Notice: Passwords are now case-sensitive

Remember Me
Register a new account
Forgot your password?

Florianman kleinman

Insurance Defense at statue of liberty
Phone 8053878605 ext 2
Email flofloflo@floflo.com
Website -
Address 123 moliere avenue
thousand oaks
CA, 91360

0 Ratings



Community Requests

Board Seeks Guidance on Transferring Liability From Special Funds

Friday, August 11, 2017 | 1299 | 0 | 0 min read

The New York State Workers’ Compensation Board is considering transferring nearly 70,000 claims to a private entity using an assumption of liability policy or other financial instrument to shed at least $830 million in estimated annual costs.

The board on July 17 issued a “request for information” seeking attorneys, financial experts, brokers, actuaries or other experts interested in advising on how to transfer liability to a third party for claims against the Special Disability Fund, the Fund for Reopened Cases, the Uninsured Employers’ Fund, and defaulted self-insured employers and group trusts.

"The purpose of the RFI is to permit the board to gather information, gauge interest and assist the board with effectuating successful transfers," the notice states.

The board said it is contemplating purchase of an assumption of liability policy, but it would also consider other means, such as a loss-portfolio transfer, special excess policy or reinsurance — as long as the assuming party takes over all liability and claims administration responsibilities.

Mark Walls, vice president of communications and strategic analysis for Safety National, said that by transferring liability for the claims to a third party, state regulators would no longer have to make annual adjustments to the state assessments on employers that now pay for the cost of claims to the funds. 

Safety National has assumed much of the debt from defaulted New York group self-insurance trusts through previous loss-portfolio transfers. Walls said the employer members of those defaulted trusts were able to pay a one-time assessment to cover all future liabilities rather than coping with the uncertainty of assessments that otherwise could be increased annually if claim reserves proved inadequate to cover costs.

“Rather than facing years and years of assessment adjustments and uncertainty regarding the cost of the claims, you do the loss portfolio transfer and you are done with it,” Walls said.

The board said in its request for information that it is interested in transferring liability for claims against:

  • The Special Disability Fund — New York’s version of a second injury fund — which the state closed for dates of injury on or after July 1, 2007. The RFI states that the fund has approximately 44,000 established claims, with reimbursements of about $580 million annually.
  • The Special Fund for Reopened Cases, which reimburses carriers for claims that are reopened more than seven years after the date of injury if at least three years have passed since the last payment of benefits. The board said the fund has 22,300 established claims with annual payments of $200 million. Total future liabilities are projected to be approximately $3.2 billion.
  • The Uninsured Employers Fund, with 1,785 established claims and about $45 million in annual payments.
  • Defaulted self-insured employers and group self-insured trusts, with approximately 1,800 outstanding claims.

The status of at least one of those funds is still up in the air. New York lawmakers passed legislation to close the Special Fund for Reopened Cases to new claims in 2014, but a coalition of insurance carriers sued to block the closure. The carriers won an Appellate Division victory last year, but the state appealed to New York's highest court, the Court of Appeals. Oral arguments in that case are scheduled for Sept. 7, according to the high court’s docket.

The board's notice said it will accept responses to its RFI until Sept. 15, although respondents were asked to send letters of interest by Aug. 4. The RFI states that parties that do not respond to the RFI are not barred from entering the competition later if the board decides to proceed with a request for proposals.


Be the first to comment.

Related Articles