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| [ Introduced ] | [ Enrolled ] | [ Senate Amendment 001 ] |
92_SB0868eng SB868 Engrossed LRB9203898RCcd 1 AN ACT in relation to workers' compensation. 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 provisions of Section 3 of this Act, and any other 10 employer who shall elect to provide and pay the compensation 11 provided for in this Act shall: 12 (1) File with the Commission annually an 13 application for approval as a self-insurer which shall 14 include a current financial statement, and annually, 15 thereafter, an application for renewal of self-insurance, 16 which shall include a current financial statement. Said 17 application and financial statement shall be signed and 18 sworn to by the president or vice president and secretary 19 or assistant secretary of the employer if it be a 20 corporation, or by all of the partners, if it be a 21 copartnership, or by the owner if it be neither a 22 copartnership nor a corporation. All initial applications 23 and all applications for renewal of self-insurance must 24 be submitted at least 60 days prior to the requested 25 effective date of self-insurance. An employer may elect 26 to provide and pay compensation as provided for in this 27 Act as a member of a group workers' compensation pool 28 under Article V 3/4 of the Illinois Insurance Code. If 29 an employer becomes a member of a group workers' 30 compensation pool, the employer shall not be relieved of 31 any obligations imposed by this Act. SB868 Engrossed -2- LRB9203898RCcd 1 If the sworn application and financial statement of 2 any such employer does not satisfy the Commission of the 3 financial ability of the employer who has filed it, the 4 Commission shall require such employer to, 5 (2) Furnish security, indemnity or a bond 6 guaranteeing the payment by the employer of the 7 compensation provided for in this Act, provided that any 8 such employer whose application and financial statement 9 shall not have satisfied the commission of his or her 10 financial ability and who shall have secured his 11 liability in part by excess liability insurance shall be 12 required to furnish to the Commission security, indemnity 13 or bond guaranteeing his or her payment up to the 14 effective limits of the excess coverage, or 15 (3) Insure his entire liability to pay such 16 compensation in some insurance carrier authorized, 17 licensed, or permitted to do such insurance business in 18 this State. Every policy of an insurance carrier, 19 insuring the payment of compensation under this Act shall 20 cover all the employees and the entire compensation 21 liability of the insured: Provided, however, that any 22 employer may insure his or her compensation liability 23 with 2 or more insurance carriers or may insure a part 24 and qualify under subsection 1, 2, or 4 for the remainder 25 of his or her liability to pay such compensation, subject 26 to the following two provisions: 27 Firstly, the entire compensation liability of 28 the employer to employees working at or from one 29 location shall be insured in one such insurance 30 carrier or shall be self-insured, and 31 Secondly, the employer shall submit evidence 32 satisfactorily to the Commission that his or her 33 entire liability for the compensation provided for 34 in this Act will be secured. Any provisions in any SB868 Engrossed -3- LRB9203898RCcd 1 policy, or in any endorsement attached thereto, 2 attempting to limit or modify in any way, the 3 liability of the insurance carriers issuing the same 4 except as otherwise provided herein shall be wholly 5 void. 6 Nothing herein contained shall apply to policies of 7 excess liability carriage secured by employers who have 8 been approved by the Commission as self-insurers, or 9 (4) Make some other provision, satisfactory to the 10 Commission, for the securing of the payment of 11 compensation provided for in this Act, and 12 (5) Upon becoming subject to this Act and 13 thereafter as often as the Commission may in writing 14 demand, file with the Commission in form prescribed by it 15 evidence of his or her compliance with the provision of 16 this Section. 17 (a-1) Regardless of its state of domicile or its 18 principal place of business, an employer shall make payments 19 to its insurance carrier or group self-insurance fund, where 20 applicable, based upon the premium rates of the situs where 21 the work or project is located in Illinois if: 22 (A) the employer is engaged primarily in the 23 building and construction industry; and 24 (B) subdivision (a)(3) of this Section applies to 25 the employer or the employer is a member of a group 26 self-insurance plan as defined in subsection (1) of 27 Section 4a. 28 The Industrial Commission shall impose a penalty upon an 29 employer for violation of this subsection (a-1) if: 30 (i) the employer is given an opportunity at a 31 hearing to present evidence of its compliance with this 32 subsection (a-1); and 33 (ii) after the hearing, the Commission finds that 34 the employer failed to make payments upon the premium SB868 Engrossed -4- LRB9203898RCcd 1 rates of the situs where the work or project is located 2 in Illinois. 