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91_SB1658
LRB9111673JSpcA
1 AN ACT concerning workers' compensation self-insurance
2 pools, amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The State Finance Act is amended by changing
6 Section 5.138 as follows:
7 (30 ILCS 105/5.138) (from Ch. 127, par. 141.138)
8 Sec. 5.138. The Group Workers' Compensation Pool
9 Self-Insurers' Insolvency Fund.
10 (Source: P.A. 83-1362.)
11 Section 10. The Illinois Insurance Code is amended by
12 adding Article V 3/4 as follows:
13 (215 ILCS 5/Art. V 3/4 heading new)
14 Article V 3/4 Group Workers' Compensation Pools; pooling;
15 insolvency fund.
16 (215 ILCS 5/107a.01 new)
17 Sec. 107a.01. Short title. This Article may be cited as
18 the Workers' Compensation Pool Law.
19 (215 ILCS 5/107a.02 new)
20 Sec. 107a.02. Scope. This Article applies to all
21 qualified group workers' compensation pools.
22 (215 ILCS 5/107a.03 new)
23 Sec. 107a.03. Purpose. The purpose of this Article is
24 to permit 2 or more employers with homogeneous risk
25 characteristics or that are members of a bona-fide
26 professional, commercial, industrial, or trade association,
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1 with homogenous risk characteristics to pool their workers'
2 compensation and employer's liability exposures under this
3 Article.
4 (215 ILCS 5/107a.04 new)
5 Sec. 107a.04. Organization under the Illinois Insurance
6 Code.
7 (a) After December 31, 2000, group workers' compensation
8 pools shall for the purpose of this Article, and this Article
9 only, be considered as though they were assessable domestic
10 mutual insurance companies and subject to the following:
11 (1) Article XII 1/2, Article XIII, Article XIII
12 1/2, Article XXIV; and
13 (2) Sections 126.2, 126.4, 126.7, 132, 132.1
14 through 132.7, 133, 134, 137, 139, 140, 141.1, 141.2,
15 142, 143, 143c, 147, 148, 149, 154.5, 154.6, 154.7,
16 154.8, 155.01, 155.04, 173.1, 173.2, 173.3, 173.4, 173.5,
17 174, 174.1, 175, 176, 178, 179b, 378, 379.1, 408, 408.3,
18 449, 456, 457, and 458, subsections A, B, C, and E of
19 Section 126.5, subsection A of Section 126.6, and
20 subsections (1) and (7) of Section 412 of this Code.
21 (b) If there is a conflict between any Section of this
22 Article and any other Section of this Code, then the
23 provisions of this Article shall apply.
24 (c) No other provision of this Code shall be applicable
25 to any qualified workers' compensation group workers'
26 compensation pool except as provided in this Article.
27 (215 ILCS 5/107a.05 new)
28 Sec. 107a.05. Definitions and interchangeable terms.
29 (a) Unless otherwise provided, the following definitions
30 shall apply:
31 "Authorized insurer" means an insurer licensed in this
32 State to transact business as described in Clauses (c) and
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1 (d) of Class 2 of Section 4 of this Code.
2 "Calendar Quarter" means the 3-month periods ending March
3 31, June 30, September 30, and December 31.
4 "Director" means the Director of Insurance.
5 "Engaged actively in the business" means a bona-fide
6 business concern having conducted commerce, trade, or
7 industry in this State for a specified period of time. Any
8 and all records relating to this requirement shall be open to
9 inspection by the Director or his designee during normal
10 business hours.
11 "Gross annual payroll" means payroll for the preceding
12 fiscal year.
13 "Independent actuarial opinion" means an opinion
14 expressed by a member of the American Academy of Actuaries or
15 Casualty Actuarial Society.
16 "Independent CPA" means an independent certified public
17 accountant or independent certified public accounting firm in
18 good standing and licensed to practice by the Department of
19 Professional Regulation.
20 "Pool" means a qualified group workers' compensation
21 pool as authorized by this Article.
22 "Qualified group workers compensation pool" means a group
23 workers' compensation pool that has received a certificate of
24 authority pursuant to this Article.
25 (b) For purposes of incorporating the provisions of this
26 Code designated in paragraphs (1) and (2) of subsection (a)
27 of Section 107a.04 into this Article, the following terms
28 shall be interchangeable:
29 "Contribution" shall be considered premium.
30 "Pooling agreement" shall be considered a policy.
31 "Trustees of a group workers compensation pool" shall be
32 considered as though they were directors of a domestic mutual
33 insurance company.
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1 (215 ILCS 5/107a.06 new)
2 Sec. 107a.06. Pool administration.
3 (a) An application for Certificate of Authority to
4 establish a pool must include the documentation and
5 information regarding its administrator, pooling agreement,
6 plan of operation, and membership required by this Section.
7 (b) Administrators must disclose all of the following:
8 (1) Biography of the risk manager on forms
9 prescribed by the Director.
10 (2) If a corporation, biographies of all officers
11 and directors.
12 (3) The size of staff and other information, such
13 as the kinds of staff positions, location of
14 administrative offices and the nature of any electronic
15 data processing equipment, if any, available for
16 servicing the pool, to demonstrate that the Administrator
17 has the resources to administer the program disclosed
18 pursuant to subsection (d).
19 (4) The most recent financial statement of the
20 administrator. If a publicly held company, a copy of the
21 last 10-K filed with the Securities and Exchange
22 Commission.
23 (5) The compensation contract of the Administrator.
24 (6) The by-laws of the pool and articles of
25 incorporation, if any.
26 (7) Any agreement that subcontracts any of the
27 administrator's duties or responsibilities.
28 (c) A pooling agreement must contain all of the
29 following:
30 (1) A description of the services to be provided by
31 the Administrator.
32 (2) The manner in which costs are to be apportioned
33 by the Administrator.
34 (3) The initial premium deposit.
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1 (4) The assessment provision.
2 (5) The termination provisions and minimum term of
3 membership, which minimum term of membership shall not be
4 less than one year.
5 (6) The duration of liability for additional
6 assessments following termination of membership, which
7 shall be for a period of not less than 3 years.
8 (7) The prerequisites for membership.
9 (8) A provision stating that a claim shall be paid
10 by the pool, regardless of the size of the claim, and
11 that the pool shall be reimbursed by the employer for any
12 amounts required to be paid by the employer under the
13 agreement.
14 (9) A provision stating that the terms of
15 termination after the first year of pool membership shall
16 be dictated by the pooling agreement.
17 (d) Plans of operation must disclose all of the
18 following:
19 (1) A listing of initial members.
20 (2) The aggregate loss history of initial members
21 for each of the last 3 years.
22 (3) The amount of the net retention of the pool and
23 a list of reinsurers.
24 (4) The names of all entities that will provide
25 services for the pool and copies of proposed contracts in
26 connection those services.
27 (5) The safety and loss control programs to be
28 provided or required.
29 (e) The application must contain information about
30 initial members specified on forms prescribed by the
31 Director.
32 (f) The application must contain the combined loss
33 experience for the group for the last 3 years and any other
34 financial data required by the Director.
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1 (g) A pool administrator's original books and records
2 relating to the operations of the pool shall at all times be
3 located within the State of Illinois.
