Illinois Electrical Employees WC Self-Insurance Pool Liquidated

Illinois Electrical Workers’ Compensation Association Inc. was placed under an order of liquidation on Nov. 4. The Circuit Court of Cook County granted Illinois Insurance Director Nathaniel S. Shapo’s petition to liquidate based on the Department of Insurance’s findings that the Illinois group’s workers compensation self-insurance pool was insolvent by at least $1 million.

Illinois Electrical has been in rehabilitation since December 20, 1999. Pursuant to his statutory authority under the Illinois Workers Compensation Act, Director Shapo had previously ordered the pool to assess its members an amount sufficient to cure the deficiencies in its financial condition. However, Illinois Electrical has been unable to recover adequate funds from its members, and the Director moved to place the company into liquidation for the protection of claimants and creditors.

Simultaneously, the Director as Receiver has ceased paying all claims. Illinois Electrical Workers Compensation Association Inc. was organized under the Illinois Workers Compensation Act in January 1995 to provide group self-insurance for workers compensation loss exposures for selected members of the Professional Electrical Contractors Association of Chicago. The company’s most recent financial statement reflects approximately $545,000 in direct premiums as of August 1, 1999.

The Liquidation Order contains an injunction prohibiting suits against the Association outside of the liquidation proceedings. The Illinois Workers Compensation Act also establishes a Group Self-insurers Insolvency Fund which can be activated whenever the Director of Insurance shall determine that compensation or medical services provided by the Act may be unpaid by reason of default of an insolvent group self-insurer.

Topics Workers' Compensation Illinois