State of Illinois
2015 and 2016


Introduced 2/20/2015, by Sen. William R. Haine


215 ILCS 5/155.44 new

    Amends the Illinois Insurance Code. Provides that any insurer with less than $100,000,000 in group surplus authorized to issue workers' compensation policies with a per-occurrence deductible of $100,000 or greater shall report the outstanding obligations owed under the deductible as liabilities of the insurer, unless the obligation is fully collateralized, and limit per-occurrence deductible obligations. Effective July 1, 2015.

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SB1805LRB099 09021 MLM 29204 b

1    AN ACT concerning insurance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by adding
5Section 155.44 as follows:
6    (215 ILCS 5/155.44 new)
7    Sec. 155.44. Financial requirements; large deductible
8workers' compensation policies and programs. Any insurer with
9less than $100,000,000 in group surplus authorized to issue
10workers' compensation policies with a per-occurrence
11deductible of $100,000 or greater shall:
12        (1) report the outstanding obligations owed under the
13    deductible as liabilities of the insurer, unless the
14    obligation is fully collateralized using one of the
15    following methods:
16            (A) a surety bond issued by a surety insurer
17        authorized to transact business by the Department, and
18        whose financial strength and size ratings from A.M.
19        Best Company are not less than "A" and "V",
20        respectively;
21            (B) an irrevocable letter of credit issued by a
22        financial institution, with an office physically
23        located within the State, and the deposits of which are



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1        federally insured; or
2            (C) cash or securities held in trust by a third
3        party, and subject to a control agreement, for the
4        express purpose of securing the workers' compensation
5        claim obligations of the policyholder; and
6        (2) limit the size of the per-occurrence deductible
7    obligation assumed by the policyholder to the lesser of:
8            (A) 20% of the full policy premium value prior to
9        application deductible discounts or credits for that
10        policyholder; or
11            (B) 10% of the total accounting net worth of the
12        policyholder at each policy inception.
13    Section 99. Effective date. This Act takes effect July 1,