SB1993 EngrossedLRB102 16865 BMS 22271 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Department of Insurance Law of the Civil
5Administrative Code of Illinois is amended by adding Section
61405-40 as follows:
 
7    (20 ILCS 1405/1405-40 new)
8    Sec. 1405-40. Transfer of functions.
9    (a) On the effective date of this amendatory Act of the
10102nd General Assembly, all powers, duties, rights, and
11responsibilities of the Insurance Compliance Division within
12the Illinois Workers' Compensation Commission are transferred
13to the Department of Insurance. The personnel of the Insurance
14Compliance Division are transferred to the Department of
15Insurance. The status and rights of such personnel under the
16Personnel Code are not affected by the transfer. The rights of
17the employees and the State of Illinois and its agencies under
18the Personnel Code and applicable collective bargaining
19agreements or under any pension, retirement, or annuity plan
20are not affected by this amendatory Act of the 102nd General
21Assembly. All books, records, papers, documents, property
22(real and personal), contracts, causes of action, and pending
23business pertaining to the powers, duties, rights, and

 

 

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1responsibilities transferred by this amendatory Act of the
2102nd General Assembly from the Insurance Compliance Division
3to the Department of Insurance, including, but not limited to,
4material in electronic or magnetic format and necessary
5computer hardware and software, are transferred to the
6Department of Insurance. The powers, duties, rights, and
7responsibilities relating to the Insurance Compliance Division
8transferred by this amendatory Act of the 102nd General
9Assembly are vested in the Department of Insurance.
10    (b) Whenever reports or notices are required to be made or
11given or papers or documents furnished or served by any person
12to or upon the Insurance Compliance Division in connection
13with any of the powers, duties, rights, and responsibilities
14transferred by this amendatory Act of the 102nd General
15Assembly, the Department of Insurance shall make, give,
16furnish, or serve them.
17    (c) This amendatory Act of the 102nd General Assembly does
18not affect any act done, ratified, or canceled, any right
19occurring or established, or any action or proceeding had or
20commenced in an administrative, civil, or criminal cause by
21the Insurance Compliance Division before the effective date of
22this amendatory Act of the 102nd General Assembly. Such
23actions or proceedings may be prosecuted and continued by the
24Department of Insurance.
25    (d) Any rules that relate to its powers, duties, rights,
26and responsibilities of the Insurance Compliance Division and

 

 

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1are in force on the effective date of this amendatory Act of
2the 102nd General Assembly become the rules of the Department
3of Insurance. This amendatory Act of the 102nd General
4Assembly does not affect the legality of any such rules.
5    (e) Any proposed rules filed with the Secretary of State
6by the Illinois Workers' Compensation Commission that are
7pending in the rulemaking process on the effective date of
8this amendatory Act of the 102nd General Assembly and pertain
9to the transferred powers, duties, rights, and
10responsibilities are deemed to have been filed by the
11Department of Insurance. As soon as practicable, the
12Department of Insurance shall revise and clarify the rules
13transferred to it under this amendatory Act of the 102nd
14General Assembly to reflect the reorganization of powers,
15duties, rights, and responsibilities affected by this
16amendatory Act of the 102nd General Assembly, using the
17procedures for recodification of rules available under the
18Illinois Administrative Procedure Act, except that existing
19title, part, and section numbering for the affected rules may
20be retained. The Department of Insurance may propose and adopt
21under the Illinois Administrative Procedure Act other rules of
22the Illinois Workers' Compensation Commission pertaining to
23this amendatory Act of the 102nd General Assembly that are
24administered by the Department of Insurance.
 
25    Section 10. The Workers' Compensation Act is amended by

 

 

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1changing Sections 4, 25.5, and 29.2 as follows:
 
2    (820 ILCS 305/4)  (from Ch. 48, par. 138.4)
3    (Text of Section from P.A. 101-40)
4    Sec. 4. (a) Any employer, including but not limited to
5general contractors and their subcontractors, who shall come
6within the provisions of Section 3 of this Act, and any other
7employer who shall elect to provide and pay the compensation
8provided for in this Act shall:
9        (1) File with the Commission annually an application
10    for approval as a self-insurer which shall include a
11    current financial statement, and annually, thereafter, an
12    application for renewal of self-insurance, which shall
13    include a current financial statement. Said application
14    and financial statement shall be signed and sworn to by
15    the president or vice president and secretary or assistant
16    secretary of the employer if it be a corporation, or by all
17    of the partners, if it be a copartnership, or by the owner
18    if it be neither a copartnership nor a corporation. All
19    initial applications and all applications for renewal of
20    self-insurance must be submitted at least 60 days prior to
21    the requested effective date of self-insurance. An
22    employer may elect to provide and pay compensation as
23    provided for in this Act as a member of a group workers'
24    compensation pool under Article V 3/4 of the Illinois
25    Insurance Code. If an employer becomes a member of a group

 

 

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1    workers' compensation pool, the employer shall not be
2    relieved of any obligations imposed by this Act.
3        If the sworn application and financial statement of
4    any such employer does not satisfy the Commission of the
5    financial ability of the employer who has filed it, the
6    Commission shall require such employer to,
7        (2) Furnish security, indemnity or a bond guaranteeing
8    the payment by the employer of the compensation provided
9    for in this Act, provided that any such employer whose
10    application and financial statement shall not have
11    satisfied the commission of his or her financial ability
12    and who shall have secured his liability in part by excess
13    liability insurance shall be required to furnish to the
14    Commission security, indemnity or bond guaranteeing his or
15    her payment up to the effective limits of the excess
16    coverage, or
17        (3) Insure his entire liability to pay such
18    compensation in some insurance carrier authorized,
19    licensed, or permitted to do such insurance business in
20    this State. Every policy of an insurance carrier, insuring
21    the payment of compensation under this Act shall cover all
22    the employees and the entire compensation liability of the
23    insured: Provided, however, that any employer may insure
24    his or her compensation liability with 2 or more insurance
25    carriers or may insure a part and qualify under subsection
26    1, 2, or 4 for the remainder of his or her liability to pay

 

 

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1    such compensation, subject to the following two
2    provisions:
3            Firstly, the entire compensation liability of the
4        employer to employees working at or from one location
5        shall be insured in one such insurance carrier or
6        shall be self-insured, and
7            Secondly, the employer shall submit evidence
8        satisfactorily to the Commission that his or her
9        entire liability for the compensation provided for in
10        this Act will be secured. Any provisions in any
11        policy, or in any endorsement attached thereto,
12        attempting to limit or modify in any way, the
13        liability of the insurance carriers issuing the same
14        except as otherwise provided herein shall be wholly
15        void.
16        Nothing herein contained shall apply to policies of
17    excess liability carriage secured by employers who have
18    been approved by the Commission as self-insurers, or
19        (4) Make some other provision, satisfactory to the
20    Commission, for the securing of the payment of
21    compensation provided for in this Act, and
22        (5) Upon becoming subject to this Act and thereafter
23    as often as the Commission may in writing demand, file
24    with the Commission in form prescribed by it evidence of
25    his or her compliance with the provision of this Section.
26    (a-1) Regardless of its state of domicile or its principal

 

 

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1place of business, an employer shall make payments to its
2insurance carrier or group self-insurance fund, where
3applicable, based upon the premium rates of the situs where
4the work or project is located in Illinois if:
5        (A) the employer is engaged primarily in the building
6    and construction industry; and
7        (B) subdivision (a)(3) of this Section applies to the
8    employer or the employer is a member of a group
9    self-insurance plan as defined in subsection (1) of
10    Section 4a.
11    The Illinois Workers' Compensation Commission shall impose
12a penalty upon an employer for violation of this subsection
13(a-1) if:
14        (i) the employer is given an opportunity at a hearing
15    to present evidence of its compliance with this subsection
16    (a-1); and
17        (ii) after the hearing, the Commission finds that the
18    employer failed to make payments upon the premium rates of
19    the situs where the work or project is located in
20    Illinois.
21    The penalty shall not exceed $1,000 for each day of work
22for which the employer failed to make payments upon the
23premium rates of the situs where the work or project is located
24in Illinois, but the total penalty shall not exceed $50,000
25for each project or each contract under which the work was
26performed.

