[ Back ] [ Bottom ]
91_HB2260
LRB9104804WHdv
1 AN ACT to amend certain Acts to create a State
2 Compensation Insurance Fund.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Workers' Compensation Act is amended by
6 changing Section 4 and adding Section 3a as follows:
7 (820 ILCS 305/3a new)
8 Sec. 3a. State Compensation Insurance Fund.
9 (a) As used in this Section:
10 (1) "Manager" means the manager of the State
11 Compensation Insurance Fund.
12 (2) "Fund" means the State Compensation Insurance
13 Fund.
14 (3) "Board" means the board of directors of the
15 State Compensation Insurance Fund.
16 (b) The State Compensation Insurance Fund is created as
17 an independent public corporation and the purpose of the
18 State Compensation Insurance Fund is to insure employers
19 against liability for injuries and occupational diseases for
20 which their employees may be entitled to benefits under the
21 Workers' Compensation Act, the Workers' Occupational Diseases
22 Act, the federal Employers' Liability Act, and the federal
23 Longshore and Harbor Workers' Compensation Act.
24 (c) (1) The State Compensation Insurance Fund shall be
25 under the direct supervision of a board of directors which
26 shall consist of 5 members to be appointed by the Governor.
27 After the Fund has operated for a period of one year, each
28 member appointed shall be a policyholder or an employee of a
29 policyholder of the Fund and at least one of the members of
30 the board of directors shall be an employee of a policyholder
31 of the Fund.
-2- LRB9104804WHdv
1 (2) One member of the board of directors shall be
2 appointed for a term ending December 31, 2000, and each other
3 director for a term expiring one, 2, 3 and 4 years
4 thereafter. Upon expiration of any of the terms, the
5 appointee or his or her successor shall be appointed for a
6 term of 4 years. Appointment to fill a vacancy caused by
7 other than expiration of the term shall be for the unexpired
8 portion of the term.
9 (3) Each appointed member of the board shall receive as
10 compensation $100 per day while in actual attendance at
11 meetings of the board and shall be reimbursed for mileage and
12 expenses.
13 (4) The chairman shall be elected annually by the
14 members of the board. The board may adopt rules and
15 regulations as it deems proper for the conduct of its
16 business. The board may from time to time amend or change the
17 rules and regulations and may cause them to be published and
18 distributed.
19 (5) The board shall meet at least once every 3 months.
20 Board meetings may be called at any time by the chairman of
21 the board or the manager of the Fund.
22 (6) The board shall be responsible for setting forth the
23 general policy for the operation of the Fund.
24 (7) There shall not be any liability in a private
25 capacity on the part of the board of directors or any member
26 thereof or any officer or employee of the Fund for or on
27 account of any act performed or obligation entered into in
28 any official capacity in connection with the administration,
29 management or conduct of the Fund or affairs relating
30 thereto.
31 (8) The board of directors is hereby vested with full
32 power, authority and jurisdiction over the Fund. The board of
33 directors may perform all acts necessary or convenient in the
34 exercise of any power, authority or jurisdiction over the
-3- LRB9104804WHdv
1 Fund, either in the administration thereof or in connection
2 with the insurance business to be carried on by it under the
3 provisions of this Section, as fully and completely as the
4 governing body of a private insurance carrier to fulfill the
5 objectives and intent of this Section.
6 (d)(1) The board of directors of the Fund shall appoint
7 a manager of the Fund who shall be in charge of the
8 day-to-day operation of the Fund. The manager shall have
9 proven successful experience as an executive at the general
10 management level. The manager shall be appointed for a term
11 of 6 years. The manager shall receive compensation as set by
12 the board, and may be removed only for cause by the board.
13 (2) Before entering on the duties of the office, the
14 manager shall qualify by giving an official bond in an amount
15 and with sureties approved by the Board. The manager shall
16 file the bond with the State Treasurer. The premium for the
17 bond shall be paid by the Fund.
18 (e) The manager, subject to the authority of the board
19 of directors, has full power, authority, and jurisdiction
20 over the Fund. The manager may perform all acts necessary or
21 convenient in the exercise of any power, authority or
22 jurisdiction over the Fund, either in the administration of
23 the Fund or in connection with the insurance business to be
24 carried on by the Fund under the provisions of this Section,
25 including the establishment of premium rates.
26 (f) The manager, subject to the approval of the board of
27 directors, may adopt rules and regulations relating to the
28 conduct of the business of the Fund.
29 (g) In conducting the business of the Fund, the manager
30 may:
31 (1) contract with physicians, surgeons, hospitals,
32 and rehabilitation facilities for medical, surgical, and
33 rehabilitation evaluation and treatment and the care and
34 nursing of injured persons entitled to benefits from the
-4- LRB9104804WHdv
1 Fund;
2 (2) make safety inspections with risks and furnish
3 advisory service to employers on safety and health
4 measures;
5 (3) act for the Fund in collecting and disbursing
6 money necessary to administer the Fund and conduct the
7 business of the Fund.
8 (h) Annually the board shall report to the Governor and
9 the General Assembly the business done by the Fund during the
10 previous year and shall submit to the Governor a statement of
11 the resources and liabilities of the Fund.
12 (i) The Fund may:
13 (1) insure an employer against any workers'
14 compensation and employer's liability such employer may
15 have on account of bodily injury or occupational diseases
16 to his or her workers arising out of and in the course of
17 employment, as fully as any other insurer;
18 (2) insure employers against their liability for
19 compensation or damages under the federal Longshore and
20 Harbor Workers' Compensation Act or any extension of that
21 Act, as fully as any other insurer;
22 (3) furnish advice, services and excess workers'
23 compensation and employer liability insurance to any
24 employer qualified as a self-insured employer; and
25 (4) reinsure any risk or any part thereof.