3 The penalty shall not exceed $1,000 for each day of work 4 for which the employer failed to make payments upon the 5 premium rates of the situs where the work or project is 6 located in Illinois, but the total penalty shall not exceed 7 $50,000 for each project or each contract under which the 8 work was performed. 9 Any penalty under this subsection (a-1) must be imposed 10 not later than one year after the expiration of the 11 applicable limitation period specified in subsection (d) of 12 Section 6 of this Act. Penalties imposed under this 13 subsection (a-1) shall be deposited into the Industrial 14 Commission Operations Fund, a special fund that is created 15 in the State treasury. Subject to appropriation, moneys in 16 the Fund shall be used solely for the operations of the 17 Industrial Commission. 18 (b) The sworn application and financial statement, or 19 security, indemnity or bond, or amount of insurance, or other 20 provisions, filed, furnished, carried, or made by the 21 employer, as the case may be, shall be subject to the 22 approval of the Commission. 23 Deposits under escrow agreements shall be cash, 24 negotiable United States government bonds or negotiable 25 general obligation bonds of the State of Illinois. Such cash 26 or bonds shall be deposited in escrow with any State or 27 National Bank or Trust Company having trust authority in the 28 State of Illinois. 29 Upon the approval of the sworn application and financial 30 statement, security, indemnity or bond or amount of 31 insurance, filed, furnished or carried, as the case may be, 32 the Commission shall send to the employer written notice of 33 its approval thereof. The certificate of compliance by the 34 employer with the provisions of subparagraphs (2) and (3) of SB868 Engrossed -5- LRB9203898RCcd 1 paragraph (a) of this Section shall be delivered by the 2 insurance carrier to the Industrial Commission within five 3 days after the effective date of the policy so certified. 4 The insurance so certified shall cover all compensation 5 liability occurring during the time that the insurance is in 6 effect and no further certificate need be filed in case such 7 insurance is renewed, extended or otherwise continued by such 8 carrier. The insurance so certified shall not be cancelled 9 or in the event that such insurance is not renewed, extended 10 or otherwise continued, such insurance shall not be 11 terminated until at least 10 days after receipt by the 12 Industrial Commission of notice of the cancellation or 13 termination of said insurance; provided, however, that if the 14 employer has secured insurance from another insurance 15 carrier, or has otherwise secured the payment of compensation 16 in accordance with this Section, and such insurance or other 17 security becomes effective prior to the expiration of the 10 18 days, cancellation or termination may, at the option of the 19 insurance carrier indicated in such notice, be effective as 20 of the effective date of such other insurance or security. 21 (c) Whenever the Commission shall find that any 22 corporation, company, association, aggregation of 23 individuals, reciprocal or interinsurers exchange, or other 24 insurer effecting workers' compensation insurance in this 25 State shall be insolvent, financially unsound, or unable to 26 fully meet all payments and liabilities assumed or to be 27 assumed for compensation insurance in this State, or shall 28 practice a policy of delay or unfairness toward employees in 29 the adjustment, settlement, or payment of benefits due such 30 employees, the Commission may after reasonable notice and 31 hearing order and direct that such corporation, company, 32 association, aggregation of individuals, reciprocal or 33 interinsurers exchange, or insurer, shall from and after a 34 date fixed in such order discontinue the writing of any such SB868 Engrossed -6- LRB9203898RCcd 1 workers' compensation insurance in this State. Subject to 2 such modification of the order as the Commission may later 3 make on review of the order, as herein provided, it shall 4 thereupon be unlawful for any such corporation, company, 5 association, aggregation of individuals, reciprocal or 6 interinsurers exchange, or insurer to effect any workers' 7 compensation insurance in this State. A copy of the order 8 shall be served upon the Director of Insurance by registered 9 mail. Whenever the Commission finds that any service or 10 adjustment company used or employed by a self-insured 11 employer or by an insurance carrier to process, adjust, 12 investigate, compromise or otherwise handle claims under this 13 Act, has practiced or is practicing a policy of delay or 14 unfairness toward employees in the adjustment, settlement or 15 payment of benefits due such employees, the Commission may 16 after reasonable notice and hearing order and direct that 17 such service or adjustment company shall from and after a 18 date fixed in such order be prohibited from processing, 19 adjusting, investigating, compromising or otherwise handling 20 claims under this Act. 21 Whenever the Commission finds that any self-insured 22 employer has practiced or is practicing delay or unfairness 23 toward employees in the adjustment, settlement or payment of 24 benefits due such employees, the Commission may, after 25 reasonable notice and hearing, order and direct that after a 26 date fixed in the order such self-insured employer shall be 27 disqualified to operate as a self-insurer and shall be 28 required to insure his entire liability to pay compensation 29 in some insurance carrier authorized, licensed and permitted 30 to do such insurance business in this State, as provided in 31 subparagraph 3 of paragraph (a) of this Section. 