Full Text of HB6987 93rd General Assembly
HB6987 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 HB6987
Introduced 02/09/04, by Thomas Holbrook SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/155.18 |
from Ch. 73, par. 767.18 |
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Amends the Illinois Insurance Code. Provides that no company writing medical liability insurance in this State may increase any rates or premiums or cancel any policies of any class of medical liability insurance for a period of 6 months after the effective date of this amendatory Act. Provides an exception to the cancellation limitation. Effective July 1, 2004.
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A BILL FOR
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HB6987 |
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LRB093 20694 SAS 46568 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 Section 155.18 as follows:
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| (215 ILCS 5/155.18) (from Ch. 73, par. 767.18)
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| Sec. 155.18. (a) This Section shall apply to insurance on | 8 |
| risks based
upon negligence by a physician, hospital or other | 9 |
| health care provider,
referred to herein as medical liability | 10 |
| insurance. This Section shall not
apply to contracts of | 11 |
| reinsurance, nor to any farm, county, district or
township | 12 |
| mutual insurance company transacting business under an Act | 13 |
| entitled
"An Act relating to local mutual district, county and | 14 |
| township insurance
companies", approved March 13, 1936, as now | 15 |
| or hereafter amended, nor to
any such company operating under a | 16 |
| special charter.
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| (b) The following standards shall apply to the making and | 18 |
| use of rates
pertaining to all classes of medical liability | 19 |
| insurance:
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| (1) Rates shall not be excessive or inadequate, as herein | 21 |
| defined, nor
shall they be unfairly discriminatory. No rate | 22 |
| shall be held to be excessive
unless such rate is unreasonably | 23 |
| high for the insurance provided, and a
reasonable degree of | 24 |
| competition does not exist in the area with respect
to the | 25 |
| classification to which such rate is applicable.
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| No rate shall be held inadequate unless it is unreasonably | 27 |
| low for the
insurance provided and continued use of it would | 28 |
| endanger solvency of the company.
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| (2) Consideration shall be given, to the extent applicable, | 30 |
| to past and
prospective loss experience within and outside this | 31 |
| State, to a reasonable
margin for underwriting profit and | 32 |
| contingencies, to past and prospective
expenses both |
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HB6987 |
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LRB093 20694 SAS 46568 b |
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| countrywide and those especially applicable to this State,
and | 2 |
| to all other factors, including judgment factors, deemed | 3 |
| relevant within
and outside this State.
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| Consideration may also be given in the making and use of | 5 |
| rates to dividends,
savings or unabsorbed premium deposits | 6 |
| allowed or returned by companies
to their policyholders, | 7 |
| members or subscribers.
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| (3) The systems of expense provisions included in the rates | 9 |
| for use by
any company or group of companies may differ from | 10 |
| those of other companies
or groups of companies to reflect the | 11 |
| operating methods of any such company
or group with respect to | 12 |
| any kind of insurance, or with respect to any subdivision
or | 13 |
| combination thereof.
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| (4) Risks may be grouped by classifications for the | 15 |
| establishment of rates
and minimum premiums. Classification | 16 |
| rates may be modified to produce
rates for individual risks in | 17 |
| accordance with rating plans which establish
standards for | 18 |
| measuring variations in hazards or expense provisions, or
both. | 19 |
| Such standards may measure any difference among risks that have | 20 |
| a
probable effect upon losses or expenses. Such classifications | 21 |
| or modifications
of classifications of risks may be established | 22 |
| based upon size, expense,
management, individual experience, | 23 |
| location or dispersion of hazard, or
any other reasonable | 24 |
| considerations and shall apply to all risks under the
same or | 25 |
| substantially the same circumstances or conditions. The rate | 26 |
| for
an established classification should be related generally | 27 |
| to the anticipated
loss and expense factors of the class.
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| (c) Every company writing medical liability insurance | 29 |
| shall file with
the Director of Insurance the rates and rating | 30 |
| schedules it uses for medical
liability insurance.
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| (1) This filing shall occur at least annually and as often | 32 |
| as the rates
are changed or amended.
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| (2) For the purposes of this Section any change in premium | 34 |
| to the company's
insureds as a result of a change in the | 35 |
| company's base rates or a change
in its increased limits | 36 |
| factors shall constitute a change in rates and shall
require a |
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HB6987 |
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LRB093 20694 SAS 46568 b |
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| filing with the Director.
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| (3) It shall be certified in such filing by an officer of | 3 |
| the company
and a qualified actuary that the company's rates | 4 |
| are based on sound actuarial
principles and are not | 5 |
| inconsistent with the company's experience.
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| (d) If after a hearing the Director finds:
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| (1) that any rate, rating plan or rating system violates | 8 |
| the provisions
of this Section applicable to it, he may issue | 9 |
| an order to the company which
has been the subject of the | 10 |
| hearing specifying in what respects such violation
exists and | 11 |
| stating when, within a reasonable period of time, the further
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| use of such rate or rating system by such company in contracts | 13 |
| of insurance
made thereafter shall be prohibited;
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| (2) that the violation of any of the provisions of this | 15 |
| Section applicable
to it by any company which has been the | 16 |
| subject of hearing was wilful, he
may suspend or revoke, in | 17 |
| whole or in part, the certificate of authority
of such company | 18 |
| with respect to the class of insurance which has been the
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| subject of the hearing.
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| (e) Notwithstanding any other provision of this Section, | 21 |
| for a period of 6 months after the effective date of this | 22 |
| amendatory Act of the 93rd General Assembly, no company writing | 23 |
| medical liability insurance in this State may increase any | 24 |
| rates or premiums or cancel any policies of any class of | 25 |
| medical liability insurance. During this 6 month period, the | 26 |
| limitation on the cancellation of policies does not apply to a | 27 |
| cancellation under a provision in a policy that was entered | 28 |
| into before the effective date of this amendatory Act of the | 29 |
| 93rd General Assembly.
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| (Source: P.A. 79-1434.)
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| Section 99. Effective date. This Act takes effect July 1, | 32 |
| 2004.
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