Change in illinois workers' compensation notification requirements

A new Illinois legislative ruling (Bill 1737, section 215 ILCS 5/462a) created a requirement that insurance carriers provide a notice for workers’ compensation policies issued, delivered, amended, or renewed on or after January 1, 2020. Specifically, carriers are required to provide at least a 30-day notification when a workers’ compensation renewal policy will result in premium in excess of 5% above the rate recommendation filed with and approved by the Illinois Department of Insurance.

For example, assuming the renewal policy results in premium in excess of 5% above the rate recommendation, if a 12-month term policy is issued effective January 1, 2020, for the renewal policy, the carrier would be required to provide at least 30 days' conditional renewal notice prior to the January 1, 2020 renewal effective date in accordance with 215 ILCS 5/462a. If the original policy had a 6-month term, then the conditional renewal notice would be required at least 30 days prior to July 1, 2020.

The premium increase does not include premium increases resulting from increased loss costs or exposure units (payroll); the application of an experience rating modification, a contracting classification premium adjustment, a large deductible program, or a retrospective rating plan; or an audit of auditable coverages.

*Note – It is possible to be sent one of these notices but end up receiving a lower premium and vice versa (i.e. not be sent a notice but still receive a rate increase). In the event that you do receive a notice, it is best to speak with your Connor & Gallagher OneSource insurance consultant.