26 (j) The moneys and assets belonging to the Fund are:
27 (1) all premiums and other moneys paid to the Fund;
28 (2) all property and securities acquired through
29 the use of money belonging to the Fund; and
30 (3) all interest and dividends earned upon money
31 belonging to the Fund and deposited or invested as
32 provided in this Section.
33 (k) (1) The State Treasurer is the ex-officio custodian
34 of the Fund and shall keep all moneys and assets belonging to
-5- LRB9104804WHdv
1 the Fund in a separate account outside of the State Treasury
2 and all interest earnings shall be credited to the Fund.
3 This separate account shall be known as the Workers'
4 Compensation Insurance Fund. The State Treasurer shall be
5 liable under his or her bond for the safe keeping of such
6 moneys and assets.
7 (2) The manager shall deliver all receipts collected or
8 received under this Section to the State Treasurer.
9 (3) The moneys and assets of the Fund shall not be
10 moneys and assets of the State but shall be used exclusively
11 for the operations and obligations of the Fund.
12 (4)(A) Except as provided in subparagraph (B) of this
13 paragraph, no money may be expended from the separate account
14 except by a warrant drawn by the State Comptroller and
15 presented by him or her to the State Treasurer to be
16 countersigned. No warrant for the payment of money from the
17 separate account by the State Treasurer may be drawn by the
18 State Comptroller without the presentation of itemized
19 vouchers by the manager indicating that the expenditure is
20 pursuant to law and is authorized.
21 (B) Money may be expended from the separate account from
22 a checking account maintained by the Fund, by checks signed
23 by the manager, but only for the payment of obligations for:
24 (i) first-aid, medical, hospital and surgical
25 services required under subsection (a) of Section 8
26 of this Act; and
27 (ii) weekly compensation payments for
28 temporary total incapacity provided under subsection
29 (b) of Section 8 of this Act; and
30 (iii) the operations of the State Compensation
31 Insurance Fund.
32 The Comptroller shall provide in his or her rules and
33 regulations for periodic transfers, with the State
34 Treasurer's approval, to the checking account of the State
-6- LRB9104804WHdv
1 Compensation Insurance Fund for use in accordance with the
2 imprest system.
3 (5) For any obligations in connection therewith the
4 liability of the State shall at no time exceed the amount of
5 the assets of the State Compensation Insurance Fund.
6 (l) The Fund may:
7 (1) use its assets to pay medical expenses,
8 rehabilitation expenses, compensation due claimants of
9 insured employers, and to pay salaries, administrative
10 and other expenses;
11 (2) declare a dividend when there is an excess of
12 assets over liabilities, necessary reserves, and a
13 reasonable surplus for catastrophic hazards;
14 (3) rent, lease, buy and sell property in its own
15 name, construct and repair buildings as necessary to
16 provide office space for its operations;
17 (4) sue and be sued in its own name;
18 (5) enter into contracts relating to the
19 administration of the Fund;
20 (6) perform all the functions which are necessary
21 or appropriate to carry out the administration of the
22 Fund; and
23 (7) hire personnel, subject to the provisions of
24 the Personnel Code, and set salaries and compensation to
25 accomplish the purposes of its existence and operations.
26 (m) The premium rates established by the manager shall
27 be that percentage of the payroll of any employer which, on
28 the average, shall produce a sufficient sum to:
29 (1) carry all claims to maturity such that rates
30 shall be based upon the reserve and not upon the
31 assessment plan; and
32 (2) produce a reasonable surplus so as to cover
33 catastrophic hazards and to insure the payment to
34 employees and their dependents of the compensation
-7- LRB9104804WHdv
1 provided in this Act.
2 In determining the amount of reserve to be laid aside to
3 meet deferred payments according to compensation awards, the
4 reserves may be ascertained by finding the present worth of
5 the deferred payments calculated at a rate of interest not
6 higher than 3% per annum and such calculations shall be made
7 according to a table of mortality not lower than the American
8 Experience Table of Mortality and, in the discretion of the
9 Board, by such other and further methods as will result in
10 the establishment of adequate reserves.
11 (n) (1) The State Compensation Insurance Fund shall be
12 open to visitation by the Director of Insurance at all
13 reasonable times, and the Director of Insurance shall require
14 from the manager reports as to the condition of the Fund and
15 such other reports as may be required by law to be made by
16 other insurance carriers doing business in this State insofar
17 as applicable to the Fund.
18 (2) The manager shall have an annual audit of the books
19 and records of the Fund made by a duly qualified independent
20 certified accountant, and have an abstract summary of this
21 audit prepared for public use.
22 (3) The Auditor General shall conduct a financial audit
23 of the Fund at least once every 2 years. The Auditor General
24 shall conduct a management or program audit when so directed
25 by either house of the General Assembly, in a resolution
26 identifying the subject, parties and scope.
27 (4) At least once every 3 years, the Director of
28 Insurance shall conduct an examination of the Fund. The
29 examination shall be conducted in the same manner as an
30 examination of a private insurance carrier. The Director of
31 Insurance shall transmit a copy of his or her examination to
32 the Governor, the General Assembly, the Auditor General, the
33 manager and the board.