4 (h) Any change of the pooling agreement, by-laws, plan
5 of operation, reinsurance agreements, or membership shall be
6 delivered to the Director within 30 days after the amendment
7 or change.
8 (i) A pool trustee must be an employee, officer,
9 director, or owner of a pool member.
10 (215 ILCS 5/107a.07 new)
11 Sec. 107a.07. Standards for issuing certificates of
12 authority to pools.
13 (a) Upon receipt of a completed application, the
14 Department shall consider the following in evaluating the
15 financial strength of the pool:
16 (1) The number of employees covered by the pool.
17 (2) The particular industries in which the
18 participants are engaged.
19 (3) The combined net worth of pool participants.
20 (4) Any excess insurance purchased from authorized
21 insurers.
22 (5) The gross annual payroll of members, which must
23 be at least $10,000,000.
24 (b) The pool administrator must either contract with a
25 licensed service company or have sufficient resources, such
26 as those set forth in item (3) of subsection (b) of Section
27 107a.06, to administer the proposed pool.
28 (c) The Department must determine whether the pool can
29 ensure that individual pool members are in compliance with
30 Section 107a.08.
31 (215 ILCS 5/107a.08 new)
32 Sec. 107a.08. Provisions applicable to members of a
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1 group workers' compensation pool.
2 (a) All members of a group workers' compensation pool
3 must have homogeneous risk characteristics as provided in
4 Section 107a.03.
5 (b) In determining whether members exhibit homogeneous
6 risk characteristics, the Director shall consider any or all
7 of the following characteristics:
8 (1) The loss frequency inherent in the occupational
9 framework of group members.
10 (2) The loss severity inherent in the occupational
11 framework of group members.
12 (3) The occupational disease potential inherent in
13 the occupational framework of group members.
14 (4) The occupational tasks of member employees.
15 (5) Any other relevant fact the group members
16 present to the Director that has reference to the
17 classification of similar risks (e.g. SIC codes).
18 (c) Eligibility as a pool participant shall be based
19 upon having a minimum of:
20 (l) 20 employees and $250,000 gross annual payroll;
21 or
22 (2) 10 employees and $125,000 gross annual payroll
23 for participants who have engaged actively in business
24 for a minimum of 3 years; or
25 (3) 5 employees and $62,500 gross annual payroll
26 for participants who have actively engaged in business
27 for a minimum of 5 years.
28 (d) Exceptions to the minimum eligibility requirements
29 of this Section may be allowed by any pool whenever the
30 following conditions are met:
31 (1) the participant has been actively engaged in
32 business for a minimum period of 5 consecutive years in
33 Illinois; and
34 (2) the participant agrees to make all of its
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1 financial records available to the Director for
2 reasonable inspection during the period of membership;
3 and
4 (3) the pool administrator certifies to the
5 Director that he examined the financial records of the
6 pool participant prior to the participant's admission to
7 the pool and found the participant to be solvent and
8 financially stable.
9 (215 ILCS 5/107a.09 new)
10 Sec. 107a.09. Service companies for group workers'
11 compensation pools.
12 (a) No association, corporation, partnership, sole
13 proprietorship, trust, or other business entity shall provide
14 services in the design, establishment, or administration of a
15 group workers' compensation pool unless it is licensed to do
16 so by the Department. An applicant for a license shall state
17 in writing the type of activities it seeks authorization to
18 engage in and the type of services it seeks authorization to
19 provide. The license shall be granted only when the Director
20 is satisfied that the entity possesses the necessary
21 organization, background, expertise, and financial integrity
22 to supply the services sought to be offered. The Department
23 may issue a license subject to restrictions or limitations,
24 including restrictions or limitations on the type of services
25 that may be supplied or the activities in which the entity
26 may engage. A license issued under this Section shall be
27 valid for 2 years.
28 (b) To assure that administrators are financially
29 solvent, that pools are administered in a fair and capable
30 fashion, and that administrators are able to process claims
31 and pay benefits in a prompt, fair, and equitable manner,
32 entities licensed to engage in those activities under this
33 Section are subject to supervision and examination by the
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1 Department.
2 (c) The Department may adopt rules for the purposes of
3 this Article. The rules shall (i) establish reporting
4 requirements for administrators for group workers'
5 compensation pools, including experience reporting
6 requirements consistent with those established under this
7 Code for insurers; (ii) establish bonding requirements or
8 other provisions assuring the financial integrity of entities
9 administering group self-insurance; and (iii) establish other
10 reasonable requirements to further the purposes of this
11 Section.
12 (215 ILCS 5/107a.10 new)
13 Sec. 107a.10. Bond requirements.
14 (a) An administrator shall obtain and maintain in force
15 fidelity bonds on employees, officers, or positions in an
16 amount not less than the amount set forth in the column
17 "Minimum Amount of Bond", based on the amount of assets
18 administered on behalf of pools by the administrator (as
19 determined from year to year) stated in the annual statement
20 of the pools as filed with the Department. All such bonds
21 shall be written with at least a one-year discovery period
22 and, if written with less than a 3-year discovery period,
23 shall contain a provision that no cancellation or termination
24 of the bond, whether by or at the request of the insured or
25 by the underwriter, shall take effect before the expiration
26 of 90 days after written notice of the cancellation or
27 termination has been filed with the Department unless an
28 earlier date of cancellation or termination is approved by
29 the Department.
30 (b) The bonds shall include all employees, officers, or
31 positions for the following perils, which may be covered
32 under separate policies:
33 (1) dishonesty of employees and officers;
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1 (2) robbery, burglary, larceny, theft, false
2 pretense, hold-up, misplacement, mysterious
3 disappearance, and damage or destruction while property
4 is in any bank, any recognized place of safe deposit, or
5 in transit; and
6 (3) forgery or alteration.
7 (c) The bond shall be written by an insurer licensed to
8 transact business in the State of Illinois.
9 (d) Schedule of assets in relationship to amount of
10 bond:
11 TOTAL ASSETS MINIMUM AMOUNT OF BOND
12 $500,000 or less.............. $20,000 plus 6% of total
13 assets
14 more than $ 500,000 and
15 not more than $1,000,000...... $50,000 plus 4% of assets
16 over $500,000
17 more than $1,000,000 and
18 not more than $3,000,000...... $70,000 plus 3% of assets
19 over $1,000,000
20 more than $3,000,000 and
21 not more than $5,000,000...... $130,000 plus 2% of assets
22 over $3,000,000
23 more than $5,000,000 and
24 not more than $10,000,000..... $170,000 plus 1.5% of assets
25 over $5,000,000
26 more than $10,000,000......... $245,000 plus 0.75% of assets
27 more than $10,000,000
28 (215 ILCS 5/107a.11 new)
29 Sec. 107a.11. Admissible assets.
30 (a) Admitted assets include amounts permitted under
31 Section 107a.12 as modified by only the following:
32 (1) Direct obligations of the United States of
33 America for the payment of money or obligations for the
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1 payment of money that are guaranteed as to the payment of
2 principal and interest by the United States of America.
3 (2) Direct obligations for the payment of money
4 issued by an agency or instrumentality of the United
5 States of America or obligations for the payment of money
6 that are guaranteed as to payment of principal and
7 interest by an agency or instrumentality of the United
8 States of America.
9 (3) Bonds or securities that are issued by any
10 state of the United States and that are secured by the
11 full faith and credit of that state.
