Illinois Governor Vetoes 1 of 2 Workers’ Comp Bills Opposed by Insurers

August 23, 2017

Illinois Gov. Bruce Rauner has vetoed a workers’ compensation reform bill that has been strongly opposed by the insurance industry.

Rauner on Aug. 18 vetoed HB 2622, which would have created the Illinois Employers Mutual Insurance Co. by allowing the director of the Illinois Workers’ Compensation Commission Operations Fund to make a loan of $10,000,000 for the initial capitalization of the company as a nonprofit, independent public corporation, according the legislative synopsis of the bill.

Under the bill, Illinois Employers Mutual would have been established as a domestic mutual insurance company, the sole purpose of which would be to provide workers’ compensation coverage. Except for the initial loan amount, the no additional state funds would have been allotted to the company.

Applauding Rauner’s veto of the bill, Jeffrey Junkas, assistant vice president state government relations for the Property Casualty Insurers Association of America (PCI), said in a statement that “House Bill 2622 would have injected Illinois into the insurance business by creating in essence, a state fund called the Illinois Employers Mutual Insurance Company (IEMIC) to provide workers compensation insurance in Illinois. Given the state of Illinois’ poor track record on many of its programs and the very competitive nature of the workers compensation market in the state, this legislation was unnecessary and would have placed a new burden on taxpayers.”

Along with HB 2622, state lawmakers this year passed another workers’ comp measure, HB2525, which essentially would require would require pre-approval of workers’ comp insurance rates.

The legislative analysis for HB2525 states that the under the bill, a workers’ comp premium rate “is excessive if it is likely to produce a long run profit that is unreasonably high for the insurance provided or if expenses are unreasonably high in relation to the services rendered.”

The bill was sent to Rauner on June 29 but as of this writing he had not yet acted on it.

PCI’s Junkas said he hopes the governor will veto HB2525, as well. “Legislation such as HB 2622 and HB 2525, with its debunked notions about insurance rate regulation, diverted attention away from the real solutions needed to further reform Illinois’ workers compensation system,” Junkas said.

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