The Illinois House recently passed HB 2622, a bill that would create the Illinois Employers Mutual Insurance Company (IEMIC), a state-sponsored fund to provide workers’ compensation insurance in Illinois.
It also passed HB 2525, which would require insurers to submit rates to the Illinois Department of Insurance.
American Insurance Association (AIA) officials called the passage of the bills disappointing.
“HB 2622 not only inappropriately interferes with the private market, but also fails to provide meaningful reform to the Illinois’ workers’ compensation system,” Steve Schneider, Midwest region vice president for the AIA, said. “No reason exists for Illinois to create its own state-sponsored workers’ compensation insurance company to compete against private sector insurers and jobs when no major crisis is present and massive government intervention is not necessary.”
Schneider added that HB 2525 would also hurt competition for worker’s compensation insurance.
“By replacing healthy competition with an extremely vague regulatory standard, HB 2525 could lead to every single workers’ compensation policy and its premiums undergoing formal review by the Department of Insurance every year, or even more frequently. Such bureaucratic interference with open competition will hurt not just workers’ compensation insurers, but all Illinois businesses,” Schneider said.
These bills are not the right approach to reform, he said.
“Insurers stand ready to work with policymakers on meaningful reform to provide an effective workers’ compensation system with reduced cost drivers for employers and appropriate benefits and medical care for injured workers with a minimum of delays and disputes,” Schneider said.