Bill Text: IL SB1943 | 2019-2020 | 101st General Assembly | Introduced
Bill Title: 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 changes.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2021-01-13 - Session Sine Die [SB1943 Detail]
Download: Illinois-2019-SB1943-Introduced.html
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1 | AN ACT concerning insurance.
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2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||
5 | changing Section 456 as
follows:
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6 | (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
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7 | Sec. 456. Making of rates. | |||||||||||||||||||
8 | (1) All rates shall be made in accordance with the | |||||||||||||||||||
9 | following provisions:
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10 | (a) Due consideration shall be given to past and | |||||||||||||||||||
11 | prospective loss
experience within and outside this State | |||||||||||||||||||
12 | state , to catastrophe hazards, if
any, to a reasonable | |||||||||||||||||||
13 | margin for profit and contingencies,
to dividends, savings | |||||||||||||||||||
14 | or unabsorbed premium deposits allowed or returned
by | |||||||||||||||||||
15 | companies to their policyholders, members or subscribers, | |||||||||||||||||||
16 | to past and
prospective expenses both countrywide and those | |||||||||||||||||||
17 | specially applicable to
this state, to underwriting | |||||||||||||||||||
18 | practice and judgment and to all other
relevant factors | |||||||||||||||||||
19 | within and outside this State. state;
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20 | (b) The systems of expense provisions included in the | |||||||||||||||||||
21 | rates for use
by any company or group of companies may | |||||||||||||||||||
22 | differ from those of other
companies or groups of companies | |||||||||||||||||||
23 | to reflect the requirements of the
operating methods of the |
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1 | any such company or group with respect to any kind
of | ||||||
2 | insurance, or with respect to any subdivision or | ||||||
3 | combination thereof
for which subdivision or combination | ||||||
4 | separate expense provisions are
applicable . ;
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5 | (c) Risks may be grouped by classifications for the | ||||||
6 | establishment of
rates and minimum premiums. | ||||||
7 | Classification rates may be modified to
produce rates for | ||||||
8 | individual risks in accordance with rating plans that which
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9 | measure variation in hazards or expense provisions, or | ||||||
10 | both. The Such rating
plans may measure any differences | ||||||
11 | among risks that have a probable
effect upon losses or | ||||||
12 | expenses . ;
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13 | (d) Rates shall not be excessive, inadequate or | ||||||
14 | unfairly
discriminatory.
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15 | A rate is excessive if it is likely to produce a profit | ||||||
16 | that is
unreasonably high for the insurance provided or if | ||||||
17 | expenses are unreasonably
high in relation to the services | ||||||
18 | rendered.
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19 | A rate is not inadequate unless the such rate is | ||||||
20 | clearly insufficient to sustain
projected losses and | ||||||
21 | expenses in the class of business to which it applies
and | ||||||
22 | the use of the such rate has or, if continued, will have | ||||||
23 | the effect of substantially
lessening competition or the | ||||||
24 | tendency to create monopoly in any market.
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25 | Unfair discrimination exists if, after allowing for | ||||||
26 | practical limitations,
price differentials fail to reflect |
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1 | equitably the differences in expected
losses and expenses. | ||||||
2 | A rate is not unfairly discriminatory because different
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3 | premiums result for policyholders with like exposures but | ||||||
4 | different expenses,
or like expenses but different loss | ||||||
5 | exposures, so long as the rate reflects
the differences | ||||||
6 | with reasonable accuracy.
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7 | (e) The rating plan shall contain a mandatory offer of | ||||||
8 | a deductible applicable
only to the medical benefit under | ||||||
9 | the Workers' Compensation Act.
Such deductible offer shall | ||||||
10 | be in a minimum amount of at least $1,000 per accident.
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11 | (f) Any rating plan or program shall include a rule | ||||||
12 | permitting 2 or more
employers with similar risk | ||||||
13 | characteristics, who participate in a loss prevention
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14 | program or safety group, to pool their premium and loss | ||||||
15 | experience in determining
their rate or premium for such | ||||||
16 | participation in the program.
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17 | (g) With respect to an employer correctly classified | ||||||
18 | within the
construction industry, the amount charged for | ||||||
19 | workers' compensation and
employers'
liability insurance | ||||||
20 | insuring the employees employed by an employer in any job
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21 | category or classification shall be based upon hours worked | ||||||
22 | by employees in
that job category or classification and | ||||||
23 | shall not be based upon the wages or
salaries paid to the | ||||||
24 | employees.
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25 | (2) Except to the extent necessary to meet the provisions | ||||||
26 | of
subdivision (d) of subsection (1) of this Section, |
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1 | uniformity among
companies in any matters within the scope of | ||||||
2 | this Section is neither
required nor prohibited.
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3 | (Source: P.A. 100-1118, eff. 2-1-19 .)
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