Full Text of HB1287 99th General Assembly
HB1287ham004 99TH GENERAL ASSEMBLY | Rep. Michael J. Madigan Filed: 5/21/2015
| | 09900HB1287ham004 | | LRB099 05153 JLS 35866 a |
|
| 1 | | AMENDMENT TO HOUSE BILL 1287
| 2 | | AMENDMENT NO. ______. Amend House Bill 1287, AS AMENDED, by | 3 | | inserting the following in its proper numeric sequence in the | 4 | | bill:
| 5 | | "Section 2. The Illinois Insurance Code is amended by | 6 | | changing Sections 456, 457, and 458 and by adding Section 462a | 7 | | as follows:
| 8 | | (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
| 9 | | Sec. 456. Making of rates. (1) All rates shall be made in | 10 | | accordance with the following provisions:
| 11 | | (a) Due consideration shall be given to past and | 12 | | prospective loss
experience within and outside this state, to | 13 | | catastrophe hazards, if
any, to a reasonable margin for profit | 14 | | and contingencies,
to dividends, savings or unabsorbed premium | 15 | | deposits allowed or returned
by companies to their | 16 | | policyholders, members or subscribers, to past and
prospective |
| | | 09900HB1287ham004 | - 2 - | LRB099 05153 JLS 35866 a |
|
| 1 | | expenses both countrywide and those specially applicable to
| 2 | | this state, to underwriting practice and judgment and to all | 3 | | other
relevant factors within and outside this state;
| 4 | | (b) The systems of expense provisions included in the rates | 5 | | for use
by any company or group of companies may differ from | 6 | | those of other
companies or groups of companies to reflect the | 7 | | requirements of the
operating methods of any such company or | 8 | | group with respect to any kind
of insurance, or with respect to | 9 | | any subdivision or combination thereof
for which subdivision or | 10 | | combination separate expense provisions are
applicable;
| 11 | | (c) Risks may be grouped by classifications for the | 12 | | establishment of
rates and minimum premiums. Classification | 13 | | rates may be modified to
produce rates for individual risks in | 14 | | accordance with rating plans which
measure variation in hazards | 15 | | or expense provisions, or both. Such rating
plans may measure | 16 | | any differences among risks that have a probable
effect upon | 17 | | losses or expenses;
| 18 | | (d) Rates shall not be excessive, inadequate or unfairly
| 19 | | discriminatory.
| 20 | | A rate in a competitive market is not excessive. A rate in | 21 | | a noncompetitive
market is excessive if it is likely to produce | 22 | | a long run profit that is
unreasonably high for the insurance | 23 | | provided or if expenses are unreasonably
high in relation to | 24 | | the services rendered.
| 25 | | A rate is not inadequate unless such rate is clearly | 26 | | insufficient to sustain
projected losses and expenses in the |
| | | 09900HB1287ham004 | - 3 - | LRB099 05153 JLS 35866 a |
|
| 1 | | class of business to which it applies
and the use of such rate | 2 | | has or, if continued, will have the effect of substantially
| 3 | | lessening competition or the tendency to create monopoly in any | 4 | | market.
| 5 | | Unfair discrimination exists if, after allowing for | 6 | | practical limitations,
price differentials fail to reflect | 7 | | equitably the differences in expected
losses and expenses. A | 8 | | rate is not unfairly discriminatory because different
premiums | 9 | | result for policyholders with like exposures but different | 10 | | expenses,
or like expenses but different loss exposures, so | 11 | | long as the rate reflects
the differences with reasonable | 12 | | accuracy.
| 13 | | (e) The rating plan shall contain a mandatory offer of a | 14 | | deductible applicable
only to the medical benefit under the | 15 | | Workers' Compensation Act.
