Full Text of HB3717 94th General Assembly
HB3717 94TH GENERAL ASSEMBLY
|
|
|
94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB3717
Introduced 2/24/2005, by Rep. Lee A. Daniels SYNOPSIS AS INTRODUCED: |
|
820 ILCS 305/4 |
from Ch. 48, par. 138.4 |
|
Amends the Workers' Compensation Act. Makes a technical change to a Section
concerning self-insurance.
|
| |
|
|
A BILL FOR
|
|
|
|
|
HB3717 |
|
LRB094 09986 WGH 40244 b |
|
| 1 |
| AN ACT concerning employment.
| 2 |
| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Workers' Compensation Act is amended by | 5 |
| changing Section 4 as follows:
| 6 |
| (820 ILCS 305/4) (from Ch. 48, par. 138.4)
| 7 |
| Sec. 4. (a) Any employer, including but not limited to | 8 |
| general contractors
and their subcontractors, who shall come | 9 |
| within the
the provisions of
Section 3 of this Act, and any | 10 |
| other employer who shall elect to provide
and pay the | 11 |
| compensation provided for in this Act shall:
| 12 |
| (1) File with the Commission annually an application | 13 |
| for approval as a
self-insurer which shall include a | 14 |
| current financial statement, and
annually, thereafter, an | 15 |
| application for renewal of self-insurance, which
shall | 16 |
| include a current financial statement. Said
application | 17 |
| and financial statement shall be signed and sworn to by the
| 18 |
| president or vice president and secretary or assistant | 19 |
| secretary of the
employer if it be a corporation, or by all | 20 |
| of the partners, if it be a
copartnership, or by the owner | 21 |
| if it be neither a copartnership nor a
corporation. All | 22 |
| initial applications and all applications for renewal of
| 23 |
| self-insurance must be submitted at least 60 days prior to | 24 |
| the requested
effective date of self-insurance. An | 25 |
| employer may elect to provide and pay
compensation as | 26 |
| provided
for in this Act as a member of a group workers' | 27 |
| compensation pool under Article
V 3/4 of the Illinois | 28 |
| Insurance Code. If an employer becomes a member of a
group | 29 |
| workers' compensation pool, the employer shall not be | 30 |
| relieved of any
obligations imposed by this Act.
| 31 |
| If the sworn application and financial statement of any | 32 |
| such employer
does not satisfy the Commission of the |
|
|
|
HB3717 |
- 2 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| financial ability of the employer
who has filed it, the | 2 |
| Commission shall require such employer to,
| 3 |
| (2) Furnish security, indemnity or a bond guaranteeing | 4 |
| the payment
by the employer of the compensation provided | 5 |
| for in this Act, provided
that any such employer whose | 6 |
| application and financial statement shall
not have | 7 |
| satisfied the commission of his or her financial ability | 8 |
| and
who shall have secured his liability in part by excess | 9 |
| liability insurance
shall be required to furnish to the | 10 |
| Commission security, indemnity or bond
guaranteeing his or | 11 |
| her payment up to the effective limits of the excess
| 12 |
| coverage, or
| 13 |
| (3) Insure his entire liability to pay such | 14 |
| compensation in some
insurance carrier authorized, | 15 |
| licensed, or permitted to do such
insurance business in | 16 |
| this State. Every policy of an insurance carrier,
insuring | 17 |
| the payment of compensation under this Act shall cover all | 18 |
| the
employees and the entire compensation liability of the | 19 |
| insured:
Provided, however, that any employer may insure | 20 |
| his or her compensation
liability with 2 or more insurance | 21 |
| carriers or may insure a part and
qualify under subsection | 22 |
| 1, 2, or 4 for the remainder of his or her
liability to pay | 23 |
| such compensation, subject to the following two | 24 |
| provisions:
| 25 |
| Firstly, the entire compensation liability of the | 26 |
| employer to
employees working at or from one location | 27 |
| shall be insured in one such
insurance carrier or shall | 28 |
| be self-insured, and
| 29 |
| Secondly, the employer shall submit evidence | 30 |
| satisfactorily to the
Commission that his or her entire | 31 |
| liability for the compensation provided
for in this Act | 32 |
| will be secured. Any provisions in any policy, or in | 33 |
| any
endorsement attached thereto, attempting to limit | 34 |
| or modify in any way,
the liability of the insurance | 35 |
| carriers issuing the same except as
otherwise provided | 36 |
| herein shall be wholly void.
