State of Illinois
92nd General Assembly
Legislation

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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.

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