 

 

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1    Any penalty under this subsection (a-1) must be imposed
2not later than one year after the expiration of the applicable
3limitation period specified in subsection (d) of Section 6 of
4this Act. Penalties imposed under this subsection (a-1) shall
5be deposited into the Illinois Workers' Compensation
6Commission Operations Fund, a special fund that is created in
7the State treasury. Subject to appropriation, moneys in the
8Fund shall be used solely for the operations of the Illinois
9Workers' Compensation Commission, the salaries and benefits of
10the Self-Insurers Advisory Board employees, the operating
11costs of the Self-Insurers Advisory Board, and by the
12Department of Insurance for the purposes authorized in
13subsection (c) of Section 25.5 of this Act.
14    (a-2) Every Employee Leasing Company (ELC), as defined in
15Section 15 of the Employee Leasing Company Act, shall at a
16minimum provide the following information to the Commission or
17any entity designated by the Commission regarding each
18workers' compensation insurance policy issued to the ELC:
19        (1) Any client company of the ELC listed as an
20    additional named insured.
21        (2) Any informational schedule attached to the master
22    policy that identifies any individual client company's
23    name, FEIN, and job location.
24        (3) Any certificate of insurance coverage document
25    issued to a client company specifying its rights and
26    obligations under the master policy that establishes both

 

 

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1    the identity and status of the client, as well as the dates
2    of inception and termination of coverage, if applicable.
3    (b) The sworn application and financial statement, or
4security, indemnity or bond, or amount of insurance, or other
5provisions, filed, furnished, carried, or made by the
6employer, as the case may be, shall be subject to the approval
7of the Commission.
8    Deposits under escrow agreements shall be cash, negotiable
9United States government bonds or negotiable general
10obligation bonds of the State of Illinois. Such cash or bonds
11shall be deposited in escrow with any State or National Bank or
12Trust Company having trust authority in the State of Illinois.
13    Upon the approval of the sworn application and financial
14statement, security, indemnity or bond or amount of insurance,
15filed, furnished or carried, as the case may be, the
16Commission shall send to the employer written notice of its
17approval thereof. The certificate of compliance by the
18employer with the provisions of subparagraphs (2) and (3) of
19paragraph (a) of this Section shall be delivered by the
20insurance carrier to the Illinois Workers' Compensation
21Commission within five days after the effective date of the
22policy so certified. The insurance so certified shall cover
23all compensation liability occurring during the time that the
24insurance is in effect and no further certificate need be
25filed in case such insurance is renewed, extended or otherwise
26continued by such carrier. The insurance so certified shall

 

 

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1not be cancelled or in the event that such insurance is not
2renewed, extended or otherwise continued, such insurance shall
3not be terminated until at least 10 days after receipt by the
4Illinois Workers' Compensation Commission of notice of the
5cancellation or termination of said insurance; provided,
6however, that if the employer has secured insurance from
7another insurance carrier, or has otherwise secured the
8payment of compensation in accordance with this Section, and
9such insurance or other security becomes effective prior to
10the expiration of the 10 days, cancellation or termination
11may, at the option of the insurance carrier indicated in such
12notice, be effective as of the effective date of such other
13insurance or security.
14    (c) Whenever the Commission shall find that any
15corporation, company, association, aggregation of individuals,
16reciprocal or interinsurers exchange, or other insurer
17effecting workers' compensation insurance in this State shall
18be insolvent, financially unsound, or unable to fully meet all
19payments and liabilities assumed or to be assumed for
20compensation insurance in this State, or shall practice a
21policy of delay or unfairness toward employees in the
22adjustment, settlement, or payment of benefits due such
23employees, the Commission may after reasonable notice and
24hearing order and direct that such corporation, company,
25association, aggregation of individuals, reciprocal or
26interinsurers exchange, or insurer, shall from and after a

 

 

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1date fixed in such order discontinue the writing of any such
2workers' compensation insurance in this State. Subject to such
3modification of the order as the Commission may later make on
4review of the order, as herein provided, it shall thereupon be
5unlawful for any such corporation, company, association,
6aggregation of individuals, reciprocal or interinsurers
7exchange, or insurer to effect any workers' compensation
8insurance in this State. A copy of the order shall be served
9upon the Director of Insurance by registered mail. Whenever
10the Commission finds that any service or adjustment company
11used or employed by a self-insured employer or by an insurance
12carrier to process, adjust, investigate, compromise or
13otherwise handle claims under this Act, has practiced or is
14practicing a policy of delay or unfairness toward employees in
15the adjustment, settlement or payment of benefits due such
16employees, the Commission may after reasonable notice and
17hearing order and direct that such service or adjustment
18company shall from and after a date fixed in such order be
19prohibited from processing, adjusting, investigating,
20compromising or otherwise handling claims under this Act.
21    Whenever the Commission finds that any self-insured
22employer has practiced or is practicing delay or unfairness
23toward employees in the adjustment, settlement or payment of
24benefits due such employees, the Commission may, after
25reasonable notice and hearing, order and direct that after a
26date fixed in the order such self-insured employer shall be

 

 

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1disqualified to operate as a self-insurer and shall be
2required to insure his entire liability to pay compensation in
3some insurance carrier authorized, licensed and permitted to
4do such insurance business in this State, as provided in
5subparagraph 3 of paragraph (a) of this Section.
6    All orders made by the Commission under this Section shall
7be subject to review by the courts, said review to be taken in
8the same manner and within the same time as provided by Section
919 of this Act for review of awards and decisions of the
10Commission, upon the party seeking the review filing with the
11clerk of the court to which said review is taken a bond in an
12amount to be fixed and approved by the court to which the
13review is taken, conditioned upon the payment of all
14compensation awarded against the person taking said review
15pending a decision thereof and further conditioned upon such
16other obligations as the court may impose. Upon the review the
17Circuit Court shall have power to review all questions of fact
18as well as of law. The penalty hereinafter provided for in this
19paragraph shall not attach and shall not begin to run until the
20final determination of the order of the Commission.
21    (d) Whenever a Commissioner, with due process and after a
22hearing, determines an employer has knowingly failed to
23provide coverage as required by paragraph (a) of this Section,
24the failure shall be deemed an immediate serious danger to
25public health, safety, and welfare sufficient to justify
26service by the Commission of a work-stop order on such

 

 

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1employer, requiring the cessation of all business operations
2of such employer at the place of employment or job site. If a
3business is declared to be extra hazardous, as defined in
4Section 3, a Commissioner may issue an emergency work-stop
5order on such an employer ex parte, prior to holding a hearing,
6requiring the cessation of all business operations of such
7employer at the place of employment or job site while awaiting
8the ruling of the Commission. Whenever a Commissioner issues
9an emergency work-stop order, the Commission shall issue a
10notice of emergency work-stop hearing to be posted at the
11employer's places of employment and job sites. Any law
12enforcement agency in the State shall, at the request of the
13Commission, render any assistance necessary to carry out the
14provisions of this Section, including, but not limited to,
15preventing any employee of such employer from remaining at a
16place of employment or job site after a work-stop order has
17taken effect. Any work-stop order shall be lifted upon proof
18of insurance as required by this Act. Any orders under this
19Section are appealable under Section 19(f) to the Circuit
20Court.
21    Any individual employer, corporate officer or director of
22a corporate employer, partner of an employer partnership, or
23member of an employer limited liability company who knowingly
24fails to provide coverage as required by paragraph (a) of this
25Section is guilty of a Class 4 felony. This provision shall not
26apply to any corporate officer or director of any

 

 

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1publicly-owned corporation. Each day's violation constitutes a
2separate offense. The State's Attorney of the county in which
3the violation occurred, or the Attorney General, shall bring
4such actions in the name of the People of the State of
5Illinois, or may, in addition to other remedies provided in
6this Section, bring an action for an injunction to restrain
7the violation or to enjoin the operation of any such employer.
8    Any individual employer, corporate officer or director of
9a corporate employer, partner of an employer partnership, or
10member of an employer limited liability company who
11negligently fails to provide coverage as required by paragraph
12(a) of this Section is guilty of a Class A misdemeanor. This
13provision shall not apply to any corporate officer or director
14of any publicly-owned corporation. Each day's violation
15constitutes a separate offense. The State's Attorney of the
16county in which the violation occurred, or the Attorney
17General, shall bring such actions in the name of the People of
18the State of Illinois.
19    The criminal penalties in this subsection (d) shall not
20apply where there exists a good faith dispute as to the
21existence of an employment relationship. Evidence of good
22faith shall include, but not be limited to, compliance with
23the definition of employee as used by the Internal Revenue
24Service.
25    All investigative actions must be acted upon within 90
26days of the issuance of the complaint. Employers who are

 

 

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1subject to and who knowingly fail to comply with this Section
2shall not be entitled to the benefits of this Act during the
3period of noncompliance, but shall be liable in an action
4under any other applicable law of this State. In the action,
5such employer shall not avail himself or herself of the
6defenses of assumption of risk or negligence or that the
7injury was due to a co-employee. In the action, proof of the
8injury shall constitute prima facie evidence of negligence on
9the part of such employer and the burden shall be on such
10employer to show freedom of negligence resulting in the
11injury. The employer shall not join any other defendant in any
12such civil action. Nothing in this amendatory Act of the 94th
13General Assembly shall affect the employee's rights under
14subdivision (a)3 of Section 1 of this Act. Any employer or
15carrier who makes payments under subdivision (a)3 of Section 1
16of this Act shall have a right of reimbursement from the
17proceeds of any recovery under this Section.
18    An employee of an uninsured employer, or the employee's
19dependents in case death ensued, may, instead of proceeding
20against the employer in a civil action in court, file an
21application for adjustment of claim with the Commission in
22accordance with the provisions of this Act and the Commission
23shall hear and determine the application for adjustment of
24claim in the manner in which other claims are heard and
25determined before the Commission.
26    All proceedings under this subsection (d) shall be

