Illinois Regulations 7100.85

1) Any self-insured employer who is unable to pay compensation under the Workers' Compensation Act (Ill. Rev. Stat. ch. 48, pars. 138.7(f), 8 (a), 8(b), 8(c), 8(d)1, 8(d)2, 8(e), 8(f), 19(b) and 19(h) and Workers' Occupational Diseases Act, (Ill. Rev. Stat. 1983, ch. 48, pars. 172.42(7), 172.7(a)-(f) has filed a written notice of such inability with the Industrial Commission; or

2) Any person who has filed an Application for Adjustment of claim against a self-insured employer gives written notice to the Industrial Commission which the Commission determines has raised a question with respect to that employer's ability to pay compensation under the Workers' Compensation Act and Workers' Occupational Diseases Act; or

3) It is established that a court of competent jurisdiction has determined or is conducting proceedings to determine that a self-insured employer is unable to pay compensation under the Workers' Compensation Act and Workers' Occupational Diseases Act; or

4) Any self-insurer has filed for or is the subject of any proceeding under the federal Bankruptcy Reform act of 1978; or is a party whether plaintiff of defendant in any proceeding in which a receiver, liquidator, custodian, rehabilitator, sequestrator or trustee or similar officer for such self-insurer or its property has been appointed;

f) Filing Periods for Claims Against Securities, Indemnity or bonds

1) If the bankruptcy proceedings set forth in subparagraph (a)(4) above have been commenced or the order under subparagraph (a)(3) or (4) above has been entered prior to September 17, 1984, any claim against the securities, indemnity or bonds with respect to a case for which an Application for Adjustment of Claim not already been filed pursuant to 50 Ill. Adm. Code 7020.20 must be filed on or before September 17, 1984.

2) If the bankruptcy proceedings set forth in subparagraph (a)(4) above have been commenced or the order under subparagraph (a)(3) or (4) above has been entered on or after September 17, 1984, any claim with respect to a case for which an Application for Adjustment of Claim has not already been filed pursuant to 50 Ill. Adm. Code 7020.20 must be filed on or before 12 months after the date of the commencement of such proceedings or the entry of such order.

g) Distribution of Securities, Indemnity or Bonds

1) Upon determination by the Commission of the extent of the Self-insured's Liability under the Act in all cases for which Applications for Adjustment of Claims or settlement contract petitions have been filed or for which claims are pending against the securities, indemnity or bonds, the Commission shall hold a hearing to determine the proceeds of the securities, indemnity or bonds. Notice of this hearing will be by mail at least 15 business days prior to the hearing and shall be given to all parties including the holders of the securities, indemnity or bonds.

2) If, after a hearing pursuant to paragraph (1) above, the Commission has determined that the proceeds of the securities, indemnity or bonds are sufficient to pay all claim against such assets in full, it shall order the holder or the depositary bank or trust company to make payment to the parties entitled thereto who have perfected claims against such assets, in accordance with the terms of awards or settlements which the Commission has entered or approved.

3) If the Commission determines that the proceeds of securities, indemnity or bonds are not sufficient to pay all claims in full, then such claims which are for compensation for death and for temporary and total permanent disability and claims for medical expenses shall, as a class, be payable prior to payment of any other claims, and if the proceeds of securities, indemnity or bonds are not sufficient to pay all claims within said class in full, then payment of such claims will be pro rated on the basis of the amount of each claim in proportion to the amount of the securities, indemnity and bonds available for distribution.

4) After all claims within the class have been paid in full, if any amount from the proceeds of securities, indemnity or bonds remains for distribution, then payments of all other claims will be pro rated on the basis of the amount of each such claim in proportion to the amount of the remainder of the securities, indemnity or bonds.

5) If after all such claims are paid in full there exists any surplus securities, indemnity or bondamounts, the Commission shall order said amounts returned to the employer, bond company, or other party with legal right to such monies.