|
|
|
|
HB3717 |
- 3 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| Nothing herein contained shall apply to policies of | 2 |
| excess liability
carriage secured by employers who have | 3 |
| been approved by the Commission
as self-insurers, or
| 4 |
| (4) Make some other provision, satisfactory to the | 5 |
| Commission, for
the securing of the payment of compensation | 6 |
| provided for in this Act,
and
| 7 |
| (5) Upon becoming subject to this Act and thereafter as | 8 |
| often as the
Commission may in writing demand, file with | 9 |
| the Commission in form prescribed
by it evidence of his or | 10 |
| her compliance with the provision of this Section.
| 11 |
| (a-1) Regardless of its state of domicile or its principal | 12 |
| place of
business, an employer shall make payments to its | 13 |
| insurance carrier or group
self-insurance fund, where | 14 |
| applicable, based upon the premium rates of the
situs where the | 15 |
| work or project is located in Illinois if:
| 16 |
| (A) the employer is engaged primarily in the building | 17 |
| and
construction industry; and
| 18 |
| (B) subdivision (a)(3) of this Section applies to the | 19 |
| employer or
the employer is a member of a group | 20 |
| self-insurance plan as defined in
subsection (1) of Section | 21 |
| 4a.
| 22 |
| The Illinois Workers' Compensation Commission shall impose | 23 |
| a penalty upon an employer
for violation of this subsection | 24 |
| (a-1) if:
| 25 |
| (i) the employer is given an opportunity at a hearing | 26 |
| to present
evidence of its compliance with this subsection | 27 |
| (a-1); and
| 28 |
| (ii) after the hearing, the Commission finds that the | 29 |
| employer
failed to make payments upon the premium rates of | 30 |
| the situs where the work or
project is located in Illinois.
| 31 |
| The penalty shall not exceed $1,000 for each day of work | 32 |
| for which
the employer failed to make payments upon the premium | 33 |
| rates of the situs where
the
work or project is located in | 34 |
| Illinois, but the total penalty shall not exceed
$50,000 for | 35 |
| each project or each contract under which the work was
| 36 |
| performed.
|
|
|
|
HB3717 |
- 4 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| Any penalty under this subsection (a-1) must be imposed not | 2 |
| later
than one year after the expiration of the applicable | 3 |
| limitation period
specified in subsection (d) of Section 6 of | 4 |
| this Act. Penalties imposed under
this subsection (a-1) shall | 5 |
| be deposited into the Illinois Workers' Compensation | 6 |
| Commission
Operations Fund, a special fund that is created in | 7 |
| the State treasury. Subject
to appropriation, moneys in the | 8 |
| Fund shall be used solely for the operations
of the Illinois | 9 |
| Workers' Compensation Commission.
| 10 |
| (b) The sworn application and financial statement, or | 11 |
| security,
indemnity or bond, or amount of insurance, or other | 12 |
| provisions, filed,
furnished, carried, or made by the employer, | 13 |
| as the case may be, shall
be subject to the approval of the | 14 |
| Commission.
| 15 |
| Deposits under escrow agreements shall be cash, negotiable | 16 |
| United
States government bonds or negotiable general | 17 |
| obligation bonds of the
State of Illinois. Such cash or bonds | 18 |
| shall be deposited in
escrow with any State or National Bank or | 19 |
| Trust Company having trust
authority in the State of Illinois.
| 20 |
| Upon the approval of the sworn application and financial | 21 |
| statement,
security, indemnity or bond or amount of insurance, | 22 |
| filed, furnished or
carried, as the case may be, the Commission | 23 |
| shall send to the employer
written notice of its approval | 24 |
| thereof. The certificate of compliance
by the employer with the | 25 |
| provisions of subparagraphs (2) and (3) of
paragraph (a) of | 26 |
| this Section shall be delivered by the insurance
carrier to the | 27 |
| Illinois Workers' Compensation Commission within five days | 28 |
| after the
effective date of the policy so certified. The | 29 |
| insurance so certified
shall cover all compensation liability | 30 |
| occurring during the time that
the insurance is in effect and | 31 |
| no further certificate need be filed in case
such insurance is | 32 |
| renewed, extended or otherwise continued by such
carrier. The | 33 |
| insurance so certified shall not be cancelled or in the
event | 34 |
| that such insurance is not renewed, extended or otherwise
| 35 |
| continued, such insurance shall not be terminated until at | 36 |
| least 10
days after receipt by the Illinois Workers' |
|
|
|
HB3717 |
- 5 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| Compensation Commission of notice of the
cancellation or | 2 |
| termination of said insurance; provided, however, that
if the | 3 |
| employer has secured insurance from another insurance carrier, | 4 |
| or
has otherwise secured the payment of compensation in | 5 |
| accordance with
this Section, and such insurance or other | 6 |
| security becomes effective
prior to the expiration of the 10 | 7 |
| days, cancellation or termination may, at
the option of the | 8 |
| insurance carrier indicated in such notice, be effective
as of | 9 |
| the effective date of such other insurance or security.