 

 

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1reported on an annual basis to the Workers' Compensation
2Advisory Board.
3    An investigator with the Department of Insurance Illinois
4Workers' Compensation Commission Insurance Compliance Division
5may issue a citation to any employer that is not in compliance
6with its obligation to have workers' compensation insurance
7under this Act. The amount of the fine shall be based on the
8period of time the employer was in non-compliance, but shall
9be no less than $500, and shall not exceed $10,000. An employer
10that has been issued a citation shall pay the fine to the
11Department of Insurance Commission and provide to the
12Department of Insurance Commission proof that it obtained the
13required workers' compensation insurance within 10 days after
14the citation was issued. This Section does not affect any
15other obligations this Act imposes on employers.
16    Upon a finding by the Commission, after reasonable notice
17and hearing, of the knowing and willful failure or refusal of
18an employer to comply with any of the provisions of paragraph
19(a) of this Section, the failure or refusal of an employer,
20service or adjustment company, or an insurance carrier to
21comply with any order of the Illinois Workers' Compensation
22Commission pursuant to paragraph (c) of this Section
23disqualifying him or her to operate as a self insurer and
24requiring him or her to insure his or her liability, or the
25knowing and willful failure of an employer to comply with a
26citation issued by an investigator with the Department of

 

 

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1Insurance Illinois Workers' Compensation Commission Insurance
2Compliance Division, the Commission may assess a civil penalty
3of up to $500 per day for each day of such failure or refusal
4after the effective date of this amendatory Act of 1989. The
5minimum penalty under this Section shall be the sum of
6$10,000. Each day of such failure or refusal shall constitute
7a separate offense. The Commission may assess the civil
8penalty personally and individually against the corporate
9officers and directors of a corporate employer, the partners
10of an employer partnership, and the members of an employer
11limited liability company, after a finding of a knowing and
12willful refusal or failure of each such named corporate
13officer, director, partner, or member to comply with this
14Section. The liability for the assessed penalty shall be
15against the named employer first, and if the named employer
16fails or refuses to pay the penalty to the Commission within 30
17days after the final order of the Commission, then the named
18corporate officers, directors, partners, or members who have
19been found to have knowingly and willfully refused or failed
20to comply with this Section shall be liable for the unpaid
21penalty or any unpaid portion of the penalty. Upon
22investigation by the Department of Insurance insurance
23non-compliance unit of the Commission, the Attorney General
24shall have the authority to prosecute all proceedings to
25enforce the civil and administrative provisions of this
26Section before the Commission. The Commission and the

 

 

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1Department of Insurance shall promulgate procedural rules for
2enforcing this Section relating to their respective duties
3prescribed herein.
4    If an employer is found to be in non-compliance with any
5provisions of paragraph (a) of this Section more than once,
6all minimum penalties will double. Therefore, upon the failure
7or refusal of an employer, service or adjustment company, or
8insurance carrier to comply with any order of the Commission
9pursuant to paragraph (c) of this Section disqualifying him or
10her to operate as a self-insurer and requiring him or her to
11insure his or her liability, or the knowing and willful
12failure of an employer to comply with a citation issued by an
13investigator with the Department of Insurance Illinois
14Workers' Compensation Commission Insurance Compliance
15Division, the Commission may assess a civil penalty of up to
16$1,000 per day for each day of such failure or refusal after
17the effective date of this amendatory Act of the 101st General
18Assembly. The minimum penalty under this Section shall be the
19sum of $20,000. In addition, employers with 2 or more
20violations of any provisions of paragraph (a) of this Section
21may not self-insure for one year or until all penalties are
22paid.
23    Upon the failure or refusal of any employer, service or
24adjustment company or insurance carrier to comply with the
25provisions of this Section and with the orders of the
26Commission under this Section, or the order of the court on

 

 

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1review after final adjudication, the Commission may bring a
2civil action to recover the amount of the penalty in Cook
3County or in Sangamon County in which litigation the
4Commission shall be represented by the Attorney General. The
5Commission shall send notice of its finding of non-compliance
6and assessment of the civil penalty to the Attorney General.
7It shall be the duty of the Attorney General within 30 days
8after receipt of the notice, to institute prosecutions and
9promptly prosecute all reported violations of this Section.
10    Any individual employer, corporate officer or director of
11a corporate employer, partner of an employer partnership, or
12member of an employer limited liability company who, with the
13intent to avoid payment of compensation under this Act to an
14injured employee or the employee's dependents, knowingly
15transfers, sells, encumbers, assigns, or in any manner
16disposes of, conceals, secretes, or destroys any property
17belonging to the employer, officer, director, partner, or
18member is guilty of a Class 4 felony.
19    Penalties and fines collected pursuant to this paragraph
20(d) shall be deposited upon receipt into a special fund which
21shall be designated the Injured Workers' Benefit Fund, of
22which the State Treasurer is ex-officio custodian, such
23special fund to be held and disbursed in accordance with this
24paragraph (d) for the purposes hereinafter stated in this
25paragraph (d), upon the final order of the Commission. The
26Injured Workers' Benefit Fund shall be deposited the same as

 

 

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1are State funds and any interest accruing thereon shall be
2added thereto every 6 months. The Injured Workers' Benefit
3Fund is subject to audit the same as State funds and accounts
4and is protected by the general bond given by the State
5Treasurer. The Injured Workers' Benefit Fund is considered
6always appropriated for the purposes of disbursements as
7provided in this paragraph, and shall be paid out and
8disbursed as herein provided and shall not at any time be
9appropriated or diverted to any other use or purpose. Moneys
10in the Injured Workers' Benefit Fund shall be used only for
11payment of workers' compensation benefits for injured
12employees when the employer has failed to provide coverage as
13determined under this paragraph (d) and has failed to pay the
14benefits due to the injured employee. The Commission shall
15have the right to obtain reimbursement from the employer for
16compensation obligations paid by the Injured Workers' Benefit
17Fund. Any such amounts obtained shall be deposited by the
18Commission into the Injured Workers' Benefit Fund. If an
19injured employee or his or her personal representative
20receives payment from the Injured Workers' Benefit Fund, the
21State of Illinois has the same rights under paragraph (b) of
22Section 5 that the employer who failed to pay the benefits due
23to the injured employee would have had if the employer had paid
24those benefits, and any moneys recovered by the State as a
25result of the State's exercise of its rights under paragraph
26(b) of Section 5 shall be deposited into the Injured Workers'

 

 

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1Benefit Fund. The custodian of the Injured Workers' Benefit
2Fund shall be joined with the employer as a party respondent in
3the application for adjustment of claim. After July 1, 2006,
4the Commission shall make disbursements from the Fund once
5each year to each eligible claimant. An eligible claimant is
6an injured worker who has within the previous fiscal year
7obtained a final award for benefits from the Commission
8against the employer and the Injured Workers' Benefit Fund and
9has notified the Commission within 90 days of receipt of such
10award. Within a reasonable time after the end of each fiscal
11year, the Commission shall make a disbursement to each
12eligible claimant. At the time of disbursement, if there are
13insufficient moneys in the Fund to pay all claims, each
14eligible claimant shall receive a pro-rata share, as
15determined by the Commission, of the available moneys in the
16Fund for that year. Payment from the Injured Workers' Benefit
17Fund to an eligible claimant pursuant to this provision shall
18discharge the obligations of the Injured Workers' Benefit Fund
19regarding the award entered by the Commission.
20    (e) This Act shall not affect or disturb the continuance
21of any existing insurance, mutual aid, benefit, or relief
22association or department, whether maintained in whole or in
23part by the employer or whether maintained by the employees,
24the payment of benefits of such association or department
25being guaranteed by the employer or by some person, firm or
26corporation for him or her: Provided, the employer contributes

 

 

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1to such association or department an amount not less than the
2full compensation herein provided, exclusive of the cost of
3the maintenance of such association or department and without
4any expense to the employee. This Act shall not prevent the
5organization and maintaining under the insurance laws of this
6State of any benefit or insurance company for the purpose of
7insuring against the compensation provided for in this Act,
8the expense of which is maintained by the employer. This Act
9shall not prevent the organization or maintaining under the
10insurance laws of this State of any voluntary mutual aid,
11benefit or relief association among employees for the payment
12of additional accident or sick benefits.
13    (f) No existing insurance, mutual aid, benefit or relief
14association or department shall, by reason of anything herein
15contained, be authorized to discontinue its operation without
16first discharging its obligations to any and all persons
17carrying insurance in the same or entitled to relief or
18benefits therein.
19    (g) Any contract, oral, written or implied, of employment
20providing for relief benefit, or insurance or any other device
21whereby the employee is required to pay any premium or
22premiums for insurance against the compensation provided for
23in this Act shall be null and void. Any employer withholding
24from the wages of any employee any amount for the purpose of
25paying any such premium shall be guilty of a Class B
26misdemeanor.