Such deductible offer shall be in a | 16 | | minimum amount of at least $1,000 per accident.
| 17 | | (f) Any rating plan or program shall include a rule | 18 | | permitting 2 or more
employers with similar risk | 19 | | characteristics, who participate in a loss prevention
program | 20 | | or safety group, to pool their premium and loss experience in | 21 | | determining
their rate or premium for such participation in the | 22 | | program.
| 23 | | (2) Except to the extent necessary to meet the provisions | 24 | | of
subdivision (d) of subsection (1) of this Section, | 25 | | uniformity among
companies in any matters within the scope of | 26 | | this Section is neither
required nor prohibited.
|
| | | 09900HB1287ham004 | - 4 - | LRB099 05153 JLS 35866 a |
|
| 1 | | (Source: P.A. 82-939.)
| 2 | | (215 ILCS 5/457) (from Ch. 73, par. 1065.4)
| 3 | | Sec. 457. Rate filings. (1) Every Beginning January 1, | 4 | | 1983, every company
shall prefile file with the Director every | 5 | | manual of classifications, every manual
of rules and rates, | 6 | | every rating plan and every modification of the foregoing
which | 7 | | it intends to use. Such filings shall be made at least not | 8 | | later than 30 days before
after they become effective.
A | 9 | | company may satisfy its obligation to make such filings by | 10 | | adopting the
filing of a licensed rating organization of which | 11 | | it is a member or subscriber,
filed pursuant to subsection (2) | 12 | | of this Section, in total or , with the approval of the | 13 | | Director, by notifying
the Director in what respects it intends | 14 | | to deviate from such filing. If a company intends to deviate | 15 | | from the filing of a licensed rating organization of which it | 16 | | is a member, the company shall provide the Director with | 17 | | supporting information that specifies the basis for the | 18 | | requested deviation and provides justification for the | 19 | | deviation. Any
company adopting a pure premium filed by a | 20 | | rating organization pursuant to subsection
(2) must file with | 21 | | the Director the modification factor it is using for
expenses | 22 | | and profit so that the final rates in use by such company can | 23 | | be determined.
| 24 | | (2) Each Beginning January 1, 1983, each licensed rating | 25 | | organization must prefile
file with the Director every manual |
| | | 09900HB1287ham004 | - 5 - | LRB099 05153 JLS 35866 a |
|
| 1 | | of classification, every manual of rules
and advisory rates, | 2 | | every pure premium which has been fully adjusted and
fully | 3 | | developed, every rating plan and every modification of any of | 4 | | the
foregoing which it intends to recommend for use to its | 5 | | members and subscribers,
at least not later than 30 days before | 6 | | after such manual, premium, plan or modification
thereof takes | 7 | | effect. Every licensed rating organization shall also file
with | 8 | | the Director the rate classification system, all rating rules, | 9 | | rating
plans, policy forms, underwriting rules or similar | 10 | | materials, and each modification
of any of the foregoing which | 11 | | it requires its members and subscribers to
adhere to not later | 12 | | than 30 days before such filings or modifications thereof
are | 13 | | to take effect. Every such filing shall state the proposed | 14 | | effective
date thereof and shall indicate the character and | 15 | | extent of the coverage contemplated.
| 16 | | (3) A filing and any supporting information made pursuant | 17 | | to this Section
shall be open to public inspection as soon as | 18 | | filed after the filing becomes effective .
| 19 | | (4) A filing shall not be effective nor used until approved | 20 | | by the Director. A filing shall be deemed approved if the | 21 | | Director fails to disapprove within 30 days after the filing. | 22 | | (Source: P.A. 82-939.)
