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92_HR0437 HDSHRXXXXCMr999cm 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 -2- HDSHRXXXXCMr999cm 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 -4- HDSHRXXXXCMr999cm 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.