Bill Text: IL SB1993 | 2021-2022 | 102nd General Assembly | Chaptered


Bill Title: Amends the Department of Insurance Law of the Civil Administrative Code of Illinois by transferring all powers, duties, rights, responsibilities, personnel, books, records, papers, documents, property (real and personal), contracts, causes of action, and pending business of the Insurance Compliance Division within the Illinois Workers' Compensation Commission to the Department of Insurance. Provides that, when reports or notices are to be made or given or papers or documents furnished or served by any person to or upon the Insurance Compliance Division, they shall be made, given, furnished, or served in the same manner to or upon the Department of Insurance. Provides that the amendatory Act does not affect any act done, ratified, or canceled, any right occurring or established, or any action or proceeding had or commenced in an administrative, civil, or criminal cause by the Insurance Compliance Division before the amendatory Act takes effect. Makes other changes. Amends the Workers' Compensation Act. Replaces references to the Insurance Compliance Division with references to the Department of Insurance. In provisions concerning Department of Insurance oversight, changes the date before which insurers licensed to write workers compensation coverage in the State must record and report specified information concerning claims from March 1 to June 1 of each year. Deletes a provision stating that the fraud and insurance non-compliance unit shall procure and implement a system using advanced analytics for the detection and prevention of fraud, waste, and abuse. Effective July 1, 2021.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2021-06-25 - Public Act . . . . . . . . . 102-0037 [SB1993 Detail]

Download: Illinois-2021-SB1993-Chaptered.html



Public Act 102-0037
SB1993 EnrolledLRB102 16865 BMS 22271 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Department of Insurance Law of the Civil
Administrative Code of Illinois is amended by adding Section
1405-40 as follows:
(20 ILCS 1405/1405-40 new)
Sec. 1405-40. Transfer of functions.
(a) On the effective date of this amendatory Act of the
102nd General Assembly, all powers, duties, rights, and
responsibilities of the Insurance Compliance Division within
the Illinois Workers' Compensation Commission are transferred
to the Department of Insurance. The personnel of the Insurance
Compliance Division are transferred to the Department of
Insurance. The status and rights of such personnel under the
Personnel Code are not affected by the transfer. The rights of
the employees and the State of Illinois and its agencies under
the Personnel Code and applicable collective bargaining
agreements or under any pension, retirement, or annuity plan
are not affected by this amendatory Act of the 102nd General
Assembly. All books, records, papers, documents, property
(real and personal), contracts, causes of action, and pending
business pertaining to the powers, duties, rights, and
responsibilities transferred by this amendatory Act of the
102nd General Assembly from the Insurance Compliance Division
to the Department of Insurance, including, but not limited to,
material in electronic or magnetic format and necessary
computer hardware and software, are transferred to the
Department of Insurance. The powers, duties, rights, and
responsibilities relating to the Insurance Compliance Division
transferred by this amendatory Act of the 102nd General
Assembly are vested in the Department of Insurance.
(b) Whenever reports or notices are required to be made or
given or papers or documents furnished or served by any person
to or upon the Insurance Compliance Division in connection
with any of the powers, duties, rights, and responsibilities
transferred by this amendatory Act of the 102nd General
Assembly, the Department of Insurance shall make, give,
furnish, or serve them.
(c) This amendatory Act of the 102nd General Assembly does
not affect any act done, ratified, or canceled, any right
occurring or established, or any action or proceeding had or
commenced in an administrative, civil, or criminal cause by
the Insurance Compliance Division before the effective date of
this amendatory Act of the 102nd General Assembly. Such
actions or proceedings may be prosecuted and continued by the
Department of Insurance.
(d) Any rules that relate to its powers, duties, rights,
and responsibilities of the Insurance Compliance Division and
are in force on the effective date of this amendatory Act of
the 102nd General Assembly become the rules of the Department
of Insurance. This amendatory Act of the 102nd General
Assembly does not affect the legality of any such rules.
(e) Any proposed rules filed with the Secretary of State
by the Illinois Workers' Compensation Commission that are
pending in the rulemaking process on the effective date of
this amendatory Act of the 102nd General Assembly and pertain
to the transferred powers, duties, rights, and
responsibilities are deemed to have been filed by the
Department of Insurance. As soon as practicable, the
Department of Insurance shall revise and clarify the rules
transferred to it under this amendatory Act of the 102nd
General Assembly to reflect the reorganization of powers,
duties, rights, and responsibilities affected by this
amendatory Act of the 102nd General Assembly, using the
procedures for recodification of rules available under the
Illinois Administrative Procedure Act, except that existing
title, part, and section numbering for the affected rules may
be retained. The Department of Insurance may propose and adopt
under the Illinois Administrative Procedure Act other rules of
the Illinois Workers' Compensation Commission pertaining to
this amendatory Act of the 102nd General Assembly that are
administered by the Department of Insurance.