| 10 |
| (c) Whenever the Commission shall find that any | 11 |
| corporation,
company, association, aggregation of individuals, | 12 |
| reciprocal or
interinsurers exchange, or other insurer | 13 |
| effecting workers' compensation
insurance in this State shall | 14 |
| be insolvent, financially unsound, or
unable to fully meet all | 15 |
| payments and liabilities assumed or to be
assumed for | 16 |
| compensation insurance in this State, or shall practice a
| 17 |
| policy of delay or unfairness toward employees in the | 18 |
| adjustment,
settlement, or payment of benefits due such | 19 |
| employees, the Commission
may after reasonable notice and | 20 |
| hearing order and direct that such
corporation, company, | 21 |
| association, aggregation of individuals,
reciprocal or | 22 |
| interinsurers exchange, or insurer, shall from and after a
date | 23 |
| fixed in such order discontinue the writing of any such | 24 |
| workers'
compensation insurance in this State. Subject to such | 25 |
| modification of
the order as the Commission may later make on | 26 |
| review of the order,
as herein provided, it shall thereupon be | 27 |
| unlawful for any such
corporation, company, association, | 28 |
| aggregation of individuals,
reciprocal or interinsurers | 29 |
| exchange, or insurer to effect any workers'
compensation | 30 |
| insurance in this State. A copy of the order shall be served
| 31 |
| upon the Director of Insurance by registered mail. Whenever the | 32 |
| Commission
finds that any service or adjustment company used or | 33 |
| employed
by a self-insured employer or by an insurance carrier | 34 |
| to process,
adjust, investigate, compromise or otherwise | 35 |
| handle claims under this
Act, has practiced or is practicing a | 36 |
| policy of delay or unfairness
toward employees in the |
|
|
|
HB3717 |
- 6 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| adjustment, settlement or payment of benefits
due such | 2 |
| employees, the Commission may after reasonable notice and
| 3 |
| hearing order and direct that such service or adjustment | 4 |
| company shall
from and after a date fixed in such order be | 5 |
| prohibited from processing,
adjusting, investigating, | 6 |
| compromising or otherwise handling claims
under this Act.
| 7 |
| Whenever the Commission finds that any self-insured | 8 |
| employer has
practiced or is practicing delay or unfairness | 9 |
| toward employees in the
adjustment, settlement or payment of | 10 |
| benefits due such employees, the
Commission may, after | 11 |
| reasonable notice and hearing, order and direct
that after a | 12 |
| date fixed in the order such self-insured employer shall be
| 13 |
| disqualified to operate as a self-insurer and shall be required | 14 |
| to
insure his entire liability to pay compensation in some | 15 |
| insurance
carrier authorized, licensed and permitted to do such | 16 |
| insurance business
in this State, as provided in subparagraph 3 | 17 |
| of paragraph (a) of this
Section.
| 18 |
| All orders made by the Commission under this Section shall | 19 |
| be subject
to review by the courts, said review to be taken in | 20 |
| the same manner and
within the same time as provided by Section | 21 |
| 19 of this Act for review of
awards and decisions of the | 22 |
| Commission, upon the party seeking the
review filing with the | 23 |
| clerk of the court to which said review is taken
a bond in an | 24 |
| amount to be fixed and approved by the court to which the
| 25 |
| review is taken, conditioned upon the payment of all | 26 |
| compensation awarded
against the person taking said review | 27 |
| pending a decision thereof and
further conditioned upon such | 28 |
| other obligations as the court may impose.
