Current through Register Vol. 48, No. 12, March 22, 2024
a) Determination of
Self-Insurer's Insolvent Condition
This Section applies whenever:
1) Any self-insured employer who is unable to
pay compensation under Sections 7(f), 8(a), 8(b), 8(c), 8(d)(1), 8(d)(2), 8(e),
8(f), 19(a) and 19(g) of the Workers' Compensation Act (the Act) and Section 7
of the Workers' Occupational Diseases Act (WODA) has filed a written notice of
that inability to pay with the Commission; or
2) Any person who has filed an Application
for Adjustment of Claim against a self-insured employer gives written notice to
the Commission that the Commission determines has raised a question with
respect to that employer's ability to pay compensation under the Act/WODA;
or
3) It is established that a
court of competent jurisdiction has determined or is conducting proceedings to
determine that a self-insured employer is unable to pay compensation under the
Act/WODA; or
4) Any self-insurer
has filed for, or is the subject of, any proceeding under the federal
Bankruptcy Reform Act of 1978 (11 U.S.C. 101 et seq.) or is a
party, whether plaintiff or defendant, in any proceeding in which a receiver,
liquidator, custodian, rehabilitator, sequestrator or trustee, or similar
officer for the self-insurer or its property, has been
appointed;
b) The
Commission, on its own motion or on the motion of any other party, shall hold a
hearing to determine the ability of the self-insurer to pay compensation under
the Act and to determine the existence and status of any action described in
subsection (a). The Commission or any member of the Commission shall
have the power to administer oaths, to subpoena and examine witnesses, and to
issue subpoena duces tecum requiring the production of such books, papers,
records or documents as may be evidence to determine such issues.
[820 ILCS
305/16 ]
c) Duty to Notify
A self-insured employer that is claiming it is unable to pay
compensation under the Act/WODA and that is a party to a bankruptcy proceeding
described in subsection (a)(4), or that is the subject of an order set forth in
subsection (a)(3) or (4), shall file written notice of that fact with the
Commission within 10 days after the occurrence of the event.
d) Stay
Upon notification of any of the actions described in subsection
(a), the Commission shall, on its own motion, stay all proceedings before the
Commission involving that self-insured employer for at least 60
days.
e) Transfer of
Securities, Indemnity or Bonds to the Commission
1) The Commission will issue notification,
within 20 days after a hearing, of its determination that the self-insured
employer is unable to pay compensation due under the Act/WODA, has filed for,
or is the subject of, any bankruptcy proceeding (see subsection (a)(4)), or is
the subject of an order under subsection (a)(3) or (4). Any holder of any
securities, indemnity or bonds furnished by that employer guaranteeing the
payment of compensation under the Act/WODA shall notify the Commission in
writing whether it is willing and able to administer those funds. Unless the
holder has provided written notification to the Commission within the 20-day
period that it is able and willing to administer the funds, the holder shall
immediately deliver all such securities, indemnity, or bonds to the Commission;
otherwise, the Commission shall order the delivery or refer the matter to the
Attorney General's Office for litigation to collect or recover all such
securities, indemnity, or bonds.
2)
Upon receipt of the securities, indemnity, or bonds, the Commission shall
deposit the proceeds of those securities, indemnity, or bonds with any state or
national bank or trust company having trust authority in the State of Illinois
that has been ranked in the upper 10% in the Annual Report submitted by the
State of Illinois Director of the Division of Banking of the Department of
Financial and Professional Regulation and that has the lowest fees for
administration of escrow funds. Deposits in the bank or trust company shall be
in the form of negotiable United States government bonds or negotiable general
obligation bonds of the State of Illinois. The bank or trust company shall
administer the funds and, upon the order of the Commission, shall distribute
the funds. The administration fees for the bank or trust company shall be
payable only from the interest accrued on the proceeds from the time of
deposit.
f) Filing
Periods for Claims Against Securities, Indemnity, or Bonds
1) If the bankruptcy proceedings described in
subsection (a)(4) have been commenced or the Order affecting an entity under
subsection (a)(3) or (4) was entered prior to September 17, 1984, any claim
against the securities, indemnity, or bonds with respect to a case for which an
Application for Adjustment of Claim has not already been filed pursuant to 50
Ill. Adm. Code 9020.20 must have been filed on
or before September 17, 1984.
2) If
the bankruptcy proceedings described in subsection (a)(4) have been commenced
or the Order affecting an entity under subsection (a)(3) or (4) was entered on
or after September 17, 1984, any claim with respect to a case for which an
Application for Adjustment of Claim has not already been filed pursuant to 50
Ill. Adm. Code 9020.20 must be filed on or
before 12 months after the date of the commencement of those proceedings or the
entry of the Order.
g)
Distribution of Securities, Indemnity, or Bonds
1) Upon determination by the Commission of
the extent of the self-insured employer's liability under the Act in all cases
for which Applications for Adjustment of Claims or Settlement Contract
Petitions have been filed or for which claims are pending against the
securities, indemnity, or bonds, the Commission shall hold a hearing to
determine the proceeds of the securities, indemnity, or bonds. Notice of this
hearing will be by mail at least 15 business days before the hearing and shall
be given to all parties, including the holders of the securities, indemnity, or
bonds.
2) If, after a hearing
pursuant to subsection (g)(1), the Commission determines that the proceeds of
the securities, indemnity, or bonds are sufficient to pay all claims against
the assets in full, it shall order the holder or the depository bank or trust
company to make payment to the parties entitled to the assets who have
perfected claims against those assets, in accordance with the terms of awards
or settlements the Commission entered or approved.
3) If the Commission determines that the
proceeds of securities, indemnity, or bonds are not sufficient to pay all
claims in full, those claims that are for compensation for death and for
temporary and total permanent disability and claims for medical expenses shall,
as a class, be payable prior to payment of any other claims. If the proceeds
are not sufficient to pay all claims within this class in full, payment of
those claims will be prorated on the basis of the amount of each claim in
proportion to the amount of the securities, indemnity, and bonds available for
distribution.
4) After all claims
within the class have been paid in full, if any amount from the proceeds of
securities, indemnity, or bonds remains for distribution, payments of all other
claims will be prorated on the basis of the amount of each identified claim in
proportion to the amount of the remainder of the securities, indemnity, or
bonds.
5) If, after all identified
claims are paid in full, any surplus securities, indemnity, or bond amounts
remain, the Commission shall order those amounts returned to the employer, bond
company, or other party with legal right to those monies. Any interest earned
from the Commission's deposit of such securities, indemnities, or bonds will be
retained by the Commission and deposited into the Self-Insurers Security
Fund.