Section 10. The Workers' Compensation Act is amended by
changing Sections 4, 25.5, and 29.2 as follows:
(820 ILCS 305/4) (from Ch. 48, par. 138.4)
(Text of Section from P.A. 101-40)
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 Illinois Workers' Compensation 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 Illinois Workers' Compensation
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 Illinois
Workers' Compensation Commission, the salaries and benefits of
the Self-Insurers Advisory Board employees, the operating
costs of the Self-Insurers Advisory Board, and by the
Department of Insurance for the purposes authorized in
subsection (c) of Section 25.5 of this Act.
(a-2) Every Employee Leasing Company (ELC), as defined in
Section 15 of the Employee Leasing Company Act, shall at a
minimum provide the following information to the Commission or
any entity designated by the Commission regarding each
workers' compensation insurance policy issued to the ELC:
(1) Any client company of the ELC listed as an
additional named insured.
(2) Any informational schedule attached to the master
policy that identifies any individual client company's
name, FEIN, and job location.
(3) Any certificate of insurance coverage document
issued to a client company specifying its rights and
obligations under the master policy that establishes both
the identity and status of the client, as well as the dates
of inception and termination of coverage, if applicable.
(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 Illinois Workers' Compensation
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
Illinois Workers' Compensation 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) Whenever a Commissioner, with due process and after a
hearing, determines an employer has knowingly failed to
provide coverage as required by paragraph (a) of this Section,
the failure shall be deemed an immediate serious danger to
public health, safety, and welfare sufficient to justify
service by the Commission of a work-stop order on such
employer, requiring the cessation of all business operations
of such employer at the place of employment or job site. If a
business is declared to be extra hazardous, as defined in
Section 3, a Commissioner may issue an emergency work-stop
order on such an employer ex parte, prior to holding a hearing,
requiring the cessation of all business operations of such
employer at the place of employment or job site while awaiting
the ruling of the Commission. Whenever a Commissioner issues
an emergency work-stop order, the Commission shall issue a
notice of emergency work-stop hearing to be posted at the
employer's places of employment and job sites. Any law
enforcement agency in the State shall, at the request of the
Commission, render any assistance necessary to carry out the
provisions of this Section, including, but not limited to,
preventing any employee of such employer from remaining at a
place of employment or job site after a work-stop order has
taken effect. Any work-stop order shall be lifted upon proof
of insurance as required by this Act. Any orders under this
Section are appealable under Section 19(f) to the Circuit
Court.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who knowingly
fails to provide coverage as required by paragraph (a) of this
Section is guilty of a Class 4 felony. This provision shall not
apply to any corporate officer or director of any
publicly-owned corporation. Each day's violation constitutes a
separate offense. The State's Attorney of the county in which
the violation occurred, or the Attorney General, shall bring
such actions in the name of the People of the State of
Illinois, or may, in addition to other remedies provided in
this Section, bring an action for an injunction to restrain
the violation or to enjoin the operation of any such employer.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who
negligently fails to provide coverage as required by paragraph
(a) of this Section is guilty of a Class A misdemeanor. This
provision shall not apply to any corporate officer or director
of any publicly-owned corporation. Each day's violation
constitutes a separate offense. The State's Attorney of the
county in which the violation occurred, or the Attorney
General, shall bring such actions in the name of the People of
the State of Illinois.
The criminal penalties in this subsection (d) shall not
apply where there exists a good faith dispute as to the
existence of an employment relationship. Evidence of good
faith shall include, but not be limited to, compliance with
the definition of employee as used by the Internal Revenue
Service.
All investigative actions must be acted upon within 90
days of the issuance of the complaint. Employers who are
subject to and who knowingly fail to comply with this Section
shall not be entitled to the benefits of this Act during the
period of noncompliance, but shall be liable in an action
under any other applicable law of this State. In the action,
such employer shall not avail himself or herself of the
defenses of assumption of risk or negligence or that the
injury was due to a co-employee. In the action, proof of the
injury shall constitute prima facie evidence of negligence on
the part of such employer and the burden shall be on such
employer to show freedom of negligence resulting in the
injury. The employer shall not join any other defendant in any
such civil action. Nothing in this amendatory Act of the 94th
General Assembly shall affect the employee's rights under
subdivision (a)3 of Section 1 of this Act. Any employer or
carrier who makes payments under subdivision (a)3 of Section 1
of this Act shall have a right of reimbursement from the
proceeds of any recovery under this Section.
