[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Engrossed ] | [ Enrolled ] | [ House Amendment 001 ] |
| [ House Amendment 003 ] | [ Senate Amendment 001 ] | [ Senate Amendment 002 ] |
| [ Senate Amendment 004 ] | [ Senate Amendment 005 ] |
91_HB2980
LRB9107003WHdv
1 AN ACT to amend the Illinois Insurance Code by changing
2 Section 456.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Insurance Code is amended by
6 changing Section 456 as follows:
7 (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
8 Sec. 456. Making of rates. (1) All rates shall be made
9 in accordance with the following provisions:
10 (a) Due consideration shall be given to past and
11 prospective loss experience within and outside this state, to
12 catastrophe hazards, if any, to a reasonable margin for
13 profit and contingencies, to dividends, savings or unabsorbed
14 premium deposits allowed or returned by companies to their
15 policyholders, members or subscribers, to past and
16 prospective expenses both countrywide and those specially
17 applicable to this state, to underwriting practice and
18 judgment and to all other relevant factors within and outside
19 this state;
20 (b) The systems of expense provisions included in the
21 rates for use by any company or group of companies may differ
22 from those of other companies or groups of companies to
23 reflect the requirements of the operating methods of any such
24 company or group with respect to any kind of insurance, or
25 with respect to any subdivision or combination thereof for
26 which subdivision or combination separate expense provisions
27 are applicable;
28 (c) Risks may be grouped by classifications for the
29 establishment of rates and minimum premiums. Classification
30 rates may be modified to produce rates for individual risks
31 in accordance with rating plans which measure variation in
-2- LRB9107003WHdv
1 hazards or expense provisions, or both. Such rating plans may
2 measure any differences among risks that have a probable
3 effect upon losses or expenses;
4 (d) Rates shall not be excessive, inadequate or unfairly
5 discriminatory.
6 A rate in a competitive market is not excessive. A rate
7 in a noncompetitive market is excessive if it is likely to
8 produce a long run profit that is unreasonably high for the
9 insurance provided or if expenses are unreasonably high in
10 relation to the services rendered.
11 A rate is not inadequate unless such rate is clearly
12 insufficient to sustain projected losses and expenses in the
13 class of business to which it applies and the use of such
14 rate has or, if continued, will have the effect of
15 substantially lessening competition or the tendency to create
16 monopoly in any market.
17 Unfair discrimination exists if, after allowing for
18 practical limitations, price differentials fail to reflect
19 equitably the differences in expected losses and expenses. A
20 rate is not unfairly discriminatory because different
21 premiums result for policyholders with like exposures but
22 different expenses, or like expenses but different loss
23 exposures, so long as the rate reflects the differences with
24 reasonable accuracy.
25 (e) The rating plan shall contain a mandatory offer of a
26 deductible applicable only to the medical benefit under the
27 Workers' Compensation Act. Such deductible offer shall be in
28 a minimum amount of at least $1,000 per accident.
29 (f) Any rating plan or program shall include a rule
30 permitting 2 or more employers with similar risk
31 characteristics, who participate in a loss prevention program
32 or safety group, to pool their premium and loss experience in
33 determining their rate or premium for such participation in
34 the program.
-3- LRB9107003WHdv
1 (g) Following a conviction of a person of an offense
2 involving a fraudulent workers' compensation insurance claim
3 and a finding by the Industrial Commission of
4 noncompensability, the insurer shall file the appropriate
5 documents to remove the fraudulent and noncompensable claim
6 from the employer's experience modification factor.
7 (2) Except to the extent necessary to meet the
8 provisions of subdivision (d) of subsection (1) of this
9 Section, uniformity among companies in any matters within the
10 scope of this Section is neither required nor prohibited.
11 (Source: P.A. 82-939.)