 

 

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1    In the event the employer does not pay the compensation
2for which he or she is liable, then an insurance company,
3association or insurer which may have insured such employer
4against such liability shall become primarily liable to pay to
5the employee, his or her personal representative or
6beneficiary the compensation required by the provisions of
7this Act to be paid by such employer. The insurance carrier may
8be made a party to the proceedings in which the employer is a
9party and an award may be entered jointly against the employer
10and the insurance carrier.
11    (h) It shall be unlawful for any employer, insurance
12company or service or adjustment company to interfere with,
13restrain or coerce an employee in any manner whatsoever in the
14exercise of the rights or remedies granted to him or her by
15this Act or to discriminate, attempt to discriminate, or
16threaten to discriminate against an employee in any way
17because of his or her exercise of the rights or remedies
18granted to him or her by this Act.
19    It shall be unlawful for any employer, individually or
20through any insurance company or service or adjustment
21company, to discharge or to threaten to discharge, or to
22refuse to rehire or recall to active service in a suitable
23capacity an employee because of the exercise of his or her
24rights or remedies granted to him or her by this Act.
25    (i) If an employer elects to obtain a life insurance
26policy on his employees, he may also elect to apply such

 

 

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1benefits in satisfaction of all or a portion of the death
2benefits payable under this Act, in which case, the employer's
3compensation premium shall be reduced accordingly.
4    (j) Within 45 days of receipt of an initial application or
5application to renew self-insurance privileges the
6Self-Insurers Advisory Board shall review and submit for
7approval by the Chairman of the Commission recommendations of
8disposition of all initial applications to self-insure and all
9applications to renew self-insurance privileges filed by
10private self-insurers pursuant to the provisions of this
11Section and Section 4a-9 of this Act. Each private
12self-insurer shall submit with its initial and renewal
13applications the application fee required by Section 4a-4 of
14this Act.
15    The Chairman of the Commission shall promptly act upon all
16initial applications and applications for renewal in full
17accordance with the recommendations of the Board or, should
18the Chairman disagree with any recommendation of disposition
19of the Self-Insurer's Advisory Board, he shall within 30 days
20of receipt of such recommendation provide to the Board in
21writing the reasons supporting his decision. The Chairman
22shall also promptly notify the employer of his decision within
2315 days of receipt of the recommendation of the Board.
24    If an employer is denied a renewal of self-insurance
25privileges pursuant to application it shall retain said
26privilege for 120 days after receipt of a notice of

 

 

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1cancellation of the privilege from the Chairman of the
2Commission.
3    All orders made by the Chairman under this Section shall
4be subject to review by the courts, such review to be taken in
5the same manner and within the same time as provided by
6subsection (f) of Section 19 of this Act for review of awards
7and decisions of the Commission, upon the party seeking the
8review filing with the clerk of the court to which such review
9is taken a bond in an amount to be fixed and approved by the
10court to which the review is taken, conditioned upon the
11payment of all compensation awarded against the person taking
12such review pending a decision thereof and further conditioned
13upon such other obligations as the court may impose. Upon the
14review the Circuit Court shall have power to review all
15questions of fact as well as of law.
16(Source: P.A. 101-40, eff. 1-1-20.)
 
17    (Text of Section from P.A. 101-384)
18    Sec. 4. (a) Any employer, including but not limited to
19general contractors and their subcontractors, who shall come
20within the provisions of Section 3 of this Act, and any other
21employer who shall elect to provide and pay the compensation
22provided for in this Act shall:
23        (1) File with the Commission annually an application
24    for approval as a self-insurer which shall include a
25    current financial statement, and annually, thereafter, an

 

 

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1    application for renewal of self-insurance, which shall
2    include a current financial statement. Said application
3    and financial statement shall be signed and sworn to by
4    the president or vice president and secretary or assistant
5    secretary of the employer if it be a corporation, or by all
6    of the partners, if it be a copartnership, or by the owner
7    if it be neither a copartnership nor a corporation. All
8    initial applications and all applications for renewal of
9    self-insurance must be submitted at least 60 days prior to
10    the requested effective date of self-insurance. An
11    employer may elect to provide and pay compensation as
12    provided for in this Act as a member of a group workers'
13    compensation pool under Article V 3/4 of the Illinois
14    Insurance Code. If an employer becomes a member of a group
15    workers' compensation pool, the employer shall not be
16    relieved of any obligations imposed by this Act.
17        If the sworn application and financial statement of
18    any such employer does not satisfy the Commission of the
19    financial ability of the employer who has filed it, the
20    Commission shall require such employer to,
21        (2) Furnish security, indemnity or a bond guaranteeing
22    the payment by the employer of the compensation provided
23    for in this Act, provided that any such employer whose
24    application and financial statement shall not have
25    satisfied the commission of his or her financial ability
26    and who shall have secured his liability in part by excess

 

 

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1    liability insurance shall be required to furnish to the
2    Commission security, indemnity or bond guaranteeing his or
3    her payment up to the effective limits of the excess
4    coverage, or
5        (3) Insure his entire liability to pay such
6    compensation in some insurance carrier authorized,
7    licensed, or permitted to do such insurance business in
8    this State. Every policy of an insurance carrier, insuring
9    the payment of compensation under this Act shall cover all
10    the employees and the entire compensation liability of the
11    insured: Provided, however, that any employer may insure
12    his or her compensation liability with 2 or more insurance
13    carriers or may insure a part and qualify under subsection
14    1, 2, or 4 for the remainder of his or her liability to pay
15    such compensation, subject to the following two
16    provisions:
17            Firstly, the entire compensation liability of the
18        employer to employees working at or from one location
19        shall be insured in one such insurance carrier or
20        shall be self-insured, and
21            Secondly, the employer shall submit evidence
22        satisfactorily to the Commission that his or her
23        entire liability for the compensation provided for in
24        this Act will be secured. Any provisions in any
25        policy, or in any endorsement attached thereto,
26        attempting to limit or modify in any way, the

 

 

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1        liability of the insurance carriers issuing the same
2        except as otherwise provided herein shall be wholly
3        void.
4        Nothing herein contained shall apply to policies of
5    excess liability carriage secured by employers who have
6    been approved by the Commission as self-insurers, or
7        (4) Make some other provision, satisfactory to the
8    Commission, for the securing of the payment of
9    compensation provided for in this Act, and
10        (5) Upon becoming subject to this Act and thereafter
11    as often as the Commission may in writing demand, file
12    with the Commission in form prescribed by it evidence of
13    his or her compliance with the provision of this Section.
14    (a-1) Regardless of its state of domicile or its principal
15place of business, an employer shall make payments to its
16insurance carrier or group self-insurance fund, where
17applicable, based upon the premium rates of the situs where
18the work or project is located in Illinois if:
19        (A) the employer is engaged primarily in the building
20    and construction industry; and
21        (B) subdivision (a)(3) of this Section applies to the
22    employer or the employer is a member of a group
23    self-insurance plan as defined in subsection (1) of
24    Section 4a.
25    The Illinois Workers' Compensation Commission shall impose
26a penalty upon an employer for violation of this subsection

 

 

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1(a-1) if:
2        (i) the employer is given an opportunity at a hearing
3    to present evidence of its compliance with this subsection
4    (a-1); and
5        (ii) after the hearing, the Commission finds that the
6    employer failed to make payments upon the premium rates of
7    the situs where the work or project is located in
8    Illinois.
9    The penalty shall not exceed $1,000 for each day of work
10for which the employer failed to make payments upon the
11premium rates of the situs where the work or project is located
12in Illinois, but the total penalty shall not exceed $50,000
13for each project or each contract under which the work was
14performed.
15    Any penalty under this subsection (a-1) must be imposed
16not later than one year after the expiration of the applicable
17limitation period specified in subsection (d) of Section 6 of
18this Act. Penalties imposed under this subsection (a-1) shall
19be deposited into the Illinois Workers' Compensation
20Commission Operations Fund, a special fund that is created in
21the State treasury. Subject to appropriation, moneys in the
22Fund shall be used solely for the operations of the Illinois
23Workers' Compensation Commission and by the Department of
24Insurance for the purposes authorized in subsection (c) of
25Section 25.5 of this Act.
26    (a-2) Every Employee Leasing Company (ELC), as defined in

 

 