Upon the review the | 29 |
| Circuit Court shall have power to review all questions
of fact | 30 |
| as well as of law. The penalty hereinafter provided for in this
| 31 |
| paragraph shall not attach and shall not begin to run until the | 32 |
| final
determination of the order of the Commission.
| 33 |
| (d) Upon a finding by the Commission, after reasonable | 34 |
| notice and
hearing, of the knowing and wilful failure or | 35 |
| refusal of an employer to
comply with
any of the provisions of | 36 |
| paragraph (a) of this Section or the failure or
refusal of an |
|
|
|
HB3717 |
- 7 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| employer, service or adjustment company, or an insurance
| 2 |
| carrier to comply with any order of the Illinois Workers' | 3 |
| Compensation Commission pursuant to
paragraph (c) of this | 4 |
| Section disqualifying him or her to operate as a self
insurer | 5 |
| and requiring him or her to insure his or her liability, the
| 6 |
| Commission may assess a civil penalty of up to $500 per day for | 7 |
| each day of
such failure or refusal after the effective date of | 8 |
| this amendatory Act of
1989. The minimum penalty under this | 9 |
| Section shall be the sum of $10,000.
Each day of such failure | 10 |
| or refusal shall constitute a separate offense.
The Commission | 11 |
| may assess the civil penalty personally and individually
| 12 |
| against the corporate officers and directors of a corporate | 13 |
| employer, the
partners of an employer partnership, and the | 14 |
| members of an employer limited
liability company, after a | 15 |
| finding of a knowing and willful refusal or failure
of each | 16 |
| such named corporate officer, director, partner, or member to | 17 |
| comply
with this Section. The liability for the assessed | 18 |
| penalty shall be
against the named employer first, and
if the | 19 |
| named employer fails or refuses to pay the penalty to the
| 20 |
| Commission within 30 days after the final order of the | 21 |
| Commission, then the
named
corporate officers, directors, | 22 |
| partners, or members who have been found to have
knowingly and | 23 |
| willfully refused or failed to comply with this Section shall | 24 |
| be
liable for the unpaid penalty or any unpaid portion of the | 25 |
| penalty. All
penalties collected under
this Section shall be | 26 |
| deposited in the Illinois Workers' Compensation Commission | 27 |
| Operations Fund.
| 28 |
| Upon the failure or refusal of any employer, service or | 29 |
| adjustment
company or insurance carrier to comply with the | 30 |
| provisions of this Section
and with the orders of the | 31 |
| Commission under this Section, or the order of
the court on | 32 |
| review after final adjudication, the Commission may bring a
| 33 |
| civil action to recover the amount of the penalty in Cook | 34 |
| County or in
Sangamon County in which litigation the Commission | 35 |
| shall be represented by
the Attorney General. The Commission | 36 |
| shall send notice of its finding of
non-compliance and |
|
|
|
HB3717 |
- 8 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| assessment of the civil penalty to the Attorney General.
It | 2 |
| shall be the duty of the Attorney General within 30 days after | 3 |
| receipt
of the notice, to institute prosecutions and promptly | 4 |
| prosecute all
reported violations of this Section.
| 5 |
| (e) This Act shall not affect or disturb the continuance of | 6 |
| any
existing insurance, mutual aid, benefit, or relief | 7 |
| association or
department, whether maintained in whole or in | 8 |
| part by the employer or
whether maintained by the employees, | 9 |
| the payment of benefits of such
association or department being | 10 |
| guaranteed by the employer or by some
person, firm or | 11 |
| corporation for him or her: Provided, the employer contributes
| 12 |
| to such association or department an amount not less than the | 13 |
| full
compensation herein provided, exclusive of the cost of the | 14 |
| maintenance
of such association or department and without any | 15 |
| expense to the
employee. This Act shall not prevent the | 16 |
| organization and maintaining
under the insurance laws of this | 17 |
| State of any benefit or insurance
company for the purpose of | 18 |
| insuring against the compensation provided
for in this Act, the | 19 |
| expense of which is maintained by the employer.