12 (4) Certificates of deposit, time deposits, or
13 demand deposits in a bank in the State of Illinois that
14 has deposits insured by the Federal Deposit Insurance
15 Corporation.
16 (5) Saving certificates issued by any savings and
17 loan association in the State of Illinois that has
18 deposits insured by the Federal Deposit Insurance
19 Corporation.
20 (6) Direct, unconditional obligations of a solvent
21 business corporation for the payment of money on the
22 following conditions:
23 (A) the corporation is incorporated under the
24 laws of the United States of America or any state of
25 the United States of America;
26 (B) the corporation has a tangible net worth
27 of not less than $500,000 and the obligations have
28 been awarded a "1" or "2" rating by the Securities
29 Valuation Office of the National Association of
30 Insurance Commissioners;
31 (C) the corporation is not affiliated with any
32 member of the pool;
33 (D) no such obligation of the corporation has
34 been in default as to principal or interest during
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1 the 5 years preceding the date of investment,
2 however, the corporation need not have had
3 obligations outstanding during that period and need
4 not have been in existence for that period, and
5 obligations acquired under this Section may be newly
6 issued;
7 (E) a pool may not invest more than 33 1/3% of
8 its assets under this item (6); and
9 (F) a pool may not invest under this Section
10 more than 5% of its assets in the obligations of any
11 one corporation.
12 (7) Obligations of any political subdivision of any
13 state of the United States of America for the payment of
14 money on the following conditions:
15 (A) the obligations are payable from ad
16 valorem taxes;
17 (B) the political subdivision is not in
18 default in the payment of principal or interest on
19 any of its direct, general obligations;
20 (C) no investment may be made under this
21 Section in obligations that are secured only by
22 special assessments for local improvements;
23 (D) a pool may not invest under this Section
24 more than 4% of its assets in direct, general
25 obligations issued by any one political subdivision;
26 and
27 (E) a pool may not invest more than 50% of its
28 assets under this item (7).
29 (8) Mutual funds:
30 (A) government money market mutual funds that
31 meet the conditions of paragraphs (c)(2), (c)(3),
32 and (c)(4) of 17 C.F.R. 270.2a-7, revised as of
33 April l, 1992, that have been rated in one of the 2
34 highest rating categories by an independent rating
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1 agency recognized by the National Association of
2 Insurance Commissioners, and that invest in
3 obligations issued, guaranteed, or insured by the
4 United States or Canada or any agency or
5 instrumentality of the United States or Canada.
6 (B) fixed income bond mutual funds that meet
7 the conditions of paragraphs (c)(2), (c)(3), and
8 (c)(4) of 17 C.F.R. 270.2a-7, revised as of April 1,
9 1992, and that have been rated in one of the 2
10 highest rating categories by an independent rating
11 agency recognized by the National Association of
12 Insurance Commissioners, however, a pool may not
13 invest in fixed income bond mutual funds more than
14 the greater of $100,000 or 10% of its total assets
15 in any one fund.
16 (9) Not more than 5% of a pool's admitted assets
17 may be assessment receivables. In order to be an admitted
18 asset, an assessment receivable cannot be more than 60
19 days past due.
20 (10) Not more than 10% of a pool's admitted assets
21 may be reinsurance receivables. In order to be an
22 admitted asset, a reinsurance receivable cannot be more
23 than 90 days past due.
24 (b) Amounts recoverable from authorized reinsurers on
25 unpaid losses may be deducted from the reserves required by
26 Section 4 of the Workers' Compensation Act.
27 (c) All securities eligible for registration shall be
28 registered in the name of the pool and all securities shall
29 be maintained in a State or National Bank having trust powers
30 and located within this State.
31 (215 ILCS 5/107a.12 new)
32 Sec. 107a.12. Annual statement.
33 (a) A pool authorized to do business in this State shall
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1 file with the Director by March 1st in each year 2 copies of
2 its financial statement for the year ending December 31st
3 immediately preceding on forms prescribed by the Director,
4 which shall conform substantially to the form of statement
5 adopted by the National Association of Insurance
6 Commissioners. Unless the Director provides otherwise, the
7 annual statement is to be prepared in accordance with the
8 annual statement instructions and the Accounting Practices
9 and Procedures Manual adopted by the National Association of
10 Insurance Commissioners. The Director may promulgate rules
11 for determining which portions of the annual statement
12 instructions and Accounting Practices and Procedures Manual
13 adopted by the National Association of Insurance
14 Commissioners are germane for the purpose of ascertaining
15 the condition and affairs of a pool.
16 (b) The Director shall have authority to extend the time
17 for filing any statement by any pool for reasons that he
18 considers good and sufficient. The admitted assets shall be
19 shown in the statement at the actual values as of the last
20 day of the preceding year, in accordance with Section 126.7.
21 The statement shall be verified by oaths of a majority of the
22 trustees or directors of the pool. In addition, when the
23 Director considers it to be necessary and appropriate for the
24 protection of policyholders, creditors, shareholders, or
25 claimants, the Director may require the pool to file, within
26 60 days after mailing to the pool a notice that a
27 supplemental summary statement is required, a supplemental
28 summary statement, as of the last day of any calendar month
29 occurring during the 100 days next preceding the mailing of
30 the notice, designated by him or her on forms prescribed and
31 furnished by the Director. The Director may require
32 supplemental summary statements to be certified by an
33 independent actuary deemed competent by the Director or by an
34 independent certified public accountant.
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1 (c) On or before June 1 of each year, a pool shall file
2 with the Director an audited financial statement reporting
3 the financial condition of the pool as of the end of the most
4 recent calendar year and changes in the surplus funds for the
5 year then ending. The annual audited financial report shall
6 include the following:
7 (1) a report of an independent certified public
8 accountant;
9 (2) a balance sheet reporting assets, as defined in
10 this Article, liabilities, and surplus funds;
11 (3) a statement of gain and loss from operations;
12 (4) a statement of changes in financial position;
13 (5) a statement of changes in surplus funds; and
14 (6) the notes to financial statements.
15 (d) The Director shall require a pool to file an
16 independent actuarial opinion as to the sufficiency of the
17 loss and loss adjustment expense reserves. This opinion shall
18 be due on June 1 of each year.
