Full Text of HB4012 94th General Assembly
HB4012 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB4012
Introduced 2/28/2005, by Rep. Eddie Washington SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/Art. XXIX heading |
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215 ILCS 5/454 |
from Ch. 73, par. 1065.1 |
215 ILCS 5/455 |
from Ch. 73, par. 1065.2 |
215 ILCS 5/456 |
from Ch. 73, par. 1065.3 |
215 ILCS 5/457 |
from Ch. 73, par. 1065.4 |
215 ILCS 5/458 |
from Ch. 73, par. 1065.5 |
215 ILCS 5/460 |
from Ch. 73, par. 1065.7 |
215 ILCS 5/462 |
from Ch. 73, par. 1065.9 |
215 ILCS 5/463 |
from Ch. 73, par. 1065.10 |
215 ILCS 5/465 |
from Ch. 73, par. 1065.12 |
215 ILCS 5/466 |
from Ch. 73, par. 1065.13 |
215 ILCS 5/467 |
from Ch. 73, par. 1065.14 |
215 ILCS 5/468 |
from Ch. 73, par. 1065.15 |
215 ILCS 5/469 |
from Ch. 73, par. 1065.16 |
215 ILCS 5/470 |
from Ch. 73, par. 1065.17 |
215 ILCS 5/471 |
from Ch. 73, par. 1065.18 |
215 ILCS 5/459 rep. |
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215 ILCS 5/461 rep. |
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Amends the Illinois Insurance Code. Abolishes authority for rating organizations. Requires insurance companies to file their own rates with the Department of Financial and Professional Regulation. Prohibits rate changes exceeding 15% without adequate justification and establishes criteria for justification. Expands the scope of rate regulation under Article XXIX to include all property and casualty insurance. Effective immediately.
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A BILL FOR
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HB4012 |
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LRB094 09462 LJB 39712 b |
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing the heading of Article XXIX and Sections 454, 455, | 6 |
| 456, 457, 458, 460, 462, 463, 465, 466, 467, 468, 469, 470, and | 7 |
| 471 as follows: | 8 |
| (215 ILCS 5/Art. XXIX heading) | 9 |
| ARTICLE XXIX. PROPERTY AND CASUALTY
WORKERS' COMPENSATION AND | 10 |
| EMPLOYER'S LIABILITY RATES.
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| (215 ILCS 5/454) (from Ch. 73, par. 1065.1)
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| Sec. 454. Purpose of Article. The purpose of this Article | 13 |
| is to promote the public welfare by
regulating property and | 14 |
| casualty insurance rates, including workers' compensation and | 15 |
| employer's liability insurance
rates , to the end that they | 16 |
| shall not be excessive, inadequate or
unfairly discriminatory, | 17 |
| or erroneously applied and to authorize and
regulate | 18 |
| co-operative
action among companies in rate making and in other | 19 |
| matters within the
scope of this Article. It is the express | 20 |
| intent of the General Assembly pursuant to this Article to | 21 |
| permit and encourage competition between companies on a sound | 22 |
| financial basis and to establish a mechanism to ensure the | 23 |
| provision of adequate insurance at reasonable rates to the | 24 |
| citizens of this State.
Nothing in this Article is intended (1) | 25 |
| to
prohibit or discourage reasonable competition, or (2) to | 26 |
| prohibit, or
encourage except to the extent necessary to | 27 |
| accomplish the
aforementioned purpose, uniformity in insurance | 28 |
| rates, rating systems,
rating plans or practices. This Article | 29 |
| shall be liberally interpreted
to carry into effect the | 30 |
| provisions of this Section. Section 462b of
this Article is a | 31 |
| codification of existing law and practice.
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| (Source: P.A. 83-1002.)
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| (215 ILCS 5/455) (from Ch. 73, par. 1065.2)
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| Sec. 455. Scope of article. This Article applies to | 4 |
| property and casualty insurance, including workers' | 5 |
| compensation and employers'
liability insurance incidental | 6 |
| thereto and written in connection
therewith , but shall not | 7 |
| apply to reinsurance thereon. As used in this Article, | 8 |
| "property and casualty insurance" means the kinds of insurance | 9 |
| described in clauses (b), (c), (d), (e), (f), (g), (h), (i), | 10 |
| (j), (k), and (l) of Class 2 and clauses (a), (b), (c), (d), | 11 |
| (e), (f), (g), (h), and (i) of Class 3 of Section 4 of this | 12 |
| Code.
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| (Source: P.A. 81-992.)
