Full Text of SB2694 95th General Assembly
SB2694sam001 95TH GENERAL ASSEMBLY
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Sen. William R. Haine
Filed: 4/2/2008
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| AMENDMENT TO SENATE BILL 2694
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| AMENDMENT NO. ______. Amend Senate Bill 2694 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 456 as follows:
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| (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
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| Sec. 456. Making of rates. | 8 |
| (1) All rates shall be made in accordance with the | 9 |
| following provisions:
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| (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 |
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| specially applicable to
this State state , to underwriting | 2 |
| practice , and judgment and to all other
relevant factors | 3 |
| within and outside this State. state;
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| (b) The systems of expense provisions included in the | 5 |
| rates for use
by any company or group of companies may | 6 |
| differ from those of other
companies or groups of companies | 7 |
| to reflect the requirements of the
operating methods of the | 8 |
| any such company or group with respect to any kind
of | 9 |
| insurance, or with respect to any subdivision or | 10 |
| combination thereof
for which subdivision or combination | 11 |
| separate expense provisions are
applicable . ;
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| (c) Risks may be grouped by classifications for the | 13 |
| establishment of
rates and minimum premiums. | 14 |
| Classification rates may be modified to
produce rates for | 15 |
| individual risks in accordance with rating plans that which
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| measure variation in hazards or expense provisions, or | 17 |
| both. The Such rating
plans may measure any differences | 18 |
| among risks that have a probable
effect upon losses or | 19 |
| expenses . ;
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| (d) Rates shall not be excessive, inadequate , or | 21 |
| unfairly
discriminatory.
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| (i) A rate in a competitive market is not | 23 |
| excessive. A rate in a noncompetitive
market is | 24 |
| excessive if it is likely to produce a long run profit | 25 |
| that is
unreasonably high for the insurance provided or | 26 |
| if expenses are unreasonably
high in relation to the |
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| services rendered.
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| (ii) A rate is not inadequate unless the such rate | 3 |
| is clearly insufficient to sustain
projected losses | 4 |
| and expenses in the class of business to which it | 5 |
| applies
and the use of the such rate has or, if | 6 |
| continued, will have the effect of substantially
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| lessening competition or the tendency to create | 8 |
| monopoly in any market.
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| (iii) Unfair discrimination exists if, after | 10 |
| allowing for practical limitations,
price | 11 |
| differentials fail to reflect equitably the | 12 |
| differences in expected
losses and expenses. A rate is | 13 |
| not unfairly discriminatory because different
premiums | 14 |
| result for policyholders with like exposures but | 15 |
| different expenses,
or like expenses but different | 16 |
| loss exposures, so long as the rate reflects
the | 17 |
| differences with reasonable accuracy.
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| (e) The rating plan shall contain a mandatory offer of | 19 |
| a deductible applicable
only to the medical benefit under | 20 |
| the Workers' Compensation Act.
Such deductible offer shall | 21 |
| be in a minimum amount of at least $1,000 per accident.
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| (f) Any rating plan or program shall include a rule | 23 |
| permitting 2 or more
employers with similar risk | 24 |
| characteristics, who participate in a loss prevention
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| program or safety group, to pool their premium and loss | 26 |
| experience in determining
their rate or premium for such |
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| participation in the program.
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| (g) With respect to an employer correctly classified | 3 |
| within the construction industry, the amount charged for | 4 |
| workers' compensation and employers' liability insurance | 5 |
| insuring the employees employed by an employer in any job | 6 |
| category or classification shall be based upon hours worked | 7 |
| by employees in that job category or classification and | 8 |
| shall not be based upon the wages or salaries paid to the | 9 |
| employees. | 10 |
| (2) Except to the extent necessary to meet the provisions | 11 |
| of
subdivision (d) of subsection (1) of this Section, | 12 |
| uniformity among
companies in any matters within the scope of | 13 |
| this Section is neither
required nor prohibited.
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| (Source: P.A. 82-939.)
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| Section 99. Effective date. This Act takes effect upon | 16 |
| becoming law.".
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