Full Text of HB2622 100th General Assembly
HB2622eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 416 and by adding Article XLVI as follows:
| 6 | | (215 ILCS 5/416)
| 7 | | Sec. 416. Illinois Workers' Compensation
Commission | 8 | | Operations Fund Surcharge.
| 9 | | (a) As of July 30, 2004 (the effective date of Public Act | 10 | | 93-840), every company licensed or
authorized by the Illinois | 11 | | Department of Insurance and insuring employers'
liabilities | 12 | | arising under the Workers' Compensation Act or the Workers'
| 13 | | Occupational Diseases Act shall remit to the Director a | 14 | | surcharge based upon
the annual direct written premium, as | 15 | | reported under Section 136 of this Act,
of the company in the | 16 | | manner provided in this
Section. Such
proceeds shall
be | 17 | | deposited into the Illinois Workers' Compensation
Commission | 18 | | Operations Fund as
established in
the Workers' Compensation | 19 | | Act. If a company
survives or
was formed by a merger, | 20 | | consolidation, reorganization, or reincorporation, the
direct
| 21 | | written premiums of all companies party to the merger, | 22 | | consolidation,
reorganization, or
reincorporation shall, for | 23 | | purposes of determining the amount of the fee
imposed by this
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| 1 | | Section, be regarded as those of the surviving or new company.
| 2 | | (b)(1) Except as provided in subsection (b)(2) of this | 3 | | Section, beginning on
July 30, 2004 (the effective date of | 4 | | Public Act 93-840) and on July 1 of each year thereafter,
the
| 5 | | Director shall
charge an annual Illinois Workers' Compensation | 6 | | Commission Operations Fund Surcharge from every
company | 7 | | subject to subsection (a) of this Section equal to 1.01% of its | 8 | | direct
written
premium for insuring employers' liabilities | 9 | | arising under the Workers'
Compensation Act or Workers' | 10 | | Occupational Diseases Act as reported in each
company's
annual
| 11 | | statement filed for the previous year as required by Section | 12 | | 136. The
Illinois Workers' Compensation Commission Operations | 13 | | Fund Surcharge shall be collected by companies
subject to | 14 | | subsection (a) of this Section as a separately stated surcharge | 15 | | on
insured employers at the rate of 1.01% of direct written | 16 | | premium. The
Illinois Workers' Compensation Commission | 17 | | Operations Fund Surcharge shall not be collected by companies
| 18 | | subject to subsection (a) of this Section from any employer | 19 | | that self-insures its liabilities arising under the Workers' | 20 | | Compensation Act or Workers' Occupational Diseases Act, | 21 | | provided that the employer has paid the Illinois Workers' | 22 | | Compensation Commission Operations Fund Fee pursuant to | 23 | | Section 4d of the Workers' Compensation Act. All sums
collected | 24 | | by
the Department of Insurance under the provisions of this | 25 | | Section shall be paid
promptly
after the receipt of the same, | 26 | | accompanied by a detailed statement thereof,
into the
Illinois |
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| 1 | | Workers' Compensation Commission Operations Fund in the State | 2 | | treasury.
| 3 | | (b)(2) The surcharge due pursuant to Public Act 93-840 | 4 | | shall be collected instead of the surcharge due on July 1, 2004 | 5 | | under Public Act 93-32. Payment of the surcharge due under | 6 | | Public Act 93-840 shall discharge the employer's obligations | 7 | | due on July 1, 2004.
| 8 | | (c) In addition to the authority specifically granted under | 9 | | Article XXV of
this
Code, the Director shall have such | 10 | | authority to adopt rules or establish forms
as may be
| 11 | | reasonably necessary for purposes of enforcing this Section. | 12 | | The Director shall
also have
authority to defer, waive, or | 13 | | abate the surcharge or any penalties imposed by
this
Section if | 14 | | in
the Director's opinion the company's solvency and ability to | 15 | | meet its insured
obligations
would be immediately threatened by | 16 | | payment of the surcharge due.
