Bill Text: IL SB1805 | 2015-2016 | 99th General Assembly | Chaptered
Bill Title: Amends the Illinois Insurance Code. Provides that any insurer with less than $100,000,000 in group surplus authorized to issue workers' compensation policies with a per-occurrence deductible of $100,000 or greater shall report the outstanding obligations owed under the deductible as liabilities of the insurer, unless the obligation is fully collateralized, and limit per-occurrence deductible obligations. Effective July 1, 2015.
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: (Passed) 2015-08-14 - Public Act . . . . . . . . . 99-0369 [SB1805 Detail]
Download: Illinois-2015-SB1805-Chaptered.html
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| Public Act 099-0369 | ||||
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AN ACT concerning insurance.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by adding | ||||
Section 155.44 as follows:
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(215 ILCS 5/155.44 new) | ||||
Sec. 155.44. Financial requirements; large deductible | ||||
agreements for workers' compensation insurance. | ||||
(a) An insurer shall: | ||||
(1) require full collateralization of the outstanding | ||||
obligations owed under a large deductible agreement by | ||||
using one of the following methods: | ||||
(A) a surety bond issued by a surety insurer | ||||
authorized to transact business by the Department and | ||||
whose financial strength and size ratings from A.M. | ||||
Best Company are not less than "A" and "V", | ||||
respectively; | ||||
(B) an irrevocable letter of credit issued by a | ||||
financial institution with an office physically | ||||
located within the State and the deposits of which are | ||||
federally insured; or | ||||
(C) cash or securities held in trust by a third | ||||
party or by the insurer and subject to a trust | ||||
agreement for the express purpose of securing the | ||
policyholder's obligation under a large deductible | ||
agreement, provided that if the assets are held by the | ||
insurer those assets are not commingled with the | ||
insurer's other assets; and | ||
(2) limit the size of the policyholder's obligations | ||
under a large deductible agreement to no greater than 20% | ||
of the total net worth of the policyholder at each policy | ||
inception, as determined by an audited financial statement | ||
as of the most recently available fiscal year end. | ||
(b) As used in this Section, "insurer" means any insurer | ||
authorized to issue a workers' compensation policy covering | ||
risks located in this State that has an A.M. Best Company | ||
rating below "A-" and does not have at least $200,000,000 in | ||
surplus. | ||
(c) As used in this Section, "large deductible agreement" | ||
means any combination of one or more policies, endorsements, | ||
contracts, or security agreements which provide for the | ||
policyholder to bear the risk of loss of $100,000 or greater | ||
per claim or occurrence covered under a policy of workers' | ||
compensation insurance and which may be subject to the | ||
aggregate limit of policyholder reimbursement obligations. | ||
(d) Except when approved by the Director of Insurance, any | ||
insurer determined to be in a financially hazardous condition | ||
pursuant to Article XII 1/2 or XIII of this Code by the | ||
Director of Insurance in this State or the equivalent in any | ||
other state is prohibited from issuing or renewing a policy | ||
that includes a large deductible agreement. | ||
(e) This Section applies to large deductible agreements | ||
issued or renewed by any insurer on or after January 1, 2016.
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Section 99. Effective date. This Act takes effect on July | ||
1, 2015.
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