The New York Board of Workers' Compensation confirmed yesterday it has shut down two more financially distressed self-insurance group trusts.
Coverage by the New York Healthcare Facilities WC Trust and Retail and Wholesale Industry WC Self Insurance Trust will end July 31, the board said.
Board spokesman Jon Sullivan said both entities lacked adequate reserves. "In the past this might have gone unnoticed, but no more," he said.
The board did not say how many employers would be affected by the shutdowns.
In December, the board ordered the Manufacturing Industry WC Self-Insurance Trust and Provider Agency Trust to shut down at their scheduled expiration date in March. This represented the first time the board had taken such a measure.
In 2001, the board tightened its guidelines for reserving that put 30 self-insurance trusts in the "underfunded" category, but only a few were threatened with action.
In October of last year, Mary Beth Woods, director of licensing for the board, said that for most of the funds listed as underreserved the discrepancy was minimal. Funds have to meet a 90 percent of liability ratio and are classified as underfunded even if they are less than 1 percent short of that category.
But in December the board acknowledged that the combined deficit of nearly half of the 64 trusts totaled $163 million.
Mr. Sullivan said he does not anticipate any action against any other trusts in the foreseeable future and he believes that remaining underfunded trusts can recover in time.
The health care facilities trust is managed by the Hamilton Wharton Group Inc. of New York, while the wholesalers and retailers trust is managed by Consolidated Risk Services.
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