The Illinois General Assembly at the end of May passed a bill that requires the pre-approval of workers’ compensation insurance rates by the Illinois Department of Insurance.
The legislation also “permits sensible corporate restructuring for insurers and reinsurers,” according to the American Insurance Association. But, according to AIA’s Steve Schneider, vice president for state affairs, Midwest region, the group is “disappointed that policymakers have chosen to mix poorly conceived government-driven rate controls with reasonable, sensible reforms. Illinois already has the most competitive marketplace for workers’ compensation insurance in the nation — reversing course and putting the state in charge of setting rates for workers’ compensation insurance does nothing to fix the true cost drivers of Illinois’ workers’ compensation system.”
Under House Amendment 1 to Illinois SB 1737, rate filings must be made at least 30 days before they are implemented. Additionally, if a carrier “intends to deviate from the filing of a licensed rating organization of which it is a member,” the insurer will be required to justify the deviation, the bill states.
Filings must be approved by the director of insurance. It is deemed to be legal and effective if not disapproved by the director within 30 days of the rate filing.
This article was first published by Insurance Journal.