Compensation Risk Managers LLC (CRM) will surrender its licence to run self-insured workers' compensation trusts, the New York state Workers' Compensation Board said, announcing a settlement.

The firm, whose parent company is Bermuda-based CRM Holdings Inc., had a notice of charges served against it by the Board in a bid to strip it of its licence following a range of alleged failures and improper acts.

A hearing which was originally set for May 20 and postponed indefinitely has now been cancelled, the Ploughkeepsie Journal reported.

CRM denied the allegations and said it had fully complied with the law. But all eight self-insured trusts run by the company became underfunded beyond the 90 percent standard held by the board and are either closed or closing.

The ultimate risk is that injured workers may one day not be paid by the trusts if they run out of money before the board's back-up plans kick-in. That is not expected to happen, board spokesman Brian Keegan said.

The Board is making assessments on non-CRM-run trusts to make up a gap of at least $59 million, but a lawsuit brought on behalf of some of those trusts has held up that approach. The Board is also looking to float a state bond in that amount to bridge the gap and legislation is being drafted for the bond.

The eight trusts CRM administered involve thousands of employers across the state and dozens in the mid-Hudson Valley.

In the settlement agreement, signed by Daniel Hickey Jr., chairman and chief executive, the company agreed to surrender its licence as a third-party administrator by September 8 and cease representing self-insurers before the Board. It will transfer to the board all claims from injured workers covered under the trusts and help in transferring to the board all records and money associated with the trusts.

Fines will also be paid totalling $151,000 by the Poughkeepsie-based company, the board said in its news release. Of this, $96,000 was assessed by the New York state Insurance Department previously in a separate matter, relating to CRM's acting as an independent insurance adjuster without a licence to do so.

The rest, $55,000, is to "satisfy all penalties that had previously been assessed", the board's statement said.

Mr. Keegan said those penalties were separate and not a condition of Monday's settlement, but he could not provide details of what led to them.