HB6565 93RD GENERAL ASSEMBLY

LRB093 16941 WGH 47028 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6565

Introduced 2/6/2004, by Terry R. Parke

SYNOPSIS AS INTRODUCED:

720 ILCS 5/46-1
720 ILCS 5/46-1.1
820 ILCS 305/4e new

Amends the Criminal Code of 1961. Provides that insurance fraud or fraud on a governmental entity is a Class A misdemeanor if the value of the property obtained or attempted to be obtained is $100 (rather than $300) or less and a Class 3 felony if the value of the property obtained or attempted to be obtained is more than $100 (rather than $300) but not more than $10,000. Amends the Workers' Compensation Act. Provides that a workers' compensation insurer or self-insured employer may provide a notice to an injured worker, on or with a check for temporary disability benefits, warning the worker that acceptance of employment with a different employer that requires the performance of activities the employee has stated that he or she cannot perform because of the injury for which he or she is receiving temporary disability benefits could constitute fraud and could result in specified criminal penalties and liability for damages, and that others found to have assisted the employee in the perpetration of fraud could also be subject to criminal prosecution and civil liability. Effective immediately.

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning fraud.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Criminal Code of 1961 is amended by changing Sections 46-1 and 46-1.1 as follows:

(720 ILCS 5/46-1)

Sec. 46-1. Insurance fraud.

(a) A person commits the offense of insurance fraud when he or she knowingly obtains, attempts to obtain, or causes to be obtained, by deception, control over the property of an insurance company or self-insured entity by the making of a false claim or by causing a false claim to be made on any policy of insurance issued by an insurance company or by the making of a false claim to a self-insured entity, intending to deprive an insurance company or self-insured entity permanently of the use and benefit of that property.

(b) Sentence.

(1) A violation of this Section in which the value of the property obtained or attempted to be obtained is $100 $300 or less is a Class A misdemeanor.

(2) A violation of the Section in which the value of the property obtained or attempted to be obtained is more than $100 $300 but not more than $10,000 is a Class 3 felony.

(3) A violation of this Section in which the value of the property obtained or attempted to be obtained is more than $10,000 but not more than $100,000 is a Class 2 felony.

(4) A violation of this Section in which the value of the property obtained or attempted to be obtained is more than $100,000 is a Class 1 felony.

(c) For the purposes of this Article, where the exact value of property obtained or attempted to be obtained is either not alleged by the accused or not specifically set by the terms of a policy of insurance, the value of the property shall be the fair market replacement value of the property claimed to be lost, the reasonable costs of reimbursing a vendor or other claimant for services to be rendered, or both.

(d) Definitions. For the purposes of this Article:

(1) "Insurance company" means "company" as defined under Section 2 of the Illinois Insurance Code.

(2) "Self-insured entity" means any person, business, partnership, corporation, or organization that sets aside funds to meet his, her, or its losses or to absorb fluctuations in the amount of loss, the losses being charged against the funds set aside or accumulated.

(3) "Obtain", "obtains control", "deception", "property" and "permanent deprivation" have the meanings ascribed to those terms in Article 15 of this Code.

(4) "Governmental entity" means each officer, board, commission, and agency created by the constitution, whether in the executive, legislative, or judicial branch of State government; each officer, department, board, commission, agency, institution, authority, university, and body politic and corporate of the State; each administrative unit or corporate outgrowth of State government that is created by or pursuant to statute, including units of local government and their officers, school districts, and boards of election commissioners; and each administrative unit or corporate outgrowth of the above and as may be created by executive order of the Governor.

(5) "False claim" means any statement made to any insurer, purported insurer, servicing corporation, insurance broker, or insurance agent, or any agent or employee of the entities, and made as part of, or in support of, a claim for payment or other benefit under a policy of insurance, or as part of, or in support of, an application for the issuance of, or the rating of, any insurance policy, when the statement contains any false, incomplete, or misleading information concerning any fact or thing material to the claim, or conceals the occurrence of an event that is material to any person's initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled.

(6) "Statement" means any assertion, oral, written, or otherwise, and includes, but is not limited to, any notice, letter, or memorandum; proof of loss; bill of lading; receipt for payment; invoice, account, or other financial statement; estimate of property damage; bill for services; diagnosis or prognosis; prescription; hospital, medical or dental chart or other record, x-ray, photograph, videotape, or movie film; test result; other evidence of loss, injury, or expense; computer-generated document; and data in any form.

(Source: P.A. 90-333, eff. 1-1-98; 91-232, eff. 1-1-00.)

(720 ILCS 5/46-1.1)

Sec. 46-1.1. Fraud on a governmental entity.

(a) A person commits the offense of fraud on a governmental entity when he or she knowingly obtains, attempts to obtain, or causes to be obtained, by deception, control over the property of any governmental entity by the making of a false claim of bodily injury or of damage to or loss or theft of property or by causing a false claim of bodily injury or of damage to or loss or theft of property to be made against the governmental entity, intending to deprive the governmental entity permanently of the use and benefit of that property.

(b) Sentence.

(1) A violation of this Section in which the value of the property obtained or attempted to be obtained is $100 $300 or less is a Class A misdemeanor.

(2) A violation of this Section in which the value of the property obtained or attempted to be obtained is more than $100 $300 but not more than $10,000 is a Class 3 felony.

(3) A violation of this Section in which the value of the property obtained or attempted to be obtained is more than $10,000 but not more than $100,000 is a Class 2 felony.

(4) A violation of this Section in which the value of the property obtained or attempted to be obtained is more than $100,000 is a Class 1 felony.

(Source: P.A. 90-333, eff. 1-1-98; 91-232, eff. 1-1-00.)

Section 10. The Workers' Compensation Act is amended by adding Section 4e as follows:

(820 ILCS 305/4e new)

Sec. 4e. Workers' Compensation Fraud Warning Notice.

(a) Legislative Declarations. The General Assembly finds and declares that:

(1) workers' compensation fraud is the largest source of fraud within the property/casualty industry, accounting for more than one-third of all property/casualty insurance fraud; and

(2) the cost of workers' compensation insurance fraud is passed on to employers in the form of higher premium costs; and

(3) insurers and self-insured employers should have the right to notify workers' compensation claimants that certain actions following the acceptance of benefits may constitute fraud.

(b) Warning Notice. An insurer or self-insured employer may provide the following notice to an injured worker on or with a check for temporary disability benefits:

Warning: Acceptance of employment with a different employer that requires the performance of activities you have stated that you cannot perform because of the injury for which you are receiving temporary disability benefits could constitute fraud and could result in criminal prosecution and liability for damages. If convicted, you could be subject to liability, lose your rights to workers' compensation benefits, and face imprisonment up to one year and a fine of up to $2,500 or double the amount of the fraud, whichever is greater. Others found to have assisted you in the perpetration of fraud could also be subject to criminal prosecution and civil liability.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect upon becoming law.