N.Y. Comp. Codes R. & Regs. tit. 11 § 365.0
Pursuant to chapter 25 of the Laws of 2020, the superintendent is required to create, in consultation with the director of the State Insurance Fund and the chair of the Workers' Compensation Board of the State, a risk adjustment pool to stabilize the market and protect insurers from disproportionate adverse risks associated with claims for disability benefits and family leave benefits paid pursuant to that chapter. The superintendent, in consultation with the director of the State Insurance Fund and the chair of the Workers' Compensation Board, has determined that claims for disability benefits and family leave benefits paid pursuant to chapter 25 of the Laws of 2020 (COVID-19 claims), represent risk that was not factored into pricing policies covering disability or family leave benefits and thus present adverse risk disproportionate to the premium charged. The superintendent also has determined that in calendar year 2020, certain insurers are anticipated to have COVID-19 claims experience relative to surplus such that immediate relief will be necessary to stabilize the impact of those claims. Therefore, this Part establishes a mechanism by which 100 percent of COVID-19 claims paid will be recouped over a period of time to be determined by the superintendent pursuant to the provisions of this Part. This shall be accomplished by the pooling of a portion of the premium associated with providing family leave benefits, which will then be redistributed to insurers, including the State Insurance Fund, proportionately, based on the actual COVID-19 claims experience. Each insurer, including the State Insurance Fund, participating in the mechanism will be entitled to payment from the pool until it has received an amount equal to 100 percent of the actual COVID-19 claims paid. Further, the mechanism will provide insurers that experience COVID-19 claims reaching a threshold level of greater than 20 percent of the company's surplus with the option to obtain immediate relief payments that shall be used solely for the purpose of paying COVID-19 claims. Such relief payments shall be subject to an interest charge that shall be paid in full by the insurer receiving the relief. Such interest charge shall not be reimbursed via the redistribution contemplated above. Finally, the superintendent, in consultation with the director of the State Insurance Fund and the chair of the Workers' Compensation Board, has determined that contributions into the pool to fund the relief payments during plan year 2020 shall, to the extent possible, be provided by the State Insurance Fund. To the extent that the State Insurance Fund is unable to make contributions necessary to cover the entire amount needed in relief, other insurers participating in the disability benefits and family leave benefits insurance market may be called upon to contribute to the pool with the guarantee that such contributions shall be repaid in full with interest. The following sections set forth the operation of this mechanism. To the extent consistent with this Part the terms defined in Part 363 of this Title shall have the same meaning when used in this Part.
N.Y. Comp. Codes R. & Regs. Tit. 11 § 365.0