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| (215 ILCS 5/456) (from Ch. 73, par. 1065.3)
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| Sec. 456. Making of rates. (1) All rates shall be made in | 16 |
| accordance with the following provisions:
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| (a) Due consideration shall be given to past and | 18 |
| prospective loss
experience within and outside this state, to | 19 |
| catastrophe hazards, if
any, to a reasonable margin for profit | 20 |
| and contingencies,
to dividends, savings or unabsorbed premium | 21 |
| deposits allowed or returned
by companies to their | 22 |
| policyholders, members or subscribers, to past and
prospective | 23 |
| expenses both countrywide and those specially applicable to
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| this state, to underwriting practice and judgment and to all | 25 |
| other
relevant factors within and outside this state;
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| (b) The systems of expense provisions included in the rates | 27 |
| for use
by any company or group of companies may differ from | 28 |
| those of other
companies or groups of companies to reflect the | 29 |
| requirements of the
operating methods of any such company or | 30 |
| group with respect to any kind
of insurance, or with respect to | 31 |
| any subdivision or combination thereof
for which subdivision or | 32 |
| combination separate expense provisions are
applicable;
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| (c) Risks may be grouped by classifications for the | 34 |
| establishment of
rates and minimum premiums. Classification |
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| rates may be modified to
produce rates for individual risks in | 2 |
| accordance with rating plans which
measure variation in hazards | 3 |
| or expense provisions, or both. Such rating
plans may measure | 4 |
| any differences among risks that have a probable
effect upon | 5 |
| losses or expenses;
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| (d) Rates shall not be excessive, inadequate or unfairly
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| discriminatory , nor shall rates be increased more than 15% | 8 |
| without adequate justification .
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| A rate in a competitive market is presumed to be not | 10 |
| excessive if it has not been increased or decreased by more | 11 |
| than 15% without adequate justification . A rate in a | 12 |
| noncompetitive
market is excessive if it is likely to produce a | 13 |
| long run profit that is
unreasonably high for the insurance | 14 |
| provided or if expenses are unreasonably
high in relation to | 15 |
| the services rendered.
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| A rate is not inadequate unless such rate is clearly | 17 |
| insufficient to sustain
projected losses and expenses in the | 18 |
| class of business to which it applies
and the use of such rate | 19 |
| has or, if continued, will have the effect of substantially
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| lessening competition or the tendency to create monopoly in any | 21 |
| market.
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| Unfair discrimination exists if, after allowing for | 23 |
| practical limitations,
price differentials fail to reflect | 24 |
| equitably the differences in expected
losses and expenses. A | 25 |
| rate is not unfairly discriminatory because different
premiums | 26 |
| result for policyholders with like exposures but different | 27 |
| expenses,
or like expenses but different loss exposures, so | 28 |
| long as the rate reflects
the differences with reasonable | 29 |
| accuracy.
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| (e) A
The rating plan for workers' compensation or | 31 |
| employer's liability insurance shall contain a mandatory offer | 32 |
| of a deductible applicable
only to the medical benefit under | 33 |
| the Workers' Compensation Act.
Such deductible offer shall be | 34 |
| 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 | 36 |
| permitting 2 or more
employers with similar risk |
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| characteristics, who participate in a loss prevention
program | 2 |
| or safety group, to pool their premium and loss experience in | 3 |
| determining
their rate or premium for such participation in the | 4 |
| program.
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| (g) In making the determination of whether there is | 6 |
| adequate justification for a rate increase of more than 15%, | 7 |
| the Secretary shall, in accordance with generally accepted and | 8 |
| reasonable actuarial techniques, consider the following | 9 |
| factors: | 10 |
| (A) Past loss experience within and outside this State. | 11 |
| (B) Past expenses both allocated and unallocated. | 12 |
| (C) The degree of competition among insurers for the | 13 |
| risk insured. | 14 |
| (D) Investment income reasonably expected by the | 15 |
| insurer, consistent with the insurer's investment | 16 |
| practices, from investable premiums anticipated in the | 17 |
| filing, plus any other expected income from currently | 18 |
| invested assets representing the amount expected on | 19 |
| unearned premium reserves and loss reserves. the | 20 |
| Department may adopt rules utilizing reasonable techniques | 21 |
| of actuarial science and economics to specify the manner in | 22 |
| which insurers shall calculate investment income | 23 |
| attributable to the classes of insurance written in this | 24 |
| State and the manner in which the investment income shall | 25 |
| be used in the calculation of insurance rates. | 26 |
| (E) The reasonableness of the judgment reflected in the | 27 |
| filing. | 28 |
| (F) Dividends, savings, or unabsorbed premium deposits | 29 |
| allowed or returned to Illinois policyholders, members, or | 30 |
| subscribers. | 31 |
| (G) The adequacy of loss reserves. | 32 |
| (H) The cost of reinsurance. | 33 |
| (I) Trend factors, including trends in actual losses | 34 |
| per insured unit for the insurer making the filing. | 35 |
| (J) Conflagration and catastrophe hazards, if | 36 |
| applicable. |
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| (K) A reasonable margin for profit and contingencies. | 2 |
| (L) Other relevant factors that impact upon the | 3 |
| frequency or severity of claims or upon expenses. | 4 |
| (M) In the case of fire insurance rates, consideration | 5 |
| shall be given to the experience of the fire insurance | 6 |
| business during a period of not less than the most recent 5 | 7 |
| year period for which the experience is available.
