Illinois General Assembly - Full Text of Public Act 099-0369
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Public Act 099-0369


 

Public Act 0369 99TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 099-0369
 
SB1805 EnrolledLRB099 09021 MLM 29204 b

    AN ACT concerning insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by adding
Section 155.44 as follows:
 
    (215 ILCS 5/155.44 new)
    Sec. 155.44. Financial requirements; large deductible
agreements for workers' compensation insurance.
    (a) An insurer shall:
        (1) require full collateralization of the outstanding
    obligations owed under a large deductible agreement by
    using one of the following methods:
            (A) a surety bond issued by a surety insurer
        authorized to transact business by the Department and
        whose financial strength and size ratings from A.M.
        Best Company are not less than "A" and "V",
        respectively;
            (B) an irrevocable letter of credit issued by a
        financial institution with an office physically
        located within the State and the deposits of which are
        federally insured; or
            (C) cash or securities held in trust by a third
        party or by the insurer and subject to a trust
        agreement for the express purpose of securing the
        policyholder's obligation under a large deductible
        agreement, provided that if the assets are held by the
        insurer those assets are not commingled with the
        insurer's other assets; and
        (2) limit the size of the policyholder's obligations
    under a large deductible agreement to no greater than 20%
    of the total net worth of the policyholder at each policy
    inception, as determined by an audited financial statement
    as of the most recently available fiscal year end.
    (b) As used in this Section, "insurer" means any insurer
authorized to issue a workers' compensation policy covering
risks located in this State that has an A.M. Best Company
rating below "A-" and does not have at least $200,000,000 in
surplus.
    (c) As used in this Section, "large deductible agreement"
means any combination of one or more policies, endorsements,
contracts, or security agreements which provide for the
policyholder to bear the risk of loss of $100,000 or greater
per claim or occurrence covered under a policy of workers'
compensation insurance and which may be subject to the
aggregate limit of policyholder reimbursement obligations.
    (d) Except when approved by the Director of Insurance, any
insurer determined to be in a financially hazardous condition
pursuant to Article XII 1/2 or XIII of this Code by the
Director of Insurance in this State or the equivalent in any
other state is prohibited from issuing or renewing a policy
that includes a large deductible agreement.
    (e) This Section applies to large deductible agreements
issued or renewed by any insurer on or after January 1, 2016.
 
    Section 99. Effective date. This Act takes effect on July
1, 2015.

Effective Date: 8/14/2015