An employee of an uninsured employer, or the employee's
dependents in case death ensued, may, instead of proceeding
against the employer in a civil action in court, file an
application for adjustment of claim with the Commission in
accordance with the provisions of this Act and the Commission
shall hear and determine the application for adjustment of
claim in the manner in which other claims are heard and
determined before the Commission.
All proceedings under this subsection (d) shall be
reported on an annual basis to the Workers' Compensation
Advisory Board.
An investigator with the Department of Insurance Illinois
Workers' Compensation Commission Insurance Compliance Division
may issue a citation to any employer that is not in compliance
with its obligation to have workers' compensation insurance
under this Act. The amount of the fine shall be based on the
period of time the employer was in non-compliance, but shall
be no less than $500, and shall not exceed $10,000. An employer
that has been issued a citation shall pay the fine to the
Department of Insurance Commission and provide to the
Department of Insurance Commission proof that it obtained the
required workers' compensation insurance within 10 days after
the citation was issued. This Section does not affect any
other obligations this Act imposes on employers.
Upon a finding by the Commission, after reasonable notice
and hearing, of the knowing and willful failure or refusal of
an employer to comply with any of the provisions of paragraph
(a) of this Section, the failure or refusal of an employer,
service or adjustment company, or an insurance carrier to
comply with any order of the Illinois Workers' Compensation
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, or the
knowing and willful failure of an employer to comply with a
citation issued by an investigator with the Department of
Insurance Illinois Workers' Compensation Commission Insurance
Compliance Division, 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. Upon
investigation by the Department of Insurance insurance
non-compliance unit of the Commission, the Attorney General
shall have the authority to prosecute all proceedings to
enforce the civil and administrative provisions of this
Section before the Commission. The Commission and the
Department of Insurance shall promulgate procedural rules for
enforcing this Section relating to their respective duties
prescribed herein.
If an employer is found to be in non-compliance with any
provisions of paragraph (a) of this Section more than once,
all minimum penalties will double. Therefore, upon the failure
or refusal of an employer, service or adjustment company, or
insurance carrier to comply with any order of the 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, or the knowing and willful
failure of an employer to comply with a citation issued by an
investigator with the Department of Insurance Illinois
Workers' Compensation Commission Insurance Compliance
Division, the Commission may assess a civil penalty of up to
$1,000 per day for each day of such failure or refusal after
the effective date of this amendatory Act of the 101st General
Assembly. The minimum penalty under this Section shall be the
sum of $20,000. In addition, employers with 2 or more
violations of any provisions of paragraph (a) of this Section
may not self-insure for one year or until all penalties are
paid.
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.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who, with the
intent to avoid payment of compensation under this Act to an
injured employee or the employee's dependents, knowingly
transfers, sells, encumbers, assigns, or in any manner
disposes of, conceals, secretes, or destroys any property
belonging to the employer, officer, director, partner, or
member is guilty of a Class 4 felony.
Penalties and fines collected pursuant to this paragraph
(d) shall be deposited upon receipt into a special fund which
shall be designated the Injured Workers' Benefit Fund, of
which the State Treasurer is ex-officio custodian, such
special fund to be held and disbursed in accordance with this
paragraph (d) for the purposes hereinafter stated in this
paragraph (d), upon the final order of the Commission. The
Injured Workers' Benefit Fund shall be deposited the same as
are State funds and any interest accruing thereon shall be
added thereto every 6 months. The Injured Workers' Benefit
Fund is subject to audit the same as State funds and accounts
and is protected by the general bond given by the State
Treasurer. The Injured Workers' Benefit Fund is considered
always appropriated for the purposes of disbursements as
provided in this paragraph, and shall be paid out and
disbursed as herein provided and shall not at any time be
appropriated or diverted to any other use or purpose. Moneys
in the Injured Workers' Benefit Fund shall be used only for
payment of workers' compensation benefits for injured
employees when the employer has failed to provide coverage as
determined under this paragraph (d) and has failed to pay the
benefits due to the injured employee. The Commission shall
have the right to obtain reimbursement from the employer for
compensation obligations paid by the Injured Workers' Benefit
Fund. Any such amounts obtained shall be deposited by the
Commission into the Injured Workers' Benefit Fund. If an
injured employee or his or her personal representative
receives payment from the Injured Workers' Benefit Fund, the
State of Illinois has the same rights under paragraph (b) of
Section 5 that the employer who failed to pay the benefits due
to the injured employee would have had if the employer had paid
those benefits, and any moneys recovered by the State as a
result of the State's exercise of its rights under paragraph
(b) of Section 5 shall be deposited into the Injured Workers'
Benefit Fund. The custodian of the Injured Workers' Benefit
Fund shall be joined with the employer as a party respondent in
the application for adjustment of claim. After July 1, 2006,
the Commission shall make disbursements from the Fund once
each year to each eligible claimant. An eligible claimant is
an injured worker who has within the previous fiscal year
obtained a final award for benefits from the Commission
against the employer and the Injured Workers' Benefit Fund and
has notified the Commission within 90 days of receipt of such
award. Within a reasonable time after the end of each fiscal
year, the Commission shall make a disbursement to each
eligible claimant. At the time of disbursement, if there are
insufficient moneys in the Fund to pay all claims, each
eligible claimant shall receive a pro-rata share, as
determined by the Commission, of the available moneys in the
Fund for that year. Payment from the Injured Workers' Benefit
Fund to an eligible claimant pursuant to this provision shall
discharge the obligations of the Injured Workers' Benefit Fund
regarding the award entered by the Commission.
