[ Home ] [ ILCS ] [ Search ] [ Bottom ]
[ Other General Assemblies ]
Public Act 92-0324
SB868 Enrolled LRB9203898RCcd
AN ACT in relation to workers' compensation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Workers' Compensation Act is amended by
changing Section 4 as follows:
(820 ILCS 305/4) (from Ch. 48, par. 138.4)
Sec. 4. (a) Any employer, including but not limited to
general contractors and their subcontractors, who shall come
within the provisions of Section 3 of this Act, and any other
employer who shall elect to provide and pay the compensation
provided for in this Act shall:
(1) File with the Commission annually an
application for approval as a self-insurer which shall
include a current financial statement, and annually,
thereafter, an application for renewal of self-insurance,
which shall include a current financial statement. Said
application and financial statement shall be signed and
sworn to by the president or vice president and secretary
or assistant secretary of the employer if it be a
corporation, or by all of the partners, if it be a
copartnership, or by the owner if it be neither a
copartnership nor a corporation. All initial applications
and all applications for renewal of self-insurance must
be submitted at least 60 days prior to the requested
effective date of self-insurance. An employer may elect
to provide and pay compensation as provided for in this
Act as a member of a group workers' compensation pool
under Article V 3/4 of the Illinois Insurance Code. If
an employer becomes a member of a group workers'
compensation pool, the employer shall not be relieved of
any obligations imposed by this Act.
If the sworn application and financial statement of
any such employer does not satisfy the Commission of the
financial ability of the employer who has filed it, the
Commission shall require such employer to,
(2) Furnish security, indemnity or a bond
guaranteeing the payment by the employer of the
compensation provided for in this Act, provided that any
such employer whose application and financial statement
shall not have satisfied the commission of his or her
financial ability and who shall have secured his
liability in part by excess liability insurance shall be
required to furnish to the Commission security, indemnity
or bond guaranteeing his or her payment up to the
effective limits of the excess coverage, or
(3) Insure his entire liability to pay such
compensation in some insurance carrier authorized,
licensed, or permitted to do such insurance business in
this State. Every policy of an insurance carrier,
insuring the payment of compensation under this Act shall
cover all the employees and the entire compensation
liability of the insured: Provided, however, that any
employer may insure his or her compensation liability
with 2 or more insurance carriers or may insure a part
and qualify under subsection 1, 2, or 4 for the remainder
of his or her liability to pay such compensation, subject
to the following two provisions:
Firstly, the entire compensation liability of
the employer to employees working at or from one
location shall be insured in one such insurance
carrier or shall be self-insured, and
Secondly, the employer shall submit evidence
satisfactorily to the Commission that his or her
entire liability for the compensation provided for
in this Act will be secured. Any provisions in any
policy, or in any endorsement attached thereto,
attempting to limit or modify in any way, the
liability of the insurance carriers issuing the same
except as otherwise provided herein shall be wholly
void.
Nothing herein contained shall apply to policies of
excess liability carriage secured by employers who have
been approved by the Commission as self-insurers, or
(4) Make some other provision, satisfactory to the
Commission, for the securing of the payment of
compensation provided for in this Act, and
(5) Upon becoming subject to this Act and
thereafter as often as the Commission may in writing
demand, file with the Commission in form prescribed by it
evidence of his or her compliance with the provision of
this Section.
(a-1) Regardless of its state of domicile or its
principal place of business, an employer shall make payments
to its insurance carrier or group self-insurance fund, where
applicable, based upon the premium rates of the situs where
the work or project is located in Illinois if:
(A) the employer is engaged primarily in the
building and construction industry; and
(B) subdivision (a)(3) of this Section applies to
the employer or the employer is a member of a group
self-insurance plan as defined in subsection (1) of
Section 4a.
