|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
| ||||||||||||||||||||||||
| ||||||||||||||||||||||||
| ||||||||||||||||||||||||
1 | AN ACT concerning insurance.
| |||||||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| |||||||||||||||||||||||
3 | represented in the General Assembly:
| |||||||||||||||||||||||
4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||||||
5 | changing Sections 107a.05, 107a.06, and 107a.09 as follows:
| |||||||||||||||||||||||
6 | (215 ILCS 5/107a.05)
| |||||||||||||||||||||||
7 | Sec. 107a.05. Definitions and interchangeable terms.
| |||||||||||||||||||||||
8 | (a) Unless otherwise provided, the following definitions | |||||||||||||||||||||||
9 | shall apply:
| |||||||||||||||||||||||
10 | "Authorized insurer" means an insurer licensed in this | |||||||||||||||||||||||
11 | State to
transact business as described
in Clauses (c) and (d) | |||||||||||||||||||||||
12 | of Class 2 of Section 4 of this Code.
| |||||||||||||||||||||||
13 | "Calendar Quarter" means the 3-month periods ending March | |||||||||||||||||||||||
14 | 31, June 30,
September 30,
and December 31.
| |||||||||||||||||||||||
15 | "Director" means the Director of Insurance.
| |||||||||||||||||||||||
16 | "Engaged actively in the business" means a bona fide | |||||||||||||||||||||||
17 | business concern having
conducted
commerce, trade, or industry | |||||||||||||||||||||||
18 | in this State for a specified period of time. Any
and all | |||||||||||||||||||||||
19 | records relating
to this requirement shall be open to | |||||||||||||||||||||||
20 | inspection by the Director or his designee
during normal
| |||||||||||||||||||||||
21 | business hours.
| |||||||||||||||||||||||
22 | "Gross annual payroll" means payroll for the preceding | |||||||||||||||||||||||
23 | fiscal year.
|
| |||||||
| |||||||
1 | "Independent actuarial opinion" means an opinion expressed | ||||||
2 | by a member of the
American
Academy of Actuaries or Casualty | ||||||
3 | Actuarial Society.
| ||||||
4 | "Independent CPA" means an independent certified public | ||||||
5 | accountant or
independent
certified public accounting firm in | ||||||
6 | good standing and licensed to practice by
the Department of
| ||||||
7 | Professional
Regulation.
| ||||||
8 | "Pool" means a qualified group workers' compensation pool | ||||||
9 | as authorized by
this Article.
| ||||||
10 | "Qualified group workers' compensation pool" means a group | ||||||
11 | workers'
compensation pool
that has received a certificate of | ||||||
12 | authority pursuant to this Article.
| ||||||
13 | (b) For purposes of incorporating the provisions of this | ||||||
14 | Code designated in
paragraphs (1)
and (2) of subsection (a) of | ||||||
15 | Section 107a.04 into this Article, the following
terms shall be
| ||||||
16 | interchangeable:
| ||||||
17 | "Contribution" shall be considered premium.
| ||||||
18 | "Pooling agreement" shall be considered a policy of | ||||||
19 | insurance.
| ||||||
20 | "Trustees of a group workers' compensation pool" shall be | ||||||
21 | considered as
though they were
directors of a domestic mutual | ||||||
22 | insurance company and shall owe the same fiduciary duty to the | ||||||
23 | pool and its members and be held to the same duty of care in the | ||||||
24 | management and administration of the pool as directors of a | ||||||
25 | stock corporation .
| ||||||
26 | "Members of a group workers compensation pool" or "pool |
| |||||||
| |||||||
1 | members" shall be considered as though they were shareholders | ||||||
2 | of a domestic mutual insurance company. | ||||||
3 | (Source: P.A. 91-757, eff. 1-1-01.)
| ||||||
4 | (215 ILCS 5/107a.06)
| ||||||
5 | Sec. 107a.06. Pool administration.
