Illinois Administrative Code › Title 50 - INSURANCE › Part 9100 - INSURANCE REGULATIONS › Section 9100.40 - Requirements for Approval as a Self-Insurer

Current through Register Vol. 48, No. 28, July 12, 2024
a) Application
1) Initial Application
A) Any private employer under the Workers'
			 Compensation Act [ 820 ILCS 305 ] (the Act) and/or the Workers' Occupational
			 Diseases Act [ 820 ILCS 310 ] (WODA) who desires to be approved as a
			 self-insurer shall file with the Commission an Application for Approval on a
			 form prescribed by the Commission and the most current 3 years' audited
			 financial statements.
A private employer does not include group
			 self-insured employers under Section 4(a) of
the Act
or
			 Section 4(a) of WODA or the State of Illinois, any political subdivision of the
			 State, unit of local government or school district, or any other public
			 authorities or quasi-governmental bodies, including any subunits of the
			 foregoing entities.
(Section 4a-2(c) of the Act) Any reference in this
			 Part to workers' compensation insurance coverage shall encompass coverage under
			 both the Act and WODA.
B)
The application and current financial statements shall be signed and
			 sworn to by the president or vice-president and secretary or assistant
			 secretary of the employer, if it is a corporation, or by all of the partners,
			 if it is a copartnership, or by the owner if it is neither a copartnership nor
			 a corporation.
(Section 4(a)(1) of the Act)
C) In the event the employer does not have
			 audited financial statements, the employer must submit financial statements
			 that have been prepared by an outside accounting firm.
D) Each controlled employer or subsidiary
			 requesting approval as a self-insurer shall provide the current financial
			 statements of the parent corporations or each of its controlling persons
			 designated by the Commission.
i) A subsidiary
			 means any entity in which another company, directly or indirectly, owns,
			 controls or holds, with the power to vote a majority (more than 50 percent) of
			 the outstanding voting securities of the company.
ii) Controlled employer means a
			 not-for-profit corporation with respect to which an individual or another
			 entity has the right either to elect or appoint, directly or indirectly, a
			 majority of the directors, trustees or other governing body of a not-for-profit
			 corporation, or has the right to approve or disapprove, directly or indirectly,
			 the persons appointed as a majority of the directors, trustees or other
			 governing body of a not-for-profit corporation.
iii) Controlling person means an individual
			 or entity that has the right to elect or appoint, directly or indirectly, a
			 majority of the directors, trustees or other governing body of a not-for-profit
			 corporation, or has the right to approve or disapprove, directly or indirectly,
			 the persons appointed as a majority of the directors, trustees or other
			 governing body of a not-for-profit corporation.
E)
All initial applications and
			 financial statements shall be submitted at least 60 days prior to the requested
			 effective date of self-insurance.
(Section 4(a)(1) of the
			 Act)
F) All initial applications
			 must include evidence of current workers' compensation insurance coverage that
			 shall be maintained until final approval as a self-insurer is
			 granted.
G) Each private employer
			 applying for self-insurance shall indicate how it will service its
			 self-insurance program. The employer shall provide adequate facilities for the
			 investigation, administration and payment of claims or shall contract with a
			 service company possessing the personnel and facilities to provide those
			 services. In determining whether facilities are adequate for the investigation,
			 administration and payment of claims, the following shall be considered:
i) whether there is personnel experienced in
			 the adjudication of workers' compensation claims;
ii) whether there is a reporting system for
			 workers' compensation claims;
iii)
			 whether the reporting system is automated and the frequency of reports
			 generated by the system;
iv) the
			 response system to claims filing; and
v) whether a current estimate of the expected
			 total cost for each claim is established based on facts of each claim, medical
			 information, and provisions of the Act. This estimation is not trended, based
			 on discounted present value, or actuarially developed.
H) If the employer has contracted with a
			 service company for the administration of claims, a copy of the contract shall
			 be submitted with the initial application.