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| (2) Except to the extent necessary to meet the provisions | 9 |
| of
subdivision (d) of subsection (1) of this Section, | 10 |
| uniformity among
companies in any matters within the scope of | 11 |
| this Section is neither
required nor prohibited.
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| (Source: P.A. 82-939.)
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| (215 ILCS 5/457) (from Ch. 73, par. 1065.4)
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| Sec. 457. Rate filings. (1) Beginning January 1, 1983, | 15 |
| every company
shall file with the Director every manual of | 16 |
| classifications, every manual
of rules and rates, every rating | 17 |
| plan and every modification of the foregoing
which it intends | 18 |
| to use. Such filings shall be made not later than 30 days
after | 19 |
| they become effective.
A company may satisfy its obligation to | 20 |
| make such filings by adopting the
filing of a licensed rating | 21 |
| organization of which it is a member or subscriber,
filed | 22 |
| pursuant to subsection (2) of this Section, in total or by | 23 |
| notifying
the Director in what respects it intends to deviate | 24 |
| from such filing. Any
company adopting a pure premium filed by | 25 |
| a rating organization pursuant to subsection
(2) must file with | 26 |
| the Director the modification factor it is using for
expenses | 27 |
| and profit so that the final rates in use by such company can | 28 |
| be determined.
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| (2) (Blank).
Beginning January 1, 1983, each licensed | 30 |
| rating organization must
file with the Director every manual of | 31 |
| classification, every manual of rules
and advisory rates, every | 32 |
| pure premium which has been fully adjusted and
fully developed, | 33 |
| every rating plan and every modification of any of the
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| foregoing which it intends to recommend for use to its members | 35 |
| and subscribers,
not later than 30 days after such manual, |
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| premium, plan or modification
thereof takes effect. Every | 2 |
| licensed rating organization shall also file
with the Director | 3 |
| the rate classification system, all rating rules, rating
plans, | 4 |
| policy forms, underwriting rules or similar materials, and each | 5 |
| modification
of any of the foregoing which it requires its | 6 |
| members and subscribers to
adhere to not later than 30 days | 7 |
| before such filings or modifications thereof
are to take | 8 |
| effect. Every such filing shall state the proposed effective
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| date thereof and shall indicate the character and extent of the | 10 |
| coverage contemplated.
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| (3) A filing and any supporting information made pursuant | 12 |
| to this Section
shall be open to public inspection after the | 13 |
| filing becomes effective.
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| (Source: P.A. 82-939.)
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| (215 ILCS 5/458) (from Ch. 73, par. 1065.5)
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| Sec. 458. Disapproval of filings. (1) If within thirty days | 17 |
| of any filing the Director
finds that such filing does not meet | 18 |
| the requirements of this Article, he
shall send to the company | 19 |
| or rating organization which made such filing a
written notice | 20 |
| of disapproval of such filing, specifying therein in what
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| respects he finds that such filing fails to meet the | 22 |
| requirements of this
Article and stating when, within a | 23 |
| reasonable period thereafter, such
filing shall be deemed no | 24 |
| longer effective. If the company or rating
organization making | 25 |
| the filing shall, prior to the expiration of the period
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| prescribed in the notice, request a hearing, such filings shall | 27 |
| be
effective until the expiration of a reasonable period | 28 |
| specified in any
order entered thereon. If the rate resulting | 29 |
| from such filing be unfairly
discriminatory or materially | 30 |
| inadequate, and the difference
between such rate and the | 31 |
| approved rate equals or exceeds the cost of
making an | 32 |
| adjustment, the Director shall in such notice or order direct | 33 |
| an
adjustment of the premium to be made with the policyholder | 34 |
| either by refund
or collection of additional premium. If the | 35 |
| policyholder does not accept
the increased rate, cancellation |
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| shall be made on a pro rata basis. Any
policy issued pursuant | 2 |
| to this subsection shall contain a provision that
the premium | 3 |
| thereon shall be subject to adjustment upon the basis of the
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| filing finally approved.