| ||||||
6 | (a) An application for Certificate of Authority to | ||||||
7 | establish a pool must
include the
documentation and information | ||||||
8 | regarding its administrator, pooling agreement,
plan of | ||||||
9 | operation,
and membership required by this Section.
| ||||||
10 | (b) Administrators must disclose all of the following:
| ||||||
11 | (1) Biography of the risk manager on forms prescribed | ||||||
12 | by the Director.
| ||||||
13 | (2) If a corporation, biographies of all officers and | ||||||
14 | directors.
| ||||||
15 | (3) The size of staff and other information, such as | ||||||
16 | the kinds of staff
positions,
location of administrative | ||||||
17 | offices and the nature of any electronic data
processing | ||||||
18 | equipment,
if any, available for servicing the pool, to | ||||||
19 | demonstrate that the administrator
has the
resources to | ||||||
20 | administer the program disclosed pursuant to
subsection | ||||||
21 | (d).
| ||||||
22 | (4) The most recent financial statement of the | ||||||
23 | administrator. If a
publicly held
company, a copy of the | ||||||
24 | last 10-K filed with the Securities and Exchange
| ||||||
25 | Commission.
|
| |||||||
| |||||||
1 | (5) The compensation contract of the administrator.
| ||||||
2 | (6) The bylaws of the pool and articles of | ||||||
3 | incorporation, if any.
| ||||||
4 | (7) Any agreement that subcontracts any of the | ||||||
5 | administrator's duties or
responsibilities.
| ||||||
6 | (c) A pooling agreement must contain all of the following:
| ||||||
7 | (1) A description of the services to be provided by
the | ||||||
8 | administrator.
| ||||||
9 | (2) The manner in which costs are to be apportioned by | ||||||
10 | the administrator.
| ||||||
11 | (3) The initial premium deposit.
| ||||||
12 | (4) The assessment provision.
| ||||||
13 | (5) The termination provisions and minimum term of | ||||||
14 | membership, which
minimum
term
of membership shall not be | ||||||
15 | less than one year.
| ||||||
16 | (6) The duration of liability for additional | ||||||
17 | assessments following
termination of
membership, which | ||||||
18 | shall be for a period of not less than 3 years.
| ||||||
19 | (7) The prerequisites for membership.
| ||||||
20 | (8) A provision stating that a claim shall be paid by | ||||||
21 | the pool, regardless
of the size
of the claim, and that the | ||||||
22 | pool shall be reimbursed by the employer for any
amounts | ||||||
23 | required
to be paid by the employer under the agreement.
| ||||||
24 | (9) A provision stating that the terms of termination | ||||||
25 | after the first year
of pool
membership shall be dictated | ||||||
26 | by the pooling agreement.
|
| |||||||
| |||||||
1 | (10) If a pooling agreement requires a member to submit | ||||||
2 | written notice
in order for the member to withdraw from a | ||||||
3 | qualified pool, then the period in
which the member must | ||||||
4 | provide the written notice cannot be greater than 90
days.
| ||||||
5 | (11) A provision stating that the administrator acts as | ||||||
6 | a fiduciary of pool members with regard to performing the | ||||||
7 | administration duties and responsibilities, | ||||||
8 | notwithstanding any contractual agreements to the | ||||||
9 | contrary. | ||||||
10 | (12) A provision stating that any service providers | ||||||
11 | performing any of the administrator's duties or | ||||||
12 | responsibilities under subcontract act as agents and | ||||||
13 | fiduciaries of pool members with regard to the provision of | ||||||
14 | any such services, notwithstanding any other agreements of | ||||||
15 | such service provider to the contrary. | ||||||
16 | (13) A provision stating that the Trustees of the Pool | ||||||
17 | act as trustees for the benefit of pool members and | ||||||
18 | fiduciaries with regard to the provision of any such | ||||||
19 | services. | ||||||
20 | (d) Plans of operation must disclose all of the following:
| ||||||
21 | (1) A listing of initial members.