34 (o) (1) Startup costs and beginning balance for the Fund
-8- LRB9104804WHdv
1 shall be provided by funds appropriated by the General
2 Assembly.
3 (2) In no case may the total amount advanced to the Fund
4 from the State under this Section exceed $10,000,000.
5 (3) State advances to the Fund shall not extend beyond
6 December 31, 2004, and any funds advanced to the Fund shall
7 be repaid, 20% each year for 5 years, beginning with calendar
8 year 2005 and continuing through calendar year 2009.
9 (p) An employer who intentionally misrepresents any
10 material fact upon which his or her premium under this
11 Section is based is liable to the Fund for 3 times the amount
12 of the difference of the premium paid and the amount the
13 employer should have paid if his or her payroll had been
14 correctly computed. The penalty shall be collected in a
15 civil action.
16 (820 ILCS 305/4) (from Ch. 48, par. 138.4)
17 Sec. 4. (a) Any employer who shall come within the
18 provisions of Section 3 of this Act, and any other employer
19 who shall elect to provide and pay the compensation provided
20 for in this Act shall:
21 (1) File with the Commission annually an
22 application for approval as a self-insurer which shall
23 include a current financial statement, and annually,
24 thereafter, an application for renewal of self-insurance,
25 which shall include a current financial statement. Said
26 application and financial statement shall be signed and
27 sworn to by the president or vice president and secretary
28 or assistant secretary of the employer if it be a
29 corporation, or by all of the partners, if it be a
30 copartnership, or by the owner if it be neither a
31 copartnership nor a corporation. All initial applications
32 and all applications for renewal of self-insurance must
33 be submitted at least 60 days prior to the requested
-9- LRB9104804WHdv
1 effective date of self-insurance.
2 If the sworn application and financial statement of
3 any such employer does not satisfy the Commission of the
4 financial ability of the employer who has filed it, the
5 Commission shall require such employer to,
6 (2) Furnish security, indemnity or a bond
7 guaranteeing the payment by the employer of the
8 compensation provided for in this Act, provided that any
9 such employer whose application and financial statement
10 shall not have satisfied the commission of his or her
11 financial ability and who shall have secured his
12 liability in part by excess liability insurance shall be
13 required to furnish to the Commission security, indemnity
14 or bond guaranteeing his or her payment up to the
15 effective limits of the excess coverage, or
16 (3) Insure his entire liability to pay such
17 compensation in some insurance carrier authorized,
18 licensed, or permitted to do such insurance business in
19 this State. Every policy of an insurance carrier,
20 insuring the payment of compensation under this Act shall
21 cover all the employees and the entire compensation
22 liability of the insured: Provided, however, that any
23 employer may insure his or her compensation liability
24 with 2 or more insurance carriers or may insure a part
25 and qualify under subsection 1, 2, or 4 for the remainder
26 of his or her liability to pay such compensation, subject
27 to the following two provisions:
28 Firstly, the entire compensation liability of
29 the employer to employees working at or from one
30 location shall be insured in one such insurance
31 carrier or shall be self-insured, and
32 Secondly, the employer shall submit evidence
33 satisfactorily to the Commission that his or her
34 entire liability for the compensation provided for
-10- LRB9104804WHdv
1 in this Act will be secured. Any provisions in any
2 policy, or in any endorsement attached thereto,
3 attempting to limit or modify in any way, the
4 liability of the insurance carriers issuing the same
5 except as otherwise provided herein shall be wholly
6 void.
7 Nothing herein contained shall apply to policies of
8 excess liability carriage secured by employers who have
9 been approved by the Commission as self-insurers, or
10 (4) Make some other provision, satisfactory to the
11 Commission, for the securing of the payment of
12 compensation provided for in this Act; provided, however,
13 that:
14 (A) the State and all departments thereof must
15 insure against their liability to pay that
16 compensation in the State Compensation Insurance
17 Fund; and
18 (B) each county, city, town, township,
19 incorporated village, school district, body politic
20 or municipal corporation must insure against its
21 liability to pay that compensation by either:
22 (i) securing the approval of the
23 Commission to be a self-insurer or a
24 participant in a self-insurance plan; or
25 (ii) insuring its liability to pay that
26 compensation in the State Compensation
27 Insurance Fund; or
28 (iii) insuring its liability to pay that
29 compensation by any other alternative
30 authorized by this Section if the premium which
31 would be required under the alternative is less
32 than can be otherwise provided by the State
33 Compensation Insurance Fund; however, any city,
34 village or incorporated town may by a majority
-11- LRB9104804WHdv
1 vote of the members of its governing body
2 present and voting remove itself from the
3 requirements of this subdivision (iii) and
4 thereafter such city, village or incorporated
5 town shall not be bound by the provisions of
6 this subdivision (iii) unless its governing
7 body by a majority vote of those present and
8 voting elects to avail itself of the provisions
9 hereof;, and
10 (5) Upon becoming subject to this Act and
11 thereafter as often as the Commission may in writing
12 demand, file with the Commission in form prescribed by it
13 evidence of his or her compliance with the provision of
14 this Section.
15 (a-1) Regardless of its state of domicile or its
16 principal place of business, an employer shall make payments
17 to its insurance carrier or group self-insurance fund, where
18 applicable, based upon the premium rates of the situs where
19 the work or project is located in Illinois if:
20 (A) the employer is engaged primarily in the
21 building and construction industry; and
22 (B) subdivision (a)(3) of this Section applies to
23 the employer or the employer is a member of a group
24 self-insurance plan as defined in subsection (1) of
25 Section 4a.
26 The Industrial Commission shall impose a penalty upon an
27 employer for violation of this subsection (a-1) if:
28 (i) the employer is given an opportunity at a
29 hearing to present evidence of its compliance with this
30 subsection (a-1); and
31 (ii) after the hearing, the Commission finds that
32 the employer failed to make payments upon the premium
33 rates of the situs where the work or project is located
34 in Illinois.
