Two pieces of legislation recently passed by the Illinois House would harm the workers’ compensation system in the state, a national insurer group says.
American Insurance Association (AIA) said HB 2525 would require insurers to submit rates to the Illinois Department of Insurance and then wait up to 30 days before using them. According to the AIA, the bill removes considerable flexibility for both insurers and their customers from the marketplace, adds unnecessary delays and imposes significant resource demands and costs.
Another measure, HB 2622, would create the Illinois Employers Mutual Insurance Company (IEMIC), a state-sponsored fund to provide workers’ compensation insurance in Illinois.
“AIA is disappointed by the House’s passage of HB 2525 and HB 2622, adverse workers’ compensation legislation,” said Steve Schneider, Midwest region vice president for the AIA.
“Illinois is the most competitive state for worker’s compensation insurance,” he said in the group’s announcement. “More than 300 insurers compete for the right to earn a customer’s business. Competition is intrinsically good for all Illinois employers who must purchase this mandated, comprehensive coverage. This competition stems from Illinois’ current open competitive rating law that has been in effect for 35 years. HB 2525 would eviscerate that law and its benefits for Illinois employers.”
Schneider also said the creation of a state-sponsored workers’ compensation insurance company via HB 2622 would not only disrupt the private market, such action would fail “to provide meaningful reform to the Illinois’ workers’ compensation system. No reason exists for Illinois to create its own to compete against private sector insurers and jobs when no major crisis is present and massive government intervention is not necessary.”
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