(820 ILCS 305/4a-6)
(from Ch. 48, par. 138.4a-6)
(a) Whenever a private self-insurer shall become an insolvent
self-insurer and the surety, the guarantor, the excess insurance company
and the holder of the securities, indemnities or bond provided by the
insolvent self-insurer to secure its payment of compensation under this
Act or the Workers' Occupational Diseases Act, are unwilling or unable to
administer and defend the claims against the insolvent self-insurer, the
Board is empowered to and shall assume on behalf of the Commission the
outstanding workers' compensation and occupational disease obligations
of the insolvent self-insured and shall take all steps necessary to
collect, recover and enforce all securities, indemnity, insurance or bonds
furnished by such self-insurer guaranteeing the payment of compensation
provided in such Acts for the purpose of paying outstanding obligations of
the insolvent self-insurer. Upon the direction of the Board, the
Commission shall convert and deposit into the
Fund such securities and any amounts received under agreements of surety,
guaranty, insurance or otherwise. Any amounts remaining from such
securities, indemnity, insurance, bonds, guaranties and sureties, following
payment of all compensation costs and related administrative fees of the
Board including attorneys' fees, and following exhaustion of all amounts
assessed and received pursuant to Section 4a-7, shall be refunded by
the Commission from the Fund as directed by the Board to the original
holder one year thereafter, provided no outstanding liabilities remain
against the Fund.
(i) Any private self-insurer who may become an insolvent self-insurer
subject to any of the proceedings set forth in this subsection (a) shall file
written notice of such fact with the Commission and the Board within 30
days of the occurrence of such event. Upon receipt of notice by the
Commission and the Board from the insolvent
self-insurer, or upon receipt of a notice from any person who has filed an
application for adjustment of a claim against a private self-insurer which
raises a reasonable question with respect to that employer's ability to pay
compensation under this Act or the Workers' Occupational Diseases Act, the
Board on behalf of the Commission shall determine the ability of that
private self-insurer to pay compensation under such Acts.
(ii) The bond holder or excess insurance carrier, or both, shall
provide written notification to the Commission
within the 30-day period set forth in paragraph (i) that it is able and
willing to administer the claims pending against the insolvent
self-insurer. Should said notice not be given, the bond
holder shall immediately deliver all such securities, guaranties, excess
insurance, indemnity or bonds it holds to the Board; otherwise the Board
shall take all action necessary on behalf of the Commission pursuant to
this Section to collect or recover all such securities, guaranties, excess
insurance, indemnities, or bonds.
(b) The Board shall be a party in interest in all proceedings involving
compensation claims against an insolvent self-insurer whose compensation
obligations have been paid or assumed by the Board and shall have all
rights of subrogation of the insolvent employer. In such proceedings the
Board shall assume and may exercise all rights and defenses of the
insolvent self-insurer, including but not limited to,
(1) The right to appear, defend and appeal claims.
(2) The right to receive notice of, investigate, adjust, compromise,
settle and pay claims.
(3) The right to investigate, handle and contest claims.
(4) The right to institute an action or to appear in any proceeding to
enforce the employer's rights under Section 5 of the Workers' Compensation
Act or Section 5 of the Workers' Occupational Diseases Act.
(c) In any proceeding in bankruptcy, the Commission at the direction of
the Board shall appear and move to lift the automatic stay and shall stand
in the place of the employees in the bankruptcy proceedings.
(d) The Commission shall notify all employees
of the name, address and telephone number of the party
administering and defending their claims.
(Source: P.A. 85-1385.)