SB0210 95TH GENERAL ASSEMBLY

LRB095 04190 JAM 24605 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB0210

Introduced 2/7/2007, by Sen. Gary G. Dahl

SYNOPSIS AS INTRODUCED:

5 ILCS 220/6	from Ch. 127, par. 746
5 ILCS 220/6.5 new

Amends the Intergovernmental Cooperation Act. Provides that joint insurance pools and other intergovernmental cooperatives offering insurance are subject to the Illinois Insurance Code's regulation of improper claims practices and attorney fees. If the Director of Insurance finds that a pool or cooperative has engaged in an improper claims practice, authorizes the Director to issue charges against the pool or cooperative, conduct a hearing on the charges, suspend the pool's or cooperative's authority to self-insure for up to 6 months, and impose a civil penalty of up to $250,000.

FISCAL NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning government.

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

Section 5. The Intergovernmental Cooperation Act is amended by changing Section 6 and by adding Section 6.5 as follows:

(5 ILCS 220/6) (from Ch. 127, par. 746)

Sec. 6. Joint self-insurance. An intergovernmental contract may, among other undertakings, authorize public agencies to jointly self-insure and authorize each public agency member of the contract to utilize its funds to pay to a joint insurance pool its costs and reserves to protect, wholly or partially, itself or any public agency member of the contract against liability or loss in the designated insurable area. A joint insurance pool shall have an annual audit performed by an independent certified public accountant and shall file an annual audited financial report with the Director of Insurance no later than 150 days after the end of the pool's immediately preceding fiscal year. The Director of Insurance shall issue rules necessary to implement this audit and report requirement. The rule shall establish the due date for filing the initial annual audited financial report. Within 30 days after January 1, 1991, and within 30 days after each January 1 thereafter, public agencies that are jointly self-insured to protect against liability under the Workers' Compensation Act and the Workers' Occupational Diseases Act shall file with the Illinois Workers' Compensation Commission a report indicating an election to self-insure.

For purposes of this Section, "public agency member" means any public agency defined or created under this Act, any local public entity as defined in Section 1-206 of the Local Governmental and Governmental Employees Tort Immunity Act, and any public agency, authority, instrumentality, council, board, service region, district, unit, bureau, or, commission, or any municipal corporation, college, or university, whether corporate or otherwise, and any other local governmental body or similar entity that is presently existing or created after the effective date of this amendatory Act of the 92nd General Assembly, whether or not specified in this Section. Only public agency members with tax receipts, tax revenues, taxing authority, or other resources sufficient to pay costs and to service debt related to intergovernmental activities described in this Section, or public agency members created by or as part of a public agency with these powers, may enter into contracts or otherwise associate among themselves as permitted in this Section.

No joint insurance pool or other intergovernmental cooperative offering health insurance shall interfere with the statutory obligation of any public agency member to bargain over or to reach agreement with a labor organization over a mandatory subject of collective bargaining as those terms are used in the Illinois Public Labor Relations Act. No intergovernmental contract of insurance offering health insurance shall limit the rights or obligations of public agency members to engage in collective bargaining, and it shall be unlawful for a joint insurance pool or other intergovernmental cooperative offering health insurance to discriminate against public agency members or otherwise retaliate against such members for limiting their participation in a joint insurance pool as a result of a collective bargaining agreement.

It shall not be considered a violation of this Section for an intergovernmental contract of insurance relating to health insurance coverage, life insurance coverage, or both to permit the pool or cooperative, if a member withdraws employees or officers into a union-sponsored program, to re-price the costs of benefits provided to the continuing employees or officers based upon the same underwriting criteria used by that pool or cooperative in the normal course of its business, but no member shall be expelled from a pool or cooperative if the continuing employees or officers meet the general criteria required of other members.

All actions by the joint insurance pool or other intergovernmental cooperative offering any insurance as authorized by this Section (and associated third-party administrators) are subject to Sections 154.5, 154.6, and 155 of the Illinois Insurance Code (215 ILCS 5/154.5, 5/154.6, and 5/155) as if the pool or cooperative were an assessable domestic mutual insurance company.

(Source: P.A. 93-721, eff. 1-1-05; 94-685, eff. 11-2-05.)

(5 ILCS 220/6.5 new)

Sec. 6.5. Statement of charges with respect to joint insurance pool or other intergovernmental cooperative offering insurance.

(a) Whenever the Director of Insurance finds that any joint insurance pool or other intergovernmental cooperative is engaging in any improper claims practice as defined in Section 154.5 of the Illinois Insurance Code, and that a proceeding in respect to that practice would be in the public interest, he or she shall issue and serve upon that pool or cooperative a statement of the charges in that respect and a notice of hearing. The notice shall set a hearing date not less than 10 days after the date of the notice.

(b) The failure of a pool or cooperative to appear at a hearing after receipt of a statement of the charges and notice of hearing (i) is considered a waiver of notice and hearing, (ii) is considered a stipulation that the charges against the pool or cooperative are true, and (iii) immediately suspends that pool's or cooperative's authority conferred by Section 6 for 30 days. The Director of Insurance must notify the pool or cooperative of any suspension or action taken under this Section.

(c) If after a hearing pursuant to this Section the Director finds that the pool or cooperative has engaged in an improper claims practice, he or she shall order the pool or cooperative to cease and desist from that practice and, in the exercise of reasonable discretion, may suspend the pool's or cooperative's authority to self-insure conferred by Section 6 for a period not to exceed 6 months or impose a civil penalty of up to $250,000, or both. Pursuant to Section 401 of the Illinois Insurance Code, the Director shall promulgate rules establishing standards for the implementation of this Section.

(d) Any order of the Director of Insurance pursuant to this Section is subject to judicial review under Section 407 of the Illinois Insurance Code.