| 23 | | (215 ILCS 5/458) (from Ch. 73, par. 1065.5)
| 24 | | Sec. 458. Disapproval of filings. (1) If within 30 thirty | 25 | | days of any filing the Director
finds that such filing does not |
| | | 09900HB1287ham004 | - 6 - | LRB099 05153 JLS 35866 a |
|
| 1 | | meet the requirements of this Article, he
shall send to the | 2 | | company or rating organization which made such filing a
written | 3 | | notice of disapproval of such filing, specifying therein in | 4 | | what
respects he finds that such filing fails to meet the | 5 | | requirements of this
Article and stating when, within a | 6 | | reasonable period thereafter, such
filing shall be deemed no | 7 | | longer effective . A company or rating organization whose filing | 8 | | has been disapproved shall be given a hearing upon a written | 9 | | request made within 30 days after the disapproval order. If the | 10 | | company or rating
organization making the filing shall, prior | 11 | | to the expiration of the period
prescribed in the notice, | 12 | | request a hearing, such filings shall be
effective until the | 13 | | expiration of a reasonable period specified in any
order | 14 | | entered thereon. If the rate resulting from such filing be | 15 | | unfairly
discriminatory or materially inadequate, and the | 16 | | difference
between such rate and the approved rate equals or | 17 | | exceeds the cost of
making an adjustment, the Director shall in | 18 | | such notice or order direct an
adjustment of the premium to be | 19 | | made with the policyholder either by refund
or collection of | 20 | | additional premium. If the policyholder does not accept
the | 21 | | increased rate, cancellation shall be made on a pro rata basis. | 22 | | Any
policy issued pursuant to this subsection shall contain a | 23 | | provision that
the premium thereon shall be subject to | 24 | | adjustment upon the basis of the
filing finally approved.
| 25 | | (2) If at any time subsequent to the applicable review | 26 | | period provided
for in subsection (1) of this Section, the |
| | | 09900HB1287ham004 | - 7 - | LRB099 05153 JLS 35866 a |
|
| 1 | | Director finds that a
filing does not meet the requirements of | 2 | | this Article, he shall, after a
hearing held upon not less than | 3 | | ten days written notice, specifying the
matters to be | 4 | | considered at such hearing, to every company and rating
| 5 | | organization which made such filing, issue an order specifying | 6 | | in what
respects he finds that such filing fails to meet the | 7 | | requirements of this
Article, and stating when, within a | 8 | | reasonable period thereafter, such
filings shall be deemed no | 9 | | longer effective. Copies of said order shall be
sent to every | 10 | | such company and rating organization. Said order shall not
| 11 | | affect any contract or policy made or issued prior to the | 12 | | expiration of the
period set forth in said order.
| 13 | | (3) Any person or organization aggrieved with respect to | 14 | | any filing
which is in effect may make written application to | 15 | | the Director for a
hearing thereon, provided, however, that the | 16 | | company or rating organization
that made the filing shall not | 17 | | be authorized to proceed under this
subsection. Such | 18 | | application shall specify the grounds to be relied upon by
the | 19 | | applicant. If the Director shall find that the application is | 20 | | made in
good faith, that the applicant would be so aggrieved if | 21 | | his grounds are
established, and that such grounds otherwise | 22 | | justify holding such a
hearing, he shall, within thirty days | 23 | | after receipt of such application,
hold a hearing upon not less | 24 | | than ten days written notice to the applicant
and to every | 25 | | company and rating organization which made such filing.
| 26 | | If, after such hearing, the Director finds that the filing |
| | | 09900HB1287ham004 | - 8 - | LRB099 05153 JLS 35866 a |
|
| 1 | | does not meet
the requirements of this Article, he shall issue | 2 | | an order specifying in
what respects he finds that such filing | 3 | | fails to meet the requirements of
this Article, and stating | 4 | | when, within a reasonable period thereafter, such
filing shall | 5 | | be deemed no longer effective. Copies of said order shall be
| 6 | | sent to the applicant and to every such company and rating | 7 | | organization.
Said order shall not affect any contract or | 8 | | policy made or issued prior to
the expiration of the period set | 9 | | forth in said order.
| 10 | | (4) Whenever an insurer has no legally effective rates as a | 11 | | result of the Director's disapproval of rates or other act, the | 12 | | Director shall on request of the insurer specify interim rates | 13 | | for the insurer that are high enough to protect the interests | 14 | | of all parties and may order that a specified portion of the | 15 | | premiums be placed in an escrow account approved by him or her. | 16 | | When new rates become legally effective, the Director shall | 17 | | order the escrowed funds or any overcharge in the interim rates | 18 | | to be distributed appropriately, except that refunds to | 19 | | policyholders that are de minimus shall not be required. | 20 | | (Source: P.A. 82-939.)
