Full Text of SB2262 95th General Assembly
SB2262 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB2262
Introduced 2/14/2008, by Sen. William R. Haine SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/456 |
from Ch. 73, par. 1065.3 |
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Amends the Illinois Insurance Code. Provides that with respect to employers correctly classified within the construction industry, the amount charged to the insured for workers' compensation and employers' liability insurance shall be based upon hours worked by employees in specific job categories or classifications, not the wages or salaries paid to the employees. Makes several technical corrections. Effective immediately.
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A BILL FOR
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SB2262 |
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LRB095 19217 KBJ 45472 b |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 456 as follows:
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| (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
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| Sec. 456. Making of rates. (1) All rates shall be made in | 8 |
| accordance with the following provisions:
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| (a) Due consideration shall be given to past and | 10 |
| prospective loss
experience within and outside this state, to | 11 |
| catastrophe hazards, if
any, to a reasonable margin for profit | 12 |
| and contingencies,
to dividends, savings , or unabsorbed | 13 |
| premium deposits allowed or returned
by companies to their | 14 |
| policyholders, members or subscribers, to past and
prospective | 15 |
| expenses both countrywide and those specially applicable to
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| this State state , to underwriting practice , and judgment and to | 17 |
| all other
relevant factors within and outside this State. | 18 |
| state;
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| (b) The systems of expense provisions included in the rates | 20 |
| for use
by any company or group of companies may differ from | 21 |
| those of other
companies or groups of companies to reflect the | 22 |
| requirements of the
operating methods of the any such company | 23 |
| or group with respect to any kind
of insurance, or with respect |
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SB2262 |
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LRB095 19217 KBJ 45472 b |
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| to any subdivision or combination thereof
for which subdivision | 2 |
| or combination separate expense provisions are
applicable . ;
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| (c) Risks may be grouped by classifications for the | 4 |
| establishment of
rates and minimum premiums. Classification | 5 |
| rates may be modified to
produce rates for individual risks in | 6 |
| accordance with rating plans that which
measure variation in | 7 |
| hazards or expense provisions, or both. The Such rating
plans | 8 |
| may measure any differences among risks that have a probable
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| effect upon losses or expenses . ;
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| (d) Rates shall not be excessive, inadequate , or unfairly
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| discriminatory.
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| (i) A rate in a competitive market is not excessive. A rate | 13 |
| in a noncompetitive
market is excessive if it is likely to | 14 |
| produce a long run profit that is
unreasonably high for the | 15 |
| insurance provided or if expenses are unreasonably
high in | 16 |
| relation to the services rendered.
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| (ii) A rate is not inadequate unless the such rate is | 18 |
| clearly insufficient to sustain
projected losses and expenses | 19 |
| in the class of business to which it applies
and the use of the | 20 |
| such rate has or, if continued, will have the effect of | 21 |
| substantially
lessening competition or the tendency to create | 22 |
| monopoly in any market.
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| (iii) Unfair discrimination exists if, after allowing for | 24 |
| practical limitations,
price differentials fail to reflect | 25 |
| equitably the differences in expected
losses and expenses. A | 26 |
| rate is not unfairly discriminatory because different
premiums |
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SB2262 |
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LRB095 19217 KBJ 45472 b |
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| result for policyholders with like exposures but different | 2 |
| expenses,
or like expenses but different loss exposures, so | 3 |
| long as the rate reflects
the differences with reasonable | 4 |
| accuracy.
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| (e) The rating plan shall contain a mandatory offer of a | 6 |
| deductible applicable
only to the medical benefit under the | 7 |
| Workers' Compensation Act.
Such deductible offer shall be in a | 8 |
| minimum amount of at least $1,000 per accident.
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| (f) Any rating plan or program shall include a rule | 10 |
| permitting 2 or more
employers with similar risk | 11 |
| characteristics, who participate in a loss prevention
program | 12 |
| or safety group, to pool their premium and loss experience in | 13 |
| determining
their rate or premium for such participation in the | 14 |
| program.
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| (g) With respect to an employer correctly classified within | 16 |
| the construction industry, the amount charged for workers' | 17 |
| compensation and employers' liability insurance insuring the | 18 |
| employees employed by an employer in any job category or | 19 |
| classification shall be based upon hours worked by employees in | 20 |
| that job category or classification and shall not be based upon | 21 |
| the wages or salaries paid to the employees. | 22 |
| (2) Except to the extent necessary to meet the provisions | 23 |
| of
subdivision (d) of subsection (1) of this Section, | 24 |
| uniformity among
companies in any matters within the scope of | 25 |
| this Section is neither
required nor prohibited.
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| (Source: P.A. 82-939.)
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| Section 99. Effective date. This Act takes effect upon | 2 |
| becoming law.
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