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| (2) If at any time subsequent to the applicable review | 6 |
| period provided
for in subsection (1) of this Section, the | 7 |
| Director finds that a
filing does not meet the requirements of | 8 |
| this Article, he shall, after a
hearing held upon not less than | 9 |
| ten days written notice, specifying the
matters to be | 10 |
| considered at such hearing, to the
every company and rating
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| organization which made such filing, issue an order specifying | 12 |
| in what
respects he finds that such filing fails to meet the | 13 |
| requirements of this
Article, and stating when, within a | 14 |
| reasonable period thereafter, such
filings shall be deemed no | 15 |
| longer effective. Copies of said order shall be
sent to every | 16 |
| such company and rating organization . Said order shall not
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| affect any contract or policy made or issued prior to the | 18 |
| expiration of the
period set forth in said order.
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| (3) Any person or organization aggrieved with respect to | 20 |
| any filing
which is in effect may make written application to | 21 |
| the Director for a
hearing thereon, provided, however, that the | 22 |
| company or rating organization
that made the filing shall not | 23 |
| be authorized to proceed under this
subsection. Such | 24 |
| application shall specify the grounds to be relied upon by
the | 25 |
| applicant. If the Director shall find that the application is | 26 |
| made in
good faith, that the applicant would be so aggrieved if | 27 |
| his grounds are
established, and that such grounds otherwise | 28 |
| justify holding such a
hearing, he shall, within thirty days | 29 |
| after receipt of such application,
hold a hearing upon not less | 30 |
| than ten days written notice to the applicant
and to every | 31 |
| company and rating organization which made such filing .
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| If, after such hearing, the Director finds that the filing | 33 |
| does not meet
the requirements of this Article, he shall issue | 34 |
| an order specifying in
what respects he finds that such filing | 35 |
| fails to meet the requirements of
this Article, and stating | 36 |
| when, within a reasonable period thereafter, such
filing shall |
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| be deemed no longer effective. Copies of said order shall be
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| sent to the applicant and to every such company and rating | 3 |
| organization .
Said order shall not affect any contract or | 4 |
| policy made or issued prior to
the expiration of the period set | 5 |
| forth in said order.
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| (Source: P.A. 82-939.)
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| (215 ILCS 5/460) (from Ch. 73, par. 1065.7)
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| Sec. 460. Competitive Market, Approval of Rates. (a) | 9 |
| Beginning January
1, 1983, a competitive market is presumed to | 10 |
| exist unless the Director, after a
hearing, determines that a | 11 |
| reasonable degree of competition does
not exist in the market | 12 |
| and
the Director issues a ruling to that effect. For purposes | 13 |
| of this Article
only, market shall mean the statewide workers' | 14 |
| compensation and employers'
liability lines of business. In | 15 |
| determining whether a reasonable degree of competition
exists, | 16 |
| the Director shall consider relevant tests of workable | 17 |
| competition
pertaining to market structure, market performance | 18 |
| and market conduct. Such
tests may include, but need not be | 19 |
| limited to, the following: size and number
of firms actively | 20 |
| engaged in the market, market shares and changes in market
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| shares of firms, ease of entry and exit
from a given market, | 22 |
| underwriting restriction, and whether profitability
for | 23 |
| companies generally in the market is unreasonably high.
The | 24 |
| determination of competition involves the interaction of the | 25 |
| various
tests and the weight given to specific tests depends | 26 |
| upon the particular
situation and pattern of test results.
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| In determining whether or not a competitive market exists, | 28 |
| the Director
shall monitor the degree of competition in this | 29 |
| State. In doing so, he
shall utilize existing relevant | 30 |
| information, analytical systems and other
sources; cause or | 31 |
| participate in the development of new relevant information,
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| analytical systems and other sources; or rely on some | 33 |
| combination thereof.
Such activities may be conducted | 34 |
| internally within the Department of Insurance,
in cooperation | 35 |
| with other state insurance departments, through outside |
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| contractors,
or in any other appropriate manner.
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| (b) If the Director finds that a reasonable degree of | 3 |
| competition does
not exist in a market, he may require that the | 4 |
| insurers in that market file
supporting information in support | 5 |
| of existing rates. If the Director believes
that such rates may | 6 |
| violate any of the requirements of this Article, he
shall call | 7 |
| a hearing prior to any disapproval.
If the Director determines | 8 |
| that a competitive market does not exist in a
the
workers' | 9 |
| compensation market as provided in a ruling pursuant to this | 10 |
| Section,
then every company must prefile every manual of | 11 |
| classifications, rules,
rates, rating plans, rating schedules, | 12 |
| and every modification of the foregoing
covered by such rule. | 13 |
| Such filing shall be made at least 30 days prior
to its taking | 14 |
| effect, and such prefiling requirement
shall remain in effect | 15 |
| as long as there is a ruling in effect pursuant to
this Section | 16 |
| that a reasonable degree of competition does not exist.