| 21 | | (215 ILCS 5/462a new) | 22 | | Sec. 462a. Premiums; review. | 23 | | (a) Premiums shall not be excessive. A premium is excessive | 24 | | if it is likely to produce a long run profit that is | 25 | | unreasonably high for the insurance provided or if expenses are |
| | | 09900HB1287ham004 | - 9 - | LRB099 05153 JLS 35866 a |
|
| 1 | | unreasonably high in relation to the coverage or services | 2 | | rendered. | 3 | | (b) At any time, an insured may file a request for review | 4 | | of a premium with the Director. The request shall be in such | 5 | | form as the Director prescribes and shall specify the grounds | 6 | | on which the premium is excessive. | 7 | | If within 30 days of any proper request for review under | 8 | | this Section, the Director finds that the premium does not meet | 9 | | the requirements of this Section, he or she shall send to the | 10 | | insurer a written notice of disapproval of premium, specifying | 11 | | therein in what respects he or she finds that the premium fails | 12 | | to meet the requirements of this Section, stating when, within | 13 | | a reasonable period thereafter, the premium shall be deemed no | 14 | | longer effective, and ordering an adjustment of the premium. An | 15 | | insurer whose premium has been disapproved shall be given a | 16 | | hearing upon a written request made within 30 days after the | 17 | | disapproval order. If the insurer requests a hearing, the | 18 | | premium shall be effective until the expiration of a reasonable | 19 | | period specified in any order entered thereon. If, after a | 20 | | hearing, the premium is found to be excessive, the Director | 21 | | shall order an adjustment of the premium. The insurer shall | 22 | | refund to the insured any amount found to be excessive under | 23 | | this Section. | 24 | | If the Director finds that a review is not warranted or a | 25 | | premium is not excessive, he or she shall provide notice of | 26 | | that decision to the insured and the insurer. |
| | | 09900HB1287ham004 | - 10 - | LRB099 05153 JLS 35866 a |
|
| 1 | | (c) An insurer shall provide all information requested by | 2 | | the Director as he or she determines necessary to assist in | 3 | | review of premiums under this Section.
| 4 | | (215 ILCS 5/460 rep.)
| 5 | | Section 3. The Illinois Insurance Code is amended by | 6 | | repealing Section 460.
| 7 | | Section 4. The Workers' Compensation Act is amended by | 8 | | adding Section 4e as follows: | 9 | | (820 ILCS 305/4e new) | 10 | | Sec. 4e. Safety programs and return to work programs; | 11 | | recalculation of premiums and waiver of self-insurers fee. | 12 | | (a) An employer may file with the Commission a workers' | 13 | | compensation safety program or a workers' compensation return | 14 | | to work program implemented by the employer. The Commission may | 15 | | certify any such safety program as a bona fide safety program | 16 | | after reviewing the program for the following minimum | 17 | | requirements: adequate safety training for employees; | 18 | | establishment of joint employer-employee safety committees; | 19 | | use of safety devices; and consultation with safety | 20 | | organizations. The Commission may certify any such return to | 21 | | work program as a bona fide return to work program after | 22 | | reviewing the program for the following minimum requirements: | 23 | | light duty or restricted duty work; leave of absence policy; |
| | | 09900HB1287ham004 | - 11 - | LRB099 05153 JLS 35866 a |
|
| 1 | | and full duty return to work policy. The Commission shall | 2 | | notify the Department of Insurance of the certification. | 3 | | (b) Upon receipt of a certification notice from the | 4 | | Commission under this Section related to an employer that | 5 | | provides workers' compensation through an insurer, the | 6 | | Director of Insurance shall immediately direct in writing the | 7 | | employer's workers' compensation insurer to recalculate the | 8 | | workers' compensation premium rates for the employer so that | 9 | | those premium rates incorporate and take into account the | 10 | | certified program. | 11 | | (c) If any workers' compensation safety program or a | 12 | | workers' compensation return to work program implemented by a | 13 | | self-insured employer is certified under this Section, the | 14 | | annual fee under Section 4d of this Act is waived for the | 15 | | self-insured employer as long as the workers' compensation | 16 | | safety program or a workers' compensation return to work | 17 | | program continues. The self-insured employer shall certify the | 18 | | continuation of the program by each July 1 after the waiver is | 19 | | obtained. ".
|
|