-12- LRB9104804WHdv
1 The penalty shall not exceed $1,000 for each day of work
2 for which the employer failed to make payments upon the
3 premium rates of the situs where the work or project is
4 located in Illinois, but the total penalty shall not exceed
5 $50,000 for each project or each contract under which the
6 work was performed.
7 Any penalty under this subsection (a-1) must be imposed
8 not later than one year after the expiration of the
9 applicable limitation period specified in subsection (d) of
10 Section 6 of this Act. Penalties imposed under this
11 subsection (a-1) shall be deposited into the Industrial
12 Commission Operations Fund, a special fund that is created
13 in the State treasury. Subject to appropriation, moneys in
14 the Fund shall be used solely for the operations of the
15 Industrial Commission.
16 (b) The sworn application and financial statement, or
17 security, indemnity or bond, or amount of insurance, or other
18 provisions, filed, furnished, carried, or made by the
19 employer, as the case may be, shall be subject to the
20 approval of the Commission.
21 Deposits under escrow agreements shall be cash,
22 negotiable United States government bonds or negotiable
23 general obligation bonds of the State of Illinois. Such cash
24 or bonds shall be deposited in escrow with any State or
25 National Bank or Trust Company having trust authority in the
26 State of Illinois.
27 Upon the approval of the sworn application and financial
28 statement, security, indemnity or bond or amount of
29 insurance, filed, furnished or carried, as the case may be,
30 the Commission shall send to the employer written notice of
31 its approval thereof. The certificate of compliance by the
32 employer with the provisions of subparagraphs (2) and (3) of
33 paragraph (a) of this Section shall be delivered by the
34 insurance carrier to the Industrial Commission within five
-13- LRB9104804WHdv
1 days after the effective date of the policy so certified.
2 The insurance so certified shall cover all compensation
3 liability occurring during the time that the insurance is in
4 effect and no further certificate need be filed in case such
5 insurance is renewed, extended or otherwise continued by such
6 carrier. The insurance so certified shall not be cancelled
7 or in the event that such insurance is not renewed, extended
8 or otherwise continued, such insurance shall not be
9 terminated until at least 10 days after receipt by the
10 Industrial Commission of notice of the cancellation or
11 termination of said insurance; provided, however, that if the
12 employer has secured insurance from another insurance
13 carrier, or has otherwise secured the payment of compensation
14 in accordance with this Section, and such insurance or other
15 security becomes effective prior to the expiration of the 10
16 days, cancellation or termination may, at the option of the
17 insurance carrier indicated in such notice, be effective as
18 of the effective date of such other insurance or security.
19 (c) Whenever the Commission shall find that any
20 corporation, company, association, aggregation of
21 individuals, reciprocal or interinsurers exchange, or other
22 insurer effecting workers' compensation insurance in this
23 State shall be insolvent, financially unsound, or unable to
24 fully meet all payments and liabilities assumed or to be
25 assumed for compensation insurance in this State, or shall
26 practice a policy of delay or unfairness toward employees in
27 the adjustment, settlement, or payment of benefits due such
28 employees, the Commission may after reasonable notice and
29 hearing order and direct that such corporation, company,
30 association, aggregation of individuals, reciprocal or
31 interinsurers exchange, or insurer, shall from and after a
32 date fixed in such order discontinue the writing of any such
33 workers' compensation insurance in this State. Subject to
34 such modification of the order as the Commission may later
-14- LRB9104804WHdv
1 make on review of the order, as herein provided, it shall
2 thereupon be unlawful for any such corporation, company,
3 association, aggregation of individuals, reciprocal or
4 interinsurers exchange, or insurer to effect any workers'
5 compensation insurance in this State. A copy of the order
6 shall be served upon the Director of Insurance by registered
7 mail. Whenever the Commission finds that any service or
8 adjustment company used or employed by a self-insured
9 employer or by an insurance carrier to process, adjust,
10 investigate, compromise or otherwise handle claims under this
11 Act, has practiced or is practicing a policy of delay or
12 unfairness toward employees in the adjustment, settlement or
13 payment of benefits due such employees, the Commission may
14 after reasonable notice and hearing order and direct that
15 such service or adjustment company shall from and after a
16 date fixed in such order be prohibited from processing,
17 adjusting, investigating, compromising or otherwise handling
18 claims under this Act.
19 Whenever the Commission finds that any self-insured
20 employer has practiced or is practicing delay or unfairness
21 toward employees in the adjustment, settlement or payment of
22 benefits due such employees, the Commission may, after
23 reasonable notice and hearing, order and direct that after a
24 date fixed in the order such self-insured employer shall be
25 disqualified to operate as a self-insurer and shall be
26 required to insure his entire liability to pay compensation
27 in some insurance carrier authorized, licensed and permitted
28 to do such insurance business in this State, as provided in
29 subparagraph 3 of paragraph (a) of this Section.