(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. 101-40, eff. 1-1-20.)
(Text of Section from P.A. 101-384)
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 Illinois Workers' Compensation 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 Illinois Workers' Compensation
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 Illinois
Workers' Compensation Commission and by the Department of
Insurance for the purposes authorized in subsection (c) of
Section 25.5 of this Act.
(a-2) Every Employee Leasing Company (ELC), as defined in
Section 15 of the Employee Leasing Company Act, shall at a
minimum provide the following information to the Commission or
any entity designated by the Commission regarding each
workers' compensation insurance policy issued to the ELC:
(1) Any client company of the ELC listed as an
additional named insured.
(2) Any informational schedule attached to the master
policy that identifies any individual client company's
name, FEIN, and job location.
(3) Any certificate of insurance coverage document
issued to a client company specifying its rights and
obligations under the master policy that establishes both
the identity and status of the client, as well as the dates
of inception and termination of coverage, if applicable.
(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 Illinois Workers' Compensation
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
Illinois Workers' Compensation 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) Whenever a panel of 3 Commissioners comprised of one
member of the employing class, one representative of a labor
organization recognized under the National Labor Relations Act
or an attorney who has represented labor organizations or has
represented employees in workers' compensation cases, and one
member not identified with either the employing class or a
labor organization, with due process and after a hearing,
determines an employer has knowingly failed to provide
coverage as required by paragraph (a) of this Section, the
failure shall be deemed an immediate serious danger to public
health, safety, and welfare sufficient to justify service by
the Commission of a work-stop order on such employer,
requiring the cessation of all business operations of such
employer at the place of employment or job site. Any law
enforcement agency in the State shall, at the request of the
Commission, render any assistance necessary to carry out the
provisions of this Section, including, but not limited to,
preventing any employee of such employer from remaining at a
place of employment or job site after a work-stop order has
taken effect. Any work-stop order shall be lifted upon proof
of insurance as required by this Act. Any orders under this
Section are appealable under Section 19(f) to the Circuit
Court.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who knowingly
fails to provide coverage as required by paragraph (a) of this
Section is guilty of a Class 4 felony. This provision shall not
apply to any corporate officer or director of any
publicly-owned corporation. Each day's violation constitutes a
separate offense. The State's Attorney of the county in which
the violation occurred, or the Attorney General, shall bring
such actions in the name of the People of the State of
Illinois, or may, in addition to other remedies provided in
this Section, bring an action for an injunction to restrain
the violation or to enjoin the operation of any such employer.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who
negligently fails to provide coverage as required by paragraph
(a) of this Section is guilty of a Class A misdemeanor. This
provision shall not apply to any corporate officer or director
of any publicly-owned corporation. Each day's violation
constitutes a separate offense. The State's Attorney of the
county in which the violation occurred, or the Attorney
General, shall bring such actions in the name of the People of
the State of Illinois.
The criminal penalties in this subsection (d) shall not
apply where there exists a good faith dispute as to the
existence of an employment relationship. Evidence of good
faith shall include, but not be limited to, compliance with
the definition of employee as used by the Internal Revenue
Service.
Employers who are subject to and who knowingly fail to
comply with this Section shall not be entitled to the benefits
of this Act during the period of noncompliance, but shall be
liable in an action under any other applicable law of this
State. In the action, such employer shall not avail himself or
herself of the defenses of assumption of risk or negligence or
that the injury was due to a co-employee. In the action, proof
of the injury shall constitute prima facie evidence of
negligence on the part of such employer and the burden shall be
on such employer to show freedom of negligence resulting in
the injury. The employer shall not join any other defendant in
any such civil action. Nothing in this amendatory Act of the
94th General Assembly shall affect the employee's rights under
subdivision (a)3 of Section 1 of this Act. Any employer or
carrier who makes payments under subdivision (a)3 of Section 1
of this Act shall have a right of reimbursement from the
proceeds of any recovery under this Section.
