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Home | News | AIA: Price Control Legislation is the Wrong Approach to Workers' Compensation in Illinois

AIA: Price Control Legislation is the Wrong Approach to Workers' Compensation in Illinois

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Washington, DC (WorkersCompensation.com) - Steve Schneider, Midwest region vice president for the American Insurance Association (AIA), issued the following statement after testifying today before the Illinois House Labor and Commerce Committee on House Amendment 4 to SB 2901.  Mr. Schneider represented an industry group that included: AIA, the Illinois Insurance Association (IIA), the National Association of Mutual Insurance Companies (NAMIC) and the Property and Casualty Insurers Association of America (PCI).

If enacted, SB 2901 and Amendment 4 would throw out 35 years of successful workers’ compensation insurance regulation and impose government price controls on workers’ compensation insurers. It would require insurers to submit rates to the Department of Insurance, and then wait up to thirty days before using them.  This removes considerable flexibility for both insurers and their customers, Illinois businesses.

Mr. Schneider’s statement follows:

“Illinois is the single most competitive market for workers’ compensation insurance in the United States. This intense level of competition stems from the state’s current open competitive rating law that has been in effect for 35 years and which would be thrown out by Amendment 4 to SB 2901.

In addition to establishing price controls and throwing out more than three decades of successful workers’ compensation insurance regulation, SB 2901 contains provisions which essentially hide or cover-up an employer’s experience modification rating for ‘repetitive or cumulative trauma’ claims filed by workers during their first 90 days of employment.  This bill represents the wrong approach to workers’ compensation reform in Illinois. 

There is meaningful workers’ compensation reform that can be achieved.  I urge the legislature to look at subjects such as the costs of the dispensation of prescription drugs in non-pharmacy settings.  Several years ago the Illinois Workers’ Compensation Commission adopted a regulation to address the costs of so-called ‘repackaged’ pharmaceuticals dispensed by physicians, not in pharmacy settings, directly to injured workers at considerable price markups.

Insurers stand ready to work with policymakers and regulators on improving the state workers’ compensation system to ensure that injured workers receive the proper care.  SB 2901 is the antithesis to that approach.”

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