The Industrial Commission shall impose a penalty upon an
employer for violation of this subsection (a-1) if:
(i) the employer is given an opportunity at a
hearing to present evidence of its compliance with this
subsection (a-1); and
(ii) after the hearing, the Commission finds that
the employer failed to make payments upon the premium
rates of the situs where the work or project is located
in Illinois.
The penalty shall not exceed $1,000 for each day of work
for which the employer failed to make payments upon the
premium rates of the situs where the work or project is
located in Illinois, but the total penalty shall not exceed
$50,000 for each project or each contract under which the
work was performed.
Any penalty under this subsection (a-1) must be imposed
not later than one year after the expiration of the
applicable limitation period specified in subsection (d) of
Section 6 of this Act. Penalties imposed under this
subsection (a-1) shall be deposited into the Industrial
Commission Operations Fund, a special fund that is created
in the State treasury. Subject to appropriation, moneys in
the Fund shall be used solely for the operations of the
Industrial Commission.
(b) The sworn application and financial statement, or
security, indemnity or bond, or amount of insurance, or other
provisions, filed, furnished, carried, or made by the
employer, as the case may be, shall be subject to the
approval of the Commission.
Deposits under escrow agreements shall be cash,
negotiable United States government bonds or negotiable
general obligation bonds of the State of Illinois. Such cash
or bonds shall be deposited in escrow with any State or
National Bank or Trust Company having trust authority in the
State of Illinois.
Upon the approval of the sworn application and financial
statement, security, indemnity or bond or amount of
insurance, filed, furnished or carried, as the case may be,
the Commission shall send to the employer written notice of
its approval thereof. The certificate of compliance by the
employer with the provisions of subparagraphs (2) and (3) of
paragraph (a) of this Section shall be delivered by the
insurance carrier to the Industrial Commission within five
days after the effective date of the policy so certified.
The insurance so certified shall cover all compensation
liability occurring during the time that the insurance is in
effect and no further certificate need be filed in case such
insurance is renewed, extended or otherwise continued by such
carrier. The insurance so certified shall not be cancelled
or in the event that such insurance is not renewed, extended
or otherwise continued, such insurance shall not be
terminated until at least 10 days after receipt by the
Industrial Commission of notice of the cancellation or
termination of said insurance; provided, however, that if the
employer has secured insurance from another insurance
carrier, or has otherwise secured the payment of compensation
in accordance with this Section, and such insurance or other
security becomes effective prior to the expiration of the 10
days, cancellation or termination may, at the option of the
insurance carrier indicated in such notice, be effective as
of the effective date of such other insurance or security.
(c) Whenever the Commission shall find that any
corporation, company, association, aggregation of
individuals, reciprocal or interinsurers exchange, or other
insurer effecting workers' compensation insurance in this
State shall be insolvent, financially unsound, or unable to
fully meet all payments and liabilities assumed or to be
assumed for compensation insurance in this State, or shall
practice a policy of delay or unfairness toward employees in
the adjustment, settlement, or payment of benefits due such
employees, the Commission may after reasonable notice and
hearing order and direct that such corporation, company,
association, aggregation of individuals, reciprocal or
interinsurers exchange, or insurer, shall from and after a
date fixed in such order discontinue the writing of any such
workers' compensation insurance in this State. Subject to
such modification of the order as the Commission may later
make on review of the order, as herein provided, it shall
thereupon be unlawful for any such corporation, company,
association, aggregation of individuals, reciprocal or
interinsurers exchange, or insurer to effect any workers'
compensation insurance in this State. A copy of the order
shall be served upon the Director of Insurance by registered
mail. Whenever the Commission finds that any service or
adjustment company used or employed by a self-insured
employer or by an insurance carrier to process, adjust,
investigate, compromise or otherwise handle claims under this
Act, has practiced or is practicing a policy of delay or
unfairness toward employees in the adjustment, settlement or
payment of benefits due such employees, the Commission may
after reasonable notice and hearing order and direct that
such service or adjustment company shall from and after a
date fixed in such order be prohibited from processing,
adjusting, investigating, compromising or otherwise handling
claims under this Act.