32 All orders made by the Commission under this Section 33 shall be subject to review by the courts, said review to be 34 taken in the same manner and within the same time as provided SB868 Engrossed -7- LRB9203898RCcd 1 by Section 19 of this Act for review of awards and decisions 2 of the Commission, upon the party seeking the review filing 3 with the clerk of the court to which said review is taken a 4 bond in an amount to be fixed and approved by the court to 5 which the review is taken, conditioned upon the payment of 6 all compensation awarded against the person taking said 7 review pending a decision thereof and further conditioned 8 upon such other obligations as the court may impose. Upon 9 the review the Circuit Court shall have power to review all 10 questions of fact as well as of law. The penalty hereinafter 11 provided for in this paragraph shall not attach and shall not 12 begin to run until the final determination of the order of 13 the Commission. 14 (d) Upon a finding by the Commission, after reasonable 15 notice and hearing, of the knowing and wilful failure or 16 refusal of an employer to comply with any of the provisions 17 of paragraph (a) of this Section or the failure or refusal of 18 an employer, service or adjustment company, or an insurance 19 carrier to comply with any order of the Industrial Commission 20 pursuant to paragraph (c) of this Section disqualifying him 21 or her to operate as a self insurer and requiring him or her 22 to insure his or her liability, the Commission may assess a 23 civil penalty of up to $500 per day for each day of such 24 failure or refusal after the effective date of this 25 amendatory Act of 1989. The minimum penalty under this 26 Section shall be the sum of $10,000. Each day of such 27 failure or refusal shall constitute a separate offense. The 28 Commission may assess the civil penalty personally and 29 individually against the corporate officers and directors of 30 a corporate employer, the partners of an employer 31 partnership, and the members of an employer limited liability 32 company, after a finding of a knowing and willful refusal or 33 failure of each such named corporate officer, director, 34 partner, or member to comply with this Section. The SB868 Engrossed -8- LRB9203898RCcd 1 liability for the assessed penalty shall be against the named 2 employer first, and if the named employer fails or refuses to 3 pay the penalty to the Commission within 30 days after the 4 final order of the Commission, then the named corporate 5 officers, directors, partners, or members who have been found 6 to have knowingly and willfully refused or failed to comply 7 with this Section shall be liable for the unpaid penalty or 8 any unpaid portion of the penalty. All penalties collected 9 under this Section shall be deposited in the Industrial 10 Commission Operations Fund. 11 Upon the failure or refusal of any employer, service or 12 adjustment company or insurance carrier to comply with the 13 provisions of this Section and with the orders of the 14 Commission under this Section, or the order of the court on 15 review after final adjudication, the Commission may bring a 16 civil action to recover the amount of the penalty in Cook 17 County or in Sangamon County in which litigation the 18 Commission shall be represented by the Attorney General. The 19 Commission shall send notice of its finding of non-compliance 20 and assessment of the civil penalty to the Attorney General. 21 It shall be the duty of the Attorney General within 30 days 22 after receipt of the notice, to institute prosecutions and 23 promptly prosecute all reported violations of this Section. 24 (e) This Act shall not affect or disturb the continuance 25 of any existing insurance, mutual aid, benefit, or relief 26 association or department, whether maintained in whole or in 27 part by the employer or whether maintained by the employees, 28 the payment of benefits of such association or department 29 being guaranteed by the employer or by some person, firm or 30 corporation for him or her: Provided, the employer 31 contributes to such association or department an amount not 32 less than the full compensation herein provided, exclusive of 33 the cost of the maintenance of such association or department 34 and without any expense to the employee. This Act shall not SB868 Engrossed -9- LRB9203898RCcd 1 prevent the organization and maintaining under the insurance 2 laws of this State of any benefit or insurance company for 3 the purpose of insuring against the compensation provided for 4 in this Act, the expense of which is maintained by the 5 employer. This Act shall not prevent the organization or 6 maintaining under the insurance laws of this State of any 7 voluntary mutual aid, benefit or relief association among 8 employees for the payment of additional accident or sick 9 benefits. 