Section 2904.10  Statutory Authority

 

This Part is promulgated by the Director of Insurance pursuant to Sections 401 and 466 of the Illinois Insurance Code (Code) [215 ILCS 5/401 and 466].

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.20  Purpose and Scope

 

It is the purpose of this Part to provide the requirements and procedures for participation in the Illinois Assigned Risk Plan for Workers' Compensation Act [820 ILCS 305] and Workers' Occupational Diseases Act [820 ILCS 310] Coverage.  This Part shall apply to every carrier writing or making Workers' Compensation and Occupational Diseases Acts insurance in the State of Illinois.  This Part shall also apply to every employer seeking Assigned Risk Insurance and licensed producers acting on behalf of those employers.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.30  Written Acceptance Required of All Insurance Carriers Writing Workers' Compensation and Occupational Diseases Insurance in Illinois

 

Every carrier writing Workers' Compensation and Workers' Occupational Diseases insurance in the State of Illinois shall file with the Director of Insurance two copies of its written acceptance of all provisions of the Workers' Compensation Act and Workers' Occupational Diseases Act by assignment of the Department of Insurance and providing for the pooling of losses and penalties for violation of those Acts.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.40  Definitions

 

As used in this Part, the following terms have the definitions set forth:

 

            "Act" means the Workers' Compensation Act [820 ILCS 305] and Workers' Occupational Diseases Act [820 ILCS 310].

 

"Administrator "  means a qualified entity who administers the managing of the Illinois Workers' Compensation Assigned Risk Plan in compliance with the Plan and appropriate statutes/regulation.  At a miminum, a qualified entity holds a valid Illinois license that enables it to develop and file its Plan and associated rates, rating plans, rules, forms and manuals.

 

            "Assigned Carrier" means the insurance company that the Administrator has determined shall provide coverage to an eligible employer who has applied for an assignment pursuant to this Part.

           

            "Plan" means the Illinois Workers' Compensation Assigned Risk Plan as filed by the Administrator and approved by the Director.

 

"Producer" means a person required to be licensed under Section 500 of the Illinois Insurance Code [215 ILCS 5-500] to sell, solicit or negotiate insurance.

 

            "Standard Coverage" means Workers' Compensation and Workers' Occupational Diseases insurance written on a basic rating plan, exclusive of deviated rating plans or retrospective rating plans.

 

            "Termination" means the cessation of coverage by either cancellation of a policy which is in force or not renewing a policy at the end of the coverage period.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.50  Designee

 

For the purpose of assisting in the assignment of an employer to a carrier, the Administrator is appointed the designee of the Department of Insurance pursuant to Sections 401 and 468 of the Illinois Insurance Code [215 ILCS 5/401 and 468].

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.60  Procedure for the Assignment of an Employer

 

An eligible employer seeking Assigned Risk Insurance will be bound under the Illinois Assigned Risk Plan in accordance with the following procedures:

 

a)         Within 60 days prior to application the employer must have requested and been rejected for standard coverage by two nonaffiliated insurance carriers that are licensed to write and are actively writing workers' compensation insurance within the State, one of which shall have been the carrier, if any, with which the employer was last insured for Workers' Compensation and Workers' Occupational Diseases Coverage at the time of application.

 

b)         The producer of the employer shall submit an application for assignment  to the Administrator. The Administrator shall review the content of the application.  If the application is complete, the Administrator shall calculate the estimated annual premium and notify the employer and licensed producer within 10 days as to the amount of estimated annual premium required. The application may be submitted online to the Administrator; however, coverage is not bound until eligibility is determined by the Administrator and the signed application is received with the appropriate premium. Coverage will be bound by the Administrator and the applicant assigned to an Assigned Carrier in accordance with the applicable Plan rules.

 

c)         The employer or producer must submit the required deposit premium or pay the annual estimated premium.  For applications submitted by mail, payments must be in the form of  a certified check, cashier's check, or a check drawn on the producer's Premium Fund Trust Account payable to the Administrator for either the required deposit premium or the full amount of the estimated annual premium.  If installment payments are requested, the deposit submitted shall be the deposit required by Section 2904.100 and the Plan.  The Administrator will bind coverage at 12:01 a.m. the first day following the date of postmark on the payment envelope, or a later date if requested in the application. For electronic applications, the total initial or deposit premium must be made electronically by credit card or electronic funds transfer (EFT).  These payments may be made directly from an employer's account or their producer's account.  Mailed checks are not accepted with the online application submission option.   The earliest eligible effective date will be 12:01 a.m. on the day after receipt of the completed online submission, if all required information and deposit premium is received, as determined by Administrator.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.70  Procedure for Immediate Binding of Coverage

 

An employer seeking Assigned Risk Insurance may be bound under the Illinois Assigned Risk Plan in accordance with the following procedures.