Whenever the Commission finds that any self-insured
employer has practiced or is practicing delay or unfairness
toward employees in the adjustment, settlement or payment of
benefits due such employees, the Commission may, after
reasonable notice and hearing, order and direct that after a
date fixed in the order such self-insured employer shall be
disqualified to operate as a self-insurer and shall be
required to insure his entire liability to pay compensation
in some insurance carrier authorized, licensed and permitted
to do such insurance business in this State, as provided in
subparagraph 3 of paragraph (a) of this Section.
All orders made by the Commission under this Section
shall be subject to review by the courts, said review to be
taken in the same manner and within the same time as provided
by Section 19 of this Act for review of awards and decisions
of the Commission, upon the party seeking the review filing
with the clerk of the court to which said review is taken a
bond in an amount to be fixed and approved by the court to
which the review is taken, conditioned upon the payment of
all compensation awarded against the person taking said
review pending a decision thereof and further conditioned
upon such other obligations as the court may impose. Upon
the review the Circuit Court shall have power to review all
questions of fact as well as of law. The penalty hereinafter
provided for in this paragraph shall not attach and shall not
begin to run until the final determination of the order of
the Commission.
(d) Upon a finding by the Commission, after reasonable
notice and hearing, of the knowing and wilful failure or
refusal of an employer to comply with any of the provisions
of paragraph (a) of this Section or the failure or refusal of
an employer, service or adjustment company, or an insurance
carrier to comply with any order of the Industrial Commission
pursuant to paragraph (c) of this Section disqualifying him
or her to operate as a self insurer and requiring him or her
to insure his or her liability, the Commission may assess a
civil penalty of up to $500 per day for each day of such
failure or refusal after the effective date of this
amendatory Act of 1989. The minimum penalty under this
Section shall be the sum of $10,000. Each day of such
failure or refusal shall constitute a separate offense. The
Commission may assess the civil penalty personally and
individually against the corporate officers and directors of
a corporate employer, the partners of an employer
partnership, and the members of an employer limited liability
company, after a finding of a knowing and willful refusal or
failure of each such named corporate officer, director,
partner, or member to comply with this Section. The
liability for the assessed penalty shall be against the named
employer first, and if the named employer fails or refuses to
pay the penalty to the Commission within 30 days after the
final order of the Commission, then the named corporate
officers, directors, partners, or members who have been found
to have knowingly and willfully refused or failed to comply
with this Section shall be liable for the unpaid penalty or
any unpaid portion of the penalty. All penalties collected
under this Section shall be deposited in the Industrial
Commission Operations Fund.
Upon the failure or refusal of any employer, service or
adjustment company or insurance carrier to comply with the
provisions of this Section and with the orders of the
Commission under this Section, or the order of the court on
review after final adjudication, the Commission may bring a
civil action to recover the amount of the penalty in Cook
County or in Sangamon County in which litigation the
Commission shall be represented by the Attorney General. The
Commission shall send notice of its finding of non-compliance
and assessment of the civil penalty to the Attorney General.
It shall be the duty of the Attorney General within 30 days
after receipt of the notice, to institute prosecutions and
promptly prosecute all reported violations of this Section.
(e) This Act shall not affect or disturb the continuance
of any existing insurance, mutual aid, benefit, or relief
association or department, whether maintained in whole or in
part by the employer or whether maintained by the employees,
the payment of benefits of such association or department
being guaranteed by the employer or by some person, firm or
corporation for him or her: Provided, the employer
contributes to such association or department an amount not
less than the full compensation herein provided, exclusive of
the cost of the maintenance of such association or department
and without any expense to the employee. This Act shall not
prevent the organization and maintaining under the insurance
laws of this State of any benefit or insurance company for
the purpose of insuring against the compensation provided for
in this Act, the expense of which is maintained by the
employer. This Act shall not prevent the organization or
maintaining under the insurance laws of this State of any
voluntary mutual aid, benefit or relief association among
employees for the payment of additional accident or sick
benefits.