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1Section 15 of the Employee Leasing Company Act, shall at a
2minimum provide the following information to the Commission or
3any entity designated by the Commission regarding each
4workers' compensation insurance policy issued to the ELC:
5        (1) Any client company of the ELC listed as an
6    additional named insured.
7        (2) Any informational schedule attached to the master
8    policy that identifies any individual client company's
9    name, FEIN, and job location.
10        (3) Any certificate of insurance coverage document
11    issued to a client company specifying its rights and
12    obligations under the master policy that establishes both
13    the identity and status of the client, as well as the dates
14    of inception and termination of coverage, if applicable.
15    (b) The sworn application and financial statement, or
16security, indemnity or bond, or amount of insurance, or other
17provisions, filed, furnished, carried, or made by the
18employer, as the case may be, shall be subject to the approval
19of the Commission.
20    Deposits under escrow agreements shall be cash, negotiable
21United States government bonds or negotiable general
22obligation bonds of the State of Illinois. Such cash or bonds
23shall be deposited in escrow with any State or National Bank or
24Trust Company having trust authority in the State of Illinois.
25    Upon the approval of the sworn application and financial
26statement, security, indemnity or bond or amount of insurance,

 

 

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1filed, furnished or carried, as the case may be, the
2Commission shall send to the employer written notice of its
3approval thereof. The certificate of compliance by the
4employer with the provisions of subparagraphs (2) and (3) of
5paragraph (a) of this Section shall be delivered by the
6insurance carrier to the Illinois Workers' Compensation
7Commission within five days after the effective date of the
8policy so certified. The insurance so certified shall cover
9all compensation liability occurring during the time that the
10insurance is in effect and no further certificate need be
11filed in case such insurance is renewed, extended or otherwise
12continued by such carrier. The insurance so certified shall
13not be cancelled or in the event that such insurance is not
14renewed, extended or otherwise continued, such insurance shall
15not be terminated until at least 10 days after receipt by the
16Illinois Workers' Compensation Commission of notice of the
17cancellation or termination of said insurance; provided,
18however, that if the employer has secured insurance from
19another insurance carrier, or has otherwise secured the
20payment of compensation in accordance with this Section, and
21such insurance or other security becomes effective prior to
22the expiration of the 10 days, cancellation or termination
23may, at the option of the insurance carrier indicated in such
24notice, be effective as of the effective date of such other
25insurance or security.
26    (c) Whenever the Commission shall find that any

 

 

SB1993 Engrossed- 32 -LRB102 16865 BMS 22271 b

1corporation, company, association, aggregation of individuals,
2reciprocal or interinsurers exchange, or other insurer
3effecting workers' compensation insurance in this State shall
4be insolvent, financially unsound, or unable to fully meet all
5payments and liabilities assumed or to be assumed for
6compensation insurance in this State, or shall practice a
7policy of delay or unfairness toward employees in the
8adjustment, settlement, or payment of benefits due such
9employees, the Commission may after reasonable notice and
10hearing order and direct that such corporation, company,
11association, aggregation of individuals, reciprocal or
12interinsurers exchange, or insurer, shall from and after a
13date fixed in such order discontinue the writing of any such
14workers' compensation insurance in this State. Subject to such
15modification of the order as the Commission may later make on
16review of the order, as herein provided, it shall thereupon be
17unlawful for any such corporation, company, association,
18aggregation of individuals, reciprocal or interinsurers
19exchange, or insurer to effect any workers' compensation
20insurance in this State. A copy of the order shall be served
21upon the Director of Insurance by registered mail. Whenever
22the Commission finds that any service or adjustment company
23used or employed by a self-insured employer or by an insurance
24carrier to process, adjust, investigate, compromise or
25otherwise handle claims under this Act, has practiced or is
26practicing a policy of delay or unfairness toward employees in

 

 

SB1993 Engrossed- 33 -LRB102 16865 BMS 22271 b

1the adjustment, settlement or payment of benefits due such
2employees, the Commission may after reasonable notice and
3hearing order and direct that such service or adjustment
4company shall from and after a date fixed in such order be
5prohibited from processing, adjusting, investigating,
6compromising or otherwise handling claims under this Act.
7    Whenever the Commission finds that any self-insured
8employer has practiced or is practicing delay or unfairness
9toward employees in the adjustment, settlement or payment of
10benefits due such employees, the Commission may, after
11reasonable notice and hearing, order and direct that after a
12date fixed in the order such self-insured employer shall be
13disqualified to operate as a self-insurer and shall be
14required to insure his entire liability to pay compensation in
15some insurance carrier authorized, licensed and permitted to
16do such insurance business in this State, as provided in
17subparagraph 3 of paragraph (a) of this Section.
18    All orders made by the Commission under this Section shall
19be subject to review by the courts, said review to be taken in
20the same manner and within the same time as provided by Section
2119 of this Act for review of awards and decisions of the
22Commission, upon the party seeking the review filing with the
23clerk of the court to which said review is taken a bond in an
24amount to be fixed and approved by the court to which the
25review is taken, conditioned upon the payment of all
26compensation awarded against the person taking said review

 

 

SB1993 Engrossed- 34 -LRB102 16865 BMS 22271 b

1pending a decision thereof and further conditioned upon such
2other obligations as the court may impose. Upon the review the
3Circuit Court shall have power to review all questions of fact
4as well as of law. The penalty hereinafter provided for in this
5paragraph shall not attach and shall not begin to run until the
6final determination of the order of the Commission.
7    (d) Whenever a panel of 3 Commissioners comprised of one
8member of the employing class, one representative of a labor
9organization recognized under the National Labor Relations Act
10or an attorney who has represented labor organizations or has
11represented employees in workers' compensation cases, and one
12member not identified with either the employing class or a
13labor organization, with due process and after a hearing,
14determines an employer has knowingly failed to provide
15coverage as required by paragraph (a) of this Section, the
16failure shall be deemed an immediate serious danger to public
17health, safety, and welfare sufficient to justify service by
18the Commission of a work-stop order on such employer,
19requiring the cessation of all business operations of such
20employer at the place of employment or job site. Any law
21enforcement agency in the State shall, at the request of the
22Commission, render any assistance necessary to carry out the
23provisions of this Section, including, but not limited to,
24preventing any employee of such employer from remaining at a
25place of employment or job site after a work-stop order has
26taken effect. Any work-stop order shall be lifted upon proof

 

 

SB1993 Engrossed- 35 -LRB102 16865 BMS 22271 b

1of insurance as required by this Act. Any orders under this
2Section are appealable under Section 19(f) to the Circuit
3Court.
4    Any individual employer, corporate officer or director of
5a corporate employer, partner of an employer partnership, or
6member of an employer limited liability company who knowingly
7fails to provide coverage as required by paragraph (a) of this
8Section is guilty of a Class 4 felony. This provision shall not
9apply to any corporate officer or director of any
10publicly-owned corporation. Each day's violation constitutes a
11separate offense. The State's Attorney of the county in which
12the violation occurred, or the Attorney General, shall bring
13such actions in the name of the People of the State of
14Illinois, or may, in addition to other remedies provided in
15this Section, bring an action for an injunction to restrain
16the violation or to enjoin the operation of any such employer.
17    Any individual employer, corporate officer or director of
18a corporate employer, partner of an employer partnership, or
19member of an employer limited liability company who
20negligently fails to provide coverage as required by paragraph
21(a) of this Section is guilty of a Class A misdemeanor. This
22provision shall not apply to any corporate officer or director
23of any publicly-owned corporation. Each day's violation
24constitutes a separate offense. The State's Attorney of the
25county in which the violation occurred, or the Attorney
26General, shall bring such actions in the name of the People of

 

 

SB1993 Engrossed- 36 -LRB102 16865 BMS 22271 b

1the State of Illinois.
2    The criminal penalties in this subsection (d) shall not
3apply where there exists a good faith dispute as to the
4existence of an employment relationship. Evidence of good
5faith shall include, but not be limited to, compliance with
6the definition of employee as used by the Internal Revenue
7Service.
8    Employers who are subject to and who knowingly fail to
9comply with this Section shall not be entitled to the benefits
10of this Act during the period of noncompliance, but shall be
11liable in an action under any other applicable law of this
12State. In the action, such employer shall not avail himself or
13herself of the defenses of assumption of risk or negligence or
14that the injury was due to a co-employee. In the action, proof
15of the injury shall constitute prima facie evidence of
16negligence on the part of such employer and the burden shall be
17on such employer to show freedom of negligence resulting in
18the injury. The employer shall not join any other defendant in
19any such civil action. Nothing in this amendatory Act of the
2094th General Assembly shall affect the employee's rights under
21subdivision (a)3 of Section 1 of this Act. Any employer or
22carrier who makes payments under subdivision (a)3 of Section 1
23of this Act shall have a right of reimbursement from the
24proceeds of any recovery under this Section.
25    An employee of an uninsured employer, or the employee's
26dependents in case death ensued, may, instead of proceeding

 

 

