SB2188 95TH GENERAL ASSEMBLY

LRB095 14707 KBJ 40628 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB2188

Introduced 2/14/2008, by Sen. Mike Jacobs

SYNOPSIS AS INTRODUCED:

215 ILCS 113/15
215 ILCS 113/30

Amends the Employee Leasing Company Act. Changes the definition of "employee leasing arrangement" to mean a written contractual arrangement (instead of only a contractual agreement) and also that the contract shall specifically identify either the employee leasing company or the client responsible for the securing of workers' compensation insurance for leased employees. Provides that when a workers' compensation policy written to cover leased employees is issued to the lessor as the named the insured, the lessee shall be identified thereon by the attachment of an appropriate endorsement indicating that the policy provides coverage solely for leased employees. Makes technical changes. Provides that when a workers' compensation policy that covers leased employees is issued to the lessee as the named insured: (1) The lessor shall be identified by the attachment of an appropriate endorsement to indicate that the policy provides coverage for the lessor as an additional insured solely for the leased employees at that client; (2) Notice of cancellation of the policy shall be provided by the carrier to both the lessee (as the named insured) and to the lessor (as an additional insured); and (3) Coverage under the policy shall cover all exposure of the client for both leased and non-leased workers. Makes other changes. Effective immediately.

A BILL FOR

AN ACT concerning insurance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Employee Leasing Company Act is amended by changing Sections 15 and 30 as follows:

(215 ILCS 113/15)

Sec. 15. Definitions. In this Act:

"Department" means the Illinois Department of Insurance.

"Employee leasing arrangement" means a written contractual arrangement, including long-term temporary arrangements whereby a lessor obligates itself to perform specified employer responsibilities as to leased employees. The contract shall specifically identify either the employee leasing company or the client responsible for including the securing of workers' compensation insurance for leased employees. For purposes of this Act, "employee leasing arrangement" does not include "temporary help arrangement".

"Leased employee" or "worker" means a person performing services for a lessee under an employee leasing arrangement.

"Lessee" or "client company" means an entity that obtains any of its work force from another entity through an employee leasing arrangement.

"Lessor" or "employee leasing company" means an entity that leases any of its workers to a lessee through an employee leasing arrangement.

"Long-term temporary arrangement" means an arrangement where one company leases all or a majority number of workers from another for a period in excess of 6 months or consecutive periods equal to or greater than one year.

"Residual market mechanism" means the residual market mechanism as defined in Section 468 of the Illinois Insurance Code.

"Temporary help arrangement" means a service whereby an organization hires its own employees and assigns them to clients for a finite time period to support or supplement the client's work force in special work situations such as, but not limited to, employee absences, temporary skill shortages, seasonal workloads, and special assignments and projects.

(Source: P.A. 90-499, eff. 1-1-98; 90-794, eff. 8-14-98.)

(215 ILCS 113/30)

Sec. 30. Responsibility for policy issuance and continuance.

(a) When a workers' compensation policy written to cover leased employees is issued to the lessor as the named insured: ,

(1) The the lessee shall be identified thereon by the attachment of an appropriate endorsement indicating that the policy provides coverage solely for leased employees. The endorsement shall, at a minimum, provide for the following:

(i) (1) Coverage under the endorsement shall be limited to the named insured's employees leased to the lessees.

(ii) (2) The experience of the employees leased to the particular lessee shall be separately maintained by the lessor as provided in Section 25.

(b) (Blank).

(2) (c) The lessor shall notify the insurer or a licensed rating organization 30 days prior to the effective date of termination or immediately upon notification of cancellation by the lessor of an employee leasing arrangement with the lessee in order to allow sufficient time to calculate an experience modification factor for the lessee.

(3) (d) The insurer shall provide proof of workers' compensation insurance to the lessor and to each applicable lessee within 30 days of the coverage being effected or changed.

(4) (e) Calculation of a lessor's or lessee's premium shall be done in accordance with the insurer's rating manual filed with the Department.

(b) When a workers' compensation policy that covers leased employees is issued to the lessee as the named insured:

(1) The lessor shall be identified by the attachment of an appropriate endorsement to indicate that the policy provides coverage for the lessor as an additional insured solely for the leased employees at that client.

(2) Notice of cancellation of the policy shall be provided by the carrier to both the lessee (as named insured) and to the lessor (as an additional insured).

(3) Coverage under the policy shall cover all exposure of the client for both leased and non-leased workers.

(c) Where the client is the party responsible for worker's compensation coverage of leased employees under the leasing arrangement, coverage under any policy issued to the lessor as named insured for direct employees of the lessor or for leased employees of the lessor at any other client shall not be extended to the leased employees at the client lessee.

(Source: P.A. 90-499, eff. 1-1-98; 90-794, eff. 8-14-98.)

Section 99. Effective date. This Act takes effect upon becoming law.