An employee of an uninsured employer, or the employee's
dependents in case death ensued, may, instead of proceeding
against the employer in a civil action in court, file an
application for adjustment of claim with the Commission in
accordance with the provisions of this Act and the Commission
shall hear and determine the application for adjustment of
claim in the manner in which other claims are heard and
determined before the Commission.
All proceedings under this subsection (d) shall be
reported on an annual basis to the Workers' Compensation
Advisory Board.
An investigator with the Department of Insurance Illinois
Workers' Compensation Commission Insurance Compliance Division
may issue a citation to any employer that is not in compliance
with its obligation to have workers' compensation insurance
under this Act. The amount of the fine shall be based on the
period of time the employer was in non-compliance, but shall
be no less than $500, and shall not exceed $2,500. An employer
that has been issued a citation shall pay the fine to the
Department of Insurance Commission and provide to the
Department of Insurance Commission proof that it obtained the
required workers' compensation insurance within 10 days after
the citation was issued. This Section does not affect any
other obligations this Act imposes on employers.
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, the failure or refusal of an employer,
service or adjustment company, or an insurance carrier to
comply with any order of the Illinois Workers' Compensation
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, or the
knowing and willful failure of an employer to comply with a
citation issued by an investigator with the Department of
Insurance Illinois Workers' Compensation Commission Insurance
Compliance Division, 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. Upon
investigation by the Department of Insurance insurance
non-compliance unit of the Commission, the Attorney General
shall have the authority to prosecute all proceedings to
enforce the civil and administrative provisions of this
Section before the Commission. The Commission and the
Department of Insurance shall promulgate procedural rules for
enforcing this Section relating to their respective duties
prescribed herein.
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.
Any individual employer, corporate officer or director of
a corporate employer, partner of an employer partnership, or
member of an employer limited liability company who, with the
intent to avoid payment of compensation under this Act to an
injured employee or the employee's dependents, knowingly
transfers, sells, encumbers, assigns, or in any manner
disposes of, conceals, secretes, or destroys any property
belonging to the employer, officer, director, partner, or
member is guilty of a Class 4 felony.
Penalties and fines collected pursuant to this paragraph
(d) shall be deposited upon receipt into a special fund which
shall be designated the Injured Workers' Benefit Fund, of
which the State Treasurer is ex-officio custodian, such
special fund to be held and disbursed in accordance with this
paragraph (d) for the purposes hereinafter stated in this
paragraph (d), upon the final order of the Commission. The
Injured Workers' Benefit Fund shall be deposited the same as
are State funds and any interest accruing thereon shall be
added thereto every 6 months. The Injured Workers' Benefit
Fund is subject to audit the same as State funds and accounts
and is protected by the general bond given by the State
Treasurer. The Injured Workers' Benefit Fund is considered
always appropriated for the purposes of disbursements as
provided in this paragraph, and shall be paid out and
disbursed as herein provided and shall not at any time be
appropriated or diverted to any other use or purpose. Moneys
in the Injured Workers' Benefit Fund shall be used only for
payment of workers' compensation benefits for injured
employees when the employer has failed to provide coverage as
determined under this paragraph (d) and has failed to pay the
benefits due to the injured employee. The Commission shall
have the right to obtain reimbursement from the employer for
compensation obligations paid by the Injured Workers' Benefit
Fund. Any such amounts obtained shall be deposited by the
Commission into the Injured Workers' Benefit Fund. If an
injured employee or his or her personal representative
receives payment from the Injured Workers' Benefit Fund, the
State of Illinois has the same rights under paragraph (b) of
Section 5 that the employer who failed to pay the benefits due
to the injured employee would have had if the employer had paid
those benefits, and any moneys recovered by the State as a
result of the State's exercise of its rights under paragraph
(b) of Section 5 shall be deposited into the Injured Workers'
Benefit Fund. The custodian of the Injured Workers' Benefit
Fund shall be joined with the employer as a party respondent in
the application for adjustment of claim. After July 1, 2006,
the Commission shall make disbursements from the Fund once
each year to each eligible claimant. An eligible claimant is
an injured worker who has within the previous fiscal year
obtained a final award for benefits from the Commission
against the employer and the Injured Workers' Benefit Fund and
has notified the Commission within 90 days of receipt of such
award. Within a reasonable time after the end of each fiscal
year, the Commission shall make a disbursement to each
eligible claimant. At the time of disbursement, if there are
insufficient moneys in the Fund to pay all claims, each
eligible claimant shall receive a pro-rata share, as
determined by the Commission, of the available moneys in the
Fund for that year. Payment from the Injured Workers' Benefit
Fund to an eligible claimant pursuant to this provision shall
discharge the obligations of the Injured Workers' Benefit Fund
regarding the award entered by the Commission.
