(215 ILCS 5/107a.04)
Sec. 107a.04. Organization under the Illinois Insurance Code.
(a) After December 31, 2000, group workers' compensation pools shall for the purpose of this Article, and this Article only, be considered as though they were assessable domestic mutual insurance companies and subject to the following:
(1) Article XII 1/2, Article XIII, Article XIII 1/2, |
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(2) Sections 126.2, 126.4, 126.7, 132, 132.1 through |
| 132.7, 133, 134, 137, 139, 140, 141.1, 141.2, 142, 143, 143c, 147, 148, 149, 154.5, 154.6, 154.7, 154.8, 155.01, 155.04, 173.1, 173.2, 173.3, 173.4, 173.5, 174, 174.1, 175, 176, 178, 179b, 378, 379.1, 408, 408.3, 449, 456, 457, and 458, subsections A, B, C, and E of Section 126.5, subsection A of Section 126.6, and subsections (1) and (7) of Section 412 of this Code. | |
(b) If there is a conflict between any Section of this Article and any other Section of this Code, then the provisions of this Article shall apply.
(c) No other provision of this Code shall be applicable to any qualified workers' compensation group workers' compensation pool except as provided in this Article.
(d) A certificate of authority that is in effect on the effective date of this amendatory Act of the 91st General Assembly and that was issued pursuant to Section 4a of the Workers' Compensation Act or Section 4a of the Workers' Occupational Diseases Act to a group self‑insurer shall remain in effect under this Article. Such group self‑insurer shall then be deemed to be a qualified group workers' compensation pool and shall be subject to this Article.
(Source: P.A. 91‑757, eff. 1‑1‑01.) |
(215 ILCS 5/107a.06)
Sec. 107a.06. Pool administration.
(a) An application for Certificate of Authority to establish a pool must include the documentation and information regarding its administrator, pooling agreement, plan of operation, and membership required by this Section.
(b) Administrators must disclose all of the following:
(1) Biography of the risk manager on forms |
| prescribed by the Director. | |
(2) If a corporation, biographies of all officers |
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(3) The size of staff and other information, such as |
| the kinds of staff positions, location of administrative offices and the nature of any electronic data processing equipment, if any, available for servicing the pool, to demonstrate that the administrator has the resources to administer the program disclosed pursuant to subsection (d). | |
(4) The most recent financial statement of the |
| administrator. If a publicly held company, a copy of the last 10‑K filed with the Securities and Exchange Commission. | |
(5) The compensation contract of the administrator.
(6) The bylaws of the pool and articles of |
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(7) Any agreement that subcontracts any of the |
| administrator's duties or responsibilities. | |
(c) A pooling agreement must contain all of the following:
(1) A description of the services to be provided by |
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(2) The manner in which costs are to be apportioned |
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(3) The initial premium deposit.
(4) The assessment provision.
(5) The termination provisions and minimum term of |
| membership, which minimum term of membership shall not be less than one year. | |
(6) The duration of liability for additional |
| assessments following termination of membership, which shall be for a period of not less than 3 years. | |
(7) The prerequisites for membership.
(8) A provision stating that a claim shall be paid |
| by the pool, regardless of the size of the claim, and that the pool shall be reimbursed by the employer for any amounts required to be paid by the employer under the agreement. | |
(9) A provision stating that the terms of |
| termination after the first year of pool membership shall be dictated by the pooling agreement. | |
(10) If a pooling agreement requires a member to |
| submit written notice in order for the member to withdraw from a qualified pool, then the period in which the member must provide the written notice cannot be greater than 90 days. | |
(d) Plans of operation must disclose all of the following:
(1) A listing of initial members.
(2) The aggregate loss history of initial members |
| for each of the last 3 years. | |
(3) The amount of the net retention of the pool and |
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(4) The names of all entities that will provide |
| services for the pool and copies of proposed contracts in connection those services. | |
(5) The safety and loss control programs to be |
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(e) The application must contain information about initial members specified on forms prescribed by the Director.
(f) The application must contain the combined loss experience for the group for the last 3 years and any other financial data required by the Director.
(g) A pool administrator's original books and records relating to the operations of the pool shall at all times be located within the State of Illinois.
(h) Any change of the pooling agreement, bylaws, plan of operation, reinsurance agreements, or membership shall be delivered to the Director within 30 days after the amendment or change.
(i) A pool trustee must be an employee, officer, director, or owner of a pool member.
(Source: P.A. 91‑757, eff. 1‑1‑01.) |
(215 ILCS 5/107a.08)
Sec. 107a.08. Provisions applicable to members of a group workers' compensation pool.
(a) All members of a group workers' compensation pool must have homogeneous risk characteristics as provided in Section 107a.03.
