State of Illinois
92nd General Assembly
Legislation

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92_HR0437

 
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 1                          HOUSE RESOLUTION

 2        WHEREAS, Workers' compensation self-insurance pools allow
 3    small  employers  with  the  same  risk  characteristics   to
 4    self-insure  their  workers'  compensation  liabilities  on a
 5    group basis; and

 6        WHEREAS,  Illinois  employers   have   been   statutorily
 7    authorized to form self-insurance pools since 1980; and

 8        WHEREAS,   The   Director  of  Insurance  has  regulatory
 9    authority over  workers'  compensation  self-insurance  pools
10    under Article V 3/4 of the Insurance Code; and

11        WHEREAS,  As  part  of the state's regulatory scheme over
12    the self-insurance pools, the state has established the Group
13    Workers' Compensation Pool Insolvency Fund; and

14        WHEREAS, The purpose of the Group  Workers'  Compensation
15    Pool  Insolvency  Fund is to pay workers' compensation awards
16    to  injured  workers  whose  employers  belong  to  insolvent
17    workers' compensation self-insurance pool; and

18        WHEREAS, Since October 2000, four  workers'  compensation
19    self-insurance  pools  have  been  declared  insolvent by the
20    Director of the Department of Insurance; and

21        WHEREAS, The total, unpaid claims owed by these insolvent
22    pools are estimated by the  Department  of  Insurance  to  be
23    between $17 million and $20 million; and

24        WHEREAS,  The Group Workers' Compensation Pool Insolvency
25    Fund is funded by means of regular assessments imposed on the
26    self-insurance pools, and these assessments are set at a rate
27    of 0.5% of total workers' compensation claims paid by a pool;
28    and
 
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 1        WHEREAS, The Director of  Insurance  is  responsible  for
 2    collecting  assessments  for  the  Workers' Compensation Pool
 3    Insolvency Fund; and

 4        WHEREAS, The Illinois Insurance Code  provides  that,  in
 5    the   event   of   insolvency   of  a  workers'  compensation
 6    self-insurance  pool,  the  director  may  impose  additional
 7    assessments on the employer members of  the  insolvent  pool;
 8    and

 9        WHEREAS,  The  Illinois  Insurance  Code further provides
10    that, where the balance of  the  Workers'  Compensation  Pool
11    Insolvency  Fund  falls  below  $1  million,  the director of
12    Insurance may impose additional assessments upon the  solvent
13    self-insurance  pools  in order to pay the claims against the
14    insolvent pools; and

15        WHEREAS,  During  its  entire   history,   the   Workers'
16    Compensation  Pool  Insolvency  Fund has collected only about
17    $800,000 in assessments; and

18        WHEREAS, The current assets of the Workers'  Compensation
19    Pool  Insolvency  Fund  are  woefully  inadequate  to pay the
20    awarded claims against the insolvent pools; and

21        WHEREAS, The efforts of the  Director  of  Insurance,  as
22    receiver  of the insolvent pools, to collect available assets
23    from the estates of the insolvent pools is  not  expected  to
24    yield  sufficient  revenues  to  pay  the  full amount of the
25    awarded claims within the near future; and

26        WHEREAS, The director's current efforts to collect assets
27    from the employer members of the insolvent pools likewise  do
28    not   appear  likely  to  yield  sufficient  assets  for  the
29    Insolvency  Fund  to  pay  all  of  the  claims  against  the
30    insolvent pools; and

31        WHEREAS, The director has  not,  as  yet,  collected  any
 
                            -3-             HDSHRXXXXCMr999cm
 1    additional assessments from the solvent self-insurance pools;
 2    and

 3        WHEREAS,   As   a   result  of  the  self-insurance  pool
 4    insolvencies, some injured workers  have  not  been  able  to
 5    receive  the  workers'  compensation  and medical benefits to
 6    which they are entitled under law for  a  period  of  over  6
 7    months; and

 8        WHEREAS,  Many  of these injured workers are in desperate
 9    financial straits, being physically unable to earn wages  for
10    themselves and their families through gainful employment; and

11        WHEREAS,  It is therefore imperative that the Director of
12    Insurance  step  up  his  efforts   to   collect   additional
13    assessments,  both  from  the  solvent pools and the employer
14    members of the insolvent pools; and

15        WHEREAS, The solvent pools appear  to  be  raising  every
16    possible   legal  objection  to  avoid  becoming  liable  for
17    additional assessments; and

18        WHEREAS, It is therefore  appropriate  that  the  General
19    Assembly  take  steps  to  monitor  the  efforts taken by the
20    Director of Insurance to collect additional  assessments  for
21    the  Workers' Compensation Pool Insolvency Fund; therefore be
22    it

23        RESOLVED, BY THE NINETY-SECOND GENERAL  ASSEMBLY  OF  THE
24    STATE  OF  ILLINOIS,  That the House of Representatives urges
25    the Director of Insurance to make  all  possible  efforts  to
26    collect  additional assessments for the Workers' Compensation
27    Pool Insolvency Fund; and be it further

28        RESOLVED, That  the  Director  of  Insurance  pursue  all
29    possible  avenues  to collect assessments, including, but not
30    limited to, the  possible  filing  of  lawsuits  against  the
31    solvent pools; and be it further
 
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 1        RESOLVED,  That  within  30  days  of the passage of this
 2    resolution, the Director of Insurance shall submit  a  report
 3    describing  the  efforts  he  has taken to collect additional
 4    assessments   from   the   solvent   workers'    compensation
 5    self-insurance  pools, as well as the employer members of the
 6    insolvent pools; and be it further

 7        RESOLVED, That the  report  shall  summarize  the  dollar
 8    amounts collected as assessments from each pool and employer,
 9    as  well  as  the  total  dollar  amounts  of  the  collected
10    assessments,  the  claims  paid from the Insolvency Fund, and
11    the Insolvency Fund balance, and be it further

12        RESOLVED,  That  the  report   shall   provide   detailed
13    explanations  of  any  failures  by  those  assessed  to  pay
14    assessments  that  the director has levied, the efforts taken
15    by the director to correct these failures, reason  given  for
16    failure to pay by those assessed, and a litigation plan where
17    appropriate; and be it further

18        RESOLVED,  That  a suitable copy of this resolution shall
19    be delivered to the Governor and the Director of Insurance.

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