Illinois General Assembly - Full Text of HB3268
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Full Text of HB3268  98th General Assembly

HB3268 98TH GENERAL ASSEMBLY


 


 
98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3268

 

Introduced , by Rep. Sue Scherer

 

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.


LRB098 08248 RPM 38346 b

 

 

A BILL FOR

 

HB3268LRB098 08248 RPM 38346 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 456 as follows:
 
6    (215 ILCS 5/456)  (from Ch. 73, par. 1065.3)
7    Sec. 456. Making of rates.
8    (1) All rates shall be made in accordance with the
9following provisions:
10        (a) Due consideration shall be given to past and
11    prospective loss experience within and outside this State,
12    to catastrophe hazards, if any, to a reasonable margin for
13    profit and contingencies, to dividends, savings, or
14    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. ;
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. ;
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
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. ;
13        (d) Rates shall not be excessive, inadequate, or
14    unfairly discriminatory.
15            (i) A rate in a competitive market is not
16        excessive. A rate in a noncompetitive market is
17        excessive if it is likely to produce a long run profit
18        that is unreasonably high for the insurance provided or
19        if expenses are unreasonably high in relation to the
20        services rendered.
21            (ii) A rate is not inadequate unless the such rate
22        is clearly insufficient to sustain projected losses
23        and expenses in the class of business to which it
24        applies and the use of the such rate has or, if
25        continued, will have the effect of substantially
26        lessening competition or the tendency to create

 

 

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

 

 

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1    shall not be based upon the wages or salaries paid to the
2    employees.
3    (2) Except to the extent necessary to meet the provisions
4of subdivision (d) of subsection (1) of this Section,
5uniformity among companies in any matters within the scope of
6this Section is neither required nor prohibited.
7(Source: P.A. 82-939.)