HB6892 93RD GENERAL ASSEMBLY

LRB093 20628 SAS 46463 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6892

Introduced 02/09/04, by Terry R. Parke

SYNOPSIS AS INTRODUCED:

215 ILCS 5/416
820 ILCS 305/4d

Amends the Illinois Insurance Code. Provides that the Industrial Commission Operations Fund Surcharge shall not be imposed on and after July 1, 2004, and that this does not affect the powers and duties of the Director of Insurance with regard to any payments due before July 1, 2004 and any deliquencies, penalties, and overpayments with respect to those payments. Amends the Worker's Compensation Act. Provides that the Industrial Commission Operations Fund Fee shall not be imposed on and after July 1, 2004, and that this does not affect the powers and duties of the Chairman of the Commission with regard to any payments due before July 1, 2004 and any deliquencies, penalties, and overpayments with respect to those payments. Effective July 1, 2004.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning the Industrial Commission Operations Fund.

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

Section 5. The Illinois Insurance Code is amended by changing Section 416 as follows:

(215 ILCS 5/416)

Sec. 416. Industrial Commission Operations Fund Surcharge.

(a) As of the effective date of this amendatory Act of the 93rd General Assembly, every company licensed or authorized by the Illinois Department of Insurance and insuring employers' liabilities arising under the Workers' Compensation Act or the Workers' Occupational Diseases Act shall remit to the Director a surcharge based upon the annual direct written premium, as reported under Section 136 of this Act, of the company in the manner provided in this Section. Such proceeds shall be deposited into the Industrial Commission Operations Fund as established in the Workers' Compensation Act. If a company survives or was formed by a merger, consolidation, reorganization, or reincorporation, the direct written premiums of all companies party to the merger, consolidation, reorganization, or reincorporation shall, for purposes of determining the amount of the fee imposed by this Section, be regarded as those of the surviving or new company.

(b)(1) (Blank). Except as provided in subsection (b)(2) of this Section, beginning on July 1, 2004 and each year thereafter, the Director shall charge an annual Industrial Commission Operations Fund Surcharge from every company subject to subsection (a) of this Section equal to 1.5% of its direct written premium for insuring employers' liabilities arising under the Workers' Compensation Act or Workers' Occupational Diseases Act as reported in each company's annual statement filed for the previous year as required by Section 136. The Industrial Commission Operations Fund Surcharge shall be collected by companies subject to subsection (a) of this Section as a separately stated surcharge on insured employers at the rate of 1.5% of direct written premium. All sums collected by the Department of Insurance under the provisions of this Section shall be paid promptly after the receipt of the same, accompanied by a detailed statement thereof, into the Industrial Commission Operations Fund in the State treasury.

(b)(2) Prior to July 1, 2004, the Director shall charge and collect the surcharge set forth in subparagraph (b)(1) of this Section on or before September 1, 2003, December 1, 2003, March 1, 2004 and June 1, 2004. For purposes of this subsection (b)(2), the company shall remit the amounts to the Director based on estimated direct premium for each quarter beginning on July 1, 2003, together with a sworn statement attesting to the reasonableness of the estimate, and the estimated amount of direct premium written forming the bases of the remittance.

(c) In addition to the authority specifically granted under Article XXV of this Code, the Director shall have such authority to adopt rules or establish forms as may be reasonably necessary for purposes of enforcing this Section. The Director shall also have authority to defer, waive, or abate the surcharge or any penalties imposed by this Section if in the Director's opinion the company's solvency and ability to meet its insured obligations would be immediately threatened by payment of the surcharge due.

(d) When a company fails to pay the full amount of any annual Industrial Commission Operations Fund Surcharge of $100 or more due under this Section, there shall be added to the amount due as a penalty the greater of $1,000 or an amount equal to 5% of the deficiency for each month or part of a month that the deficiency remains unpaid.

(e) The Department of Insurance may enforce the collection of any delinquent payment, penalty, or portion thereof by legal action or in any other manner by which the collection of debts due the State of Illinois may be enforced under the laws of this State.