19 (215 ILCS 5/107a.13 new)
20 Sec. 107a.13. Group Workers' Compensation Pool
21 Insolvency Fund.
22 (a) All qualified group workers' compensation pools
23 shall pay a sum equal to 0.5% of all compensation payments
24 made under either the Workers' Compensation Act or the
25 Workers' Occupational Diseases Act during the 6 months
26 immediately preceding the date of payment, into the Group
27 Workers' Compensation Pool Insolvency Fund, the successor
28 fund to the Group Self-Insurers' Insolvency Fund. On the
29 effective date of this amendatory Act of the 91st General
30 Assembly, all moneys in the Group Self-Insurers' Insolvency
31 Fund shall be transferred into the Group Workers'
32 Compensation Pool Insolvency Fund.
33 (b) The State Treasurer is ex-officio custodian of the
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1 Group Workers' Compensation Pool Insolvency Fund. Moneys in
2 the Fund shall be deposited the same as are State funds and
3 any interest accruing on moneys in the Fund shall be added to
4 the Fund every 6 months. The Fund shall be subject to audit
5 the same as State funds and accounts and shall be protected
6 by the general bond given by the State Treasurer. The Fund
7 shall be considered always appropriated for the purposes of
8 compensating employees who are eligible to receive benefits
9 from their employers pursuant to the provisions of the
10 Workers' Compensation Act or Workers' Occupational Diseases
11 Act when their employer is a member of a qualified group
12 workers' compensation pool and the qualified group workers'
13 compensation pool has become unable to pay compensation due
14 to financial insolvency either prior to or following the date
15 of award. Moneys in the Fund may be used to compensate any
16 type of injury or occupational disease that is compensable
17 under either the Workers' Compensation Act or the Workers'
18 Occupational Diseases Act. The State Treasurer shall be
19 joined with the qualified group workers' compensation pool as
20 party respondent in any claim or application for adjustment
21 of claim filed against a qualified group workers'
22 compensation pool whenever the compensation and medical
23 services provided pursuant to this Article may be unpaid by
24 reason of default of an insolvent qualified group workers'
25 compensation pool.
26 (c) Payment shall be made out of the Group Workers'
27 Compensation Pool Insolvency Fund only upon order of the
28 Director and only after the penal sum of the fidelity bond
29 and securities has been exhausted. It shall be the obligation
30 of a qualified group workers' compensation pool or its
31 successor to make arrangements to repay the Group Workers'
32 Compensation Pool Insolvency Fund for all moneys paid out in
33 its behalf. The Director is authorized to make arrangements
34 with the qualified group workers' compensation pool as to
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1 terms of repayment. The obligations of qualified group
2 workers' compensation pools to make contributions to the
3 Group Workers' Compensation Pool Insolvency Fund shall be
4 waived on any January 1 or July 1, if the fund has a positive
5 balance of at least $2,000,000 on the date one month prior to
6 the date of payment.
7 (215 ILCS 5/107a.14 new)
8 Sec. 107a.14. Group workers' compensation pools
9 assessment provisions.
10 (a) When the Director determines by means of audit,
11 annual certified statement, actuarial opinion, or otherwise
12 that the assets possessed by a pool are less than the
13 reserves required together with any other unpaid liabilities,
14 he or she shall order the pool administrator to assess the
15 individual pool participants in an amount not less than
16 necessary to correct the deficiency. This Section is not
17 intended to restrict or preclude the administrator from time
18 to time levying assessments or increasing premium deposits in
19 accordance with the pooling agreement.
20 (b) When the Director determines that the compensation
21 and medical services provided pursuant to this Article may be
22 unpaid by reason of the default of an insolvent group
23 workers' compensation pool and the penal sum of the fidelity
24 bond and the securities provided by the group workers'
25 compensation pool are about to become exhausted, the Director
26 shall declare the group workers' compensation pool to be in
27 default and first levy upon and collect from the individual
28 employer members of the group workers' compensation pool in
29 default an assessment to assure prompt payment of
30 compensation and medical services. No assessment of any
31 individual employer member of the group workers' compensation
32 pool made pursuant to this subsection shall exceed 25% of the
33 average annual contribution paid by that employer over the
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1 previous 3-year period; however, if the Group Workers'
2 Compensation Pool Insolvency Fund is then for any reason
3 financially unable to assure prompt payment of compensation
4 and medical services, the employer member may be assessed
5 without limitation. If and only if (i) the Group Workers'
6 Compensation Pool Insolvency Fund has a positive balance of
7 less than $1,000,000,(ii) the Director has declared a group
8 workers' compensation pool to be in default, and (iii) the
9 Group Workers' Compensation Pool Insolvency Fund is
10 financially unable to pay all employees whose compensation
11 and medical services have been approved, the director shall
12 levy upon and collect from all group workers' compensation
13 pools an assessment to provide the balance necessary to
14 assure prompt payment of approved compensation and medical
15 services. If an insurance carrier becomes liable for workers'
16 compensation and occupational diseases payments under the
17 terms of the policy covering the group workers' compensation
18 pool, the carrier shall make appropriate payments and
19 payments from the Fund shall cease. Payments from the Fund
20 shall resume only when the insurance carrier's liability is
21 exhausted.
22 (215 ILCS 5/107a.15 new)
23 Sec. 107a.15. Authority of Director.
24 (a) If the Director determines that a group workers'
25 compensation pool is not in compliance with Sections 107a.04,
26 107a.11, and 107a.12 of this Article, the Director shall
27 require the pool to eliminate the condition causing the
28 noncompliance within a specified time from the date the
29 notice of the Director's requirement is mailed or delivered
30 to the pool.
31 (b) If a pool fails to comply with the Director's
32 requirement, the pool shall be deemed to be in a hazardous
33 financial condition, and the Director may take one or more of
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1 the actions authorized by law as to pools in hazardous
2 financial condition.
3 (215 ILCS 5/464a rep.)
4 Section 15. The Illinois Insurance Code is amended by
5 repealing Section 464a.
6 Section 20. The Workers' Compensation Act is amended by
7 changing Section 4 as follows:
8 (820 ILCS 305/4) (from Ch. 48, par. 138.4)
9 Sec. 4. (a) Any employer, including but not limited to
10 general contractors and their subcontractors, who shall come
11 within the provisions of Section 3 of this Act, and any other
12 employer who shall elect to provide and pay the compensation
13 provided for in this Act shall:
14 (1) File with the Commission annually an
15 application for approval as a self-insurer which shall
16 include a current financial statement, and annually,
17 thereafter, an application for renewal of self-insurance,
18 which shall include a current financial statement. Said
19 application and financial statement shall be signed and
20 sworn to by the president or vice president and secretary
21 or assistant secretary of the employer if it be a
22 corporation, or by all of the partners, if it be a
23 copartnership, or by the owner if it be neither a
24 copartnership nor a corporation. All initial applications
25 and all applications for renewal of self-insurance must
26 be submitted at least 60 days prior to the requested
27 effective date of self-insurance. An employer may elect
28 to provide and pay compensation as provided for in this
29 Act as a member of a group workers' compensation pool
30 under Article V 3/4 of the Illinois Insurance Code. If
31 an employer becomes a member of a group workers'
-20- LRB9111673JSpcA
1 compensation pool, the employer shall not be relieved of
2 any obligations imposed by this Act.