30 All orders made by the Commission under this Section
31 shall be subject to review by the courts, said review to be
32 taken in the same manner and within the same time as provided
33 by Section 19 of this Act for review of awards and decisions
34 of the Commission, upon the party seeking the review filing
-15- LRB9104804WHdv
1 with the clerk of the court to which said review is taken a
2 bond in an amount to be fixed and approved by the court to
3 which the review is taken, conditioned upon the payment of
4 all compensation awarded against the person taking said
5 review pending a decision thereof and further conditioned
6 upon such other obligations as the court may impose. Upon
7 the review the Circuit Court shall have power to review all
8 questions of fact as well as of law. The penalty hereinafter
9 provided for in this paragraph shall not attach and shall not
10 begin to run until the final determination of the order of
11 the Commission.
12 (d) Upon a finding by the Commission, after reasonable
13 notice and hearing, of the knowing and wilful failure of an
14 employer to comply with any of the provisions of paragraph
15 (a) of this Section or the failure or refusal of an employer,
16 service or adjustment company, or an insurance carrier to
17 comply with any order of the Industrial Commission pursuant
18 to paragraph (c) of this Section disqualifying him or her to
19 operate as a self insurer and requiring him or her to insure
20 his or her liability, the Commission may assess a civil
21 penalty of up to $500 per day for each day of such failure or
22 refusal after the effective date of this amendatory Act of
23 1989. Each day of such failure or refusal shall constitute a
24 separate offense.
25 Upon the failure or refusal of any employer, service or
26 adjustment company or insurance carrier to comply with the
27 provisions of this Section and with the orders of the
28 Commission under this Section, or the order of the court on
29 review after final adjudication, the Commission may bring a
30 civil action to recover the amount of the penalty in Cook
31 County or in Sangamon County in which litigation the
32 Commission shall be represented by the Attorney General. The
33 Commission shall send notice of its finding of non-compliance
34 and assessment of the civil penalty to the Attorney General.
-16- LRB9104804WHdv
1 It shall be the duty of the Attorney General within 30 days
2 after receipt of the notice, to institute prosecutions and
3 promptly prosecute all reported violations of this Section.
4 (e) This Act shall not affect or disturb the continuance
5 of any existing insurance, mutual aid, benefit, or relief
6 association or department, whether maintained in whole or in
7 part by the employer or whether maintained by the employees,
8 the payment of benefits of such association or department
9 being guaranteed by the employer or by some person, firm or
10 corporation for him or her: Provided, the employer
11 contributes to such association or department an amount not
12 less than the full compensation herein provided, exclusive of
13 the cost of the maintenance of such association or department
14 and without any expense to the employee. This Act shall not
15 prevent the organization and maintaining under the insurance
16 laws of this State of any benefit or insurance company for
17 the purpose of insuring against the compensation provided for
18 in this Act, the expense of which is maintained by the
19 employer. This Act shall not prevent the organization or
20 maintaining under the insurance laws of this State of any
21 voluntary mutual aid, benefit or relief association among
22 employees for the payment of additional accident or sick
23 benefits.
24 (f) No existing insurance, mutual aid, benefit or relief
25 association or department shall, by reason of anything herein
26 contained, be authorized to discontinue its operation without
27 first discharging its obligations to any and all persons
28 carrying insurance in the same or entitled to relief or
29 benefits therein.
30 (g) Any contract, oral, written or implied, of
31 employment providing for relief benefit, or insurance or any
32 other device whereby the employee is required to pay any
33 premium or premiums for insurance against the compensation
34 provided for in this Act shall be null and void. Any
-17- LRB9104804WHdv
1 employer withholding from the wages of any employee any
2 amount for the purpose of paying any such premium shall be
3 guilty of a Class B misdemeanor.
4 In the event the employer does not pay the compensation
5 for which he or she is liable, then an insurance company,
6 association or insurer which may have insured such employer
7 against such liability shall become primarily liable to pay
8 to the employee, his or her personal representative or
9 beneficiary the compensation required by the provisions of
10 this Act to be paid by such employer. The insurance carrier
11 may be made a party to the proceedings in which the employer
12 is a party and an award may be entered jointly against the
13 employer and the insurance carrier.
14 (h) It shall be unlawful for any employer, insurance
15 company or service or adjustment company to interfere with,
16 restrain or coerce an employee in any manner whatsoever in
17 the exercise of the rights or remedies granted to him or her
18 by this Act or to discriminate, attempt to discriminate, or
19 threaten to discriminate against an employee in any way
20 because of his or her exercise of the rights or remedies
21 granted to him or her by this Act.
22 It shall be unlawful for any employer, individually or
23 through any insurance company or service or adjustment
24 company, to discharge or to threaten to discharge, or to
25 refuse to rehire or recall to active service in a suitable
26 capacity an employee because of the exercise of his or her
27 rights or remedies granted to him or her by this Act.
28 (i) If an employer elects to obtain a life insurance
29 policy on his employees, he may also elect to apply such
30 benefits in satisfaction of all or a portion of the death
31 benefits payable under this Act, in which case, the
32 employer's compensation premium shall be reduced accordingly.
33 (j) Within 45 days of receipt of an initial application
34 or application to renew self-insurance privileges the
-18- LRB9104804WHdv
1 Self-Insurers Advisory Board shall review and submit for
2 approval by the Chairman of the Commission recommendations of
3 disposition of all initial applications to self-insure and
4 all applications to renew self-insurance privileges filed by
5 private self-insurers pursuant to the provisions of this
6 Section and Section 4a-9 of this Act. Each private
7 self-insurer shall submit with its initial and renewal
8 applications the application fee required by Section 4a-4 of
9 this Act.
