Blagojevich Administration Orders Workers’ Compensation Refunds or Credits for Illinois Companies

Thousands of Illinois employers may see premium refunds or account credits for their 2003, 2004, and/or 2005 Workers’ Compensation premiums.  Governor Blagojevich led the fight to reform Illinois’ workers’ compensation laws in 2005 and has ordered the Illinois Department of Financial and Professional Regulation’s Division of Insurance to make sure that data collected from Illinois employers is recomputed to more accurately reflect Illinois workers compensation costs. If discrepancies are found, those Illinois companies will receive premium refunds and credits from insurers.

The Division of Insurance found that some companies’ employment data was not included in the filings prepared by the National Council on Compensation Insurance (NCCI), a licensed advisory organization that prepares Workers’ Compensation loss cost and rate filings on behalf of insurers in Illinois.  The Division directed NCCI to amend its 2003, 2004 and 2005 rate and loss cost filings using the corrected payroll exposure amounts to determine whether some Illinois businesses paid more than they should have. 

“Several thousands of policyholders, including thousands of Illinois employers, will receive refunds or premium adjustments,” said Director Michael T. McRaith   “We’ve instructed the impacted insurance companies to notify their affected customers as soon as possible.”

To assist insurers in notifying policyholders – the businesses who purchase workers’ compensation insurance – the Division required NCCI to provide all Illinois Workers’ Compensation insurers with a list of every reported insured whose policy or policies included one or more of the employee groups. Based on that information and the insurers own policy reviews, the insurance companies are required to:

• Recalculate 2003, 2004, and 2005 premiums for all affected Illinois employers;
• Make appropriate refunds or premium adjustments to the employers for amounts over $10.00;
• Notify affected employers of the refund or premium adjustment amount;
• Provide insurer or agent contact information for employers with questions about the process or the amount of refund or premium adjustment;
• Make a good faith effort to locate former Illinois business customers if the first attempt is unsuccessful; and
• Report to the Division of Insurance the amounts of refunds or premium adjustments issued.

Employers who question whether a refund or premium adjustment is due may review the list of affected classification codes at the Department’s website, http://www.idfpr.com  to determine if the NCCI recalculations for 2003, 2004, or 2005 include their employee codes.  While inclusion of an impacted class code does not guarantee a refund or premium adjustment, many Illinois employers will receive the monetary benefits of the Division’s Order.

Most employers are likely to learn within the next two-to-three months whether they are a due a refund or premium adjustment.  If, after several months, an employer whose policy included affected class codes hasn’t received notice of a refund or adjustment, the employer should contact the agent or company and if necessary contact IDFPR’s Division of Insurance for assistance.

The Division also cautions that employers are unlikely to need to retain or pay a third party to obtain the refunds or premium adjustments.  The Division of Insurance required NCCI to provide insurers with lists of affected employers, and insurers must check their own records to verify additional affected customers.  The Division of Insurance will audit insurance carrier reports to verify the information and accuracy of refunds or adjustments.