3 If the sworn application and financial statement of
4 any such employer does not satisfy the Commission of the
5 financial ability of the employer who has filed it, the
6 Commission shall require such employer to,
7 (2) Furnish security, indemnity or a bond
8 guaranteeing the payment by the employer of the
9 compensation provided for in this Act, provided that any
10 such employer whose application and financial statement
11 shall not have satisfied the commission of his or her
12 financial ability and who shall have secured his
13 liability in part by excess liability insurance shall be
14 required to furnish to the Commission security, indemnity
15 or bond guaranteeing his or her payment up to the
16 effective limits of the excess coverage, or
17 (3) Insure his entire liability to pay such
18 compensation in some insurance carrier authorized,
19 licensed, or permitted to do such insurance business in
20 this State. Every policy of an insurance carrier,
21 insuring the payment of compensation under this Act shall
22 cover all the employees and the entire compensation
23 liability of the insured: Provided, however, that any
24 employer may insure his or her compensation liability
25 with 2 or more insurance carriers or may insure a part
26 and qualify under subsection 1, 2, or 4 for the remainder
27 of his or her liability to pay such compensation, subject
28 to the following two provisions:
29 Firstly, the entire compensation liability of
30 the employer to employees working at or from one
31 location shall be insured in one such insurance
32 carrier or shall be self-insured, and
33 Secondly, the employer shall submit evidence
34 satisfactorily to the Commission that his or her
-21- LRB9111673JSpcA
1 entire liability for the compensation provided for
2 in this Act will be secured. Any provisions in any
3 policy, or in any endorsement attached thereto,
4 attempting to limit or modify in any way, the
5 liability of the insurance carriers issuing the same
6 except as otherwise provided herein shall be wholly
7 void.
8 Nothing herein contained shall apply to policies of
9 excess liability carriage secured by employers who have
10 been approved by the Commission as self-insurers, or
11 (4) Make some other provision, satisfactory to the
12 Commission, for the securing of the payment of
13 compensation provided for in this Act, and
14 (5) Upon becoming subject to this Act and
15 thereafter as often as the Commission may in writing
16 demand, file with the Commission in form prescribed by it
17 evidence of his or her compliance with the provision of
18 this Section.
19 (a-1) Regardless of its state of domicile or its
20 principal place of business, an employer shall make payments
21 to its insurance carrier or group self-insurance fund, where
22 applicable, based upon the premium rates of the situs where
23 the work or project is located in Illinois if:
24 (A) the employer is engaged primarily in the
25 building and construction industry; and
26 (B) subdivision (a)(3) of this Section applies to
27 the employer or the employer is a member of a group
28 self-insurance plan as defined in subsection (1) of
29 Section 4a.
30 The Industrial Commission shall impose a penalty upon an
31 employer for violation of this subsection (a-1) if:
32 (i) the employer is given an opportunity at a
33 hearing to present evidence of its compliance with this
34 subsection (a-1); and
-22- LRB9111673JSpcA
1 (ii) after the hearing, the Commission finds that
2 the employer failed to make payments upon the premium
3 rates of the situs where the work or project is located
4 in Illinois.
5 The penalty shall not exceed $1,000 for each day of work
6 for which the employer failed to make payments upon the
7 premium rates of the situs where the work or project is
8 located in Illinois, but the total penalty shall not exceed
9 $50,000 for each project or each contract under which the
10 work was performed.
11 Any penalty under this subsection (a-1) must be imposed
12 not later than one year after the expiration of the
13 applicable limitation period specified in subsection (d) of
14 Section 6 of this Act. Penalties imposed under this
15 subsection (a-1) shall be deposited into the Industrial
16 Commission Operations Fund, a special fund that is created
17 in the State treasury. Subject to appropriation, moneys in
18 the Fund shall be used solely for the operations of the
19 Industrial Commission.
20 (b) The sworn application and financial statement, or
21 security, indemnity or bond, or amount of insurance, or other
22 provisions, filed, furnished, carried, or made by the
23 employer, as the case may be, shall be subject to the
24 approval of the Commission.
25 Deposits under escrow agreements shall be cash,
26 negotiable United States government bonds or negotiable
27 general obligation bonds of the State of Illinois. Such cash
28 or bonds shall be deposited in escrow with any State or
29 National Bank or Trust Company having trust authority in the
30 State of Illinois.
31 Upon the approval of the sworn application and financial
32 statement, security, indemnity or bond or amount of
33 insurance, filed, furnished or carried, as the case may be,
34 the Commission shall send to the employer written notice of
-23- LRB9111673JSpcA
1 its approval thereof. The certificate of compliance by the
2 employer with the provisions of subparagraphs (2) and (3) of
3 paragraph (a) of this Section shall be delivered by the
4 insurance carrier to the Industrial Commission within five
5 days after the effective date of the policy so certified.
6 The insurance so certified shall cover all compensation
7 liability occurring during the time that the insurance is in
8 effect and no further certificate need be filed in case such
9 insurance is renewed, extended or otherwise continued by such
10 carrier. The insurance so certified shall not be cancelled
11 or in the event that such insurance is not renewed, extended
12 or otherwise continued, such insurance shall not be
13 terminated until at least 10 days after receipt by the
14 Industrial Commission of notice of the cancellation or
15 termination of said insurance; provided, however, that if the
16 employer has secured insurance from another insurance
17 carrier, or has otherwise secured the payment of compensation
18 in accordance with this Section, and such insurance or other
19 security becomes effective prior to the expiration of the 10
20 days, cancellation or termination may, at the option of the
21 insurance carrier indicated in such notice, be effective as
22 of the effective date of such other insurance or security.
23 (c) Whenever the Commission shall find that any
24 corporation, company, association, aggregation of
25 individuals, reciprocal or interinsurers exchange, or other
26 insurer effecting workers' compensation insurance in this
27 State shall be insolvent, financially unsound, or unable to
28 fully meet all payments and liabilities assumed or to be
29 assumed for compensation insurance in this State, or shall
30 practice a policy of delay or unfairness toward employees in
31 the adjustment, settlement, or payment of benefits due such
32 employees, the Commission may after reasonable notice and
33 hearing order and direct that such corporation, company,
34 association, aggregation of individuals, reciprocal or
-24- LRB9111673JSpcA
1 interinsurers exchange, or insurer, shall from and after a
2 date fixed in such order discontinue the writing of any such
3 workers' compensation insurance in this State. Subject to
4 such modification of the order as the Commission may later
5 make on review of the order, as herein provided, it shall
6 thereupon be unlawful for any such corporation, company,
7 association, aggregation of individuals, reciprocal or
8 interinsurers exchange, or insurer to effect any workers'
9 compensation insurance in this State. A copy of the order
10 shall be served upon the Director of Insurance by registered
11 mail. Whenever the Commission finds that any service or
12 adjustment company used or employed by a self-insured
13 employer or by an insurance carrier to process, adjust,
14 investigate, compromise or otherwise handle claims under this
15 Act, has practiced or is practicing a policy of delay or
16 unfairness toward employees in the adjustment, settlement or
17 payment of benefits due such employees, the Commission may
18 after reasonable notice and hearing order and direct that
19 such service or adjustment company shall from and after a
20 date fixed in such order be prohibited from processing,
21 adjusting, investigating, compromising or otherwise handling
22 claims under this Act.
23 Whenever the Commission finds that any self-insured
24 employer has practiced or is practicing delay or unfairness
25 toward employees in the adjustment, settlement or payment of
26 benefits due such employees, the Commission may, after
27 reasonable notice and hearing, order and direct that after a
28 date fixed in the order such self-insured employer shall be
29 disqualified to operate as a self-insurer and shall be
30 required to insure his entire liability to pay compensation
31 in some insurance carrier authorized, licensed and permitted
32 to do such insurance business in this State, as provided in
33 subparagraph 3 of paragraph (a) of this Section.