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| (c) The Director shall disapprove a rate if he finds that | 18 |
| the rate is
excessive, inadequate or unfairly discriminatory as | 19 |
| defined in Section 456 or has been increased by more than 15% | 20 |
| without adequate justification . An
insurer whose rates have | 21 |
| been disapproved shall be given a hearing upon
a written | 22 |
| request made within 30 days after the disapproval order.
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| If the Director disapproves a rate, he shall issue an order | 24 |
| specifying
in what respects it fails to meet the requirements | 25 |
| of this Article and stating
when within a reasonable period | 26 |
| thereafter such rate shall be
discontinued for any policy | 27 |
| issued or renewed after a date specified in
the order. The | 28 |
| order shall be issued within 30 days after the close of
the | 29 |
| hearing or within such reasonable time extension as the | 30 |
| Director may
fix. Such order may include a provision for | 31 |
| premium adjustment for the
period after the effective date of | 32 |
| the order for policies in effect on such date.
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| (d) Whenever an insurer has no legally effective rates as a | 34 |
| result of
the Director's disapproval of rates or other act, the | 35 |
| Director shall on
request of the insurer specify interim rates | 36 |
| for the insurer that are high
enough to protect the interest of |
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| all parties and may order that a specified
portion of the | 2 |
| premiums be placed in an escrow account approved by him.
When | 3 |
| new rates become legally effective, the Director shall order | 4 |
| the escrowed
funds or any overcharge in the interim rates to be | 5 |
| distributed appropriately,
except that refunds to | 6 |
| policyholders that are de minimus shall not be required.
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| (Source: P.A. 82-939.)
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| (215 ILCS 5/462) (from Ch. 73, par. 1065.9)
| 9 |
| Sec. 462. Information to be furnished insureds - Hearings | 10 |
| and appeals of
insureds. Every rating organization, and every | 11 |
| company which does
not adopt the rates of a rating | 12 |
| organization,
shall, within a reasonable time after receiving | 13 |
| written request therefor, furnish to
any insured affected by a | 14 |
| rate made by it, or to the authorized
representative of such | 15 |
| insured, in readily understandable language,
all pertinent | 16 |
| information as to such rate as specified in rules adopted
by | 17 |
| the Department.
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| Every rating organization, and every company which does not | 19 |
| adopt
the rates of a rating organization,
shall provide within | 20 |
| this state reasonable means whereby any person
aggrieved by the | 21 |
| application of its rating system may be heard, in
person or by | 22 |
| his authorized representative, on his written request to
review | 23 |
| the manner in which such rating system has been applied in
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| connection with the insurance afforded him. If the rating | 25 |
| organization
or company fails to grant or reject such request | 26 |
| within thirty days
after it is made, the applicant may proceed | 27 |
| in the same manner as if his
application had been rejected. Any | 28 |
| party affected by the action of such
rating organization or | 29 |
| such company on such request may, within thirty
days after | 30 |
| written notice of such action, appeal to the Director, who,
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| after a hearing held upon not less than ten days' written | 32 |
| notice to the
appellant and to such rating organization or | 33 |
| company, may affirm or
reverse such action.
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| (Source: P.A. 82-939.)
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| (215 ILCS 5/463) (from Ch. 73, par. 1065.10)
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| Sec. 463. Advisory organizations. (1) Every group, | 3 |
| association or other organization of companies whether
located | 4 |
| within or outside this state, which assists companies which | 5 |
| make
their own filings or rating organizations in rate making, | 6 |
| by the collection
and furnishing of loss or expense statistics, | 7 |
| or by the submission of
recommendations, but which does not | 8 |
| make filings under this Article, shall
be known as an advisory | 9 |
| organization.
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| (2) Every advisory organization shall file with the | 11 |
| Director (a) a copy
of its constitution, its articles of | 12 |
| agreement or association or its
certificate of incorporation | 13 |
| and of its by-laws, rules and regulations
governing its | 14 |
| activities, (b) a list of its members, (c) the name and
address | 15 |
| of a resident of this state upon whom notices or orders of the
| 16 |
| Director or process issued at his direction may be served, and | 17 |
| (d) an
agreement that the Director may examine such advisory | 18 |
| organization in
accordance with the provisions of Section 465 | 19 |
| of this Article.
