N.Y. Insurance Law 4708 – Contingent liability
§ 4708. Contingent liability. (a) The municipal cooperation agreement and the plan document delivered to each participating municipal corporation shall provide that every municipal corporation participating in the municipal cooperative health benefit plan shall be liable in the event of an order issued pursuant to subsection (b) of this section for an assessment, in addition to the amount of premium equivalent paid or payable.
Terms Used In N.Y. Insurance Law 4708
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- contribution: means the amount contributed by participating municipal corporations to cover expected claims and expenses thereon, required reserves, surplus, stop-loss insurance, and other expenses associated with the operations of the municipal cooperative health benefit plan. See N.Y. Insurance Law 4702
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Governing board: means the group of persons, designated in the municipal cooperation agreement establishing the municipal cooperative health benefit plan, to be responsible for administering the plan. See N.Y. Insurance Law 4702
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Municipal cooperation agreement: means an appropriate cooperative agreement authorized by Article 5-G of the general municipal law. See N.Y. Insurance Law 4702
- Municipal corporation: means within the state of New York, a city with a population of less than one million or a county outside the city of New York, town, village, board of cooperative educational services, school district, a public library, as defined in § 253 of the education law, or district, as defined in § 119-n of the general municipal law. See N.Y. Insurance Law 4702
- plan: means any plan established or maintained by two or more municipal corporations pursuant to a municipal cooperation agreement for the purpose of providing medical, surgical or hospital services to employees or retirees of such municipal corporations and to the dependents of such employees or retirees. See N.Y. Insurance Law 4702
(b) If the municipal cooperative health benefit plan does not have admitted assets, as defined in section one hundred seven of this chapter, at least equal to the aggregate of its liabilities, reserves and minimum surplus required by this article, the governing board of such plan shall, within thirty days thereafter, order an assessment for the amount that will provide sufficient funds to remove such impairment and collect from each municipal corporation a pro rata share of such assessed amount.
(c) Every municipal corporation that participated in the municipal cooperative health benefit plan at any time during the two-year period prior to the issuing of an assessment order by the plan's governing board shall, if notified of such assessment, pay its pro rata share of such assessment within ninety days after the issuance of that assessment order.
(d) A municipal corporation's pro rata share of any assessment shall be determined by applying the ratio of the total assessment to the total contributions or premium equivalents earned during the period covered by the assessment on all municipal corporations subject to assessment to the contribution or premium equivalent earned during such period attributable to such municipal corporation.
(e) The contingent liability of municipal corporations for additional premium equivalents or assessments shall not be included as an asset in the financial statements of the municipal cooperative health benefit plan.