| ||||||
22 | (2) The aggregate loss history of initial members for | ||||||
23 | each of the last 3
years.
| ||||||
24 | (3) The amount of the net retention of the pool and a | ||||||
25 | list of reinsurers.
| ||||||
26 | (4) The names of all entities that will provide |
| |||||||
| |||||||
1 | services for the pool and
copies of
proposed contracts in | ||||||
2 | connection those services.
| ||||||
3 | (5) The safety and loss control programs to be provided | ||||||
4 | or required.
| ||||||
5 | (e) The application must contain information about initial | ||||||
6 | members specified
on forms
prescribed by the Director.
| ||||||
7 | (f) The application must contain the combined loss | ||||||
8 | experience for the group
for
the last 3 years and
any other | ||||||
9 | financial data required by the Director.
| ||||||
10 | (g) A pool administrator's original books and records | ||||||
11 | relating to the
operations of the pool
shall at all times be | ||||||
12 | located within the State of Illinois.
| ||||||
13 | (h) Any change of the pooling agreement, bylaws, plan of | ||||||
14 | operation,
reinsurance
agreements, or membership shall be | ||||||
15 | delivered to the Director within 30 days
after the amendment
or | ||||||
16 | change.
| ||||||
17 | (i) A pool trustee must be an employee, officer, director, | ||||||
18 | or owner of a
pool member.
| ||||||
19 | (Source: P.A. 91-757, eff. 1-1-01.)
| ||||||
20 | (215 ILCS 5/107a.09)
| ||||||
21 | Sec. 107a.09. Service companies for group workers' | ||||||
22 | compensation pools.
| ||||||
23 | (a) No association, corporation, partnership, sole | ||||||
24 | proprietorship, trust, or
other business
entity shall provide | ||||||
25 | services in the design, establishment, or administration
of a |
| |||||||
| |||||||
1 | group workers'
compensation pool unless it is licensed to do so | ||||||
2 | by the Department. An
applicant for a license shall
state in | ||||||
3 | writing the type of activities it seeks authorization to engage | ||||||
4 | in and
the type of services it
seeks authorization to provide. | ||||||
5 | The license shall be granted only when the
Director is | ||||||
6 | satisfied that
the entity possesses the necessary | ||||||
7 | organization, background, character,
expertise, and
financial | ||||||
8 | integrity to
supply the services sought to be offered. The | ||||||
9 | Department may issue a license
subject to restrictions
or | ||||||
10 | limitations, including restrictions or limitations on the type | ||||||
11 | of services
that may be supplied or
the activities in which the | ||||||
12 | entity may engage. A license issued under this
Section shall be | ||||||
13 | valid for
2 years.
| ||||||
14 | (b) To assure that administrators are financially solvent, | ||||||
15 | that pools are
administered in a fair
and capable fashion, and | ||||||
16 | that administrators are able to process claims and pay
benefits | ||||||
17 | in a prompt,
fair, and equitable manner, entities licensed to | ||||||
18 | engage in those activities
under this Section are
subject to | ||||||
19 | supervision and examination by the Department. Entities | ||||||
20 | licensed to engage in the activities set forth in subsection | ||||||
21 | (a) of this Section are subject to supervision and examination | ||||||
22 | in the same manner as the administrators for group workers | ||||||
23 | compensation insurance pools.
| ||||||
24 | (c) The Department may adopt rules for the purposes of this | ||||||
25 | Article. The
rules shall (i)
establish reporting requirements | ||||||
26 | for administrators for group workers'
compensation pools,
|
| |||||||
| |||||||
1 | including experience
reporting requirements consistent with | ||||||
2 | those established under this Code for
insurers; (ii) establish
| ||||||
3 | bonding requirements or other provisions assuring the | ||||||
4 | financial integrity of
entities administering
group | ||||||
5 | self-insurance; and (iii) establish other reasonable | ||||||
6 | requirements to
further the purposes of this
Article.
| ||||||
7 | (Source: P.A. 91-757, eff. 1-1-01.)
|