34 All orders made by the Commission under this Section
-25- LRB9111673JSpcA
1 shall be subject to review by the courts, said review to be
2 taken in the same manner and within the same time as provided
3 by Section 19 of this Act for review of awards and decisions
4 of the Commission, upon the party seeking the review filing
5 with the clerk of the court to which said review is taken a
6 bond in an amount to be fixed and approved by the court to
7 which the review is taken, conditioned upon the payment of
8 all compensation awarded against the person taking said
9 review pending a decision thereof and further conditioned
10 upon such other obligations as the court may impose. Upon
11 the review the Circuit Court shall have power to review all
12 questions of fact as well as of law. The penalty hereinafter
13 provided for in this paragraph shall not attach and shall not
14 begin to run until the final determination of the order of
15 the Commission.
16 (d) Upon a finding by the Commission, after reasonable
17 notice and hearing, of the knowing and wilful failure of an
18 employer to comply with any of the provisions of paragraph
19 (a) of this Section or the failure or refusal of an employer,
20 service or adjustment company, or an insurance carrier to
21 comply with any order of the Industrial Commission pursuant
22 to paragraph (c) of this Section disqualifying him or her to
23 operate as a self insurer and requiring him or her to insure
24 his or her liability, the Commission may assess a civil
25 penalty of up to $500 per day for each day of such failure or
26 refusal after the effective date of this amendatory Act of
27 1989. Each day of such failure or refusal shall constitute a
28 separate offense.
29 Upon the failure or refusal of any employer, service or
30 adjustment company or insurance carrier to comply with the
31 provisions of this Section and with the orders of the
32 Commission under this Section, or the order of the court on
33 review after final adjudication, the Commission may bring a
34 civil action to recover the amount of the penalty in Cook
-26- LRB9111673JSpcA
1 County or in Sangamon County in which litigation the
2 Commission shall be represented by the Attorney General. The
3 Commission shall send notice of its finding of non-compliance
4 and assessment of the civil penalty to the Attorney General.
5 It shall be the duty of the Attorney General within 30 days
6 after receipt of the notice, to institute prosecutions and
7 promptly prosecute all reported violations of this Section.
8 (e) This Act shall not affect or disturb the continuance
9 of any existing insurance, mutual aid, benefit, or relief
10 association or department, whether maintained in whole or in
11 part by the employer or whether maintained by the employees,
12 the payment of benefits of such association or department
13 being guaranteed by the employer or by some person, firm or
14 corporation for him or her: Provided, the employer
15 contributes to such association or department an amount not
16 less than the full compensation herein provided, exclusive of
17 the cost of the maintenance of such association or department
18 and without any expense to the employee. This Act shall not
19 prevent the organization and maintaining under the insurance
20 laws of this State of any benefit or insurance company for
21 the purpose of insuring against the compensation provided for
22 in this Act, the expense of which is maintained by the
23 employer. This Act shall not prevent the organization or
24 maintaining under the insurance laws of this State of any
25 voluntary mutual aid, benefit or relief association among
26 employees for the payment of additional accident or sick
27 benefits.
28 (f) No existing insurance, mutual aid, benefit or relief
29 association or department shall, by reason of anything herein
30 contained, be authorized to discontinue its operation without
31 first discharging its obligations to any and all persons
32 carrying insurance in the same or entitled to relief or
33 benefits therein.
34 (g) Any contract, oral, written or implied, of
-27- LRB9111673JSpcA
1 employment providing for relief benefit, or insurance or any
2 other device whereby the employee is required to pay any
3 premium or premiums for insurance against the compensation
4 provided for in this Act shall be null and void. Any
5 employer withholding from the wages of any employee any
6 amount for the purpose of paying any such premium shall be
7 guilty of a Class B misdemeanor.
8 In the event the employer does not pay the compensation
9 for which he or she is liable, then an insurance company,
10 association or insurer which may have insured such employer
11 against such liability shall become primarily liable to pay
12 to the employee, his or her personal representative or
13 beneficiary the compensation required by the provisions of
14 this Act to be paid by such employer. The insurance carrier
15 may be made a party to the proceedings in which the employer
16 is a party and an award may be entered jointly against the
17 employer and the insurance carrier.
18 (h) It shall be unlawful for any employer, insurance
19 company or service or adjustment company to interfere with,
20 restrain or coerce an employee in any manner whatsoever in
21 the exercise of the rights or remedies granted to him or her
22 by this Act or to discriminate, attempt to discriminate, or
23 threaten to discriminate against an employee in any way
24 because of his or her exercise of the rights or remedies
25 granted to him or her by this Act.
26 It shall be unlawful for any employer, individually or
27 through any insurance company or service or adjustment
28 company, to discharge or to threaten to discharge, or to
29 refuse to rehire or recall to active service in a suitable
30 capacity an employee because of the exercise of his or her
31 rights or remedies granted to him or her by this Act.
32 (i) If an employer elects to obtain a life insurance
33 policy on his employees, he may also elect to apply such
34 benefits in satisfaction of all or a portion of the death
-28- LRB9111673JSpcA
1 benefits payable under this Act, in which case, the
2 employer's compensation premium shall be reduced accordingly.
3 (j) Within 45 days of receipt of an initial application
4 or application to renew self-insurance privileges the
5 Self-Insurers Advisory Board shall review and submit for
6 approval by the Chairman of the Commission recommendations of
7 disposition of all initial applications to self-insure and
8 all applications to renew self-insurance privileges filed by
9 private self-insurers pursuant to the provisions of this
10 Section and Section 4a-9 of this Act. Each private
11 self-insurer shall submit with its initial and renewal
12 applications the application fee required by Section 4a-4 of
13 this Act.
14 The Chairman of the Commission shall promptly act upon
15 all initial applications and applications for renewal in full
16 accordance with the recommendations of the Board or, should
17 the Chairman disagree with any recommendation of disposition
18 of the Self-Insurer's Advisory Board, he shall within 30 days
19 of receipt of such recommendation provide to the Board in
20 writing the reasons supporting his decision. The Chairman
21 shall also promptly notify the employer of his decision
22 within 15 days of receipt of the recommendation of the Board.
23 If an employer is denied a renewal of self-insurance
24 privileges pursuant to application it shall retain said
25 privilege for 120 days after receipt of a notice of
26 cancellation of the privilege from the Chairman of the
27 Commission.
28 All orders made by the Chairman under this Section shall
29 be subject to review by the courts, such review to be taken
30 in the same manner and within the same time as provided by
31 subsection (f) of Section 19 of this Act for review of awards
32 and decisions of the Commission, upon the party seeking the
33 review filing with the clerk of the court to which such
34 review is taken a bond in an amount to be fixed and approved
-29- LRB9111673JSpcA
1 by the court to which the review is taken, conditioned upon
2 the payment of all compensation awarded against the person
3 taking such review pending a decision thereof and further
4 conditioned upon such other obligations as the court may
5 impose. Upon the review the Circuit Court shall have power
6 to review all questions of fact as well as of law.
7 (Source: P.A. 90-109, eff. 1-1-98; 91-375, eff. 1-1-00.)
8 (820 ILCS 305/4a rep.)
9 Section 25. The Workers' Compensation Act is amended by
10 repealing Section 4a.