10 The Chairman of the Commission shall promptly act upon
11 all initial applications and applications for renewal in full
12 accordance with the recommendations of the Board or, should
13 the Chairman disagree with any recommendation of disposition
14 of the Self-Insurer's Advisory Board, he shall within 30 days
15 of receipt of such recommendation provide to the Board in
16 writing the reasons supporting his decision. The Chairman
17 shall also promptly notify the employer of his decision
18 within 15 days of receipt of the recommendation of the Board.
19 If an employer is denied a renewal of self-insurance
20 privileges pursuant to application it shall retain said
21 privilege for 120 days after receipt of a notice of
22 cancellation of the privilege from the Chairman of the
23 Commission.
24 All orders made by the Chairman under this Section shall
25 be subject to review by the courts, such review to be taken
26 in the same manner and within the same time as provided by
27 subsection (f) of Section 19 of this Act for review of awards
28 and decisions of the Commission, upon the party seeking the
29 review filing with the clerk of the court to which such
30 review is taken a bond in an amount to be fixed and approved
31 by the court to which the review is taken, conditioned upon
32 the payment of all compensation awarded against the person
33 taking such review pending a decision thereof and further
34 conditioned upon such other obligations as the court may
-19- LRB9104804WHdv
1 impose. Upon the review the Circuit Court shall have power
2 to review all questions of fact as well as of law.
3 (Source: P.A. 90-109, eff. 1-1-98.)
4 Section 10. The Workers' Occupational Diseases Act is
5 amended by changing Section 4 as follows:
6 (820 ILCS 310/4) (from Ch. 48, par. 172.39)
7 Sec. 4. (a) Any employer required by the terms of this
8 Act or by election to pay the compensation provided for in
9 this Act shall:
10 (1) File with the Commission an application for
11 approval as a self-insurer which shall include a current
12 financial statement. The application and financial
13 statement shall be signed and sworn to by the president
14 or vice-president and secretary or assistant secretary of
15 the employer if it be a corporation, or by all of the
16 partners if it be a copartnership, or by the owner if it
17 be neither a copartnership nor a corporation.
18 If the sworn application and financial statement of
19 any such employer does not satisfy the Commission of the
20 financial ability of the employer who has filed it, the
21 Commission shall require such employer to:
22 (2) Furnish security, indemnity or a bond
23 guaranteeing the payment by the employer of the
24 compensation provided for in this Act, provided that any
25 such employer who shall have secured his or her liability
26 in part by excess liability coverage shall be required to
27 furnish to the Commission security, indemnity or bond
28 guaranteeing his or her payment up to the amount of the
29 effective limits of the excess coverage in accordance
30 with the provisions of this paragraph, or
31 (3) Insure his or her entire liability to pay such
32 compensation in some insurance carrier authorized,
-20- LRB9104804WHdv
1 licensed or permitted to do such insurance business in
2 this State. All policies of such insurance carriers
3 insuring the payment of compensation under this Act shall
4 cover all the employees and all such employer's
5 compensation liability in all cases in which the last day
6 of the last exposure to the occupational disease involved
7 is within the effective period of the policy, anything to
8 the contrary in the policy notwithstanding. Provided,
9 however, that any employer may insure his or her
10 compensation liability under this Act with 2 or more
11 insurance carriers or may insure a part and qualify under
12 Subsection 1, 2, or 4 for the remainder of his liability
13 to pay such compensation, subject to the following two
14 provisions:
15 Firstly, the entire liability of the employer
16 to employees working at or from one location shall
17 be insured in one such insurance carrier or shall be
18 self-insured.
19 Secondly, the employer shall submit evidence
20 satisfactory to the Commission that his or her
21 entire liability for the compensation provided for
22 in this Act will be secured.
23 Any provision in a policy or in any endorsement
24 attached thereto attempting to limit or modify in any way
25 the liability of the insurance carrier issuing the same,
26 except as otherwise provided herein, shall be wholly
27 void.
28 The insurance or security in force to cover
29 compensation liability under this Act shall be separate
30 and distinct from the insurance or security under the
31 "Workers' Compensation Act" and any insurance contract
32 covering liability under either Act need not cover any
33 liability under the other. Nothing herein contained
34 shall apply to policies of excess liability carriage
-21- LRB9104804WHdv
1 secured by employers who have been approved by the
2 Commission as self-insurers, or
3 (4) Make some other provision, satisfactory to the
4 Commission, for the securing of the payment of
5 compensation provided for in this Act; provided, however,
6 that:
7 (A) the State and all departments thereof must
8 insure against their liability to pay that
9 compensation in the State Compensation Insurance
10 Fund; and
11 (B) each county, city, town, township,
12 incorporated village, school district, body politic
13 or municipal corporation must insure against its
14 liability to pay that compensation by either:
15 (i) securing the approval of the
16 Commission to be a self-insurer or a
17 participant in a self-insurance plan; or
18 (ii) insuring its liability to pay that
19 compensation in the State Compensation
20 Insurance Fund; or
21 (iii) insuring its liability to pay that
22 compensation by any other alternative
23 authorized by this Section if the premium which
24 would be required under the alternative is less
25 than can be otherwise provided by the State
26 Compensation Insurance Fund; however, any city,
27 village or incorporated town may by a majority
28 vote of the members of its governing body
29 present and voting remove itself from the
30 requirements of this subdivision (iii) and
31 thereafter such city, village or incorporated
32 town shall not be bound by the provisions of
33 this subdivision (iii) unless its governing
34 body by a majority vote of those present and
-22- LRB9104804WHdv
1 voting elects to avail itself of the provisions
2 hereof;, and
3 (5) Upon becoming subject to this Act and
4 thereafter as often as the Commission may in writing
5 demand, file with the Commission in form prescribed by it
6 evidence of his or her compliance with the provision of
7 this Section.
