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NYS Pays Big For Failed Health Trusts

State Issues $370M in Bonds for Failed Health Trusts:


New York state issued $370 million in bonds to help hundreds of businesses meet their obligations to injured workers following the failures of nearly two dozen group self-insurance trusts, Gov. Andrew Cuomo announced.


The New York State Workers’ Compensation Board will use the bond proceeds to buy insurance policies that will pay the claims of these injured workers. The businesses that once relied on the failed trusts will reimburse the board for those "assumption of liability policies" for 10 years.


The board said it would purchase by the end of the month the insurance policy on behalf of the two largest defaulted group trusts, the Healthcare Industry Trust of New York and the Healthcare Providers Self-Insurance Trust. Together they covered 652 member companies.


Additional bond proceeds can purchase policies for other group trusts that failed to meet their obligations and ceded them to the board. Under the 2013 Business Relief Act, the state is authorized to issue up to $900 million in bonds to settle the self-insurance trust claims.


The bonds, issued through the state Dormitory Authority, received the highest possible credit ratings from Moody’s, Standard & Poor’s and Fitch. Lead bank Siebert Brandford Shank and Goldman Sachs brought the bonds to market.


Cuomo's statement announcing the bond issuance is here.


Source: N.Y. Governor's Office

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