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| (3) If, after a hearing, the Director finds that the | 21 |
| furnishing of such
information or assistance involves any act | 22 |
| or practice which is unfair or
unreasonable or otherwise | 23 |
| inconsistent with the provisions of this Article,
he may issue | 24 |
| a written order specifying in what respects such act or
| 25 |
| practice is unfair or unreasonable or otherwise inconsistent | 26 |
| with the
provisions of this Article, and requiring the | 27 |
| discontinuance of such act or
practice.
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| (4) No company which makes its own filings nor any rating | 29 |
| organization
shall support its filings by statistics or adopt | 30 |
| rate making
recommendations, furnished to it by an advisory | 31 |
| organization which has not
complied with this Section or with | 32 |
| an order of the Director involving such
statistics or | 33 |
| recommendations issued under subsection (3) of this Section.
If | 34 |
| the Director finds such company or rating organization to be in
| 35 |
| violation of this subsection he may issue an order requiring | 36 |
| the
discontinuance of such violation.
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| (Source: Laws 1947, p. 1098.)
| 2 |
| (215 ILCS 5/465) (from Ch. 73, par. 1065.12)
| 3 |
| Sec. 465. Examinations. The Director shall, at least once | 4 |
| in five years, make or cause to be
made an examination of each | 5 |
| rating organization licensed in this state as
provided in | 6 |
| Section 459 and he may, as often as he may deem it expedient,
| 7 |
| make or cause to be made an examination of each advisory | 8 |
| organization
referred to in Section 463 and of each group, | 9 |
| association or other
organization referred to in Section 464. | 10 |
| The reasonable costs of any such
examination shall be paid by | 11 |
| the rating organization, advisory
organization , or group, | 12 |
| association or other organization examined upon
presentation | 13 |
| to it of a detailed account of such costs. The officers,
| 14 |
| manager, agents and employees of such rating organization, | 15 |
| advisory
organization or group, association or other | 16 |
| organization may be examined at
any time under oath and shall | 17 |
| exhibit all books, records, accounts,
documents, or agreements | 18 |
| governing its method of operation. In lieu of any
such | 19 |
| examination the Director may accept the report of an | 20 |
| examination made
by the insurance supervisory official of | 21 |
| another state, pursuant to the
laws of such state. The | 22 |
| provisions of Sections 132 through 132.7, 402,
and 403 shall be
| 23 |
| applicable to the examinations hereunder.
| 24 |
| (Source: P.A. 89-97, eff. 7-7-95.)
| 25 |
| (215 ILCS 5/466) (from Ch. 73, par. 1065.13)
| 26 |
| Sec. 466. Rate administration. (1) Recording and Reporting | 27 |
| of Loss and Expense Experience.
| 28 |
| The Director shall promulgate reasonable rules and shall | 29 |
| approve statistical
plans, reasonably adapted to each of the | 30 |
| rating systems on file with him, which
may be modified from | 31 |
| time to time and which shall be used thereafter by
each company | 32 |
| in the recording and reporting of its loss and countrywide
| 33 |
| expense experience, in order that the experience of all | 34 |
| companies may be
made available at least annually in such form |
|
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| and detail as may be
necessary to aid him in determining | 2 |
| whether rating systems comply with the
standards set forth in | 3 |
| Section 456. An approved statistical plan need not
be adopted | 4 |
| as a rule, but shall be made available for public inspection at
| 5 |
| the Department's principal office and a copy of the plan shall | 6 |
| be filed
with the Secretary of State. Such rules and plans may | 7 |
| also provide
for the recording and reporting of expense | 8 |
| experience items which are
specially applicable to this state | 9 |
| and are not susceptible of determination
by a prorating of | 10 |
| countrywide expense experience. In promulgating such rules
and | 11 |
| approving plans, the Director shall give due consideration to | 12 |
| the rating
systems on file with him and in order that such | 13 |
| rules and plans may be as
uniform as is practicable among the | 14 |
| several states, to the rules and to the
form of the plans used | 15 |
| for such rating systems in other states. No company
shall be | 16 |
| required to record or report any experience on an experience
| 17 |
| classification which it does not use in the making of its rates | 18 |
| or to
record or report its experience on any basis or | 19 |
| statistical plan that
differs from that which is regularly | 20 |
| employed and used in the usual course
of such company's | 21 |
| business, nor shall any company be required to record or
report | 22 |
| its loss experience on a classification basis that is | 23 |
| inconsistent
with the rating system filed by it, nor shall it | 24 |
| be required to report such
experience to any rating | 25 |
| organization of which it is not a member or
subscriber, or to | 26 |
| an agency operated by or subject to the control of such a
| 27 |
| rating organization, nor shall the Department's rules state | 28 |
| that the
insurer must record or report its experience in | 29 |
| accordance with a uniform
statistical plan which differs from | 30 |
| that which is regularly employed and
used in the usual course | 31 |
| of such company's business. All companies
Any
company not | 32 |
| reporting such experience to a rating
organization or other | 33 |
| agency designated by the Director, shall report such
experience | 34 |
| to the Director. The Director may designate one or more rating
| 35 |
| organizations or other agencies to assist him in gathering all | 36 |
| such
experience and in making compilations thereof. The |
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| experience of any
company filed with the Director shall be | 2 |
| deemed confidential and shall not
be revealed by the Director | 3 |
| to any other company or other person, provided,
however, that | 4 |
| the Director may make compilations of all experience,
including | 5 |
| the experience of any such company, or of such experience and | 6 |
| the
compilation made by the designated rating organization or | 7 |
| other agency or agencies . All
such compilations, whether made | 8 |
| by the Director or by a
any designated rating
organization or | 9 |
| other agency, shall be made available, subject to
reasonable | 10 |
| rules promulgated by the Director, to companies and rating
| 11 |
| organizations .