(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. 101-384, eff. 1-1-20.)
(820 ILCS 305/25.5)
Sec. 25.5. Unlawful acts; penalties.
(a) It is unlawful for any person, company, corporation,
insurance carrier, healthcare provider, or other entity to:
(1) Intentionally present or cause to be presented any
false or fraudulent claim for the payment of any workers'
compensation benefit.
(2) Intentionally make or cause to be made any false
or fraudulent material statement or material
representation for the purpose of obtaining or denying any
workers' compensation benefit.
(3) Intentionally make or cause to be made any false
or fraudulent statements with regard to entitlement to
workers' compensation benefits with the intent to prevent
an injured worker from making a legitimate claim for any
workers' compensation benefits.
(4) Intentionally prepare or provide an invalid,
false, or counterfeit certificate of insurance as proof of
workers' compensation insurance.
(5) Intentionally make or cause to be made any false
or fraudulent material statement or material
representation for the purpose of obtaining workers'
compensation insurance at less than the proper amount rate
for that insurance.
(6) Intentionally make or cause to be made any false
or fraudulent material statement or material
representation on an initial or renewal self-insurance
application or accompanying financial statement for the
purpose of obtaining self-insurance status or reducing the
amount of security that may be required to be furnished
pursuant to Section 4 of this Act.
(7) Intentionally make or cause to be made any false
or fraudulent material statement to the Department of
Insurance's fraud and insurance non-compliance unit in the
course of an investigation of fraud or insurance
non-compliance.
(8) Intentionally assist, abet, solicit, or conspire
with any person, company, or other entity to commit any of
the acts in paragraph (1), (2), (3), (4), (5), (6), or (7)
of this subsection (a).
(9) Intentionally present a bill or statement for the
payment for medical services that were not provided.
For the purposes of paragraphs (2), (3), (5), (6), (7),
and (9), the term "statement" includes any writing, notice,
proof of injury, bill for services, hospital or doctor records
and reports, or X-ray and test results.
(b) Sentences for violations of subsection (a) are as
follows:
(1) A violation in which the value of the property
obtained or attempted to be obtained is $300 or less is a
Class A misdemeanor.
(2) A violation in which the value of the property
obtained or attempted to be obtained is more than $300 but
not more than $10,000 is a Class 3 felony.
(3) A violation in which the value of the property
obtained or attempted to be obtained is more than $10,000
but not more than $100,000 is a Class 2 felony.
(4) A violation in which the value of the property
obtained or attempted to be obtained is more than $100,000
is a Class 1 felony.
(5) A person convicted under this Section shall be
ordered to pay monetary restitution to the insurance
company or self-insured entity or any other person for any
financial loss sustained as a result of a violation of
this Section, including any court costs and attorney fees.
An order of restitution also includes expenses incurred
and paid by the State of Illinois or an insurance company
or self-insured entity in connection with any medical
evaluation or treatment services.
For the purposes of this Section, where the exact value of
property obtained or attempted to be obtained is either not
alleged or is not specifically set by the terms of a policy of
insurance, the value of the property shall be the fair market
replacement value of the property claimed to be lost, the
reasonable costs of reimbursing a vendor or other claimant for
services to be rendered, or both. Notwithstanding the
foregoing, an insurance company, self-insured entity, or any
other person suffering financial loss sustained as a result of
violation of this Section may seek restitution, including
court costs and attorney's fees in a civil action in a court of
competent jurisdiction.
(c) The Department of Insurance shall establish a fraud
and insurance non-compliance unit responsible for
investigating incidences of fraud and insurance non-compliance
pursuant to this Section. The size of the staff of the unit
shall be subject to appropriation by the General Assembly. It
shall be the duty of the fraud and insurance non-compliance
unit to determine the identity of insurance carriers,
employers, employees, or other persons or entities who have
violated the fraud and insurance non-compliance provisions of
this Section. The fraud and insurance non-compliance unit
shall report violations of the fraud and insurance
non-compliance provisions of this Section to the Special
Prosecutions Bureau of the Criminal Division of the Office of
the Attorney General or to the State's Attorney of the county
in which the offense allegedly occurred, either of whom has
the authority to prosecute violations under this Section.
With respect to the subject of any investigation being
conducted, the fraud and insurance non-compliance unit shall
have the general power of subpoena of the Department of
Insurance, including the authority to issue a subpoena to a
medical provider, pursuant to Section 8-802 of the Code of
Civil Procedure.