| 17 | | (d) When a company fails to pay the full amount of any | 18 | | annual
Illinois Workers' Compensation
Commission Operations | 19 | | Fund Surcharge of $100 or more due under this Section,
there
| 20 | | shall be
added to the amount due as a penalty the greater of | 21 | | $1,000 or an amount equal
to 5% of
the deficiency for each | 22 | | month or part of a month that the deficiency remains
unpaid.
| 23 | | (e) The Department of Insurance may enforce the collection | 24 | | of any delinquent
payment, penalty, or portion thereof by legal | 25 | | action or in any other manner by
which the
collection of debts | 26 | | due the State of Illinois may be enforced under the laws of
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| 1 | | this State.
| 2 | | (f) Whenever it appears to the satisfaction of the Director | 3 | | that a company
has
paid
pursuant to this Act an Illinois | 4 | | Workers' Compensation Commission Operations Fund Surcharge in
| 5 | | an amount
in excess of the amount legally collectable from the | 6 | | company, the Director
shall issue a
credit memorandum for an | 7 | | amount equal to the amount of such overpayment. A
credit
| 8 | | memorandum may be applied for the 2-year period from the date | 9 | | of issuance,
against the
payment of any amount due during that | 10 | | period under the surcharge imposed by
this
Section or,
subject | 11 | | to reasonable rule of the Department of Insurance including | 12 | | requirement
of
notification, may be assigned to any other | 13 | | company subject to regulation under
this Act.
Any application | 14 | | of credit memoranda after the period provided for in this
| 15 | | Section is void.
| 16 | | (g) Annually, the Governor may direct a transfer of up to | 17 | | 2% of all moneys
collected under this Section to the Insurance | 18 | | Financial Regulation Fund.
| 19 | | (h) After the effective date of this amendatory Act of the | 20 | | 100th General Assembly, the Director shall make a loan to the | 21 | | Illinois Employers Mutual Insurance Company of $10,000,000 | 22 | | from the Illinois Workers' Compensation Commission Operations | 23 | | Fund for the start-up funding and initial capitalization of the | 24 | | Illinois Employers Mutual Insurance Company. The Board of | 25 | | Directors of the Illinois Employers Mutual Insurance Company | 26 | | shall make an application to the Director for the loans, |
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| 1 | | stating the amount to be loaned to the Illinois Employers | 2 | | Mutual Insurance Company. The Illinois Employers Mutual | 3 | | Insurance Company shall repay the loans in full within 5 years | 4 | | after issuance, plus any interest that would have accrued | 5 | | thereon had the loan not occurred. | 6 | | (Source: P.A. 95-331, eff. 8-21-07.)
| 7 | | (215 ILCS 5/Art. XLVI heading new) | 8 | | ARTICLE XLVI. | 9 | | THE ILLINOIS
EMPLOYERS MUTUAL INSURANCE COMPANY | 10 | | (215 ILCS 5/1700 new) | 11 | | Sec. 1700. Purpose. The purpose of this Article is to | 12 | | establish the Illinois Employers Mutual Insurance Company as a | 13 | | nonprofit, independent public corporation to insure Illinois | 14 | | employers against liability for workers' compensation and | 15 | | occupational disease coverage. | 16 | | (215 ILCS 5/1705 new) | 17 | | Sec. 1705. Definitions. As used in this Article: | 18 | | "Board" means the board of directors of the Illinois | 19 | | Employers Mutual Insurance Company. | 20 | | "Board director" means a member of the board of directors | 21 | | of the Company. | 22 | | "Company" means the Illinois Employers Mutual Insurance | 23 | | Company created by this Article. |
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| 1 | | (215 ILCS 5/1710 new) | 2 | | Sec. 1710. Establishment of the Company. | 3 | | (a) There is hereby created the Illinois Employers Mutual | 4 | | Insurance Company, which shall be a nonprofit, independent | 5 | | public corporation. The Company shall be operated as a domestic | 6 | | mutual insurance company, subject to all applicable provisions | 7 | | of this Code. | 8 | | (b) The Company shall issue insurance for workers' | 9 | | compensation and occupational disease. The Company shall not | 10 | | provide any other type of insurance. | 11 | | (c) The Company shall provide workers' compensation | 12 | | coverage to employers at the highest level of service and | 13 | | savings consistent with reasonable applicable actuarial | 14 | | standards and shall maintain the financial integrity of the | 15 | | Company. The Company shall foster employer involvement in | 16 | | safety initiatives and the creation of workplace safety plans | 17 | | set forth in Section 1740 of this Article. | 18 | | (d) The Company shall not be considered a State agency or | 19 | | instrumentality of the State for any purpose. Employees of the | 20 | | Company are not employees of the State and are not subject to | 21 | | the Personnel Code. The Company shall not receive any State | 22 | | appropriations or funds, except for an initial loan or loans | 23 | | made pursuant to Section 416 of this Code. The State shall not | 24 | | borrow or otherwise appropriate funds from the Company. The | 25 | | Company or its liabilities shall not be deemed to constitute a |
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| 1 | | debt or a liability of the State or a pledge of the full faith | 2 | | and credit of the State. | 3 | | (215 ILCS 5/1715 new) | 4 | | Sec. 1715. Board of directors. | 5 | | (a) The Company shall be managed by a 7-member board of | 6 | | directors. The board of directors shall be appointed by the | 7 | | Governor with the advice and consent of the Senate. For the | 8 | | initial set of appointments, 2 Board directors shall be | 9 | | appointed to a term ending July 1, 2019, 2 Board directors | 10 | | shall be appointed to a term ending July 1, 2020, 2 Board | 11 | | directors shall be appointed to a term ending July 1, 2021, and | 12 | | one Board director shall be appointed to a term ending July 1, | 13 | | 2022. All initial appointments shall be made by the Governor | 14 | | within 30 days after the effective date of this amendatory Act | 15 | | of the 100th General Assembly. Thereafter, all appointments or | 16 | | reappointments shall be a for a 5-year term ending on July 1 of | 17 | | the fifth year. The appointment and reappointment of Board | 18 | | directors by the Governor shall be subject to the provisions of | 19 | | Article 3A of the Illinois Governmental Ethics Act. | 20 | | (b) A Board director appointed by the Governor must meet | 21 | | all of the following qualifications: | 22 | | (1) he or she does not have any interest as a | 23 | | stockholder, employee, attorney, agent, broker, or | 24 | | contractor of an insurance entity that writes workers' | 25 | | compensation insurance or whose affiliates write workers' |
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| 1 | | compensation insurance; however, nothing in this Section | 2 | | shall be construed to prohibit an individual who previously | 3 | | had an interest in an insurance entity that writes workers' | 4 | | compensation insurance or whose affiliates write workers' | 5 | | compensation insurance from being appointed to the Board; | 6 | | (2) he or she is not the spouse or an immediate family | 7 | | member living with a person who has an interest as a | 8 | | stockholder, employee, attorney, agent, broker, or | 9 | | contractor of an insurance entity that writes workers' | 10 | | compensation insurance or whose affiliates write workers' | 11 | | compensation insurance; however, nothing in this Section | 12 | | shall be construed to prohibit an individual who previously | 13 | | had an interest in an insurance entity that writes workers' | 14 | | compensation insurance or whose affiliates write workers' | 15 | | compensation insurance from being appointed to the Board; | 16 | | (3) he or she is a resident of the State of Illinois; | 17 | | (4) he or she is of good moral character and has never | 18 | | pleaded guilty to, or been found guilty of, a felony; and | 19 | | (5) he or she is not a registered lobbyist under the | 20 | | Lobbyist Registration Act. | 21 | | (c) The Board directors shall elect a chairman from the | 22 | | Board. | 23 | | (d) The Board is vested with the full power, authority, and | 24 | | jurisdiction over the Company and may perform any necessary or | 25 | | convenient act in the exercise of its power. The Board shall | 26 | | discharge its duties with the care, skill, prudence, and |
