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| 1 | AN ACT concerning insurance.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Employee Leasing Company Act is amended by | ||||||
| 5 | changing Sections 15 and 30 as follows:
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| 6 | (215 ILCS 113/15)
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| 7 | Sec. 15. Definitions. In this Act:
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| 8 | "Department" means the Illinois Department of Insurance.
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| 9 | "Employee leasing arrangement" means a written contractual | ||||||
| 10 | arrangement,
including long-term temporary arrangements | ||||||
| 11 | whereby a lessor obligates itself
to perform specified employer | ||||||
| 12 | responsibilities as to leased employees. The contract shall | ||||||
| 13 | specifically identify either the employee leasing company or | ||||||
| 14 | the client responsible for including
the securing of workers' | ||||||
| 15 | compensation insurance for leased employees. For purposes of | ||||||
| 16 | this Act,
"employee leasing arrangement" does not include | ||||||
| 17 | "temporary help arrangement".
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| 18 | "Leased employee" or "worker" means a person performing | ||||||
| 19 | services for a
lessee under an
employee leasing arrangement.
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| 20 | "Lessee" or "client company" means an entity that obtains | ||||||
| 21 | any of its
work force from
another entity through an employee | ||||||
| 22 | leasing arrangement.
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| 23 | "Lessor" or "employee leasing company" means an entity that | ||||||
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| 1 | leases any of
its workers to a lessee through an
employee | ||||||
| 2 | leasing arrangement.
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| 3 | "Long-term temporary arrangement" means an arrangement | ||||||
| 4 | where one company
leases all or a
majority number of workers | ||||||
| 5 | from
another for a
period in excess of 6 months or consecutive | ||||||
| 6 | periods equal to or greater than
one year.
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| 7 | "Residual market mechanism" means the residual market | ||||||
| 8 | mechanism as
defined in Section 468 of the Illinois Insurance | ||||||
| 9 | Code.
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| 10 | "Temporary help arrangement" means a service whereby an | ||||||
| 11 | organization hires
its own employees and assigns them to | ||||||
| 12 | clients for a finite time period to
support or supplement the | ||||||
| 13 | client's work force in special work situations such
as, but not | ||||||
| 14 | limited to, employee absences, temporary skill shortages, | ||||||
| 15 | seasonal
workloads, and special assignments and projects.
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| 16 | (Source: P.A. 90-499, eff. 1-1-98; 90-794, eff. 8-14-98.)
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| 17 | (215 ILCS 113/30)
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| 18 | Sec. 30. Responsibility for policy issuance and | ||||||
| 19 | continuance.
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| 20 | (a) When a workers' compensation policy written to cover | ||||||
| 21 | leased
employees is issued to the lessor as the named
insured: | ||||||
| 22 | , | ||||||
| 23 | (1) The the lessee shall be identified thereon by the
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| 24 | attachment of
an appropriate endorsement indicating that | ||||||
| 25 | the policy provides coverage solely for
leased
employees. | ||||||
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| 1 | The endorsement shall, at a
minimum, provide for the | ||||||
| 2 | following:
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| 3 | (i) (1) Coverage under the endorsement shall be | ||||||
| 4 | limited to the
named insured's
employees leased to the | ||||||
| 5 | lessees.
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| 6 | (ii) (2) The experience of the employees leased to | ||||||
| 7 | the particular
lessee shall be separately maintained | ||||||
| 8 | by the lessor as provided in Section
25.
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| 9 | (b) (Blank).
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| 10 | (2) (c) The lessor shall notify the insurer or a | ||||||
| 11 | licensed rating organization 30
days prior to the effective | ||||||
| 12 | date of termination or immediately upon
notification of | ||||||
| 13 | cancellation by the lessor of an employee leasing | ||||||
| 14 | arrangement
with the lessee in order to allow sufficient | ||||||
| 15 | time to calculate an experience
modification factor for
the | ||||||
| 16 | lessee.
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| 17 | (3) (d) The insurer shall provide proof of workers' | ||||||
| 18 | compensation
insurance to
the lessor and to each applicable | ||||||
| 19 | lessee within 30 days of the coverage
being effected or | ||||||
| 20 | changed.
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| 21 | (4) (e) Calculation of a lessor's or lessee's premium | ||||||
| 22 | shall be done in
accordance with the insurer's rating | ||||||
| 23 | manual filed with the
Department.
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| 24 | (b) When a workers' compensation policy that covers leased | ||||||
| 25 | employees is issued to the lessee as the named insured: | ||||||
| 26 | (1) The lessor shall be identified by the attachment of | ||||||
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| 1 | an appropriate endorsement to indicate that the policy | ||||||
| 2 | provides coverage for the lessor as an additional insured | ||||||
| 3 | solely for the leased employees at that client. | ||||||
| 4 | (2) Notice of cancellation of the policy shall be | ||||||
| 5 | provided by the carrier to both the lessee (as named | ||||||
| 6 | insured) and to the lessor (as an additional insured). | ||||||
| 7 | (3) Coverage under the policy shall cover all exposure | ||||||
| 8 | of the client for both leased and non-leased workers. | ||||||
| 9 | (c) Where the client is the party responsible for workers' | ||||||
| 10 | compensation coverage of leased employees under the leasing | ||||||
| 11 | arrangement, coverage under any policy issued to the lessor as | ||||||
| 12 | named insured for direct employees of the lessor or for leased | ||||||
| 13 | employees of the lessor at any other client shall not be | ||||||
| 14 | extended to the leased employees at the client lessee. | ||||||
| 15 | (Source: P.A. 90-499, eff. 1-1-98; 90-794, eff. 8-14-98.)
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| 16 | Section 99. Effective date. This Act takes effect upon | ||||||
| 17 | becoming law.
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