cancellation of such employer's contract with the state insurance fund has become effective.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the workers' compensation law, in relation to the requirement for policyholders to provide 30-days notice to withdraw from the state insurance fund
Purpose
The bill would remove the requirement for State Insurance Fund policyholders to provide 30 days notice to withdraw from the Fund if they have secured coverage with another insurance carrier.
Summary of provisions
Section 1. Amends section 94 of the workers' compensation law as it relates to removing the requirement of policyholders of the State Insurance Fund to provide 30 days notice of their intent to withdraw from the Fund for employers who have secured insurance with another insurance carrier. In the event that an employer secured another insurance policy, the employer shall have to provide notice to the Fund including intention to withdraw, demonstration they have secured a new insurance policy and the effective date of cancellation which shall be the date the new policy takes effect.
Read the full memo (663 words)
Section 2 is the effective date.
Justification
The State Insurance Fund (SIF) is a non-profit agency of the State of New York established in 1914 to provide a guaranteed source of workers' compensation insurance coverage for employers in New York State. SIF is the largest single carrier of workers' compensation insurance in the State, with 40 percent of the market.
Although a quasi-public agency, SIF was intended by the Legislature to be treated the same as a private insurance company. See Commissioners of State insurance Fund v. Low, 285 App. Div. 525, 138 N.Y.S 2d 437 (3rd Dept 1955) It is more closely equated to an insurance company than to a typical state agency Martin Minkiowtiz, PRACTICE COMMENTARIES, N.Y. Work. Comp. Section 76 (McKinney 1994)
Despite the fact that SIF was intended to be treated as a private insurance company, it is not licensed by the New York State DFS, nor is it subject to the Department's oversight and regulation. As a result, SIF policyholders are put at a disadvantage when compared to policyholders of private workers' compensation insurers.
As a result, SIF policyholders have reported various unfair practices which have gone unchecked. One common complaint is that SIF takes retaliatory actions against policyholders who seek to move their business from SIF to another coverage provider. Policyholders have reported aggressive and unfair tactics, such as SIF suddenly revising audits and questioning classifications in an effort to charge a departing customer a higher premium.
To rectify one of these inequities, the bill would place SIF on an even footing with other insurers providing workers' compensation insurance by removing the 30 day notice requirement placed upon policyholders who have secured a new insurance policy with another carrier. Currently, SIF policyholders that want to cancel their policy with SIF because they have found other coverage must provide SIF with 30 days advance written notice. During this notice period, policyholders report that SIF employs aggressive and retaliatory tactics in an effort to retain the business. Under the legislation, the 30 day notice requirement would only be required when you are not replacing a policy. If you are replacing a policy, the 30 day notice is not required and the effective date of cancellation is the effective date of the new policy. Therefore, you can move the policy at any point, even less than 30 days, if you can demonstrate that you have a replacement policy and provide them with notice.
Moreover, if SIF policyholders cannot provide 30 days notice, they find themselves subject to excessive short-rate penalty provisions that unfairly burden New York's businesses.
It is simply unfair to require policyholders of the SIF to provide more notice than is required of policyholders of private carrier's. This statutory provision has outlived its usefulness and has become an article of anti-competitive protectionism for the Fund.
Legislative history
S.5250 of 2016.
Fiscal implications
None.
Effective date
This act shall take effect on the ninetieth day after it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.