Insurers Object to Workers’ Comp Reform Proposal in Illinois

January 11, 2017

Insurance industry lobbying groups are speaking out against a proposed amendment to an Illinois statute that would give insurance regulators in that state more control over workers’ compensation rates.

Illinois House Amendment 4 to SB 2901 would, among other things, require insurers to pre-file workers’ comp rates and allow insurance regulators to approve or disprove those rates; allow the director of the Illinois insurance department to require refunds to consumers in cases in which an insurer is found to be charging excessive rates; and allow the director to specify interim rates when an insurer’s rates are found to be excessive.

Representing various insurance industry trade groups, Steve Schneider, Midwest region vice president for the American Insurance Association (AIA), testified against the proposed amendment before the before the Illinois House Labor and Commerce Committee.

In addition to the AIA, the Illinois Insurance Association (IIA), the National Association of Mutual Insurance Companies (NAMIC) and the Property and Casualty Insurers Association of America (PCI) oppose the amendment. A statement released by the AIA said the amendment “would throw out 35 years of successful workers’ compensation insurance regulation and impose government price controls on workers’ compensation insurers,” and remove “considerable flexibility for both insurers and their customers, Illinois businesses.”

Schneider said as proposed, SB 2901 not only establishes price controls, it “contains provisions which essentially hide or cover-up an employer’s experience modification rating for ‘repetitive or cumulative trauma’ claims filed by workers during their first 90 days of employment. This bill represents the wrong approach to workers’ compensation reform in Illinois.”

In considering reforms for the workers’ comp system, Schneider urged the legislature instead “to look at subjects such as the costs of the dispensation of prescription drugs in non-pharmacy settings.”

He added that that the insurance industry stands “ready to work with policymakers and regulators on improving the state workers’ compensation system to ensure that injured workers receive the proper care. SB 2901 is the antithesis to that approach.”

The 2016 Oregon Workers’ Compensation Premium Rate Ranking Summary, released in October, showed that Illinois had the eighth highest workers’ comp rates in the nation, with an index rate of 2.23 on Jan. 1, 2015, which is 121 percent of national median.

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Latest Comments

  • January 11, 2017 at 2:51 pm
    Patrick Gallagher says:
    I completely agree with FFA. It is a way that our lame duck legislators are trying to fix the workers compensation system by controlling rates without fixing the problem. It i... read more
  • January 11, 2017 at 1:14 pm
    FFA says:
    If this passes, it will just chase more carrier out and force business back to the pool.
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