10 (f) No existing insurance, mutual aid, benefit or relief 11 association or department shall, by reason of anything herein 12 contained, be authorized to discontinue its operation without 13 first discharging its obligations to any and all persons 14 carrying insurance in the same or entitled to relief or 15 benefits therein. 16 (g) Any contract, oral, written or implied, of 17 employment providing for relief benefit, or insurance or any 18 other device whereby the employee is required to pay any 19 premium or premiums for insurance against the compensation 20 provided for in this Act shall be null and void. Any 21 employer withholding from the wages of any employee any 22 amount for the purpose of paying any such premium shall be 23 guilty of a Class B misdemeanor. 24 In the event the employer does not pay the compensation 25 for which he or she is liable, then an insurance company, 26 association or insurer which may have insured such employer 27 against such liability shall become primarily liable to pay 28 to the employee, his or her personal representative or 29 beneficiary the compensation required by the provisions of 30 this Act to be paid by such employer. The insurance carrier 31 may be made a party to the proceedings in which the employer 32 is a party and an award may be entered jointly against the 33 employer and the insurance carrier. 34 (h) It shall be unlawful for any employer, insurance SB868 Engrossed -10- LRB9203898RCcd 1 company or service or adjustment company to interfere with, 2 restrain or coerce an employee in any manner whatsoever in 3 the exercise of the rights or remedies granted to him or her 4 by this Act or to discriminate, attempt to discriminate, or 5 threaten to discriminate against an employee in any way 6 because of his or her exercise of the rights or remedies 7 granted to him or her by this Act. 8 It shall be unlawful for any employer, individually or 9 through any insurance company or service or adjustment 10 company, to discharge or to threaten to discharge, or to 11 refuse to rehire or recall to active service in a suitable 12 capacity an employee because of the exercise of his or her 13 rights or remedies granted to him or her by this Act. 14 (i) If an employer elects to obtain a life insurance 15 policy on his employees, he may also elect to apply such 16 benefits in satisfaction of all or a portion of the death 17 benefits payable under this Act, in which case, the 18 employer's compensation premium shall be reduced accordingly. 19 (j) Within 45 days of receipt of an initial application 20 or application to renew self-insurance privileges the 21 Self-Insurers Advisory Board shall review and submit for 22 approval by the Chairman of the Commission recommendations of 23 disposition of all initial applications to self-insure and 24 all applications to renew self-insurance privileges filed by 25 private self-insurers pursuant to the provisions of this 26 Section and Section 4a-9 of this Act. Each private 27 self-insurer shall submit with its initial and renewal 28 applications the application fee required by Section 4a-4 of 29 this Act. 30 The Chairman of the Commission shall promptly act upon 31 all initial applications and applications for renewal in full 32 accordance with the recommendations of the Board or, should 33 the Chairman disagree with any recommendation of disposition 34 of the Self-Insurer's Advisory Board, he shall within 30 days SB868 Engrossed -11- LRB9203898RCcd 1 of receipt of such recommendation provide to the Board in 2 writing the reasons supporting his decision. The Chairman 3 shall also promptly notify the employer of his decision 4 within 15 days of receipt of the recommendation of the Board. 5 If an employer is denied a renewal of self-insurance 6 privileges pursuant to application it shall retain said 7 privilege for 120 days after receipt of a notice of 8 cancellation of the privilege from the Chairman of the 9 Commission. 10 All orders made by the Chairman under this Section shall 11 be subject to review by the courts, such review to be taken 12 in the same manner and within the same time as provided by 13 subsection (f) of Section 19 of this Act for review of awards 14 and decisions of the Commission, upon the party seeking the 15 review filing with the clerk of the court to which such 16 review is taken a bond in an amount to be fixed and approved 17 by the court to which the review is taken, conditioned upon 18 the payment of all compensation awarded against the person 19 taking such review pending a decision thereof and further 20 conditioned upon such other obligations as the court may 21 impose. Upon the review the Circuit Court shall have power 22 to review all questions of fact as well as of law. 23 (Source: P.A. 90-109, eff. 1-1-98; 91-375, eff. 1-1-00; 24 91-757, eff. 1-1-01.) 25 Section 99. Effective date. This Act takes effect upon 26 becoming law.