SB1993 Engrossed- 37 -LRB102 16865 BMS 22271 b

1against the employer in a civil action in court, file an
2application for adjustment of claim with the Commission in
3accordance with the provisions of this Act and the Commission
4shall hear and determine the application for adjustment of
5claim in the manner in which other claims are heard and
6determined before the Commission.
7    All proceedings under this subsection (d) shall be
8reported on an annual basis to the Workers' Compensation
9Advisory Board.
10    An investigator with the Department of Insurance Illinois
11Workers' Compensation Commission Insurance Compliance Division
12may issue a citation to any employer that is not in compliance
13with its obligation to have workers' compensation insurance
14under this Act. The amount of the fine shall be based on the
15period of time the employer was in non-compliance, but shall
16be no less than $500, and shall not exceed $2,500. An employer
17that has been issued a citation shall pay the fine to the
18Department of Insurance Commission and provide to the
19Department of Insurance Commission proof that it obtained the
20required workers' compensation insurance within 10 days after
21the citation was issued. This Section does not affect any
22other obligations this Act imposes on employers.
23    Upon a finding by the Commission, after reasonable notice
24and hearing, of the knowing and wilful failure or refusal of an
25employer to comply with any of the provisions of paragraph (a)
26of this Section, the failure or refusal of an employer,

 

 

SB1993 Engrossed- 38 -LRB102 16865 BMS 22271 b

1service or adjustment company, or an insurance carrier to
2comply with any order of the Illinois Workers' Compensation
3Commission pursuant to paragraph (c) of this Section
4disqualifying him or her to operate as a self insurer and
5requiring him or her to insure his or her liability, or the
6knowing and willful failure of an employer to comply with a
7citation issued by an investigator with the Department of
8Insurance Illinois Workers' Compensation Commission Insurance
9Compliance Division, the Commission may assess a civil penalty
10of up to $500 per day for each day of such failure or refusal
11after the effective date of this amendatory Act of 1989. The
12minimum penalty under this Section shall be the sum of
13$10,000. Each day of such failure or refusal shall constitute
14a separate offense. The Commission may assess the civil
15penalty personally and individually against the corporate
16officers and directors of a corporate employer, the partners
17of an employer partnership, and the members of an employer
18limited liability company, after a finding of a knowing and
19willful refusal or failure of each such named corporate
20officer, director, partner, or member to comply with this
21Section. The liability for the assessed penalty shall be
22against the named employer first, and if the named employer
23fails or refuses to pay the penalty to the Commission within 30
24days after the final order of the Commission, then the named
25corporate officers, directors, partners, or members who have
26been found to have knowingly and willfully refused or failed

 

 

SB1993 Engrossed- 39 -LRB102 16865 BMS 22271 b

1to comply with this Section shall be liable for the unpaid
2penalty or any unpaid portion of the penalty. Upon
3investigation by the Department of Insurance insurance
4non-compliance unit of the Commission, the Attorney General
5shall have the authority to prosecute all proceedings to
6enforce the civil and administrative provisions of this
7Section before the Commission. The Commission and the
8Department of Insurance shall promulgate procedural rules for
9enforcing this Section relating to their respective duties
10prescribed herein.
11    Upon the failure or refusal of any employer, service or
12adjustment company or insurance carrier to comply with the
13provisions of this Section and with the orders of the
14Commission under this Section, or the order of the court on
15review after final adjudication, the Commission may bring a
16civil action to recover the amount of the penalty in Cook
17County or in Sangamon County in which litigation the
18Commission shall be represented by the Attorney General. The
19Commission shall send notice of its finding of non-compliance
20and assessment of the civil penalty to the Attorney General.
21It shall be the duty of the Attorney General within 30 days
22after receipt of the notice, to institute prosecutions and
23promptly prosecute all reported violations of this Section.
24    Any individual employer, corporate officer or director of
25a corporate employer, partner of an employer partnership, or
26member of an employer limited liability company who, with the

 

 

SB1993 Engrossed- 40 -LRB102 16865 BMS 22271 b

1intent to avoid payment of compensation under this Act to an
2injured employee or the employee's dependents, knowingly
3transfers, sells, encumbers, assigns, or in any manner
4disposes of, conceals, secretes, or destroys any property
5belonging to the employer, officer, director, partner, or
6member is guilty of a Class 4 felony.
7    Penalties and fines collected pursuant to this paragraph
8(d) shall be deposited upon receipt into a special fund which
9shall be designated the Injured Workers' Benefit Fund, of
10which the State Treasurer is ex-officio custodian, such
11special fund to be held and disbursed in accordance with this
12paragraph (d) for the purposes hereinafter stated in this
13paragraph (d), upon the final order of the Commission. The
14Injured Workers' Benefit Fund shall be deposited the same as
15are State funds and any interest accruing thereon shall be
16added thereto every 6 months. The Injured Workers' Benefit
17Fund is subject to audit the same as State funds and accounts
18and is protected by the general bond given by the State
19Treasurer. The Injured Workers' Benefit Fund is considered
20always appropriated for the purposes of disbursements as
21provided in this paragraph, and shall be paid out and
22disbursed as herein provided and shall not at any time be
23appropriated or diverted to any other use or purpose. Moneys
24in the Injured Workers' Benefit Fund shall be used only for
25payment of workers' compensation benefits for injured
26employees when the employer has failed to provide coverage as

 

 

SB1993 Engrossed- 41 -LRB102 16865 BMS 22271 b

1determined under this paragraph (d) and has failed to pay the
2benefits due to the injured employee. The Commission shall
3have the right to obtain reimbursement from the employer for
4compensation obligations paid by the Injured Workers' Benefit
5Fund. Any such amounts obtained shall be deposited by the
6Commission into the Injured Workers' Benefit Fund. If an
7injured employee or his or her personal representative
8receives payment from the Injured Workers' Benefit Fund, the
9State of Illinois has the same rights under paragraph (b) of
10Section 5 that the employer who failed to pay the benefits due
11to the injured employee would have had if the employer had paid
12those benefits, and any moneys recovered by the State as a
13result of the State's exercise of its rights under paragraph
14(b) of Section 5 shall be deposited into the Injured Workers'
15Benefit Fund. The custodian of the Injured Workers' Benefit
16Fund shall be joined with the employer as a party respondent in
17the application for adjustment of claim. After July 1, 2006,
18the Commission shall make disbursements from the Fund once
19each year to each eligible claimant. An eligible claimant is
20an injured worker who has within the previous fiscal year
21obtained a final award for benefits from the Commission
22against the employer and the Injured Workers' Benefit Fund and
23has notified the Commission within 90 days of receipt of such
24award. Within a reasonable time after the end of each fiscal
25year, the Commission shall make a disbursement to each
26eligible claimant. At the time of disbursement, if there are

 

 

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1insufficient moneys in the Fund to pay all claims, each
2eligible claimant shall receive a pro-rata share, as
3determined by the Commission, of the available moneys in the
4Fund for that year. Payment from the Injured Workers' Benefit
5Fund to an eligible claimant pursuant to this provision shall
6discharge the obligations of the Injured Workers' Benefit Fund
7regarding the award entered by the Commission.
8    (e) This Act shall not affect or disturb the continuance
9of any existing insurance, mutual aid, benefit, or relief
10association or department, whether maintained in whole or in
11part by the employer or whether maintained by the employees,
12the payment of benefits of such association or department
13being guaranteed by the employer or by some person, firm or
14corporation for him or her: Provided, the employer contributes
15to such association or department an amount not less than the
16full compensation herein provided, exclusive of the cost of
17the maintenance of such association or department and without
18any expense to the employee. This Act shall not prevent the
19organization and maintaining under the insurance laws of this
20State of any benefit or insurance company for the purpose of
21insuring against the compensation provided for in this Act,
22the expense of which is maintained by the employer. This Act
23shall not prevent the organization or maintaining under the
24insurance laws of this State of any voluntary mutual aid,
25benefit or relief association among employees for the payment
26of additional accident or sick benefits.

