2010 New York Code
RPP - Real Property
Article 12 - (370 - 436) REGISTERING TITLE TO REAL PROPERTY
428 - Action against assurance fund.

§  428.    Action  against  assurance  fund.    Any  allowed claim for
  indemnity shall be paid in the same manner as other claims  against  the
  county.    In  the  city  of  New  York a claim shall be passed upon and
  approved by the city register and by the corporation counsel of the city
  before payment is allowed.   The rejection of  a  claim  by  the  proper
  county  officials  (or  in the city of New York by the city register and
  corporation counsel) shall not preclude the claimant  from  bringing  an
  action  to  recover  such  claim.    No claim or judgment on a claim for
  indemnity shall be binding on the county or on the county treasurer  (in
  New  York  city the commissioner of finance) for an amount exceeding the
  amount credited to the assurance fund.  If the amount  credited  to  the
  assurance fund is insufficient to pay the claim or judgment in full, the
  unpaid  balance  shall bear interest at the legal rate and shall be paid
  out of the first moneys coming into said assurance fund or the county or
  city general fund after the assurance fund has been terminated  pursuant
  to  section  four  hundred  twenty-six  of this article. If any right of
  action against any person for damages for negligence or other cause,  or
  under  any  covenant  or  contract of warranty or guaranty or otherwise,
  exists in favor of the person to whom  indemnity  is  paid,  the  county
  treasurer (in New York city the commissioner of finance) shall be deemed
  to  be  subrogated  to  such  right  and  may bring an action to recover
  thereunder.  Any amounts recovered by the county treasurer (in New  York
  city the commissioner of finance) under such an action shall be credited
  to the account of the assurance fund.  Until the assurance fund provided
  as  aforesaid  shall have been exhausted, payment for any such losses or
  damages shall be made out of such fund.