8 (a-1) Regardless of its state of domicile or its
9 principal place of business, an employer shall make payments
10 to its insurance carrier or group self-insurance fund, where
11 applicable, based upon the premium rates of the situs where
12 the work or project is located in Illinois if:
13 (A) the employer is engaged primarily in the
14 building and construction industry; and
15 (B) subdivision (a)(3) of this Section applies to
16 the employer or the employer is a member of a group
17 self-insurance plan as defined in subsection (1) of
18 Section 4a.
19 The Industrial Commission shall impose a penalty upon an
20 employer for violation of this subsection (a-1) if:
21 (i) the employer is given an opportunity at a
22 hearing to present evidence of its compliance with this
23 subsection (a-1); and
24 (ii) after the hearing, the Commission finds that
25 the employer failed to make payments upon the premium
26 rates of the situs where the work or project is located
27 in Illinois.
28 The penalty shall not exceed $1,000 for each day of work
29 for which the employer failed to make payments upon the
30 premium rates of the situs where the work or project is
31 located in Illinois, but the total penalty shall not exceed
32 $50,000 for each project or each contract under which the
33 work was performed.
34 Any penalty under this subsection (a-1) must be imposed
-23- LRB9104804WHdv
1 not later than one year after the expiration of the
2 applicable limitation period specified in subsection (c) of
3 Section 6 of this Act. Penalties imposed under this
4 subsection (a-1) shall be deposited into the Industrial
5 Commission Operations Fund created under Section 4 of the
6 Workers' Compensation Act.
7 (b) The sworn application and financial statement, or
8 security, indemnity or bond, or amount of insurance, or other
9 provisions, filed, furnished, carried, or made by the
10 employer, as the case may be, shall be subject to the
11 approval of the Commission.
12 Deposits under escrow agreements shall be cash,
13 negotiable United States government bonds or negotiable
14 general obligation bonds of the State of Illinois. Such cash
15 or bonds shall be deposited in escrow with any State or
16 National Bank or Trust Company having trust authority in the
17 State of Illinois.
18 Upon the approval of the sworn application and financial
19 statement, security, indemnity or bond or amount of
20 insurance, filed, furnished, or carried, as the case may be,
21 the Commission shall send to the employer written notice of
22 its approval thereof. Said certificate of compliance by the
23 employer with the provisions of subparagraphs (2) and (3) of
24 paragraph (a) of this Section shall be delivered by the
25 insurance carrier to the Industrial Commission within 5 days
26 after the effective date of the policy so certified. The
27 insurance so certified shall cover all compensation liability
28 occurring during the time that the insurance is in effect and
29 no further certificate need be filed in case such insurance
30 is renewed, extended or otherwise continued by such carrier.
31 The insurance so certified shall not be cancelled or in the
32 event that such insurance is not renewed, extended or
33 otherwise continued, such insurance shall not be terminated
34 until at least 10 days after receipt by the Industrial
-24- LRB9104804WHdv
1 Commission of notice of the cancellation or termination of
2 said insurance; provided, however, that if the employer has
3 secured insurance from another insurance carrier, or has
4 otherwise secured the payment of compensation in accordance
5 with this Section, and such insurance or other security
6 becomes effective prior to the expiration of said 10 days,
7 cancellation or termination may, at the option of the
8 insurance carrier indicated in such notice, be effective as
9 of the effective date of such other insurance or security.
10 (c) Whenever the Commission shall find that any
11 corporation, company, association, aggregation of
12 individuals, reciprocal or interinsurers exchange, or other
13 insurer effecting workers' occupational disease compensation
14 insurance in this State shall be insolvent, financially
15 unsound, or unable to fully meet all payments and liabilities
16 assumed or to be assumed for compensation insurance in this
17 State, or shall practice a policy of delay or unfairness
18 toward employees in the adjustment, settlement, or payment of
19 benefits due such employees, the Commission may after
20 reasonable notice and hearing order and direct that such
21 corporation, company, association, aggregation of
22 individuals, reciprocal or interinsurers exchange, or
23 insurer, shall from and after a date fixed in such order
24 discontinue the writing of any such workers' occupational
25 disease compensation insurance in this State. It shall
26 thereupon be unlawful for any such corporation, company,
27 association, aggregation of individuals, reciprocal or
28 interinsurers exchange, or insurer to effect any workers'
29 occupational disease compensation insurance in this State. A
30 copy of the order shall be served upon the Director of
31 Insurance by registered mail. Whenever the Commission finds
32 that any service or adjustment company used or employed by a
33 self-insured employer or by an insurance carrier to process,
34 adjust, investigate, compromise or otherwise handle claims
-25- LRB9104804WHdv
1 under this Act, has practiced or is practicing a policy of
2 delay or unfairness toward employees in the adjustment,
3 settlement or payment of benefits due such employees, the
4 Commission may after reasonable notice and hearing order and
5 direct that such service or adjustment company shall from and
6 after a date fixed in such order be prohibited from
7 processing, adjusting, investigating, compromising or
8 otherwise handling claims under this Act.