11 Section 30. The Workers' Occupational Diseases Act is
12 amended by changing Section 4 as follows:
13 (820 ILCS 310/4) (from Ch. 48, par. 172.39)
14 Sec. 4. (a) Any employer, including but not limited to
15 general contractors and their subcontractors, required by the
16 terms of this Act or by election to pay the compensation
17 provided for in this Act shall:
18 (1) File with the Commission an application for
19 approval as a self-insurer which shall include a current
20 financial statement. The application and financial
21 statement shall be signed and sworn to by the president
22 or vice-president and secretary or assistant secretary of
23 the employer if it be a corporation, or by all of the
24 partners if it be a copartnership, or by the owner if it
25 be neither a copartnership nor a corporation. An
26 employer may elect to provide and pay compensation as
27 provided for in this Act as a member of a group workers'
28 compensation pool under Article V 3/4 of the Illinois
29 Insurance Code. If an employer becomes a member of a
30 group worker's compensation pool, the employer shall not
31 be relieved of any obligations imposed by this Act.
-30- LRB9111673JSpcA
1 If the sworn application and financial statement of
2 any such employer does not satisfy the Commission of the
3 financial ability of the employer who has filed it, the
4 Commission shall require such employer to:
5 (2) Furnish security, indemnity or a bond
6 guaranteeing the payment by the employer of the
7 compensation provided for in this Act, provided that any
8 such employer who shall have secured his or her liability
9 in part by excess liability coverage shall be required to
10 furnish to the Commission security, indemnity or bond
11 guaranteeing his or her payment up to the amount of the
12 effective limits of the excess coverage in accordance
13 with the provisions of this paragraph, or
14 (3) Insure his or her entire liability to pay such
15 compensation in some insurance carrier authorized,
16 licensed or permitted to do such insurance business in
17 this State. All policies of such insurance carriers
18 insuring the payment of compensation under this Act shall
19 cover all the employees and all such employer's
20 compensation liability in all cases in which the last day
21 of the last exposure to the occupational disease involved
22 is within the effective period of the policy, anything to
23 the contrary in the policy notwithstanding. Provided,
24 however, that any employer may insure his or her
25 compensation liability under this Act with 2 or more
26 insurance carriers or may insure a part and qualify under
27 Subsection 1, 2, or 4 for the remainder of his liability
28 to pay such compensation, subject to the following two
29 provisions:
30 Firstly, the entire liability of the employer
31 to employees working at or from one location shall
32 be insured in one such insurance carrier or shall be
33 self-insured.
34 Secondly, the employer shall submit evidence
-31- LRB9111673JSpcA
1 satisfactory to the Commission that his or her
2 entire liability for the compensation provided for
3 in this Act will be secured.
4 Any provision in a policy or in any endorsement
5 attached thereto attempting to limit or modify in any way
6 the liability of the insurance carrier issuing the same,
7 except as otherwise provided herein, shall be wholly
8 void.
9 The insurance or security in force to cover
10 compensation liability under this Act shall be separate
11 and distinct from the insurance or security under the
12 "Workers' Compensation Act" and any insurance contract
13 covering liability under either Act need not cover any
14 liability under the other. Nothing herein contained
15 shall apply to policies of excess liability carriage
16 secured by employers who have been approved by the
17 Commission as self-insurers, or
18 (4) Make some other provision, satisfactory to the
19 Commission, for the securing of the payment of
20 compensation provided for in this Act, and
21 (5) Upon becoming subject to this Act and
22 thereafter as often as the Commission may in writing
23 demand, file with the Commission in form prescribed by it
24 evidence of his or her compliance with the provision of
25 this Section.
26 (a-1) Regardless of its state of domicile or its
27 principal place of business, an employer shall make payments
28 to its insurance carrier or group self-insurance fund, where
29 applicable, based upon the premium rates of the situs where
30 the work or project is located in Illinois if:
31 (A) the employer is engaged primarily in the
32 building and construction industry; and
33 (B) subdivision (a)(3) of this Section applies to
34 the employer or the employer is a member of a group
-32- LRB9111673JSpcA
1 self-insurance plan as defined in subsection (1) of
2 Section 4a.
3 The Industrial Commission shall impose a penalty upon an
4 employer for violation of this subsection (a-1) if:
5 (i) the employer is given an opportunity at a
6 hearing to present evidence of its compliance with this
7 subsection (a-1); and
8 (ii) after the hearing, the Commission finds that
9 the employer failed to make payments upon the premium
10 rates of the situs where the work or project is located
11 in Illinois.
12 The penalty shall not exceed $1,000 for each day of work
13 for which the employer failed to make payments upon the
14 premium rates of the situs where the work or project is
15 located in Illinois, but the total penalty shall not exceed
16 $50,000 for each project or each contract under which the
17 work was performed.
18 Any penalty under this subsection (a-1) must be imposed
19 not later than one year after the expiration of the
20 applicable limitation period specified in subsection (c) of
21 Section 6 of this Act. Penalties imposed under this
22 subsection (a-1) shall be deposited into the Industrial
23 Commission Operations Fund created under Section 4 of the
24 Workers' Compensation Act.
25 (b) The sworn application and financial statement, or
26 security, indemnity or bond, or amount of insurance, or other
27 provisions, filed, furnished, carried, or made by the
28 employer, as the case may be, shall be subject to the
29 approval of the Commission.
30 Deposits under escrow agreements shall be cash,
31 negotiable United States government bonds or negotiable
32 general obligation bonds of the State of Illinois. Such cash
33 or bonds shall be deposited in escrow with any State or
34 National Bank or Trust Company having trust authority in the
-33- LRB9111673JSpcA
1 State of Illinois.
2 Upon the approval of the sworn application and financial
3 statement, security, indemnity or bond or amount of
4 insurance, filed, furnished, or carried, as the case may be,
5 the Commission shall send to the employer written notice of
6 its approval thereof. Said certificate of compliance by the
7 employer with the provisions of subparagraphs (2) and (3) of
8 paragraph (a) of this Section shall be delivered by the
9 insurance carrier to the Industrial Commission within 5 days
10 after the effective date of the policy so certified. The
11 insurance so certified shall cover all compensation liability
12 occurring during the time that the insurance is in effect and
13 no further certificate need be filed in case such insurance
14 is renewed, extended or otherwise continued by such carrier.
15 The insurance so certified shall not be cancelled or in the
16 event that such insurance is not renewed, extended or
17 otherwise continued, such insurance shall not be terminated
18 until at least 10 days after receipt by the Industrial
19 Commission of notice of the cancellation or termination of
20 said insurance; provided, however, that if the employer has
21 secured insurance from another insurance carrier, or has
22 otherwise secured the payment of compensation in accordance
23 with this Section, and such insurance or other security
24 becomes effective prior to the expiration of said 10 days,
25 cancellation or termination may, at the option of the
26 insurance carrier indicated in such notice, be effective as
27 of the effective date of such other insurance or security.