(d) Any person may report allegations of insurance
non-compliance and fraud pursuant to this Section to the
Department of Insurance's fraud and insurance non-compliance
unit whose duty it shall be to investigate the report. The unit
shall notify the Commission of reports of insurance
non-compliance. Any person reporting an allegation of
insurance non-compliance or fraud against either an employee
or employer under this Section must identify himself. Except
as provided in this subsection and in subsection (e), all
reports shall remain confidential except to refer an
investigation to the Attorney General or State's Attorney for
prosecution or if the fraud and insurance non-compliance
unit's investigation reveals that the conduct reported may be
in violation of other laws or regulations of the State of
Illinois, the unit may report such conduct to the appropriate
governmental agency charged with administering such laws and
regulations. Any person who intentionally makes a false report
under this Section to the fraud and insurance non-compliance
unit is guilty of a Class A misdemeanor.
(e) In order for the fraud and insurance non-compliance
unit to investigate a report of fraud related to an employee's
claim, (i) the employee must have filed with the Commission an
Application for Adjustment of Claim and the employee must have
either received or attempted to receive benefits under this
Act that are related to the reported fraud or (ii) the employee
must have made a written demand for the payment of benefits
that are related to the reported fraud. There shall be no
immunity, under this Act or otherwise, for any person who
files a false report or who files a report without good and
just cause. Confidentiality of medical information shall be
strictly maintained. Investigations that are not referred for
prosecution shall be destroyed upon the expiration of the
statute of limitations for the acts under investigation and
shall not be disclosed except that the person making the
report shall be notified that the investigation is being
closed. It is unlawful for any employer, insurance carrier,
service adjustment company, third party administrator,
self-insured, or similar entity to file or threaten to file a
report of fraud against an employee because of the exercise by
the employee of the rights and remedies granted to the
employee by this Act.
(e-5) (Blank). The fraud and insurance non-compliance unit
shall procure and implement a system utilizing advanced
analytics inclusive of predictive modeling, data mining,
social network analysis, and scoring algorithms for the
detection and prevention of fraud, waste, and abuse on or
before January 1, 2012. The fraud and insurance non-compliance
unit shall procure this system using a request for proposals
process governed by the Illinois Procurement Code and rules
adopted under that Code. The fraud and insurance
non-compliance unit shall provide a report to the President of
the Senate, Speaker of the House of Representatives, Minority
Leader of the House of Representatives, Minority Leader of the
Senate, Governor, Chairman of the Commission, and Director of
Insurance on or before July 1, 2012 and annually thereafter
detailing its activities and providing recommendations
regarding opportunities for additional fraud waste and abuse
detection and prevention.
(f) Any person convicted of fraud related to workers'
compensation pursuant to this Section shall be subject to the
penalties prescribed in the Criminal Code of 2012 and shall be
ineligible to receive or retain any compensation, disability,
or medical benefits as defined in this Act if the
compensation, disability, or medical benefits were owed or
received as a result of fraud for which the recipient of the
compensation, disability, or medical benefit was convicted.
This subsection applies to accidental injuries or diseases
that occur on or after the effective date of this amendatory
Act of the 94th General Assembly.
(g) Civil liability. Any person convicted of fraud who
knowingly obtains, attempts to obtain, or causes to be
obtained any benefits under this Act by the making of a false
claim or who knowingly misrepresents any material fact shall
be civilly liable to the payor of benefits or the insurer or
the payor's or insurer's subrogee or assignee in an amount
equal to 3 times the value of the benefits or insurance
coverage wrongfully obtained or twice the value of the
benefits or insurance coverage attempted to be obtained, plus
reasonable attorney's fees and expenses incurred by the payor
or the payor's subrogee or assignee who successfully brings a
claim under this subsection. This subsection applies to
accidental injuries or diseases that occur on or after the
effective date of this amendatory Act of the 94th General
Assembly.
(h) The fraud and insurance non-compliance unit shall
submit a written report on an annual basis to the Chairman of
the Commission, the Workers' Compensation Advisory Board, the
General Assembly, the Governor, and the Attorney General by
January 1 and July 1 of each year. This report shall include,
at the minimum, the following information:
(1) The number of allegations of insurance
non-compliance and fraud reported to the fraud and
insurance non-compliance unit.
(2) The source of the reported allegations
(individual, employer, or other).
(3) The number of allegations investigated by the
fraud and insurance non-compliance unit.
(4) The number of criminal referrals made in
accordance with this Section and the entity to which the
referral was made.
(5) All proceedings under this Section.
(6) Recommendations regarding opportunities for
additional fraud detection.
(Source: P.A. 97-18, eff. 6-28-11; 97-1150, eff. 1-25-13.)
(820 ILCS 305/29.2)
Sec. 29.2. Insurance oversight.
