What's happening
This bill allows all New York school districts to establish insurance reserve funds, determined by an independent actuary.
Why it matters
Levels the playing field for all school districts. Previously, only a few specific districts could maintain insurance reserve funds; this bill extends that ability to every district, which could help smaller or less affluent schools better manage unexpected costs.
Professional oversight and accountability. Reserve fund amounts and management must be determined by an independent, certified actuary, reducing the risk of over- or under-funding and ensuring decisions are based on expert risk assessment rather than political or administrative discretion.
Potential for budget stability and lower insurance costs. With reserve funds, school districts can more effectively absorb financial shocks from lawsuits or insurance claims, potentially leading to more predictable budgeting and possibly negotiating better terms with insurers.
Protects educational programs and taxpayers. By enabling districts to set aside funds for insurance-related liabilities, the bill helps prevent sudden budget cuts or emergency tax increases that might otherwise be needed to cover large, unexpected claims.
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Who cares
Headline styles
Let Schools Create Insurance Funds
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to local government
- Print number 2067b
- Amend and recommit to local government
- Print number 2067a
- Amend (t) and recommit to local government
- 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.
Let Schools Create Insurance Funds
In Assembly Committee · Education · Sponsor David Buchwald
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2067--B
2019-2020 Regular Sessions
IN SENATE
January 22, 2019
Introduced by Sens. JORDAN, AKSHAR, AMEDORE, ANTONACCI, BOYLE, GALLIVAN, RANZENHOFER, TEDISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the general municipal law, in relation to authorizing all school districts to establish reserve funds
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 and any other school district may establish insurance reserve funds in compliance with this
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08480-03-9
S. 2067--B 2
section and article seventy-four of the education law, in an amount and manner determined by a qualified and independent actuary certified by the American Academy of Actuaries to be reasonable and necessary, and such school districts may make expenditures in compliance with this section and article seventy-four of the education law 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 on the first of July next succeeding the date on which 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 general municipal law, in relation to authorizing all school districts to establish reserve funds
Summary of provisions
Section 1 amends section 6-n of the general municipal law by providing that any school district may establish insurance reserve funds in compliance with section 6-n and provisions in the education law. The provisions also include a limit on funds reserved to be determined by an independent actuary.
Section 2 sets forth the effective date.
Justification
Current law allows municipal corporations to self-insure to provide health insurance to their employees, officers, and retirees. Section 6-n of the general municipal law specifically does so by allowing these municipal corporations to establish and make expenditures from insurance reserve funds, but exempts accident and health insurance from these provisions.
Previous chapters authorized specific school districts to use their insurance reserve funds for expenses related to health and accident insurance as defined by paragraph three of subsection (a) of section one thousand one hundred thirteen of the insurance law. In the era of the tax cap, several school districts have opted to adopt self-insurance to manage rising healthcare costs, and for these districts, insurance reserve funds are necessary to maintain their self-insurance programs. These districts have requested several bills currently before the legis- lature that would allow their individual school district to do so, but the policy of the State should be aimed at allowing all school districts this degree of flexibility. This bill offers exactly that by expanding the authorization to any school district that wishes to create or use an insurance reserve fund for health self-insurance.
Legislative history
S.7702 of 2018, 3rd Reading
Fiscal implications
None to the state.
Effective date
The first of July next succeeding the date on which 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.