 

a)         Within 60 days prior to application the employer must have requested and been rejected for standard coverage by two nonaffiliated insurance carriers licensed and actively writing workers' compensation insurance within the State, one of which shall have been the carrier, if any, with which the employer was last insured for Workers' Compensation and Workers' Occupational Diseases Coverage at the time of application.

 

b)         The producer of the employer must contact the Administrator and provide the necessary information for the Administrator to determine the estimated annual premium.  A completed and signed application must be received along with the applicable deposit required by Section 2904.100 and the Plan.

 

c)         Upon receipt of a completed application and required deposit premium, the Administrator shall bind coverage in accordance with Section 2904.60(b).  The Administrator shall then provide to the assigned carrier the complete binder package electronically the day after binding.  The assigned carrier shall provide to the employer and producer an electronic or hard copy  notice as to the amount of any additional premium due within 10 days from the date of assignment of coverage from the Administrator and assigned carrier's receipt of the required information. The employer or producer shall remit to the assigned carrier the additional premium, or any additional deposit premium payments due when election is made under Section 2904.100, within 30 days from the date that the notice of additional premium is provided to the employer and producer.  The assigned carrier shall maintain proof that  the notice of additional premium was provided to the employer and producer.  Coverage will be cancelled by the assigned carrier for nonpayment of premium in accordance with Section 143.16 of the Code if the additional premium, or any additional deposit premium due under Section 2904.100, is not received by the assigned carrier within 30 days from the date the notice of additional premium was provided to the employer.

 

d)         The Administrator will not bind coverage if the deposit premium does not accompany the application.  If an application is submitted for the binding of immediate coverage which does not contain sufficient information to complete the assignment, the Administrator shall advise the producer by telephone or electronic communication that the application is being rejected and return the appropriate premium funds provided, if any, to the original payor with an explanation of the rejection to the producer.  Coverage shall not be considered bound on rejected applications.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.80  Premium Notice to be Filed with the Bureau (Repealed)

 

(Source:  Repealed at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.90  Commissions

 

Any casualty producer who is licensed to place insurance through the facilities offered herein, shall be entitled to a commission at a rate determined by the Department of Insurance.  Commissions shall be paid as follows:

 

a)         When the payment of premium or premium installment is made by the employer directly to the assigned carrier, within 90 days the assigned carrier shall pay to the producer of the employer the applicable amount of commission due.

 

b)         If there has been no commission paid on an expiring policy or existing policy, and the employer desires that a commission be paid to a producer, the employer shall notify the assigned carrier in writing, or the producer may submit to the assigned carrier a letter of authority signed by the employer appointing the agent or broker as such for the insurance. If the appointment is received by the assigned carrier after the date of renewal, the commission shall be paid on a pro rata basis for the remainder of the policy term.

 

c)         If there has been a commission paid on a policy, the producer of record may be changed upon the request of the employer effective upon the next renewal of the policy.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.100  Installment Payment of Premium

 

Policies with an estimated premium of $1,000 or less shall be paid in full.  Payment of the estimated annual premium is required in accordance with the filed and approved Plan.  An installment payment plan may be requested by the employer and will be made available only in accordance with the filed and approved Plan rules.  The Illinois Workers' Compensation Commission surcharge is not a premium and must be paid in full, in addition to the required deposit premium, prior to binding of coverage.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.110  Insurance Policy to be Issued by Assigned Carrier Within Ten Days After Receipt of Payment

 

A policy or binder shall be issued to the eligible employer and producer within 10 days after receipt of the required premium payment.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.120  Final Earned Premium

 

Final earned premium for any policy issued under the requirements of this Part shall be determined on actual, instead of estimated, payroll or other premium basis.

 

Section 2904.130  Renewal of Policies Issued Under this Part

 

a)         The assigned carrier shall, 60 days prior to the expiration of the policy, submit to the employer and producer a notice of premium for renewal of the policy.  If the renewal premium is not received by the assigned carrier 30 days prior to the expiration of the policy, the assigned carrier shall issue a notice of expiration.