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| 1 | | diligence as that of prudent directors acting in a similar | 2 | | enterprise and purpose. The powers of the Board include, but | 3 | | are not limited to: | 4 | | (1) the ability to enter into contracts; | 5 | | (2) the purchase of reinsurance; and | 6 | | (3) the declaration of dividends. | 7 | | (e) The Board shall develop bylaws which shall be subject | 8 | | to the restrictions set forth in this Article. The bylaws shall | 9 | | provide for a schedule of at least quarterly meetings and set | 10 | | forth rules specifically relating to the conduct of meetings | 11 | | and voting procedures. | 12 | | (f) The Board shall reflect the ethnic, cultural, and | 13 | | geographical diversity of the State. | 14 | | (215 ILCS 5/1720 new) | 15 | | Sec. 1720. Ratemaking. The Board shall have full power and | 16 | | authority to establish rates to be charged by the Company for | 17 | | insurance, subject to the applicable provisions of this Code. | 18 | | The Board shall contract for the services of or hire an | 19 | | independent actuary, who is a member in good standing with the | 20 | | American Academy of Actuaries, to develop and recommend | 21 | | actuarially sound rates. Rates shall be set at amounts | 22 | | sufficient, when invested, to carry all claims to maturity, | 23 | | meet the reasonable expenses of conducting the business of the | 24 | | Company, and maintain a reasonable surplus. |
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| 1 | | (215 ILCS 5/1725 new) | 2 | | Sec. 1725. Guaranty fund. The Company shall be subject to | 3 | | Article XXXIV of this Code and shall pay any assessments | 4 | | required for members of the Illinois Insurance Guaranty Fund. | 5 | | (215 ILCS 5/1730 new) | 6 | | Sec. 1730. Chief executive officer. | 7 | | (a) The Board shall hire a chief executive officer who | 8 | | shall serve at the pleasure of the Board. The chief executive | 9 | | officer shall not be a member of the Board and must be | 10 | | qualified by education and experience to manage an organization | 11 | | with financial and operational obligations to policyholders | 12 | | and claimants. The compensation of the chief executive officer | 13 | | shall be determined by the Board. | 14 | | (b) The chief executive officer shall be responsible for | 15 | | conducting the day-to-day operations of the Company, including | 16 | | the hiring of personnel. The chief executive officer shall also | 17 | | maintain an Internet website for the Company, which shall | 18 | | include information regarding the purchase of policies from the | 19 | | Company, as well as any reports required to be published under | 20 | | this Article. | 21 | | (c) The chief executive officer shall present a proposed | 22 | | operating budget for the Company to the Board for its approval | 23 | | on an annual basis. The operating budget shall include a | 24 | | description of administrative and personnel costs. |
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| 1 | | (215 ILCS 5/1735 new) | 2 | | Sec. 1735. Liability. The Board and its employees shall | 3 | | not be personally liable for acts performed in good faith, | 4 | | without the intent to defraud, and made in an official | 5 | | capacity. | 6 | | (215 ILCS 5/1740 new) | 7 | | Sec. 1740. Workplace safety plan. | 8 | | (a) The chief executive officer shall formulate, | 9 | | implement, and monitor a workplace safety plan for all | 10 | | policyholders. This plan shall include written guidance to | 11 | | reduce workplace accidents, prevent injuries, and promote safe | 12 | | working conditions. Each plan shall have clearly stated safety | 13 | | objectives for the policyholder. | 14 | | (b) Employees of the Company shall have access to the | 15 | | premises of any policyholder for the purpose of examining the | 16 | | safety conditions of the workplace. The Company may terminate a | 17 | | policy if there is a refusal by the policyholder to permit | 18 | | on-site examinations by the Company or if the policyholder | 19 | | disregards or fails to comply with the safety objectives set | 20 | | forth by the Company in the workplace safety plan. | 21 | | (215 ILCS 5/1745 new) | 22 | | Sec. 1745. Investments. | 23 | | (a) The Company shall formulate and adopt an investment | 24 | | policy that safeguards the value of all assets and maximizes |