(b) In determining whether members exhibit homogeneous risk characteristics, the Director shall consider any or all of the following characteristics:
(1) The loss frequency inherent in the occupational |
| framework of group members. | |
(2) The loss severity inherent in the occupational |
| framework of group members. | |
(3) The occupational disease potential inherent in |
| the occupational framework of group members. | |
(4) The occupational tasks of member employees.
(5) Any other relevant fact the group members |
| present to the Director that has reference to the classification of similar risks (e.g. SIC codes). | |
(c) Eligibility as a pool participant shall be based upon having a minimum of:
(l) 20 employees and $250,000 gross annual payroll; |
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(2) 10 employees and $125,000 gross annual payroll |
| for participants who have engaged actively in business for a minimum of 3 years; or | |
(3) 5 employees and $62,500 gross annual payroll for |
| participants who have actively engaged in business for a minimum of 5 years. | |
(d) Exceptions to the minimum eligibility requirements of this Section may be allowed by any pool whenever the following conditions are met:
(1) the participant has been actively engaged in |
| business for a minimum period of 5 consecutive years in Illinois; and | |
(2) the participant agrees to make all of its |
| financial records available to the Director for reasonable inspection during the period of membership; and | |
(3) the pool administrator certifies to the Director |
| that he examined the financial records of the pool participant prior to the participant's admission to the pool and found the participant to be solvent and financially stable. | |
(Source: P.A. 91‑757, eff. 1‑1‑01.) |
(215 ILCS 5/107a.09)
Sec. 107a.09. Service companies for group workers' compensation pools.
(a) No association, corporation, partnership, sole proprietorship, trust, or other business entity shall provide services in the design, establishment, or administration of a group workers' compensation pool unless it is licensed to do so by the Department. An applicant for a license shall state in writing the type of activities it seeks authorization to engage in and the type of services it seeks authorization to provide. The license shall be granted only when the Director is satisfied that the entity possesses the necessary organization, background, character, expertise, and financial integrity to supply the services sought to be offered. The Department may issue a license subject to restrictions or limitations, including restrictions or limitations on the type of services that may be supplied or the activities in which the entity may engage. A license issued under this Section shall be valid for 2 years.
(b) To assure that administrators are financially solvent, that pools are administered in a fair and capable fashion, and that administrators are able to process claims and pay benefits in a prompt, fair, and equitable manner, entities licensed to engage in those activities under this Section are subject to supervision and examination by the Department.
(c) The Department may adopt rules for the purposes of this Article. The rules shall (i) establish reporting requirements for administrators for group workers' compensation pools, including experience reporting requirements consistent with those established under this Code for insurers; (ii) establish bonding requirements or other provisions assuring the financial integrity of entities administering group self‑insurance; and (iii) establish other reasonable requirements to further the purposes of this Article.
(Source: P.A. 91‑757, eff. 1‑1‑01.) |
(215 ILCS 5/107a.10)
Sec. 107a.10. Bond requirements.
(a) An administrator shall obtain and maintain in force fidelity bonds on employees, officers, or positions in an amount not less than the amount set forth in the column "Minimum Amount of Bond", based on the amount of assets administered on behalf of pools by the administrator (as determined from year to year) stated in the annual statement of the pools as filed with the Department. All such bonds shall be written with at least a one‑year discovery period and, if written with less than a 3‑year discovery period, shall contain a provision that no cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, shall take effect before the expiration of 90 days after written notice of the cancellation or termination has been filed with the Department unless an earlier date of cancellation or termination is approved by the Department.
(b) The bonds shall include all employees, officers, or positions for the following perils, which may be covered under separate policies:
(1) dishonesty of employees and officers;
(2) robbery, burglary, larceny, theft, false |
| pretense, hold‑up, misplacement, mysterious disappearance, and damage or destruction while property is in any bank, any recognized place of safe deposit, or in transit; and | |
(3) forgery or alteration.
(c) The bond shall be written by an insurer licensed to transact business in the State of Illinois.
(d) Schedule of assets in relationship to amount of bond: |
TOTAL ASSETS | MINIMUM AMOUNT OF BOND | $500,000 or less................ | $20,000 plus 6% of total | | assets | more than $ 500,000 and | | not more than $1,000,000........ | $50,000 plus 4% of assets | | over $500,000 | more than $1,000,000 and | | not more than $3,000,000........ | $70,000 plus 3% of assets | | over $1,000,000 | more than $3,000,000 and | | not more than $5,000,000........ | $130,000 plus 2% of assets | | over $3,000,000 | more than $5,000,000 and | | not more than $10,000,000....... | $170,000 plus 1.5% of assets | | over $5,000,000 | more than $10,000,000........... | $245,000 plus 0.75% of assets | | more than $10,000,000 |
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(Source: P.A. 91‑757, eff. 1‑1‑01.) |