| 12 |
| (2) Interchange of Rating Plan Data
| 13 |
| Reasonable rules and plans may be promulgated by the | 14 |
| Director for the
interchange of data necessary for the | 15 |
| application of rating plans.
| 16 |
| (3) Consultation with Other States
| 17 |
| In order to further uniform administration of rate | 18 |
| regulatory laws, the
Director and every company and rating | 19 |
| organization may exchange information
and experience data with | 20 |
| insurance supervisory officials and , companies and
rating | 21 |
| organizations in other states and may consult with them with | 22 |
| respect
to rate making and the application of rating systems.
| 23 |
| (4) Rules and Regulations
| 24 |
| The Director may make reasonable rules and regulations | 25 |
| necessary to
effect the purpose of this Article.
| 26 |
| (Source: P.A. 84-427.)
| 27 |
| (215 ILCS 5/467) (from Ch. 73, par. 1065.14)
| 28 |
| Sec. 467. False or misleading information. No person, | 29 |
| company or
organization shall wilfully withhold information
| 30 |
| from, or knowingly give false or misleading information to , the | 31 |
| Director,
any statistical agency designated by the Director, | 32 |
| any rating organization,
or , any company which will affect the | 33 |
| rates or premiums chargeable under
this Article. A violation of | 34 |
| this Section shall subject the one guilty of
such violation to | 35 |
| the penalties provided in Section 470 of this Article.
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| (Source: Laws 1947, p. 1098.)
| 2 |
| (215 ILCS 5/468) (from Ch. 73, par. 1065.15)
| 3 |
| Sec. 468. Residual Market Mechanism. All companies | 4 |
| licensed to write
workers' compensation and employers' | 5 |
| liability insurance in this State shall
participate in a plan | 6 |
| providing for the equitable apportionment among them
of | 7 |
| insurance which may be afforded applicants who are in good | 8 |
| faith entitled
to but who are unable to procure such insurance | 9 |
| through ordinary methods.
Companies must submit such a plan for | 10 |
| the Director's approval within 60
days of the effective date of | 11 |
| this amendatory Act of 1982. The rates to be used
in such a | 12 |
| plan and any future modification thereof must be submitted to
| 13 |
| the Director for approval at least 30 days prior to their | 14 |
| effective date.
Such rates shall reflect residual market | 15 |
| experience to the extent it is
actuarially appropriate. The | 16 |
| Director shall disapprove any filing that
does not meet the | 17 |
| requirements
of subparagraph (d) of paragraph (1) of Section | 18 |
| 456 of this Article. A
filing shall be deemed to meet such | 19 |
| requirements unless disapproved by the
Director within 30 days | 20 |
| after the filing is made. In disapproving a filing
made under | 21 |
| this Section, the Director shall have the same authority and
| 22 |
| shall follow the same procedure as in disapproving a filing | 23 |
| under Section
458. Notwithstanding any other provisions of this | 24 |
| Article, rating organizations
may make and file rates under | 25 |
| this Section.
| 26 |
| (Source: P.A. 82-939.)