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| 1 | | investment potential. All investments by the Company shall be | 2 | | subject to the applicable restrictions for domestic mutual | 3 | | insurers set forth in this Code. | 4 | | (b) The Company may retain an independent investment | 5 | | counsel who shall be subject to standards applicable to | 6 | | fiduciaries responsible for safeguarding the assets of a | 7 | | corporation. | 8 | | (215 ILCS 5/1750 new) | 9 | | Sec. 1750. Dividends. | 10 | | (a) The Company may declare a dividend in accordance with | 11 | | the requirements set forth in this Code. | 12 | | (b) Dividends may be distributed in the form of premium | 13 | | discounts, dividends, or a combination of dividends and | 14 | | discounts. | 15 | | (c) In addition to any requirements for dividends set forth | 16 | | in this Code, dividends may only be distributed if: | 17 | | (1) the initial funding of the Company has been repaid | 18 | | in full; | 19 | | (2) an independent actuarial report of the prior year's | 20 | | operations has been completed and reviewed by the Board; | 21 | | (3) the Company has met all expenses for administration | 22 | | and claims for the prior year; and | 23 | | (4) adequate reserves exist to pay all claims. | 24 | | (215 ILCS 5/1755 new) |
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| 1 | | Sec. 1755. Sale of policies. The Company shall administer | 2 | | the sale of policies for workers' compensation and occupational | 3 | | disease coverage. The Company shall utilize the Internet and | 4 | | other technologies to the greatest extent possible in order to | 5 | | facilitate the purchase of a policy for employers in this | 6 | | State. | 7 | | (215 ILCS 5/1760 new) | 8 | | Sec. 1760. Auditing requirements. | 9 | | (a) The Company shall be subject to all examinations and | 10 | | audits required under this Code. | 11 | | (b) The Board shall retain a competent and independent firm | 12 | | of certified public accountants to perform an annual audit of | 13 | | the performance and management of the Company and an audit of | 14 | | the accounts, funds, and securities of the Company. The costs | 15 | | of these audits shall be paid for by the Company. The audits | 16 | | shall be published on the Company's Internet website. | 17 | | (215 ILCS 5/1765 new) | 18 | | Sec. 1765. Annual report. | 19 | | (a) On July 1, 2018, the Board shall prepare and submit a | 20 | | report to the Governor, the President of the Senate, the | 21 | | Minority Leader of the Senate, the Speaker of the House, and | 22 | | the Minority Leader of the House. This report shall describe | 23 | | the progress of the Company to date in establishing its | 24 | | operations as a domestic mutual insurance company in this State |
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| 1 | | providing workers' compensation and occupational disease | 2 | | coverage. This report shall include the information required in | 3 | | subsection (b) of this Section, if available. | 4 | | (b) Beginning July 1, 2019 and continuing every July 1 | 5 | | thereafter, the Board shall prepare and submit a report to the | 6 | | Governor, the President of the Senate, the Minority Leader of | 7 | | the Senate, the Speaker of the House, and the Minority Leader | 8 | | of the House. This report shall contain, at a minimum, the | 9 | | following information: | 10 | | (1) a summary of the most recent audits performed | 11 | | pursuant to Section 1760 of this Code; | 12 | | (2) statistical and actuarial data related to the | 13 | | determination of premium rate levels; and | 14 | | (3) the incidence of work-related injuries and costs | 15 | | related to those injuries. | 16 | | (c) The reports required under this Section shall be | 17 | | submitted electronically and posted on the Internet website of | 18 | | the Company.
| 19 | | Section 99. Effective date. This Act takes effect upon | 20 | | becoming law.
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| 1 | |
INDEX
| 2 | |
Statutes amended in order of appearance
| | 3 | | 215 ILCS 5/416 | | | 4 | | 215 ILCS 5/Art. XLVI | 5 | | heading new | | | 6 | | 215 ILCS 5/1700 new | | | 7 | | 215 ILCS 5/1705 new | | | 8 | | 215 ILCS 5/1710 new | | | 9 | | 215 ILCS 5/1715 new | | | 10 | | 215 ILCS 5/1720 new | | | 11 | | 215 ILCS 5/1725 new | | | 12 | | 215 ILCS 5/1730 new | | | 13 | | 215 ILCS 5/1735 new | | | 14 | | 215 ILCS 5/1740 new | | | 15 | | 215 ILCS 5/1745 new | | | 16 | | 215 ILCS 5/1750 new | | | 17 | | 215 ILCS 5/1755 new | | | 18 | | 215 ILCS 5/1760 new | | | 19 | | 215 ILCS 5/1765 new | |
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