28 (c) Whenever the Commission shall find that any
29 corporation, company, association, aggregation of
30 individuals, reciprocal or interinsurers exchange, or other
31 insurer effecting workers' occupational disease compensation
32 insurance in this State shall be insolvent, financially
33 unsound, or unable to fully meet all payments and liabilities
34 assumed or to be assumed for compensation insurance in this
-34- LRB9111673JSpcA
1 State, or shall practice a policy of delay or unfairness
2 toward employees in the adjustment, settlement, or payment of
3 benefits due such employees, the Commission may after
4 reasonable notice and hearing order and direct that such
5 corporation, company, association, aggregation of
6 individuals, reciprocal or interinsurers exchange, or
7 insurer, shall from and after a date fixed in such order
8 discontinue the writing of any such workers' occupational
9 disease compensation insurance in this State. It shall
10 thereupon be unlawful for any such corporation, company,
11 association, aggregation of individuals, reciprocal or
12 interinsurers exchange, or insurer to effect any workers'
13 occupational disease compensation insurance in this State. A
14 copy of the order shall be served upon the Director of
15 Insurance by registered mail. Whenever the Commission finds
16 that any service or adjustment company used or employed by a
17 self-insured employer or by an insurance carrier to process,
18 adjust, investigate, compromise or otherwise handle claims
19 under this Act, has practiced or is practicing a policy of
20 delay or unfairness toward employees in the adjustment,
21 settlement or payment of benefits due such employees, the
22 Commission may after reasonable notice and hearing order and
23 direct that such service or adjustment company shall from and
24 after a date fixed in such order be prohibited from
25 processing, adjusting, investigating, compromising or
26 otherwise handling claims under this Act.
27 Whenever the Commission finds that any self-insured
28 employer has practiced or is practicing delay or unfairness
29 toward employees in the adjustment, settlement or payment of
30 benefits due such employees, the Commission may after
31 reasonable notice and hearing order and direct that after a
32 date fixed in the order such self-insured employer shall be
33 disqualified to operate as a self-insurer and shall be
34 required to insure his entire liability to pay compensation
-35- LRB9111673JSpcA
1 in some insurance carrier authorized, licensed and permitted
2 to do such insurance business in this State as provided in
3 subparagraph (3) of paragraph (a) of this Section.
4 All orders made by the Commission under this Section
5 shall be subject to review by the courts, the review to be
6 taken in the same manner and within the same time as provided
7 by Section 19 of this Act for review of awards and decisions
8 of the Commission, upon the party seeking the review filing
9 with the clerk of the court to which said review is taken a
10 bond in an amount to be fixed and approved by the court to
11 which said review is taken, conditioned upon the payment of
12 all compensation awarded against the person taking the review
13 pending a decision thereof and further conditioned upon such
14 other obligations as the court may impose. Upon the review
15 the Circuit Court shall have power to review all questions of
16 fact as well as of law. The penalty hereinafter provided for
17 in this paragraph shall not attach and shall not begin to run
18 until the final determination of the order of the Commission.
19 (d) Upon a finding by the Commission, after reasonable
20 notice and hearing, of the knowing and wilful failure of an
21 employer to comply with any of the provisions of paragraph
22 (a) of this Section or the failure or refusal of an employer,
23 service or adjustment company, or insurance carrier to comply
24 with any order of the Industrial Commission pursuant to
25 paragraph (c) of this Section the Commission may assess a
26 civil penalty of up to $500 per day for each day of such
27 failure or refusal after the effective date of this
28 amendatory Act of 1989. Each day of such failure or refusal
29 shall constitute a separate offense.
30 Upon the failure or refusal of any employer, service or
31 adjustment company or insurance carrier to comply with the
32 provisions of this Section and orders of the Commission under
33 this Section, or the order of the court on review after final
34 adjudication, the Commission may bring a civil action to
-36- LRB9111673JSpcA
1 recover the amount of the penalty in Cook County or in
2 Sangamon County in which litigation the Commission shall be
3 represented by the Attorney General. The Commission shall
4 send notice of its finding of non-compliance and assessment
5 of the civil penalty to the Attorney General. It shall be
6 the duty of the Attorney General within 30 days after receipt
7 of the notice, to institute prosecutions and promptly
8 prosecute all reported violations of this Section.
9 (e) This Act shall not affect or disturb the continuance
10 of any existing insurance, mutual aid, benefit, or relief
11 association or department, whether maintained in whole or in
12 part by the employer or whether maintained by the employees,
13 the payment of benefits of such association or department
14 being guaranteed by the employer or by some person, firm or
15 corporation for him or her: Provided, the employer
16 contributes to such association or department an amount not
17 less than the full compensation herein provided, exclusive of
18 the cost of the maintenance of such association or department
19 and without any expense to the employee. This Act shall not
20 prevent the organization and maintaining under the insurance
21 laws of this State of any benefit or insurance company for
22 the purpose of insuring against the compensation provided for
23 in this Act, the expense of which is maintained by the
24 employer. This Act shall not prevent the organization or
25 maintaining under the insurance laws of this State of any
26 voluntary mutual aid, benefit or relief association among
27 employees for the payment of additional accident or sick
28 benefits.
29 (f) No existing insurance, mutual aid, benefit or relief
30 association or department shall, by reason of anything herein
31 contained, be authorized to discontinue its operation without
32 first discharging its obligations to any and all persons
33 carrying insurance in the same or entitled to relief or
34 benefits therein.
-37- LRB9111673JSpcA
1 (g) Any contract, oral, written or implied, of
2 employment providing for relief benefit, or insurance or any
3 other device whereby the employee is required to pay any
4 premium or premiums for insurance against the compensation
5 provided for in this Act shall be null and void. Any
6 employer withholding from the wages of any employee any
7 amount for the purpose of paying any such premium shall be
8 guilty of a Class B misdemeanor.
9 In the event the employer does not pay the compensation
10 for which he or she is liable, then an insurance company,
11 association or insurer which may have insured such employer
12 against such liability shall become primarily liable to pay
13 to the employee, his personal representative or beneficiary
14 the compensation required by the provisions of this Act to be
15 paid by such employer. The insurance carrier may be made a
16 party to the proceedings in which the employer is a party and
17 an award may be entered jointly against the employer and the
18 insurance carrier.
19 (h) It shall be unlawful for any employer, insurance
20 company or service or adjustment company to interfere with,
21 restrain or coerce an employee in any manner whatsoever in
22 the exercise of the rights or remedies granted to him or her
23 by this Act or to discriminate, attempt to discriminate, or
24 threaten to discriminate against an employee in any way
25 because of his exercise of the rights or remedies granted to
26 him by this Act.
27 It shall be unlawful for any employer, individually or
28 through any insurance company or service or adjustment
29 company, to discharge or to threaten to discharge, or to
30 refuse to rehire or recall to active service in a suitable
31 capacity an employee because of the exercise of his or her
32 rights or remedies granted to him or her by this Act.
33 (i) If an employer elects to obtain a life insurance
34 policy on his employees, he may also elect to apply such
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1 benefits in satisfaction of all or a portion of the death
2 benefits payable under this Act, in which case, the
3 employer's premium for coverage for benefits under this Act
4 shall be reduced accordingly.
5 (Source: P.A. 90-109, eff. 1-1-98; 91-375, eff. 1-1-00.)
6 (820 ILCS 310/4a rep.)
7 Section 35. The Workers' Occupational Diseases Act is
8 amended by repealing Section 4a.
9 Section 99. Effective date. This Act takes effect
10 January 1, 2001.