Bill Text: IL HB4042 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that beginning January 1, 2017, 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 technical and grammatical changes.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2015-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB4042 Detail]

Download: Illinois-2015-HB4042-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB4042 Introduced , by Rep. Brandon W. Phelps SYNOPSIS AS INTRODUCED:
215 ILCS 5/456 from Ch. 73, par. 1065.3
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 technical and grammatical changes.
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A BILL FOR
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AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Section 456 as follows:
(215 ILCS 5/456) (from Ch. 73, par. 1065.3)
Sec. 456. Making of rates.
(1) All rates shall be made in accordance with the
following provisions:
(a) Due consideration shall be given to past and
prospective loss experience within and outside this State,
to catastrophe hazards, if any, to a reasonable margin for
profit and contingencies, to dividends, savings, or
unabsorbed premium deposits allowed or returned by
companies to their policyholders, members or subscribers,
to past and prospective expenses both countrywide and those
specially applicable to this State, to underwriting
practice and judgment, and to all other relevant factors
within and outside this State. ;
(b) The systems of expense provisions included in the
rates for use by any company or group of companies may
differ from those of other companies or groups of companies
to reflect the requirements of the operating methods of the

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any such company or group with respect to any kind of
insurance, or with respect to any subdivision or
combination thereof for which subdivision or combination
separate expense provisions are applicable. ;
(c) Risks may be grouped by classifications for the
establishment of rates and minimum premiums.
Classification rates may be modified to produce rates for
individual risks in accordance with rating plans that which
measure variation in hazards or expense provisions, or
both. The Such rating plans may measure any differences
among risks that have a probable effect upon losses or
expenses. ;
(d) Rates shall not be excessive, inadequate, or
unfairly discriminatory.
(i) A rate in a competitive market is not
excessive. A rate in a noncompetitive market 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.
(ii) A rate is not inadequate unless the such rate
is clearly insufficient to sustain projected losses
and expenses in the class of business to which it
applies and the use of the such rate has or, if
continued, will have the effect of substantially
lessening competition or the tendency to create

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monopoly in any market.
(iii) Unfair discrimination exists if, after
allowing for practical limitations, price
differentials fail to reflect equitably the
differences in expected losses and expenses. A rate is
not unfairly discriminatory because different premiums
result for policyholders with like exposures but
different expenses, or like expenses but different
loss exposures, so long as the rate reflects the
differences with reasonable accuracy.
(e) The rating plan shall contain a mandatory offer of
a deductible applicable only to the medical benefit under
the Workers' Compensation Act. Such deductible offer shall
be in a minimum amount of at least $1,000 per accident.
(f) Any rating plan or program shall include a rule
permitting 2 or more employers with similar risk
characteristics, who participate in a loss prevention
program or safety group, to pool their premium and loss
experience in determining their rate or premium for such
participation in the program.
(g) Beginning on January 1, 2017, with respect to an
employer correctly classified within the construction
industry, the amount charged for workers' compensation and
employers' liability insurance insuring the employees
employed by an employer in any job category or
classification shall be based upon hours worked by

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employees in that job category or classification and shall
not be based upon the wages or salaries paid to the
employees.
(2) Except to the extent necessary to meet the provisions
of subdivision (d) of subsection (1) of this Section,
uniformity among companies in any matters within the scope of
this Section is neither required nor prohibited.
(Source: P.A. 82-939.)