What's happening
This bill allows employers to withdraw from the state insurance fund immediately upon securing new coverage, without a 30-day notice.
Why it matters
Reduces administrative burden for employers. By allowing immediate withdrawal from the state insurance fund upon securing alternate coverage, employers avoid the previous 30-day waiting period and potential dual coverage or premium overlap.
Increases flexibility and responsiveness. Employers can more quickly respond to changing business needs, such as switching insurers for better rates or coverage options, without being locked into a fixed notice period.
May impact state insurance fund stability. The state fund could see more unpredictable changes in its pool of insured employers, potentially affecting its financial planning and risk management.
Emphasizes proof of continuous coverage. The new rules still require employers to demonstrate that replacement insurance is in effect before withdrawal, ensuring workers remain protected without gaps in coverage.
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Who cares
Headline styles
Change Insurance Withdrawal Notice
Plain English, a few words. Used as the page title.
Sponsors
History
- Print number 3516a
- Amend and recommit to labor
- 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.
Ease Insurance Fund Withdrawal
In Senate Committee · Labor · Sponsor Kenneth Zebrowski
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3516--A
2019-2020 Regular Sessions
IN SENATE
February 8, 2019
Introduced by Sens. BRESLIN, SEWARD, GALLIVAN, JACOBS, JORDAN, LITTLE, MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Labor -- recommitted to the Committee on Labor in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
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 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 deemed not to take effect until the cancellation of such employer's contract with the state insurance fund has become effective.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06523-05-9
S. 3516--A 2
The requirements of this subdivision shall not apply when an employer has given written notice to the fund of his intention to withdraw, which shall include the effective date of such cancellation and proof that the employer has complied with subdivision two of section fifty of this chapter. The effective date of cancellation of such employer's contract with the state insurance fund shall be the date that the new insurance contract with the stock corporation, mutual corporation or reciprocal insurer takes effect.
§ 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 or general idea of bill
The purpose of this bill is to remove the requirement for New York State Insurance Fund (NYSIF) policyholders to provide a 30-day notice to with- draw from the Fund if they have secured insurance with another insurance carrier.
Summary of provisions
Section one of the bill amends section 94(a) of the Workers' Compen- sation Law to establish that when an employer has given written notice to NYSIF of his intention to withdraw from the Fund, which includes the effective date of cancellation and proof that the employer has secured insurance with another insurance carrier, such employer shall not be required to provide such notice 30 days before the effective date of such cancellation. The effective date of cancellation of such employer's contract with NYSIF shall be the date that the new insurance contract with the stock corporation, mutual corporation or reciprocal insurer takes effect.
Read the full memo (738 words)
Section two the bill sets forth an effective date of 90 days after enactment.
Difference between original and amended version (if applicable)
The amended version makes technical changes to ensure that if an employ- er meets the requirements of the new undesignated paragraph, the rest of the subdivision shall not apply.
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 insur- ance company, it is not licensed by the New York State DES, 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 SW take s retal- iatory 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 demon- strate 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 arti- cle of anti-competitive protectionism for the Fund.
Prior legislative history
S.428 of 2018 S.5250 of 2016.
Fiscal implications for state and local governments
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.