This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

FOREIGN FIRE INSURANCE TAXES -- Exempt Volunteer Firemen's Benevolent Association (need to be member of association to receive benefits); (use of money for retirement and death benefits)

INSURANCE LAW, §§9104, 9105: The Volunteer and Exempt Firemen's Benevolent Association of Hicksville may expend foreign fire insurance tax moneys to provide death benefits to family members of deceased volunteer firefighters, and to fund retirement benefits to indigent or disabled volunteer firefighters, without regard to whether the deceased firefighters were, or the indigent or disabled firefighters are, members of the Association.

You ask whether the Volunteer and Exempt Firemen's Benevolent Association of Hicksville may establish an annuity program, funded by a portion of the foreign fire insurance tax moneys it receives, to provide retirement and death benefits to all members of the Association or their beneficiaries on a pro rata basis.

Insurance Law, §§9104 and 9105 govern the distribution and use of foreign fire insurance tax moneys except as otherwise provided in any special law. Therefore, where an exempt firemen's benevolent association has been created by special act of the State Legislature and is authorized to receive direct payment of foreign fire insurance tax moneys, the moneys may be expended only in the manner prescribed by the special act (see 1991 Opns St Comp No. 91-29, p 84; 1989 Opns St Comp No. 89-11, p 23; 1983 Opns St Comp No. 83-120, p 151; 1981 Opns St Comp No. 81-328, p 357).

The Volunteer and Exempt Firemen's Benevolent Association of Hicksville was incorporated by chapter 73 of the Laws of 1940, a special act of the State Legislature which added sections 605.0 through 605.6 to the Nassau County Civil Divisions Act (L 1939, ch 273, as amended). Section 605.6 authorizes the Association to receive foreign fire insurance tax moneys and to use such moneys as follows:

Such taxes shall only be used for the care and relief of disabled or indigent volunteer and exempt firemen and their families.

Thus, the only purpose for which the Association may expend foreign fire insurance tax moneys is the care and relief of disabled or indigent volunteer and exempt firemen and their families. The Association is not authorized to expend these moneys for any other purpose.

In connection with special acts similar to the one incorporating your association, this Office has previously concluded that a benevolent association may use foreign fire insurance tax moneys to fund a death benefit payable to the family of deceased volunteer firefighters since, in our opinion, death is a "disability" within the intendment of the special acts (1984 Opns St Comp No. 84-36, p 44). Therefore, it is our opinion that foreign fire tax moneys may be used to fund a program which provides the payment of death benefits to family members of deceased volunteer firefighters. In our opinion, since the special act incorporating the Association does not restrict use of foreign fire insurance tax moneys only to members of the Association, such a death benefit must be available to families of deceased volunteer firefighters without regard to whether the firefighters were members of the Association (see Bruno v Walder, 82 AD2d 903, 440 NYS2d 703; Uniformed Fire Officers Assoc. v Mutual Aid Association, 82 AD2d 916, 440 NYS2d 706; see also 1983 Opns St Comp No. 83-33, p 38; 1981 Opns St Comp No. 81-392, p 429). We also recommend that the Association contact the New York State Insurance Department with respect to whether the establishment of a death benefit program would subject the Association to licensing requirements of the Insurance Department or whether the annuity proposed to be purchased otherwise complies with the applicable provisions of the New York State Insurance Law (see Insurance Law, §4522[a][3]; Opn No. 84-36, supra).

As noted, the special act limits use of foreign fire insurance tax moneys to care and relief of indigent or disabled firefighters and their families. Therefore, these moneys may not be used to fund a proposed retirement program that will make payments only to members of the Association and without regard to indigency or disability. Foreign fire insurance moneys, however, may properly be used to fund a retirement program which provides payments to indigent or disabled firefighters and their families without regard to whether the firefighters are members of the Association. Again, since you indicate that you contemplate the purchase of an annuity, we suggest that you discuss any proposed program with appropriate officials in the New York State Insurance Department.

December 10, 1991
Dennis Mulligan, Chairman
Volunteer and Exempt Firemen's Benevolent
Association of Hicksville