Workers’ compensation insurers in New York can cease making payments to the state’s security fund, now that the fund has amassed $74 million in assets, the Insurance Department said.
By statute, the department can suspend the requirement that insurers pay into the fund once it has reached that minimum threshold. However, if assets fall below that level in the future, payments will once again be required.
The fund is meant to guarantee claims to injured workers in the event of an insurer’s insolvency. Normally insurers pay up to 2 percent of their net written premiums each quarter into the fund.
The suspension affects contributions for the first quarter of 2008.
The self-sufficient status of the fund is a far cry from where it stood barely three years ago. In February 2005, the security fund had about $1 million in assets but $7.5 million in claims and expenses, and was paying claims to more than 7,500 claimants.
As part of a legislative package to ensure its solvency, insurers’ payments into the fund were doubled.
Topics Workers' Compensation New York
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