(745 ILCS 10/9-103)
(from Ch. 85, par. 9-103)
(a) A local public entity may protect itself against any property damage or against any liability or loss which may
be imposed upon it or one
of its employees for a tortious act under Federal or State common or statutory
law, or imposed upon it under the Workers' Compensation Act, the Workers'
Occupational Diseases Act, or the Unemployment Insurance Act by means
including, but not limited to, insurance, individual or joint self-insurance,
including all operating and administrative costs and expenses directly
associated therewith, claims services and risk management directly attributable
to loss prevention and loss reduction, legal services directly
attributable to the
insurance, self-insurance, or joint self-insurance program,
educational, inspectional, and supervisory services directly relating
prevention and loss reduction, or participation in a reciprocal insurer as
Sections 72, 76 and 81 of the Illinois Insurance Code. Insurance shall be
carried with a company authorized by the Department of Insurance to write
such insurance coverage in Illinois.
(a-5) A local public entity may
individually or jointly self-insure provided it complies with any other
statutory requirements specifically related to individual or joint
self-insurance by local public entities. Whenever the terms "self-insure"
or "self-insurance" are utilized within this Act, such term shall apply to
both individual and joint self-insurance. The expenditure of funds of a
local public entity to protect itself or its employees against liability is
proper for any local public entity.
A local public entity that has individually self-insured may establish
expected losses for any liability or loss for which the local public entity is
authorized to purchase insurance under this Act. The decision of the local
public entity to establish a reserve and the amount of the reserve shall be
based on reasonable actuarial or insurance underwriting evidence. Property
taxes shall not be levied or extended if the effect is
to increase the reserve beyond 125% of the actuary's or insurance underwriter's
estimated ultimate losses at the 95% confidence level. Certification of the
amount of the reserve shall be made by the independent auditor, actuary, or
insurance underwriter and
included in an annual report.
The annual report shall also list all expenditures from the reserve
or from property taxes levied or extended for tort immunity purposes. Total
claims payments and total reserves must be listed in aggregate amounts. All
other expenditures must be identified individually.
A local public entity
that maintains a self-insurance reserve or that levies and extends a property
tax for tort immunity purposes must include in its audit or annual report any
the property tax levy or self-insurance reserve within the scope of the
audit or annual report.
(b) A local public entity may contract for or purchase any of the
guaranteed fund certificates or shares of guaranteed capital as provided
for in Section 56 of the Illinois Insurance Code. The expenditure of
funds of the local public entity for said contract or purchase is proper
for any local public entity.
(c) Any insurance company that provides insurance coverage to a local
public entity shall utilize any immunities or may assert any defenses to
which the insured local public entity or its employees are entitled.
Public entities which are individually or jointly self-insured shall be
entitled to assert all of the immunities provided by this Act or by common
law or statute on behalf of themselves or their employees unless the local
public entities shall elect by action of their corporate authorities or
specifically contract to waive in whole or in part such immunities.
(d) Within 30 days after January 1, 1991, and within 30 days after
each January 1 thereafter, local public entities that are individually or
jointly self-insured to protect against liability under the Workers'
Compensation Act and the Workers' Occupational Diseases Act shall file with
the Illinois Workers' Compensation Commission a report indicating an election to self-insure.
(Source: P.A. 93-721, eff. 1-1-05.)