 

b)         If the renewal premium is received prior to the expiration date, the policy shall be renewed without lapse in coverage.  If the renewal premium is received within 30 days after the expiration date, the policy shall be renewed effective 12:01 a.m. on the first day following the date of postmark on the payment envelope.  If the renewal premium is received more than 30 days after the expiration date, the premium may be refused and the employer may apply for assignment pursuant to Sections 2904.60 or 2904.70.  The assigned carrier may accept renewal premiums more than 30 days after the expiration of the policy, which renewal shall be effective 12:01 a.m. on the first day following the date of postmark on the payment envelope.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.140  Policy Termination – General

 

The assigned carrier may terminate a policy issued under this Part as permitted by law.  The termination notice shall indicate whether the policy is being cancelled or nonrenewed.  The termination notice shall include the proposed date of termination, the reason or reasons for the termination, and all other information required by law.  The termination notice shall notify the employer of the hearing procedures set forth in Section 2904.160. 

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.150  Policy Termination for Failure to Comply With Employee Welfare Laws

 

Termination for failure to comply with Employee Welfare Laws shall be based upon a finding of violation by the appropriate Federal, State or local enforcement authority.  The termination request shall indicate the applicable law, date of violation and the enforcement authority which entered the finding.

 

Section 2904.160  Policy Termination – Hearing

 

a)         An employer who wishes to object to the reason or reasons for termination shall, within 10 days after receipt of the notice of termination, mail or deliver to the Director of Insurance a written request for a hearing that shall clearly state the basis for the objection.  This Section shall not apply to cancellations at the employer's request or to cancellations in the case of nonpayment of premium as defined in Section 143.13 of the Code.  The notice of cancellation or nonrenewal to which this Section applies shall advise the named insured of his or her right to appeal and the procedure to follow for the appeal.

 

b)         Within 10 days after receipt of the request for a hearing and upon 10 days notice to the parties, the Director shall convene a hearing.  Within 20 days after the conclusion of the hearing, the Director shall issue his or her written findings to the parties.  The policy will remain in force until the Director has given his or her findings.  If the Director finds for the employer, he or she shall order the assigned carrier to rescind its notice of termination.  If the Director finds for the assigned carrier, he or she shall order that the termination be effective 30 days from the date of his or her order.  The assigned carrier is entitled to a premium for any extension of coverage and the extension shall be contingent upon the payment of the premium.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.170  Policies of Insurance and Termination Notice to be Imprinted "Assigned Risk"

 

All assigned carriers shall stamp or print on all policies or binders of Insurance or Termination Notices filed pursuant to this Part the words "Assigned Risk" in letters not less than ⅜ of an inch high.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.180  Annual Reports Required of Mutual and Stock Insurance Pools

 

The Mutual and Stock Pools shall each file with the Department of Insurance, not later than March 1st of each year, a report showing for the previous calendar year:

 

a)         The total combined compensation premium and number of policies written in Illinois under both the Workers' Compensation Act and the Workers' Occupational Disease Act.

 

b)         Total assigned risk premium, both written and earned, on assigned risk policies issued.

 

c)         The total losses on assigned risk Workers' Compensation and Workers' Occupational Diseases policies during the year.

 

Section 2904.190  Rating Standards

 

All assigned carriers shall rate all policies issued under this Part in accord with the Manuals of Rules and Rates filed with the the Administrator and approved by the Department of Insurance.  The Administrator shall establish audit procedures and a remediation program to evaluate an assigned carrier's compliance with this Section and establish corrective measures as required by the remediation program.  The audit procedures and remediation program established pursuant to this Section shall be made available to assigned carriers.  

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.200  Location of Servicing Office and Records

 

All assigned carriers shall have their records readily available.  All assigned carriers shall include with the premium notice the name and telephone number of the person to contact concerning the policy.

 

Section 2904.210  Cost Containment

 

All assigned carriers shall adopt measures to contain costs in the distribution of benefits in accordance with standards, orders or directives prescribed by the Director.

 

Section 2904.220  Procedure to be Followed in the Suspension of Insurance Carriers for Non-Compliance with this Part

 

If any carrier refuses or neglects to comply with any of the provisions of this Part, the Director shall pursue the suspension of the Certificate of Authority of that carrier.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.230  Penalties

 

Any carrier or producer failing to comply with the requirements of this Part shall be subject to penalties as may be appropriate under the Code.

 

(Source:  Amended at 38 Ill. Reg. 15611, effective July 2, 2014)

 

Section 2904.240  Severability

 

If any provision of this Part shall be held invalid, the remainder of the Part shall not be affected thereby.