ILLINOIS - The University of Illinois Board of Trustees

19791 UNIVERSITY OF ILLINOIS 187
4. Established a claim registry and a procedure to review, evaluate, and make
recommendations on the disposition of all claims.
The Risk Management Policy Committee and the subcommittees have recommended
to the vice president for administration a revision of the program tu
provide a less costly method for financing some of the risks, to improve the administration
of claims, and to provide coverage more responsive to the University’s
needs:
A. Pooling of Funds
There are three claim reserve funds (accounts) established for the self-insurance
programs: Workmen’s Compensation Reserve Fund, Public and Contract
Liability Reserve Fund, and the Hospital Medical Professional Liability Reserve
Fund (a part of which is held by the First National Bank of Chicago in the
University of Illinois Hospital Trust Fund).
Currently, the funds deposited in an account are used only to pay the
predicted claims and expenses assigned to that account. The three funds are
separate and are not pooled for the purpose of paying claims or establishing
actuarially sound reserves.
The Risk Management Policy Committee has recommended that the Public
and Contract Liability Reserve Fund (now to be called General and Contract
Liability Reserve Fund) and the Hospital Medical Professional Liability Reserve
Fund be continued as separate funds for internal accounting purposes only but
pooled for the purpose of paying claims for general, contract, and professional
liability. This pooling of the accounts will be accomplished by transferring money
between these two accounts as necessary for claim payments and will permit a
lower level of funding without reducing the level of confidence that the funds
will be sufficient to pay the anticipated claims. The United States Department
of Health, Education and Welfare “Regulations for Provider’s Reimbursement
under the Medicare Program” do not allow transfer of funds from the University
of Illinois Hospital Trust Fund to other accounts. It is not recommended
at this time that the Workmen’s Compensation Reserve Fund be pooled.
B. Program Document for General and Professional Liability
The self-insurance coverage for general and professionai liability was oripinally
subject to the same terms, conditions, limitations, and exclusions as the insurance
contracts which expired on August 1, 1976. The insurance contracts provided
by commercial insurance companies are not entirely suitable for the
description and operation of a self-insurance program. Therefore, it is recommended
that the University of Illinoh Self-Insurance Plan for General and
Professional Liability, dated February 21, 1979 (this document is filed with the
secretary of the board for record), be accepted as the document which describes
the coverage of the University’s program in the general and professional
liability areas, and as replacing various published references to the “insurance
contracts.” It is further recommended that the authority of the vice president
for administration to approve claim payments be increased to ($30,000).’
C. Administration of Workmen’s Compensation Program
The Workmen’s Compensation Act requires the employer to provide for the
payment of loss of income and all necessary first aid, medical, surgical, and
hospital services incurred which are reasonably required to cure or relieve from
the effects of an accidental injury.
The present procedure for the administration of claims is for the risk
management staff to review and recommend to the vice president for administration
the payment of loss of income up to six weeks. medical expenses up to
$3,000, and permanent disabilities up to $1,500. Claims which exceed these
1 The amount recommended was reduced to $30,000 by action of the trustees (see p. 188).