(f) No existing insurance, mutual aid, benefit or relief
association or department shall, by reason of anything herein
contained, be authorized to discontinue its operation without
first discharging its obligations to any and all persons
carrying insurance in the same or entitled to relief or
benefits therein.
(g) Any contract, oral, written or implied, of
employment providing for relief benefit, or insurance or any
other device whereby the employee is required to pay any
premium or premiums for insurance against the compensation
provided for in this Act shall be null and void. Any
employer withholding from the wages of any employee any
amount for the purpose of paying any such premium shall be
guilty of a Class B misdemeanor.
In the event the employer does not pay the compensation
for which he or she is liable, then an insurance company,
association or insurer which may have insured such employer
against such liability shall become primarily liable to pay
to the employee, his or her personal representative or
beneficiary the compensation required by the provisions of
this Act to be paid by such employer. The insurance carrier
may be made a party to the proceedings in which the employer
is a party and an award may be entered jointly against the
employer and the insurance carrier.
(h) It shall be unlawful for any employer, insurance
company or service or adjustment company to interfere with,
restrain or coerce an employee in any manner whatsoever in
the exercise of the rights or remedies granted to him or her
by this Act or to discriminate, attempt to discriminate, or
threaten to discriminate against an employee in any way
because of his or her exercise of the rights or remedies
granted to him or her by this Act.
It shall be unlawful for any employer, individually or
through any insurance company or service or adjustment
company, to discharge or to threaten to discharge, or to
refuse to rehire or recall to active service in a suitable
capacity an employee because of the exercise of his or her
rights or remedies granted to him or her by this Act.
(i) If an employer elects to obtain a life insurance
policy on his employees, he may also elect to apply such
benefits in satisfaction of all or a portion of the death
benefits payable under this Act, in which case, the
employer's compensation premium shall be reduced accordingly.
(j) Within 45 days of receipt of an initial application
or application to renew self-insurance privileges the
Self-Insurers Advisory Board shall review and submit for
approval by the Chairman of the Commission recommendations of
disposition of all initial applications to self-insure and
all applications to renew self-insurance privileges filed by
private self-insurers pursuant to the provisions of this
Section and Section 4a-9 of this Act. Each private
self-insurer shall submit with its initial and renewal
applications the application fee required by Section 4a-4 of
this Act.
The Chairman of the Commission shall promptly act upon
all initial applications and applications for renewal in full
accordance with the recommendations of the Board or, should
the Chairman disagree with any recommendation of disposition
of the Self-Insurer's Advisory Board, he shall within 30 days
of receipt of such recommendation provide to the Board in
writing the reasons supporting his decision. The Chairman
shall also promptly notify the employer of his decision
within 15 days of receipt of the recommendation of the Board.
If an employer is denied a renewal of self-insurance
privileges pursuant to application it shall retain said
privilege for 120 days after receipt of a notice of
cancellation of the privilege from the Chairman of the
Commission.
All orders made by the Chairman under this Section shall
be subject to review by the courts, such review to be taken
in the same manner and within the same time as provided by
subsection (f) of Section 19 of this Act for review of awards
and decisions of the Commission, upon the party seeking the
review filing with the clerk of the court to which such
review is taken a bond in an amount to be fixed and approved
by the court to which the review is taken, conditioned upon
the payment of all compensation awarded against the person
taking such review pending a decision thereof and further
conditioned upon such other obligations as the court may
impose. Upon the review the Circuit Court shall have power
to review all questions of fact as well as of law.
(Source: P.A. 90-109, eff. 1-1-98; 91-375, eff. 1-1-00;
91-757, eff. 1-1-01.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 17, 2001.
Approved August 09, 2001.
[ Top ]