WORKERS’ COMP GUARANTY FUND SAVED:

The New York Assembly and Senate have passed and Gov. George Pataki has signed into law industry-supported legislation that provides short-term rescue for the state’s workers compensation guaranty fund that had been in danger of running out of funds to pay injured workers. The measure authorizes the fund to borrow from the estates of liquidated insurers with the repayment of the loans covered by an increased assessment on workers’ compensation policies. This legislation should keep the fund solvent at least through the end of 2005.
“This bill provides a responsible short-term solution to keep the fund solvent, providing payments to injured workers who depend upon it,” said Gary Henning, American Insurance Association’s northeast assistant vice president.

AIA worked with the legislature and the National Conference of Insurance Guaranty Funds to craft a measure that would meet the short-term financial needs of the fund. The legislation also includes two provisions that are long-term in nature. There is an early access provision for the guaranty fund, as well as a provision providing for a change in the priority of distribution.