9 Whenever the Commission finds that any self-insured
10 employer has practiced or is practicing delay or unfairness
11 toward employees in the adjustment, settlement or payment of
12 benefits due such employees, the Commission may after
13 reasonable notice and hearing order and direct that after a
14 date fixed in the order such self-insured employer shall be
15 disqualified to operate as a self-insurer and shall be
16 required to insure his entire liability to pay compensation
17 in some insurance carrier authorized, licensed and permitted
18 to do such insurance business in this State as provided in
19 subparagraph (3) of paragraph (a) of this Section.
20 All orders made by the Commission under this Section
21 shall be subject to review by the courts, the review to be
22 taken in the same manner and within the same time as provided
23 by Section 19 of this Act for review of awards and decisions
24 of the Commission, upon the party seeking the review filing
25 with the clerk of the court to which said review is taken a
26 bond in an amount to be fixed and approved by the court to
27 which said review is taken, conditioned upon the payment of
28 all compensation awarded against the person taking the review
29 pending a decision thereof and further conditioned upon such
30 other obligations as the court may impose. Upon the review
31 the Circuit Court shall have power to review all questions of
32 fact as well as of law. The penalty hereinafter provided for
33 in this paragraph shall not attach and shall not begin to run
34 until the final determination of the order of the Commission.
-26- LRB9104804WHdv
1 (d) Upon a finding by the Commission, after reasonable
2 notice and hearing, of the knowing and wilful failure of an
3 employer to comply with any of the provisions of paragraph
4 (a) of this Section or the failure or refusal of an employer,
5 service or adjustment company, or insurance carrier to comply
6 with any order of the Industrial Commission pursuant to
7 paragraph (c) of this Section the Commission may assess a
8 civil penalty of up to $500 per day for each day of such
9 failure or refusal after the effective date of this
10 amendatory Act of 1989. Each day of such failure or refusal
11 shall constitute a separate offense.
12 Upon the failure or refusal of any employer, service or
13 adjustment company or insurance carrier to comply with the
14 provisions of this Section and orders of the Commission under
15 this Section, or the order of the court on review after final
16 adjudication, the Commission may bring a civil action to
17 recover the amount of the penalty in Cook County or in
18 Sangamon County in which litigation the Commission shall be
19 represented by the Attorney General. The Commission shall
20 send notice of its finding of non-compliance and assessment
21 of the civil penalty to the Attorney General. It shall be
22 the duty of the Attorney General within 30 days after receipt
23 of the notice, to institute prosecutions and promptly
24 prosecute all reported violations of this Section.
25 (e) This Act shall not affect or disturb the continuance
26 of any existing insurance, mutual aid, benefit, or relief
27 association or department, whether maintained in whole or in
28 part by the employer or whether maintained by the employees,
29 the payment of benefits of such association or department
30 being guaranteed by the employer or by some person, firm or
31 corporation for him or her: Provided, the employer
32 contributes to such association or department an amount not
33 less than the full compensation herein provided, exclusive of
34 the cost of the maintenance of such association or department
-27- LRB9104804WHdv
1 and without any expense to the employee. This Act shall not
2 prevent the organization and maintaining under the insurance
3 laws of this State of any benefit or insurance company for
4 the purpose of insuring against the compensation provided for
5 in this Act, the expense of which is maintained by the
6 employer. This Act shall not prevent the organization or
7 maintaining under the insurance laws of this State of any
8 voluntary mutual aid, benefit or relief association among
9 employees for the payment of additional accident or sick
10 benefits.
11 (f) No existing insurance, mutual aid, benefit or relief
12 association or department shall, by reason of anything herein
13 contained, be authorized to discontinue its operation without
14 first discharging its obligations to any and all persons
15 carrying insurance in the same or entitled to relief or
16 benefits therein.
17 (g) Any contract, oral, written or implied, of
18 employment providing for relief benefit, or insurance or any
19 other device whereby the employee is required to pay any
20 premium or premiums for insurance against the compensation
21 provided for in this Act shall be null and void. Any
22 employer withholding from the wages of any employee any
23 amount for the purpose of paying any such premium shall be
24 guilty of a Class B misdemeanor.
25 In the event the employer does not pay the compensation
26 for which he or she is liable, then an insurance company,
27 association or insurer which may have insured such employer
28 against such liability shall become primarily liable to pay
29 to the employee, his personal representative or beneficiary
30 the compensation required by the provisions of this Act to be
31 paid by such employer. The insurance carrier may be made a
32 party to the proceedings in which the employer is a party and
33 an award may be entered jointly against the employer and the
34 insurance carrier.
-28- LRB9104804WHdv
1 (h) It shall be unlawful for any employer, insurance
2 company or service or adjustment company to interfere with,
3 restrain or coerce an employee in any manner whatsoever in
4 the exercise of the rights or remedies granted to him or her
5 by this Act or to discriminate, attempt to discriminate, or
6 threaten to discriminate against an employee in any way
7 because of his exercise of the rights or remedies granted to
8 him by this Act.
9 It shall be unlawful for any employer, individually or
10 through any insurance company or service or adjustment
11 company, to discharge or to threaten to discharge, or to
12 refuse to rehire or recall to active service in a suitable
13 capacity an employee because of the exercise of his or her
14 rights or remedies granted to him or her by this Act.
15 (i) If an employer elects to obtain a life insurance
16 policy on his employees, he may also elect to apply such
17 benefits in satisfaction of all or a portion of the death
18 benefits payable under this Act, in which case, the
19 employer's premium for coverage for benefits under this Act
20 shall be reduced accordingly.
21 (Source: P.A. 90-109, eff. 1-1-98.)
[ Top ]