SB2902 93RD GENERAL ASSEMBLY

LRB093 21065 SAS 47094 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2902

Introduced 2/6/2004, by Susan Garrett

SYNOPSIS AS INTRODUCED:

215 ILCS 5/155.18	from Ch. 73, par. 767.18
215 ILCS 5/155.21a new
225 ILCS 60/20	from Ch. 111, par. 4400-20
735 ILCS 5/2-101	from Ch. 110, par. 2-101

Amends the Illinois Insurance Code. In provisions pertaining to the rates and rating schedules of companies writing medical liability insurance, provides that if a company's rate filing seeks a rate increase of 10% or more, such a rate increase may not go into effect without prior approval of the Director of the Department of Insurance. Requires the company to provide the Director with information as the Director deems appropriate to evaluate the company's filing. Provides that if, after a hearing, the Director finds that the rate increase is excessive under standards that shall be adopted by the Director by rule, the Director shall reduce the amount of the rate increase, and the reduced rate shall go into effect. Provides that if, after a hearing, the Director finds that the rate increase is appropriate under those standards, the rate shall go into effect. Requires the Department of Insurance and all medical organizations to disclose and make accessible to the public a listing of all registered and operating medical liability insurance providers in this State including all addresses and telephone numbers and the names of all agents and brokers associated with such providers. Amends the Medical Practice Act of 1987. In provisions pertaining to continuing education, requires risk management training. Amends the Code of Civil Procedure. Provides that every medical malpractice action must be commenced in the county where the occurrence or incident took place. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning medical malpractice.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Insurance Code is amended by changing Section 155.18 and by adding Section 155.21a as follows:

(215 ILCS 5/155.18) (from Ch. 73, par. 767.18)

Sec. 155.18. (a) This Section shall apply to insurance on risks based upon negligence by a physician, hospital or other health care provider, referred to herein as medical liability insurance. This Section shall not apply to contracts of reinsurance, nor to any farm, county, district or township mutual insurance company transacting business under an Act entitled "An Act relating to local mutual district, county and township insurance companies", approved March 13, 1936, as now or hereafter amended, nor to any such company operating under a special charter.

(b) The following standards shall apply to the making and use of rates pertaining to all classes of medical liability insurance:

(1) Rates shall not be excessive or inadequate, as herein defined, nor shall they be unfairly discriminatory. No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided, and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable.

No rate shall be held inadequate unless it is unreasonably low for the insurance provided and continued use of it would endanger solvency of the company.

(2) Consideration shall be given, to the extent applicable, to past and prospective loss experience within and outside this State, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses both countrywide and those especially applicable to this State, and to all other factors, including judgment factors, deemed relevant within and outside this State.

Consideration may also be given in the making and use of rates to dividends, savings or unabsorbed premium deposits allowed or returned by companies to their policyholders, members or subscribers.

(3) The systems of expense provisions included in the rates for use by any company or group of companies may differ from those of other companies or groups of companies to reflect the operating methods of any such company or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.

(4) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that have a probable effect upon losses or expenses. Such classifications or modifications of classifications of risks may be established based upon size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations and shall apply to all risks under the same or substantially the same circumstances or conditions. The rate for an established classification should be related generally to the anticipated loss and expense factors of the class.

(c) Every company writing medical liability insurance shall file with the Director of Insurance the rates and rating schedules it uses for medical liability insurance.

(1) This filing shall occur at least annually and as often as the rates are changed or amended.

(2) For the purposes of this Section any change in premium to the company's insureds as a result of a change in the company's base rates or a change in its increased limits factors shall constitute a change in rates and shall require a filing with the Director.

(3) It shall be certified in such filing by an officer of the company and a qualified actuary that the company's rates are based on sound actuarial principles and are not inconsistent with the company's experience.

