2006 New York Code - Compliance And Enforcement.

 
    § 71.  Compliance  and  enforcement. 1. The trustees of every employee
  welfare fund shall be responsible in a fiduciary capacity for all money,
  property, or other assets received, managed or  disbursed  by  them,  or
  under their authority, on behalf of such fund.
    2.  (a) No employee welfare fund and no employer or labor organization
  representing any employees eligible for  employee  benefits  thereunder,
  and  no  trustee or other officer or employee of any such fund, employer
  or  labor  organization  shall  receive,  directly  or  indirectly,  any
  payment,  commission,  loan  or  other thing of value from any insurance
  company, insurance agent, insurance broker or any hospital, surgical  or
  medical service plan, in connection with the solicitation, sale, service
  or  administration  of  a  contract providing employee benefits for such
  fund; and no such employer,  labor  organization,  trustee,  officer  or
  employee  shall  receive  any  payment, commission, loan, service or any
  other thing of value from such fund, or which is  charged  against  such
  fund  or  would  otherwise  be  payable to such fund, either directly or
  indirectly, except  that  any  such  person  may  receive  any  employee
  benefits  to  which  he  is  otherwise entitled, and any such trustee or
  other officer or  employee  of  a  fund,  may  receive  from  such  fund
  reasonable  compensation for necessary services and expenses rendered or
  incurred by  him  in  connection  with  his  official  duties  as  such;
  provided,  however,  that  nothing  in this subdivision shall affect the
  payment of any dividend or rate credit or other adjustment due under the
  terms of any insurance or annuity contract.
    (b) No insurance company, insurance agent or insurance broker  and  no
  hospital,  surgical  or  medical  service plan, shall either directly or
  indirectly, pay any commission, make any loan or give any other  payment
  or  thing  of  value  to any employee welfare fund or to any employer or
  labor organization representing  any  employees  eligible  for  employee
  benefits  thereunder  or  to any trustee or other officer or employee of
  any such fund, employer or labor organization, in  connection  with  the
  solicitation,  sale,  service  or administration of a contract providing
  employee benefits for such fund.
    (c) The superintendent may, after notice and a hearing,  prohibit  the
  trustees  of  an  employee  welfare  fund from employing or retaining or
  continuing to employ  or  retain  any  person  upon  finding  that  such
  employment  or retention involves a conflict of interest which is not in
  the best interests of the fund or adversely  affects  the  interests  of
  covered  employees.  Any  such  finding  by  the superintendent shall be
  subject to judicial review.
    (d) The superintendent may, by regulation  or  order,  and  upon  such
  terms  and  conditions  as  he  may  require,  authorize  or approve any
  transaction or transactions otherwise  prohibited  by  this  subdivision
  upon  his  finding  that the transaction or transactions promote or will
  promote the best interests of the relevant employee welfare  funds,  and
  do  not  or  will  not  adversely  affect  the  interests of the covered
  employees.
    3. (a) No insurance company shall pay any  dividend  or  retrospective
  rate  credit  on  any  covering  policy  except  by check payable to the
  affected employee welfare fund or by credit memo forwarded to such fund.
    (b) No employee welfare fund shall  pay  any  premium  on  a  covering
  policy except by check payable to the insurance company directly.
    4.  No political contributions shall be made directly or indirectly by
  or from any employee welfare fund.
    5.  The  superintendent  may  impose  a  penalty  of  not  to   exceed
  twenty-five  hundred dollars upon any trustee or other officer, agent or
  employee of any employee welfare fund subject to  this  article  or  may
  remove   such  trustee,  officer,  agent  or  employee  from  office  or
  employment, or both such penalty and removal,  if  after  notice  and  a
  hearing  he  shall  find  that he has wilfully failed to comply with the
  requirements of this article. Any  such  action  of  the  superintendent
  under this subdivision shall be subject to judicial review.
    6.  In  any case where, after notice and a hearing, the superintendent
  finds that any employee welfare fund has been depleted by reason of  any
  wrongful  or  negligent  act  or  omission  of a trustee or of any other
  person, he may transmit a copy of his findings to the attorney  general,
  who  may  bring  an  action  in  the name of the people of the state, or
  intervene in an action brought by or on behalf of an employee,  for  the
  recovery  of  such  fund for the benefit of the employees and such other
  persons as may have an interest in the fund.
    7. (a) Any person who wilfully  violates  or  causes  or  induces  the
  violation  of  any provision of this article or any regulation hereunder
  shall be guilty of a misdemeanor.
    (b) Any person who makes a false  statement  or  representation  of  a
  material  fact,  knowing  it  to  be  false,  or  who knowingly fails to
  disclose a material fact in any registration, examination, statement  or
  report  required  under this article or the regulations thereunder shall
  be guilty of a misdemeanor.
    (c) Any person who makes a false entry in any book, record, report  or
  statement  required  by  this article or any regulation thereunder to be
  kept by him for any employee welfare fund,  with  intent  to  injure  or
  defraud  such  fund or any beneficiary thereunder, or to deceive any one
  authorized or entitled to examine the affairs  of  such  fund  shall  be
  guilty of a misdemeanor.
    (d)  Nothing  in  paragraphs  (b)  or (c) of this subdivision shall be
  construed in any manner to limit the effect of paragraph (a).