RESOLUTION NO. 121

Presented by Representative Mautino

    WHEREAS, as of December 31, 1999, 26 Group Workers Compensation Self-insured Pools were licensed by the Department of Insurance (the Department);

    WHEREAS, Workers Compensation Insurance is required for most employers under the Workers Compensation Act which is administered by the Illinois Industrial Commission (the Commission);

    WHEREAS, during the past year, several Group Workers Compensation Self-insured Pools have been placed into liquidation due to insolvency, with deficits of over $15 million;

    WHEREAS, for those Self-insured Pools that have been placed into liquidation, payment on compensation claims from injured workers have been delayed; an

    WHEREAS, the Director of the Department of Insurance, acting as the Court Appointed Receiver, and by or through one or more special deputy receivers (herein referred to as the Office of the Special Deputy Receiver or OSD), is responsible for overseeing the conservation, rehabilitation and liquidation of insolvent domestic insurance companies; therefor

    BE IT RESOLVED, BY THE Legislative Audit Commission that the Auditor General is directed to conduct a management audit of the Department, the OSD, the Commission and any other State agency with regard to their responsibilities pertaining to Group Workers Compensation Self-insured Pools in the State of Illinois; and be it further

    RESOLVED that the audit include, but need not be limited to, the following determinations with regard to the Group Workers Compensation Self-insured Pools (Pools) in liquidation:

• What activities are or were undertaken by any State agency to regulated, oversee manage or monitor the Pools;
• What information was available to those agencies concerning the financial condition of the Pools and the frequency, timeliness and comprehensiveness of such information;
• The process for reviewing financial reports and other information provided by the Pools in the years prior to their default and any actions undertaken by State agencies in response to that information prior to the Pools' insolvencies;
• What methods are available to the State to identify and cure deficiencies in the financial condition of Pools prior to their being placed in liquidation and whether those methods are effective; and
• The process for liquidating insolvent Pools, including asset protection, allocation of losses and payment of claims.

RESOLVED, that the Department, OSD, the Industrial Commission and any other entity that may have relevant information pertaining to this audit cooperate fully and promptly with the Auditor General's Office in the conduct of this audit;

RESOLVED, that the Auditor General commence this audit as soon as possible and report his findings and recommendations upon completion to the Legislative Audit Commission, the Governor and the members of the General Assembly.

    Adopted this 26th day of June 2001.