New York Laws
Article 47 - Municipal Cooperative Health Benefit Plans
4706 - Reserve and Surplus Requirements.

(1) a reserve for payment of claims and expenses thereon reported but
not yet paid, and claims and expenses thereon incurred but not yet
reported which shall not be less than an amount equal to twenty-five
percent of expected incurred claims and expenses thereon for the current
plan year, unless a qualified actuary has demonstrated to the
superintendent's satisfaction that a lesser amount will be adequate;
(2) a reserve for unearned premium equivalents;
(3) a claim stabilization reserve;
(4) a reserve for other obligations of the municipal cooperative
health benefit plan; and
(5) a surplus account, established and maintained for the sole purpose
of satisfying unexpected obligations of the municipal cooperative health
benefit plan in the event of termination or abandonment of the plan,
which shall not be less than:
(A) five percent of the annualized earned premium equivalents during
the current fiscal year of a municipal cooperative health benefit plan
which consists of five or more participating municipal corporations and
covers two thousand or more employees and retirees; or
(B) seven percent of the annualized earned premium equivalents during
the current fiscal year of the municipal cooperative health benefit plan
which consists of four or fewer participating municipal corporations or
covers fewer than two thousand employees and retirees.
(b) The moneys in the plan's reserve funds and surplus account shall
be deposited in one or more banks or trust companies designated by the
governing board in accordance with the municipal cooperation agreement,
in one or more separate segregated accounts, subject to investment in
obligations specified in the general municipal law or education law (as
applicable) for investment of moneys in reserve funds or as otherwise
expressly permitted by the superintendent. Any such bank or trust
company shall be located in this state and shall be duly chartered
pursuant to federal law or the laws of this state. Any interest earned
or capital gain realized on the money so deposited or invested shall
accrue to and become part of the plan's reserve funds or surplus
account, as applicable.
(c) The plan's chief fiscal officer shall account for the plan's
reserve funds separate and apart from all other funds of the municipal
cooperative health benefit plan, and such accounting shall show:
(1) the purpose, source, date and amount of each sum paid into the
fund;
(2) the interest earned by such funds;
(3) capital gains or losses resulting from the sale of investments of
the plan's reserve funds;
(4) the order, purpose, date and amount of each payment from the
reserve fund; and
(5) the assets of the fund, indicating cash balance and schedule of
investments.
(d) The plan's chief fiscal officer, within ninety days of the end of
each fiscal year, shall furnish a detailed report of the operations and
condition of the plan's reserve funds to the governing board.
(e) An expenditure from the plan's reserve funds shall be made only
for the payment of benefits and other obligations of the municipal

cooperative health benefit plan or expenses incurred in administering
such plan.
(f) If the municipal cooperative health benefit plan ceases to provide
plan benefits on a shared-funding basis, the moneys remaining in the
plan's reserve funds not needed to satisfy plan liabilities incurred
prior to such cessation shall be disposed of in the manner provided in
the municipal cooperation agreement.
(g) If a municipal corporation withdraws from a municipal cooperative
health benefit plan operating under a certificate of authority, the
governing board shall, in accordance with the municipal cooperation
agreement, determine the amount, if any, of the plan's reserve funds
attributable to such municipal corporation, after considering all plan
liabilities, and dispose of such amount in the manner provided in the
municipal cooperation agreement.