(a) To the extent that the self-insurer pays first-party benefits, the self-insurer is entitled to the proceeds of any settlement or judgment resulting from the exercise of any right of recovery for damages for personal injury under section 5104(b) of the New York Insurance Law. The self- insurer shall have a lien upon any such settlement or judgment to the extent that the self-insurer has paid first-party benefits. An eligible injured person shall:

1. (1) hold in trust, for the benefit of the self-insurer, all rights of recovery which he shall have for personal injury under section 5104(b) of the New York Insurance Law;
2. (2) do whatever is proper to secure, and shall do nothing to prejudice, such rights; and
3. (3) execute, and deliver to the self-insurer, instruments and papers as may be appropriate to secure the rights and obligations of such person and the self-insurer, established by this Part.

(b) An eligible injured person shall not compromise an action to recover damages brought under section 5104(b) of the New York Insurance Law except:

1. (1) with the written consent of the self-insurer;
2. (2) with approval of the court; or
3. (3) where the amount of the settlement exceeds $50,000.