98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5501

 

Introduced , by Rep. Monique D. Davis

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 220/6  from Ch. 127, par. 746

    Amends the Intergovernmental Cooperation Act. Deletes provisions: (i) authorizing the Director, or his or her designees, to examine the affairs, transactions, accounts, records, and assets and liabilities of each joint insurance pool as often as the Director deems advisable, (ii) requiring the joint insurance pools to cooperate fully with the Director's representatives in all evaluations and audits and to resolve issues raised in those evaluations and audits, and (iii) that the failure to resolve those issues shall constitute a violation of the Act and may, after notice and an opportunity to be heard, result in the imposition of penalties established by the Director by administrative rule. Effective immediately.


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A BILL FOR

 

HB5501LRB098 20079 OMW 55336 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Intergovernmental Cooperation Act is
5amended by changing Section 6 as follows:
 
6    (5 ILCS 220/6)  (from Ch. 127, par. 746)
7    Sec. 6. Joint self-insurance. An intergovernmental
8contract may, among other undertakings, authorize public
9agencies to jointly self-insure and authorize each public
10agency member of the contract to utilize its funds to pay to a
11joint insurance pool its costs and reserves to protect, wholly
12or partially, itself or any public agency member of the
13contract against liability or loss in the designated insurable
14area.
15    A joint insurance pool shall have an annual audit performed
16by an independent certified public accountant and shall file an
17annual audited financial report with the Director of Insurance
18no later than 150 days after the end of the pool's immediately
19preceding fiscal year. The Director of Insurance shall issue
20rules necessary to implement this audit and report requirement.
21The rule shall establish the due date for filing the initial
22annual audited financial report. Within 30 days after January
231, 1991, and within 30 days after each January 1 thereafter,

 

 

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1public agencies that are jointly self-insured to protect
2against liability under the Workers' Compensation Act and the
3Workers' Occupational Diseases Act shall file with the Illinois
4Workers' Compensation Commission a report indicating an
5election to self-insure.
6    The joint insurance pool shall also annually file with the
7Director a statement of actuarial opinion by an independent
8actuary who is an associate or fellow in a casualty actuarial
9society that the pool's reserves are in accordance with sound
10loss-reserving standards and adequate for the payment of
11claims. This opinion shall be filed no later than 150 days
12after the end of each fiscal year. The joint insurance pool
13shall be exempt from filing a statement of actuarial opinion by
14an independent actuary who is an associate or fellow in a
15casualty actuarial society that the joint insurance pool's
16reserves are in accordance with sound loss-reserving standards
17and payment of claims for the primary level of coverage if the
18joint insurance pool files with the Director, by the reporting
19deadline, a statement of actuarial opinion from the provider of
20the joint pool's aggregate coverage, reinsurance, or other
21similar excess insurance coverage.
22    The Director may assess penalties against a joint insurance
23pool that fails to comply with the auditing and , statement of
24actuarial opinion, and examination requirements of this
25Section in an amount equal to $500 per day for each violation,
26up to a maximum of $10,000 for each violation. The Director (or

 

 

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1his or her staff) or a Director-selected independent auditor
2(or actuarial firm) that is not owned or affiliated with an
3insurance brokerage firm, insurance company, or other
4insurance industry affiliated entity may examine, as often as
5the Director deems advisable, the affairs, transactions,
6accounts, records, and assets and liabilities of each joint
7insurance pool that fails to comply with this Section. The
8joint insurance pool shall cooperate fully with the Director's
9representatives in all evaluations and audits of the joint
10insurance pool and resolve issues raised in those evaluations
11and audits. The failure to resolve those issues may constitute
12a violation of this Section, and may, after notice and an
13opportunity to be heard, result in the imposition of penalties
14pursuant to this Section. No sanctions under this Section may
15become effective until 30 days after the date that a notice of
16sanctions is delivered by registered or certified mail to the
17joint insurance pool. The Director shall have the authority to
18extend the time for filing any statement by any joint insurance
19pool for reasons that he or she considers good and sufficient.
20    If a joint insurance pool requires a member to submit
21written notice in order for the member to withdraw from a
22qualified pool, then the period in which the member must
23provide the written notice cannot be greater than 120 days,
24except that this requirement applies only to joint insurance
25pool agreements entered into, modified, or renewed on or after
26the effective date of this amendatory Act of the 98th General

 

 

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1Assembly.
2    For purposes of this Section, "public agency member" means
3any public agency defined or created under this Act, any local
4public entity as defined in Section 1-206 of the Local
5Governmental and Governmental Employees Tort Immunity Act, and
6any public agency, authority, instrumentality, council, board,
7service region, district, unit, bureau, or, commission, or any
8municipal corporation, college, or university, whether
9corporate or otherwise, and any other local governmental body
10or similar entity that is presently existing or created after
11the effective date of this amendatory Act of the 92nd General
12Assembly, whether or not specified in this Section. Only public
13agency members with tax receipts, tax revenues, taxing
14authority, or other resources sufficient to pay costs and to
15service debt related to intergovernmental activities described
16in this Section, or public agency members created by or as part
17of a public agency with these powers, may enter into contracts
18or otherwise associate among themselves as permitted in this
19Section.
20    No joint insurance pool or other intergovernmental
21cooperative offering health insurance shall interfere with the
22statutory obligation of any public agency member to bargain
23over or to reach agreement with a labor organization over a
24mandatory subject of collective bargaining as those terms are
25used in the Illinois Public Labor Relations Act. No
26intergovernmental contract of insurance offering health

 

 

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1insurance shall limit the rights or obligations of public
2agency members to engage in collective bargaining, and it shall
3be unlawful for a joint insurance pool or other
4intergovernmental cooperative offering health insurance to
5discriminate against public agency members or otherwise
6retaliate against such members for limiting their
7participation in a joint insurance pool as a result of a
8collective bargaining agreement.
9    It shall not be considered a violation of this Section for
10an intergovernmental contract of insurance relating to health
11insurance coverage, life insurance coverage, or both to permit
12the pool or cooperative, if a member withdraws employees or
13officers into a union-sponsored program, to re-price the costs
14of benefits provided to the continuing employees or officers
15based upon the same underwriting criteria used by that pool or
16cooperative in the normal course of its business, but no member
17shall be expelled from a pool or cooperative if the continuing
18employees or officers meet the general criteria required of
19other members.
20(Source: P.A. 98-504, eff. 1-1-14.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.