IL SB1805

Requires insurers with A.M. Best ratings below "A-" and less than $200,000,000 in surplus to fully collateralize large deductible agreements using surety bonds, letters of credit, or cash/securities held in trust.

Limits policyholder obligations under large deductible agreements to no greater than 20% of the policyholder's total net worth as determined by the most recent audited financial statement.

Defines a large deductible agreement as any policy arrangement requiring the policyholder to bear the risk of loss of $100,000 or greater per claim or occurrence under workers' compensation insurance.

Prohibits insurers determined to be in financially hazardous condition from issuing or renewing policies with large deductible agreements, except when approved by the Director of Insurance.

Applies to large deductible agreements issued or renewed on or after January 1, 2016, with the act taking effect July 1, 2015.