What's happening
This bill allows additional specified school districts to establish insurance reserve funds under general municipal and education law.
Why it matters
Expands financial flexibility for more school districts. By allowing additional districts to establish insurance reserve funds, these schools can better manage unexpected costs related to lawsuits, claims, or losses, rather than relying solely on annual budgets or emergency measures.
May stabilize school budgets and protect educational programs. With dedicated insurance reserves, schools are less likely to need sudden cuts to programs or services when faced with large, unforeseen expenses, helping maintain continuity for students and staff.
Reduces reliance on outside insurance and can lead to cost savings. Self-insuring certain risks through a reserve fund may lower long-term insurance premiums or administrative costs, freeing up more resources for educational needs.
Creates a precedent for other districts seeking similar authority. Adding more named districts sets an example and may encourage further legislative requests from other school districts across the state seeking these financial tools.
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Who cares
Headline styles
Let More Schools Create Insurance Funds
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7786
IN SENATE
February 23, 2018
Introduced by Sen. JACOBS -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law, in relation to insurance reserve funds of certain school districts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (a) of subdivision 2 of section 6-n of the general municipal law, as separately amended by chapters 414 and 416 of the laws of 2016, is amended to read as follows:
(a) The governing board of any municipal corporation may establish a reserve fund to be known as the insurance reserve fund. Upon the creation of the fund, the municipality may make expenditures from the fund for any loss, claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance, except those kinds of risks for which insurance is authorized pursuant to paragraph one, two, three, fifteen, sixteen, seventeen, eighteen, twenty-two or twenty-three of subsection (a) of section one thousand one hundred thirteen of the insurance law, or for payments in lieu of contributions under article eighteen of the labor law; provided however, that no municipality shall make an expenditure from such fund for any loss, claim, action or judgment for which the municipal corporation has established a reserve fund under any other provision of law; provided, further that the Scarsdale union free school district and the Vernon Verona Sherrill central school district may establish insurance reserve funds in compliance with this section and article seventy-four of the education law and the Minisink Valley central school district may establish insurance reserve funds in compliance with this section and article seventy-four of the education law and the Grand Island central school district, the Tonawanda central school district, the Kenmore Tonawanda union free school district, the Frontier central school district, and the Orchard Park central school district may establish insurance reserve funds in compliance with this section and article seventy-four of the education law and such school districts may make expenditures in compliance with this section and article seventy-four of the education law
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14526-01-8
S. 7786 2
from such reserve fund for any loss, claim, action or judgment for which the school districts are 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.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general municipal law, in relation to insurance reserve funds of certain school districts
Purpose
This bill will allow certain school districts who have elected to self- insure to establish an insurance reserve fund.
Summary of provisions
Section 1 Amends paragraph (a) of subdivision 2 of section 6-n of the general municipal law by providing certain school districts the ability to establish an insurance reserve fund.
Section 2 is the enacting clause
Justification
In order to prudently manage the rising costs of health insurance, certain school districts have elected to self-insure its health benefit program. Self-insurance offers many advantages for school district and its employees, however under current law, school districts are prevented from retaining more than four percent of their budget in an unappropri- ated fund balance. Authorizing certain school districts to establish an insurance reserve fund will allow them to manage year-to-year variabil- ity in claims.
Legislative history
New Bill
Fiscal implications
None
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.