This Act shall | 20 |
| not prevent the organization or maintaining under the
insurance | 21 |
| laws of this State of any voluntary mutual aid, benefit or
| 22 |
| relief association among employees for the payment of | 23 |
| additional
accident or sick 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 employment | 31 |
| providing
for relief benefit, or insurance or any other device | 32 |
| whereby the
employee is required to pay any premium or premiums | 33 |
| for insurance
against the compensation provided for in this Act | 34 |
| shall be null and
void. Any employer withholding from the wages | 35 |
| of any employee any
amount for the purpose of paying any such | 36 |
| premium shall be guilty of a
Class B misdemeanor.
|
|
|
|
HB3717 |
- 9 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| In the event the employer does not pay the compensation for | 2 |
| which he or
she is liable, then an insurance company, | 3 |
| association or insurer which may
have insured such employer | 4 |
| against such liability shall become primarily
liable to pay to | 5 |
| the employee, his or her personal representative or
beneficiary | 6 |
| the compensation required by the provisions of this Act to
be | 7 |
| paid by such employer. The insurance carrier may be made a | 8 |
| party to
the proceedings in which the employer is a party and | 9 |
| an award may be
entered jointly against the employer and the | 10 |
| insurance carrier.
| 11 |
| (h) It shall be unlawful for any employer, insurance | 12 |
| company or
service or adjustment company to interfere with, | 13 |
| restrain or coerce an
employee in any manner whatsoever in the | 14 |
| exercise of the rights or
remedies granted to him or her by | 15 |
| this Act or to discriminate, attempt to
discriminate, or | 16 |
| threaten to discriminate against an employee in any way
because | 17 |
| of his or her exercise of the rights or remedies granted to
him | 18 |
| or her by this Act.
| 19 |
| It shall be unlawful for any employer, individually or | 20 |
| through any
insurance company or service or adjustment company, | 21 |
| to discharge or to
threaten to discharge, or to refuse to | 22 |
| rehire or recall to active
service in a suitable capacity an | 23 |
| employee because of the exercise of
his or her rights or | 24 |
| remedies granted to him or her by this Act.
| 25 |
| (i) If an employer elects to obtain a life insurance policy | 26 |
| on his
employees, he may also elect to apply such benefits in | 27 |
| satisfaction of all
or a portion of the death benefits payable | 28 |
| under this Act, in which case,
the employer's compensation | 29 |
| premium shall be reduced accordingly.
| 30 |
| (j) Within 45 days of receipt of an initial application or | 31 |
| application
to renew self-insurance privileges the | 32 |
| Self-Insurers Advisory Board shall
review and submit for | 33 |
| approval by the Chairman of the Commission
recommendations of | 34 |
| disposition of all initial applications to self-insure
and all | 35 |
| applications to renew self-insurance privileges filed by | 36 |
| private
self-insurers pursuant to the provisions of this |
|
|
|
HB3717 |
- 10 - |
LRB094 09986 WGH 40244 b |
|
| 1 |
| Section and Section 4a-9
of this Act. Each private self-insurer | 2 |
| shall submit with its initial and
renewal applications the | 3 |
| application fee required by Section 4a-4 of this Act.
| 4 |
| The Chairman of the Commission shall promptly act upon all | 5 |
| initial
applications and applications for renewal in full | 6 |
| accordance with the
recommendations of the Board or, should the | 7 |
| Chairman disagree with any
recommendation of disposition of the | 8 |
| Self-Insurer's Advisory Board, he
shall within 30 days of | 9 |
| receipt of such recommendation provide to the Board
in writing | 10 |
| the reasons supporting his decision. The Chairman shall also
| 11 |
| promptly notify the employer of his decision within 15 days of | 12 |
| receipt of
the recommendation of the Board.
| 13 |
| If an employer is denied a renewal of self-insurance | 14 |
| privileges pursuant
to application it shall retain said | 15 |
| privilege for 120 days after receipt of
a notice of | 16 |
| cancellation of the privilege from the Chairman of the | 17 |
| Commission.
| 18 |
| All orders made by the Chairman under this Section shall be | 19 |
| subject to
review by the courts, such review to be taken in the | 20 |
| same manner and within
the same time as provided by subsection | 21 |
| (f) of Section 19 of this Act for
review of awards and | 22 |
| decisions of the Commission, upon the party seeking
the review | 23 |
| filing with the clerk of the court to which such review is | 24 |
| taken
a bond in an amount to be fixed and approved by the court | 25 |
| to which the
review is taken, conditioned upon the payment of | 26 |
| all compensation awarded
against the person taking such review | 27 |
| pending a decision thereof and
further conditioned upon such | 28 |
| other obligations as the court may impose.
Upon the review the | 29 |
| Circuit Court shall have power to review all questions
of fact | 30 |
| as well as of law.
| 31 |
| (Source: P.A. 92-324, eff. 8-9-01; 93-721, eff. 1-1-05.)
|
|