DOS-22-15-00010-E Rules Relating to Insurance and Bond Requirements

6/3/15 N.Y. St. Reg. DOS-22-15-00010-E

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 22

June 03, 2015

RULE MAKING ACTIVITIES

DEPARTMENT OF STATE

EMERGENCY RULE MAKING

 

I.D No. DOS-22-15-00010-E

Filing No. 392

Filing Date. May. 18, 2015

Effective Date. May. 18, 2015

Rules Relating to Insurance and Bond Requirements

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken:

Repeal of section 160.9; and addition of new section 160.9 to Title 19 NYCRR.

Statutory authority:

Executive Law, section 91; General Business Law, sections 402(5) and 404

Finding of necessity for emergency rule:

Preservation of public health, public safety and general welfare.

Specific reasons underlying the finding of necessity:

The Department of State (“Department”) is charged, inter alia, with the enforcement of New York General Business Law (“NY GBL”) Article 27, which relates to the appearance enhancement industry. A principal purpose behind the enactment of Article 27 was to provide a system of licensure of appearance enhancement businesses and operators that would both allow for the greatest possible flexibility in the establishment of regulated services and implement measures to protect those inextricably entwined in the industry. Consistent with this legislative intent of Article 27, the Department is empowered to issue regulations which protect the general welfare of the public, including workers employed by business owners. Notwithstanding existing laws and regulations, a number of businesses have taken unfair advantage of a significant number of licensed workers who contribute to the community and economy. The ease with which some establishments have been able to deprive workers of fair wages and other rights is due in part to the inadequate protections.

To help ensure that workers, who are often vulnerable to abuses, are guaranteed to receive wages which are legally due, new bonding and insurance requirements are needed. The enhancement of public safety, health and general welfare necessitates the promulgation of this regulation on an emergency basis. The Department finds that by imposing new bonding and insurance provisions potential abuses by unscrupulous business owners will be reduced and hardworking employees will be protected.

Subject:

Rules relating to insurance and bond requirements.

Purpose:

To enhance protections to workers by adding new provisions requiring wage coverage.

Text of emergency rule:

Section 160.9 of Title 19 of the NYCRR is repealed and a new 160.9 is added to read as follows:

19 NYCRR § 160.9 Bond or liability insurance

(a) An owner must maintain liability coverage in the following amounts:

(1) for accident and professional liability, at least $25,000 per individual occurrence and $75,000 in the aggregate; and

(2) for payment of wages and remuneration legally due employees and providers of appearance enhancement services pursuant to the following schedule:

(i) if owner employs one to four individuals, at least $25,000 or in such other amount as directed by the Secretary;

(ii) if owner employs five to ten individuals, at least $40,000 or in such other amount as directed by the Secretary;

(iii) if owner employs 11 to 25 individuals, at least $75,000 or in such other amount as directed by the Secretary; or

(iv) if owner employs 26 or more individuals, at least $125,000 or in such other amount as directed by the Secretary.

(b) Such liability coverage may be obtained by purchasing:

(1) a bond with a corporate surety, from a company authorized to do business in this state, payable in favor of the people of the state of New York; or

(2) accidental and professional liability insurance, or general liability insurance; or

(3) any combination of (1) or (2) as provided in this Subdivision provided that the coverage amounts set forth in Subdivision (a) of this Section are satisfied.

(c) Bond or liability insurance coverage may be terminated in accordance with the following provisions:

(1) A bond obtained pursuant to this Section shall be filed with the Secretary. Such bond shall not be cancelled, revoked, or terminated by the owner, nor shall the owner take action that would result in the cancellation, revocation, or termination of such bond, except after notice to, and with the consent of, the Secretary at least forty-five days in advance of such cancellation, revocation, or termination. The bond shall include a provision requiring the surety to provide sixty days' notice to the Secretary prior to the effective date of cancellation of the bond. Additionally, no business owner license shall be issued or renewed until such bond, if applicable, is filed.

(2) Upon the termination of a liability insurance policy obtained pursuant to this Section, an owner must submit to the Secretary a notice of termination of insurance in a form prescribed by the Secretary. Such notice must filed with the Secretary prior to the effective date of termination.

(d) Evidence of such bond or liability insurance policy must be maintained on the business premises. Such evidence shall be accessible by all employees at all times that the business is open.

(e) An owner will be permitted to maintain a bond or liability insurance policy as required by former Section 160.09 until June 30, 2015. All owners shall comply with the provisions of this Section on or after July 1, 2015. The requirements of this Section shall apply immediately to any owner who was not licensed on or before the effective date of this Section.

This notice is intended

to serve only as a notice of emergency adoption. This agency intends to adopt this emergency rule as a permanent rule and will publish a notice of proposed rule making in the State Register at some future date. The emergency rule will expire August 15, 2015.

Text of rule and any required statements and analyses may be obtained from:

David A. Mossberg, Esq. , NYS Dept. of State, 123 William Street, 20th Fl., New York, NY 10038, [phone], email: [e-mail]

Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

A Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement are not submitted, but will be published in the Register within 30 days of the rule's effective date.

Assessment of Public Comment

The agency received no public comment since publication of the last assessment of public comment.