| 27 |
| (215 ILCS 5/469) (from Ch. 73, par. 1065.16)
| 28 |
| Sec. 469. Rebates prohibited. No broker or agent shall | 29 |
| knowingly charge, demand or receive a premium
for any policy of | 30 |
| insurance except in accordance with the provisions of
this | 31 |
| Article. No company or employee thereof, and no broker or agent | 32 |
| shall
pay, allow or give, or offer to pay, allow or give, | 33 |
| directly or indirectly,
as an inducement to insurance, or after | 34 |
| insurance has been effected, any
rebates, discount, abatement, |
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| credit or reduction of the premium named in a
policy of | 2 |
| insurance, or any special favor or advantage in the dividends | 3 |
| or
other benefits to accrue thereon, or any valuable | 4 |
| consideration or
inducement whatever, not specified in the | 5 |
| policy of insurance, except to
the extent provided for in an | 6 |
| applicable filing. No insured named in a
policy of insurance, | 7 |
| nor any employee of such insured shall knowingly
receive or | 8 |
| accept, directly or indirectly, any such rebate, discount,
| 9 |
| abatement, credit or reduction of premium, or any such special | 10 |
| favor or
advantage or valuable consideration or inducement. | 11 |
| Nothing in this Section
shall be construed as prohibiting the | 12 |
| payment of commissions or other
compensation to duly licensed | 13 |
| agents and brokers, nor as prohibiting any
company from | 14 |
| allowing or returning to its participating policyholders,
| 15 |
| members or subscribers, dividends, savings or unabsorbed | 16 |
| premium deposits.
| 17 |
| Sections 151 and 152 of the Insurance Code shall not apply | 18 |
| to any kind
of insurance subject to this Article.
| 19 |
| (Source: P.A. 76-943.)
| 20 |
| (215 ILCS 5/470) (from Ch. 73, par. 1065.17)
| 21 |
| Sec. 470. Penalties. Any person, company or organization | 22 |
| violating any provision of this
Article shall be guilty of a | 23 |
| petty offense for each such violation,
provided that a series | 24 |
| of acts or events based upon the same alleged
violation shall | 25 |
| be treated and considered as a single violation.
| 26 |
| The Director may suspend the license of any rating | 27 |
| organization or
company which fails to comply with an order of | 28 |
| the Director within the time
limited by such order, or any | 29 |
| extension thereof which the Director may
grant. The Director | 30 |
| shall not suspend the license of any rating
organization or | 31 |
| company for failure to comply with an order until the time
| 32 |
| prescribed for filing a petition for review thereof as provided | 33 |
| in Section
471 has expired or if such petition for review has | 34 |
| been filed until such
order has been affirmed. The Director may | 35 |
| determine when a suspension of
license shall become effective |
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| and it shall remain in effect for the period
fixed by him, | 2 |
| unless he modifies or rescinds such suspension, or until the
| 3 |
| order upon which such suspension is based is modified, | 4 |
| rescinded or
reversed.
| 5 |
| No license shall be suspended or revoked except upon a | 6 |
| written order of
the Director, stating his findings, made after | 7 |
| a hearing held upon not less
than ten days' written notice to | 8 |
| such person or organization specifying the
alleged violation.
| 9 |
| (Source: P.A. 77-2699.)
| 10 |
| (215 ILCS 5/471) (from Ch. 73, par. 1065.18)
| 11 |
| Sec. 471. Hearing procedure and judicial review. (1) Any | 12 |
| company or rating
organization aggrieved by any order or
| 13 |
| decision of the Director made without a hearing, may, within 30 | 14 |
| days
after notice of the order to the company or organization , | 15 |
| make written
request to the Director for a hearing thereon. The | 16 |
| Director shall hear
such party or parties within 20 days after | 17 |
| receipt of such request
and shall give not less than 10 days' | 18 |
| written notice of the time and
place of the hearing. Within 15 | 19 |
| days after such hearing the
Director shall affirm, reverse or | 20 |
| modify his previous action, specifying
his reasons therefor. | 21 |
| Pending such hearing and decision thereon the
Director may | 22 |
| suspend or postpone the effective date of his previous
action.
| 23 |
| (2) Nothing contained in this Article shall require the | 24 |
| observance
at any hearing of formal rules of pleading or | 25 |
| evidence.
| 26 |
| (3) The Administrative Review Law shall apply to and govern | 27 |
| all
proceedings for the judicial review of orders and decisions | 28 |
| of the
Director under this Article. Provided, however, that, in | 29 |
| the review of
any order or decision of the Director under this | 30 |
| Article, such order or
decision shall not be deemed prima facie | 31 |
| to be correct and proper , and
provided further that a rating | 32 |
| organization aggrieved by an order or
decision under this | 33 |
| Article may initiate such proceedings for its
review .
| 34 |
| (Source: P.A. 82-783.)
|
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| 1 |
| (215 ILCS 5/459 rep.)
| 2 |
| (215 ILCS 5/461 rep.)
| 3 |
| Section 10. The Illinois Insurance Code is amended by | 4 |
| repealing Sections 459 and 461.
| 5 |
| Section 99. Effective date. This Act takes effect upon | 6 |
| becoming law.
|
|