 

 

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1    (f) No existing insurance, mutual aid, benefit or relief
2association or department shall, by reason of anything herein
3contained, be authorized to discontinue its operation without
4first discharging its obligations to any and all persons
5carrying insurance in the same or entitled to relief or
6benefits therein.
7    (g) Any contract, oral, written or implied, of employment
8providing for relief benefit, or insurance or any other device
9whereby the employee is required to pay any premium or
10premiums for insurance against the compensation provided for
11in this Act shall be null and void. Any employer withholding
12from the wages of any employee any amount for the purpose of
13paying any such premium shall be guilty of a Class B
14misdemeanor.
15    In the event the employer does not pay the compensation
16for which he or she is liable, then an insurance company,
17association or insurer which may have insured such employer
18against such liability shall become primarily liable to pay to
19the employee, his or her personal representative or
20beneficiary the compensation required by the provisions of
21this Act to be paid by such employer. The insurance carrier may
22be made a party to the proceedings in which the employer is a
23party and an award may be entered jointly against the employer
24and the insurance carrier.
25    (h) It shall be unlawful for any employer, insurance
26company or service or adjustment company to interfere with,

 

 

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1restrain or coerce an employee in any manner whatsoever in the
2exercise of the rights or remedies granted to him or her by
3this Act or to discriminate, attempt to discriminate, or
4threaten to discriminate against an employee in any way
5because of his or her exercise of the rights or remedies
6granted to him or her by this Act.
7    It shall be unlawful for any employer, individually or
8through any insurance company or service or adjustment
9company, to discharge or to threaten to discharge, or to
10refuse to rehire or recall to active service in a suitable
11capacity an employee because of the exercise of his or her
12rights or remedies granted to him or her by this Act.
13    (i) If an employer elects to obtain a life insurance
14policy on his employees, he may also elect to apply such
15benefits in satisfaction of all or a portion of the death
16benefits payable under this Act, in which case, the employer's
17compensation premium shall be reduced accordingly.
18    (j) Within 45 days of receipt of an initial application or
19application to renew self-insurance privileges the
20Self-Insurers Advisory Board shall review and submit for
21approval by the Chairman of the Commission recommendations of
22disposition of all initial applications to self-insure and all
23applications to renew self-insurance privileges filed by
24private self-insurers pursuant to the provisions of this
25Section and Section 4a-9 of this Act. Each private
26self-insurer shall submit with its initial and renewal

 

 

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1applications the application fee required by Section 4a-4 of
2this Act.
3    The Chairman of the Commission shall promptly act upon all
4initial applications and applications for renewal in full
5accordance with the recommendations of the Board or, should
6the Chairman disagree with any recommendation of disposition
7of the Self-Insurer's Advisory Board, he shall within 30 days
8of receipt of such recommendation provide to the Board in
9writing the reasons supporting his decision. The Chairman
10shall also promptly notify the employer of his decision within
1115 days of receipt of the recommendation of the Board.
12    If an employer is denied a renewal of self-insurance
13privileges pursuant to application it shall retain said
14privilege for 120 days after receipt of a notice of
15cancellation of the privilege from the Chairman of the
16Commission.
17    All orders made by the Chairman under this Section shall
18be subject to review by the courts, such review to be taken in
19the same manner and within the same time as provided by
20subsection (f) of Section 19 of this Act for review of awards
21and decisions of the Commission, upon the party seeking the
22review filing with the clerk of the court to which such review
23is taken a bond in an amount to be fixed and approved by the
24court to which the review is taken, conditioned upon the
25payment of all compensation awarded against the person taking
26such review pending a decision thereof and further conditioned

 

 

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1upon such other obligations as the court may impose. Upon the
2review the Circuit Court shall have power to review all
3questions of fact as well as of law.
4(Source: P.A. 101-384, eff. 1-1-20.)
 
5    (820 ILCS 305/25.5)
6    Sec. 25.5. Unlawful acts; penalties.
7    (a) It is unlawful for any person, company, corporation,
8insurance carrier, healthcare provider, or other entity to:
9        (1) Intentionally present or cause to be presented any
10    false or fraudulent claim for the payment of any workers'
11    compensation benefit.
12        (2) Intentionally make or cause to be made any false
13    or fraudulent material statement or material
14    representation for the purpose of obtaining or denying any
15    workers' compensation benefit.
16        (3) Intentionally make or cause to be made any false
17    or fraudulent statements with regard to entitlement to
18    workers' compensation benefits with the intent to prevent
19    an injured worker from making a legitimate claim for any
20    workers' compensation benefits.
21        (4) Intentionally prepare or provide an invalid,
22    false, or counterfeit certificate of insurance as proof of
23    workers' compensation insurance.
24        (5) Intentionally make or cause to be made any false
25    or fraudulent material statement or material

 

 

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1    representation for the purpose of obtaining workers'
2    compensation insurance at less than the proper amount rate
3    for that insurance.
4        (6) Intentionally make or cause to be made any false
5    or fraudulent material statement or material
6    representation on an initial or renewal self-insurance
7    application or accompanying financial statement for the
8    purpose of obtaining self-insurance status or reducing the
9    amount of security that may be required to be furnished
10    pursuant to Section 4 of this Act.
11        (7) Intentionally make or cause to be made any false
12    or fraudulent material statement to the Department of
13    Insurance's fraud and insurance non-compliance unit in the
14    course of an investigation of fraud or insurance
15    non-compliance.
16        (8) Intentionally assist, abet, solicit, or conspire
17    with any person, company, or other entity to commit any of
18    the acts in paragraph (1), (2), (3), (4), (5), (6), or (7)
19    of this subsection (a).
20        (9) Intentionally present a bill or statement for the
21    payment for medical services that were not provided.
22    For the purposes of paragraphs (2), (3), (5), (6), (7),
23and (9), the term "statement" includes any writing, notice,
24proof of injury, bill for services, hospital or doctor records
25and reports, or X-ray and test results.
26    (b) Sentences for violations of subsection (a) are as

 

 

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1follows:
2        (1) A violation in which the value of the property
3    obtained or attempted to be obtained is $300 or less is a
4    Class A misdemeanor.
5        (2) A violation in which the value of the property
6    obtained or attempted to be obtained is more than $300 but
7    not more than $10,000 is a Class 3 felony.
8        (3) A violation in which the value of the property
9    obtained or attempted to be obtained is more than $10,000
10    but not more than $100,000 is a Class 2 felony.
11        (4) A violation in which the value of the property
12    obtained or attempted to be obtained is more than $100,000
13    is a Class 1 felony.
14        (5) A person convicted under this Section shall be
15    ordered to pay monetary restitution to the insurance
16    company or self-insured entity or any other person for any
17    financial loss sustained as a result of a violation of
18    this Section, including any court costs and attorney fees.
19    An order of restitution also includes expenses incurred
20    and paid by the State of Illinois or an insurance company
21    or self-insured entity in connection with any medical
22    evaluation or treatment services.
23    For the purposes of this Section, where the exact value of
24property obtained or attempted to be obtained is either not
25alleged or is not specifically set by the terms of a policy of
26insurance, the value of the property shall be the fair market

 

 

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1replacement value of the property claimed to be lost, the
2reasonable costs of reimbursing a vendor or other claimant for
3services to be rendered, or both. Notwithstanding the
4foregoing, an insurance company, self-insured entity, or any
5other person suffering financial loss sustained as a result of
6violation of this Section may seek restitution, including
7court costs and attorney's fees in a civil action in a court of
8competent jurisdiction.
9    (c) The Department of Insurance shall establish a fraud
10and insurance non-compliance unit responsible for
11investigating incidences of fraud and insurance non-compliance
12pursuant to this Section. The size of the staff of the unit
13shall be subject to appropriation by the General Assembly. It
14shall be the duty of the fraud and insurance non-compliance
15unit to determine the identity of insurance carriers,
16employers, employees, or other persons or entities who have
17violated the fraud and insurance non-compliance provisions of
18this Section. The fraud and insurance non-compliance unit
19shall report violations of the fraud and insurance
20non-compliance provisions of this Section to the Special
21Prosecutions Bureau of the Criminal Division of the Office of
22the Attorney General or to the State's Attorney of the county
23in which the offense allegedly occurred, either of whom has
24the authority to prosecute violations under this Section.
25    With respect to the subject of any investigation being
26conducted, the fraud and insurance non-compliance unit shall

 

 

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1have the general power of subpoena of the Department of
2Insurance, including the authority to issue a subpoena to a
3medical provider, pursuant to Section 8-802 of the Code of
4Civil Procedure.
5    (d) Any person may report allegations of insurance
6non-compliance and fraud pursuant to this Section to the
7Department of Insurance's fraud and insurance non-compliance
8unit whose duty it shall be to investigate the report. The unit
9shall notify the Commission of reports of insurance
10non-compliance. Any person reporting an allegation of
11insurance non-compliance or fraud against either an employee
12or employer under this Section must identify himself. Except
13as provided in this subsection and in subsection (e), all
14reports shall remain confidential except to refer an
15investigation to the Attorney General or State's Attorney for
16prosecution or if the fraud and insurance non-compliance
17unit's investigation reveals that the conduct reported may be
18in violation of other laws or regulations of the State of
19Illinois, the unit may report such conduct to the appropriate
20governmental agency charged with administering such laws and
21regulations. Any person who intentionally makes a false report
22under this Section to the fraud and insurance non-compliance
23unit is guilty of a Class A misdemeanor.
24    (e) In order for the fraud and insurance non-compliance
25unit to investigate a report of fraud related to an employee's
26claim, (i) the employee must have filed with the Commission an

 

 