(a) The Department of Insurance shall annually submit to
the Governor, the Chairman of the Commission, the President of
the Senate, the Speaker of the House of Representatives, the
Minority Leader of the Senate, and the Minority Leader of the
House of Representatives a written report that details the
state of the workers' compensation insurance market in
Illinois. The report shall be completed by April 1 of each
year, beginning in 2012, or later if necessary data or
analyses are only available to the Department at a later date.
The report shall be posted on the Department of Insurance's
Internet website. Information to be included in the report
shall be for the preceding calendar year. The report shall
include, at a minimum, the following:
(1) Gross premiums collected by workers' compensation
carriers in Illinois and the national rank of Illinois
based on premium volume.
(2) The number of insurance companies actively engaged
in Illinois in the workers' compensation insurance market,
including both holding companies and subsidiaries or
affiliates, and the national rank of Illinois based on
number of competing insurers.
(3) The total number of insured participants in the
Illinois workers' compensation assigned risk insurance
pool, and the size of the assigned risk pool as a
proportion of the total Illinois workers' compensation
insurance market.
(4) The advisory organization premium rate for
workers' compensation insurance in Illinois for the
previous year.
(5) The advisory organization prescribed assigned risk
pool premium rate.
(6) The total amount of indemnity payments made by
workers' compensation insurers in Illinois.
(7) The total amount of medical payments made by
workers' compensation insurers in Illinois, and the
national rank of Illinois based on average cost of medical
claims per injured worker.
(8) The gross profitability of workers' compensation
insurers in Illinois, and the national rank of Illinois
based on profitability of workers' compensation insurers.
(9) The loss ratio of workers' compensation insurers
in Illinois and the national rank of Illinois based on the
loss ratio of workers' compensation insurers. For purposes
of this loss ratio calculation, the denominator shall
include all premiums and other fees collected by workers'
compensation insurers and the numerator shall include the
total amount paid by the insurer for care or compensation
to injured workers.
(10) The growth of total paid indemnity benefits by
temporary total disability, scheduled and non-scheduled
permanent partial disability, and total disability.
(11) The number of injured workers receiving wage loss
differential awards and the average wage loss differential
award payout.
(12) Illinois' rank, relative to other states, for:
(i) the maximum and minimum temporary total
disability benefit level;
(ii) the maximum and minimum scheduled and
non-scheduled permanent partial disability benefit
level;
(iii) the maximum and minimum total disability
benefit level; and
(iv) the maximum and minimum death benefit level.
(13) The aggregate growth of medical benefit payout by
non-hospital providers and hospitals.
(14) The aggregate growth of medical utilization for
the top 10 most common injuries to specific body parts by
non-hospital providers and hospitals.
(15) The percentage of injured workers filing claims
at the Commission that are represented by an attorney.
(16) The total amount paid by injured workers for
attorney representation.
(b) The Director of Insurance shall promulgate rules
requiring each insurer licensed to write workers' compensation
coverage in the State to record and report the following
information on an aggregate basis to the Department of
Insurance before June 1 March 1 of each year, relating to
claims in the State opened within the prior calendar year:
(1) The number of claims opened.
(2) The number of reported medical only claims.
(3) The number of contested claims.
(4) The number of claims for which the employee has
attorney representation.
(5) The number of claims with lost time and the number
of claims for which temporary total disability was paid.
(6) The number of claim adjusters employed to adjust
workers' compensation claims.
(7) The number of claims for which temporary total
disability was not paid within 14 days from the first full
day off, regardless of reason.
(8) The number of medical bills paid 60 days or later
from date of service and the average days paid on those
paid after 60 days for the previous calendar year.
(9) The number of claims in which in-house defense
counsel participated, and the total amount spent on
in-house legal services.
(10) The number of claims in which outside defense
counsel participated, and the total amount paid to outside
defense counsel.
(11) The total amount billed to employers for bill
review.
(12) The total amount billed to employers for fee
schedule savings.
(13) The total amount charged to employers for any and
all managed care fees.
(14) The number of claims involving in-house medical
nurse case management, and the total amount spent on
in-house medical nurse case management.
(15) The number of claims involving outside medical
nurse case management, and the total amount paid for
outside medical nurse case management.
(16) The total amount paid for Independent Medical
exams.
(17) The total amount spent on in-house Utilization
Review for the previous calendar year.
(18) The total amount paid for outside Utilization
Review for the previous calendar year.
The Department shall make the submitted information
publicly available on the Department's Internet website or
such other media as appropriate in a form useful for
consumers.
(Source: P.A. 97-18, eff. 6-28-11.)
Section 99. Effective date. This Act takes effect July 1,
2021.
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