(f) Whenever it appears to the satisfaction of the Director that a company has paid pursuant to this Act an Industrial Commission Operations Fund Surcharge in an amount in excess of the amount legally collectable from the company, the Director shall issue a credit memorandum for an amount equal to the amount of such overpayment. A credit memorandum may be applied for the 2-year period from the date of issuance, against the payment of any amount due during that period under the surcharge imposed by this Section or, subject to reasonable rule of the Department of Insurance including requirement of notification, may be assigned to any other company subject to regulation under this Act. Any application of credit memoranda after the period provided for in this Section is void.

(g) Annually, the Governor may direct a transfer of up to 2% of all moneys collected under this Section to the Insurance Financial Regulation Fund.

(h) Notwithstanding any other provision of this Section, the Industrial Commission Operations Fund Surcharge shall not be imposed on and after July 1, 2004. This subsection (h) does not affect the powers and duties of the Director under this Section with regard to payments due under subsection (b)(2) and any deliquencies, penalties, and overpayments with respect to payments due under subsection (b)(2).

(Source: P.A. 93-32, eff. 6-20-03.)

Section 10. The Workers' Compensation Act is amended by changing Section 4d as follows:

(820 ILCS 305/4d)

Sec. 4d. Industrial Commission Operations Fund Fee.

(a) As of the effective date of this amendatory Act of the 93rd General Assembly, each employer that self-insures its liabilities arising under this Act or Workers' Occupational Diseases Act shall pay a fee measured by the annual actual wages paid in this State of such an employer in the manner provided in this Section. Such proceeds shall be deposited in the Industrial Commission Operations Fund. If an employer survives or was formed by a merger, consolidation, reorganization, or reincorporation, the actual wages paid in this State of all employers party to the merger, consolidation, reorganization, or reincorporation shall, for purposes of determining the amount of the fee imposed by this Section, be regarded as those of the surviving or new employer.

(b) (Blank). Beginning on the effective date of this amendatory Act of the 93rd General Assembly and on July 1 of each year thereafter, the Chairman shall charge and collect an annual Industrial Commission Operations Fund Fee from every employer subject to subsection (a) of this Section equal to 0.045% of its annual actual wages paid in this State as reported in each employer's annual self-insurance renewal filed for the previous year as required by Section 4 of this Act and Section 4 of the Workers' Occupational Diseases Act. All sums collected by the Commission under the provisions of this Section shall be paid promptly after the receipt of the same, accompanied by a detailed statement thereof, into the Industrial Commission Operations Fund.

(c) In addition to the authority specifically granted under Section 16, the Chairman shall have such authority to adopt rules or establish forms as may be reasonably necessary for purposes of enforcing this Section. The Commission shall have authority to defer, waive, or abate the fee or any penalties imposed by this Section if in the Commission's opinion the employer's solvency and ability to meet its obligations to pay workers' compensation benefits would be immediately threatened by payment of the fee due.

(d) When an employer fails to pay the full amount of any annual Industrial Commission Operations Fund Fee of $100 or more due under this Section, there shall be added to the amount due as a penalty the greater of $1,000 or an amount equal to 5% of the deficiency for each month or part of a month that the deficiency remains unpaid.

(e) The Commission may enforce the collection of any delinquent payment, penalty or portion thereof by legal action or in any other manner by which the collection of debts due the State of Illinois may be enforced under the laws of this State.

(f) Whenever it appears to the satisfaction of the Chairman that an employer has paid pursuant to this Act an Industrial Commission Operations Fund Fee in an amount in excess of the amount legally collectable from the employer, the Chairman shall issue a credit memorandum for an amount equal to the amount of such overpayment. A credit memorandum may be applied for the 2-year period from the date of issuance against the payment of any amount due during that period under the fee imposed by this Section or, subject to reasonable rule of the Commission including requirement of notification, may be assigned to any other employer subject to regulation under this Act. Any application of credit memoranda after the period provided for in this Section is void.

(g) Notwithstanding any other provision of this Section, the Industrial Commission Operations Fund Fee shall not be imposed on and after July 1, 2004. This subsection (g) does not affect the powers and duties of the Chairman under this Section with regard to payments that were due under subsection (b) through June 30, 2004 and any deliquencies, penalties, and overpayments with respect to those payments.

(Source: P.A. 93-32, eff. 6-20-03.)

Section 99. Effective date. This Act takes effect July 1, 2004.