New York Gov. George Pataki (R) has signed legislation (S.5248A/A.7708) to protect the solvency of the workers’ compensation security fund in New York. The American Insurance Association (AIA) worked with the legislature to draft this important legislation which is now Chapter 33 of the laws of 2005.
“AIA is pleased that the governor acted swiftly to sign this bill. The law provides a responsible short-term solution to keep the fund solvent, providing payments to injured workers who depend upon it,” said Gary Henning, AIA assistant vice president, northeast region. “The legislation authorizes loans from the estates of liquidated insurers and provides for a clear method of repayment.”
The repayments of the loans to the fund will come from a portion of an increased assessment on workers’ comp policies.
AIA worked with the legislature and the National Conference of Insurance Guaranty Funds (NCIGF) to craft a measure that would meet the short-term financial needs of the fund. This legislation will keep the fund solvent at least through the end of 2005. While this was the focus of the legislation, it also includes two reform provisions that are long-term in nature. There is an early access provision for the workers’ compensation guaranty fund, which was not in the prior versions of this legislation, as well as a provision providing for a change in the priority of distribution.
“AIA and NCIGF are ready to work with the legislature and Governor Pataki to construct a solution for the long-term that will enable the fund to operate efficiently in order to continue meeting the needs of injured workers, employers and insurers,” added Henning.
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