Section 4714. Transition

For  municipal cooperative health benefit plans
  that provided medical,  surgical  or  hospital  services  on  or  before
  January  first,  nineteen  hundred  ninety-three pursuant to a municipal
  cooperation agreement authorized under article  five-G  of  the  general
  municipal  law,  the  reserve  and  surplus requirements in section four
  thousand seven hundred six of this article  may  be  phased  in  over  a
  period of up to five plan years, provided that:
    (a)  the  amount  for  the  reserve  described  in  paragraph  one  of
  subsection (a) of section  four  thousand  seven  hundred  six  of  this
  article:
    (1)  at  the end of the first plan year on or after the effective date
  of this article shall not  be  less  than  twelve  percent  of  expected
  incurred claims and expenses thereon for such plan year; and
    (2) at the end of each subsequent plan year during the phase-in period
  shall  not  be  less  than  the actual percentage amount in the previous
  year, plus an  amount  equal  to  the  difference  between  such  actual
  percentage  amount  and  the  percentage amount otherwise required under
  section four thousand seven hundred six of this article, divided by  the
  number of years remaining in the phase-in period;
    (b) the amount of surplus:
    (1)  at  the end of the first plan year on or after the effective date
  of this article shall not be less than two  percent  of  the  annualized
  earned premium equivalents during such plan year; and
    (2) at the end of each subsequent plan year shall not be less than the
  actual percentage amount in the previous plan year, plus an amount equal
  to  the  difference  between  such  actual  percentage  amount  and  the
  percentage otherwise required under section four thousand seven  hundred
  six  of  this  article,  divided by the number of years remaining in the
  phase-in period; and
    (c) the superintendent may reduce the aggregate or specific  stop-loss
  retention  amounts  or  attachment  points,  referred to in section four
  thousand seven hundred seven of this article, during the phase-in period
  for any municipal cooperative health  benefit  plan  which  consists  of
  fewer  than  five  municipal  corporations or which covers less than two
  thousand employees and retirees.