(d) If after a hearing the Director finds:

(1) that any rate, rating plan or rating system violates the provisions of this Section applicable to it, he may issue an order to the company which has been the subject of the hearing specifying in what respects such violation exists and stating when, within a reasonable period of time, the further use of such rate or rating system by such company in contracts of insurance made thereafter shall be prohibited;

(2) that the violation of any of the provisions of this Section applicable to it by any company which has been the subject of hearing was wilful, he may suspend or revoke, in whole or in part, the certificate of authority of such company with respect to the class of insurance which has been the subject of the hearing.

(e) Notwithstanding any other provision of this Section, a hearing must be held by the Director if a company's filing seeks a rate increase of 10% or more. Such a rate increase may not go into effect without prior approval of the Director. Before the hearing, the company shall provide to the Director such information as the Director deems appropriate to evaluate the company's filing. If, after a hearing, the Director finds that the rate increase is excessive under standards that shall be adopted by the Director by rule, the Director shall reduce the amount of the rate increase and the reduced rate shall go into effect. If, after a hearing, the Director finds that the rate increase is appropriate under those standards, the rate shall go into effect.

(Source: P.A. 79-1434.)

(215 ILCS 5/155.21a new)

Sec. 155.21a. Disclosure of medical liability insurance companies. The Department of Insurance and all medical organizations must disclose and make accessible to the public a listing of all registered and operating medical liability insurance providers in this State including all addresses, telephone numbers, and the names of all agents and brokers associated with such providers.

Section 10. The Medical Practice Act of 1987 is amended by changing Section 20 as follows:

(225 ILCS 60/20) (from Ch. 111, par. 4400-20)

(Section scheduled to be repealed on January 1, 2007)

Sec. 20. Continuing education. The Department shall promulgate rules of continuing education for persons licensed under this Act that require 150 hours of continuing education, including risk management training, per license renewal cycle. These rules shall be consistent with requirements of relevant professional associations, speciality societies, or boards. The rules shall also address variances in part or in whole for good cause, including but not limited to illness or hardship. In establishing these rules, the Department shall consider educational requirements for medical staffs, requirements for specialty society board certification or for continuing education requirements as a condition of membership in societies representing the 2 categories of licensee under this Act. These rules shall assure that licensees are given the opportunity to participate in those programs sponsored by or through their professional associations or hospitals which are relevant to their practice. Each licensee is responsible for maintaining records of completion of continuing education and shall be prepared to produce the records when requested by the Department.

(Source: P.A. 92-750, eff. 1-1-03.)

Section 15. The Code of Civil Procedure is amended by changing Section 2-101 as follows:

(735 ILCS 5/2-101) (from Ch. 110, par. 2-101)

Sec. 2-101. Generally. Except as otherwise provided in this Act, every action must be commenced (1) in the county of residence of any defendant who is joined in good faith and with probable cause for the purpose of obtaining a judgment against him or her and not solely for the purpose of fixing venue in that county, or (2) in the county in which the transaction or some part thereof occurred out of which the cause of action arose.

Except as otherwise provided in this Act, every medical malpractice action must be commenced in the county where the occurrence or incident took place.

If a check, draft, money order, or other instrument for the payment of child support payable to or delivered to the State Disbursement Unit established under Section 10-26 of the Illinois Public Aid Code is returned by the bank or depository for any reason, venue for the enforcement of any criminal proceedings or civil cause of action for recovery and attorney fees shall be in the county where the principal office of the State Disbursement Unit is located.

If all defendants are nonresidents of the State, an action may be commenced in any county.

If the corporate limits of a city, village or town extend into more than one county, then the venue of an action or proceeding instituted by that municipality to enforce any fine, imprisonment, penalty or forfeiture for violation of any ordinance of that municipality, regardless of the county in which the violation was committed or occurred, may be in the appropriate court (i) in the county wherein the office of the clerk of the municipality is located or (ii) in any county in which at least 35% of the territory within the municipality's corporate limits is located.

(Source: P.A. 91-212, eff. 7-20-99.)

Section 99. Effective date. This Act takes effect upon becoming law.