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1Application for Adjustment of Claim and the employee must have
2either received or attempted to receive benefits under this
3Act that are related to the reported fraud or (ii) the employee
4must have made a written demand for the payment of benefits
5that are related to the reported fraud. There shall be no
6immunity, under this Act or otherwise, for any person who
7files a false report or who files a report without good and
8just cause. Confidentiality of medical information shall be
9strictly maintained. Investigations that are not referred for
10prosecution shall be destroyed upon the expiration of the
11statute of limitations for the acts under investigation and
12shall not be disclosed except that the person making the
13report shall be notified that the investigation is being
14closed. It is unlawful for any employer, insurance carrier,
15service adjustment company, third party administrator,
16self-insured, or similar entity to file or threaten to file a
17report of fraud against an employee because of the exercise by
18the employee of the rights and remedies granted to the
19employee by this Act.
20    (e-5) (Blank). The fraud and insurance non-compliance unit
21shall procure and implement a system utilizing advanced
22analytics inclusive of predictive modeling, data mining,
23social network analysis, and scoring algorithms for the
24detection and prevention of fraud, waste, and abuse on or
25before January 1, 2012. The fraud and insurance non-compliance
26unit shall procure this system using a request for proposals

 

 

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1process governed by the Illinois Procurement Code and rules
2adopted under that Code. The fraud and insurance
3non-compliance unit shall provide a report to the President of
4the Senate, Speaker of the House of Representatives, Minority
5Leader of the House of Representatives, Minority Leader of the
6Senate, Governor, Chairman of the Commission, and Director of
7Insurance on or before July 1, 2012 and annually thereafter
8detailing its activities and providing recommendations
9regarding opportunities for additional fraud waste and abuse
10detection and prevention.
11    (f) Any person convicted of fraud related to workers'
12compensation pursuant to this Section shall be subject to the
13penalties prescribed in the Criminal Code of 2012 and shall be
14ineligible to receive or retain any compensation, disability,
15or medical benefits as defined in this Act if the
16compensation, disability, or medical benefits were owed or
17received as a result of fraud for which the recipient of the
18compensation, disability, or medical benefit was convicted.
19This subsection applies to accidental injuries or diseases
20that occur on or after the effective date of this amendatory
21Act of the 94th General Assembly.
22    (g) Civil liability. Any person convicted of fraud who
23knowingly obtains, attempts to obtain, or causes to be
24obtained any benefits under this Act by the making of a false
25claim or who knowingly misrepresents any material fact shall
26be civilly liable to the payor of benefits or the insurer or

 

 

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1the payor's or insurer's subrogee or assignee in an amount
2equal to 3 times the value of the benefits or insurance
3coverage wrongfully obtained or twice the value of the
4benefits or insurance coverage attempted to be obtained, plus
5reasonable attorney's fees and expenses incurred by the payor
6or the payor's subrogee or assignee who successfully brings a
7claim under this subsection. This subsection applies to
8accidental injuries or diseases that occur on or after the
9effective date of this amendatory Act of the 94th General
10Assembly.
11    (h) The fraud and insurance non-compliance unit shall
12submit a written report on an annual basis to the Chairman of
13the Commission, the Workers' Compensation Advisory Board, the
14General Assembly, the Governor, and the Attorney General by
15January 1 and July 1 of each year. This report shall include,
16at the minimum, the following information:
17        (1) The number of allegations of insurance
18    non-compliance and fraud reported to the fraud and
19    insurance non-compliance unit.
20        (2) The source of the reported allegations
21    (individual, employer, or other).
22        (3) The number of allegations investigated by the
23    fraud and insurance non-compliance unit.
24        (4) The number of criminal referrals made in
25    accordance with this Section and the entity to which the
26    referral was made.

 

 

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1        (5) All proceedings under this Section.
2        (6) Recommendations regarding opportunities for
3    additional fraud detection.
4(Source: P.A. 97-18, eff. 6-28-11; 97-1150, eff. 1-25-13.)
 
5    (820 ILCS 305/29.2)
6    Sec. 29.2. Insurance oversight.
7    (a) The Department of Insurance shall annually submit to
8the Governor, the Chairman of the Commission, the President of
9the Senate, the Speaker of the House of Representatives, the
10Minority Leader of the Senate, and the Minority Leader of the
11House of Representatives a written report that details the
12state of the workers' compensation insurance market in
13Illinois. The report shall be completed by April 1 of each
14year, beginning in 2012, or later if necessary data or
15analyses are only available to the Department at a later date.
16The report shall be posted on the Department of Insurance's
17Internet website. Information to be included in the report
18shall be for the preceding calendar year. The report shall
19include, at a minimum, the following:
20        (1) Gross premiums collected by workers' compensation
21    carriers in Illinois and the national rank of Illinois
22    based on premium volume.
23        (2) The number of insurance companies actively engaged
24    in Illinois in the workers' compensation insurance market,
25    including both holding companies and subsidiaries or

 

 

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1    affiliates, and the national rank of Illinois based on
2    number of competing insurers.
3        (3) The total number of insured participants in the
4    Illinois workers' compensation assigned risk insurance
5    pool, and the size of the assigned risk pool as a
6    proportion of the total Illinois workers' compensation
7    insurance market.
8        (4) The advisory organization premium rate for
9    workers' compensation insurance in Illinois for the
10    previous year.
11        (5) The advisory organization prescribed assigned risk
12    pool premium rate.
13        (6) The total amount of indemnity payments made by
14    workers' compensation insurers in Illinois.
15        (7) The total amount of medical payments made by
16    workers' compensation insurers in Illinois, and the
17    national rank of Illinois based on average cost of medical
18    claims per injured worker.
19        (8) The gross profitability of workers' compensation
20    insurers in Illinois, and the national rank of Illinois
21    based on profitability of workers' compensation insurers.
22        (9) The loss ratio of workers' compensation insurers
23    in Illinois and the national rank of Illinois based on the
24    loss ratio of workers' compensation insurers. For purposes
25    of this loss ratio calculation, the denominator shall
26    include all premiums and other fees collected by workers'

 

 

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1    compensation insurers and the numerator shall include the
2    total amount paid by the insurer for care or compensation
3    to injured workers.
4        (10) The growth of total paid indemnity benefits by
5    temporary total disability, scheduled and non-scheduled
6    permanent partial disability, and total disability.
7        (11) The number of injured workers receiving wage loss
8    differential awards and the average wage loss differential
9    award payout.
10        (12) Illinois' rank, relative to other states, for:
11            (i) the maximum and minimum temporary total
12        disability benefit level;
13            (ii) the maximum and minimum scheduled and
14        non-scheduled permanent partial disability benefit
15        level;
16            (iii) the maximum and minimum total disability
17        benefit level; and
18            (iv) the maximum and minimum death benefit level.
19        (13) The aggregate growth of medical benefit payout by
20    non-hospital providers and hospitals.
21        (14) The aggregate growth of medical utilization for
22    the top 10 most common injuries to specific body parts by
23    non-hospital providers and hospitals.
24        (15) The percentage of injured workers filing claims
25    at the Commission that are represented by an attorney.
26        (16) The total amount paid by injured workers for

 

 

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1    attorney representation.
2    (b) The Director of Insurance shall promulgate rules
3requiring each insurer licensed to write workers' compensation
4coverage in the State to record and report the following
5information on an aggregate basis to the Department of
6Insurance before June 1 March 1 of each year, relating to
7claims in the State opened within the prior calendar year:
8        (1) The number of claims opened.
9        (2) The number of reported medical only claims.
10        (3) The number of contested claims.
11        (4) The number of claims for which the employee has
12    attorney representation.
13        (5) The number of claims with lost time and the number
14    of claims for which temporary total disability was paid.
15        (6) The number of claim adjusters employed to adjust
16    workers' compensation claims.
17        (7) The number of claims for which temporary total
18    disability was not paid within 14 days from the first full
19    day off, regardless of reason.
20        (8) The number of medical bills paid 60 days or later
21    from date of service and the average days paid on those
22    paid after 60 days for the previous calendar year.
23        (9) The number of claims in which in-house defense
24    counsel participated, and the total amount spent on
25    in-house legal services.
26        (10) The number of claims in which outside defense

 

 

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1    counsel participated, and the total amount paid to outside
2    defense counsel.
3        (11) The total amount billed to employers for bill
4    review.
5        (12) The total amount billed to employers for fee
6    schedule savings.
7        (13) The total amount charged to employers for any and
8    all managed care fees.
9        (14) The number of claims involving in-house medical
10    nurse case management, and the total amount spent on
11    in-house medical nurse case management.
12        (15) The number of claims involving outside medical
13    nurse case management, and the total amount paid for
14    outside medical nurse case management.
15        (16) The total amount paid for Independent Medical
16    exams.
17        (17) The total amount spent on in-house Utilization
18    Review for the previous calendar year.
19        (18) The total amount paid for outside Utilization
20    Review for the previous calendar year.
21    The Department shall make the submitted information
22publicly available on the Department's Internet website or
23such other media as appropriate in a form useful for
24consumers.
25(Source: P.A. 97-18, eff. 6-28-11.)
 
26    Section 99. Effective date. This Act takes effect July 1,

 

 

SB1993 Engrossed- 59 -LRB102 16865 BMS 22271 b

12021.