Illinois’ House of Representatives has passed a bill that would create a state-monitored insurance company with the intention of driving down workers’ compensation insurance costs in the state.
The House voted 62-43 on a plan that would establish an independent underwriter with a $10 million state loan. It would act as an insurance company in the market and pay back the loan, according to the Associated Press.
The bill would create the Illinois Employers Mutual Insurance Company. Startup funding would come from the Illinois Workers’ Compensation Commission Operations Fund.
Glenview Democratic Rep. Laura Fine’s idea is that it would compete with policy writers that Democrats claim haven’t lowered premium rates reflected by cost-saving changes they made in 2011.
HB4595 is identical to legislation Republican Gov. Bruce Rauner vetoed last year.
Rauner has made lowering workers’ comp costs one of the top priorities of his three years at the helm. But Republicans say government intervention in the market is not the answer.
The American Insurance Association strongly opposes the plan. “Putting the state in the workers’ compensation business is the wrong idea at the wrong time,” Steve Schneider, AIA’s vice president for state affairs, midwest region, said in the association’s release.
“Illinois has the most competitive workers’ compensation insurance marketplace in the country — 323 insurers currently compete for business across the state. There is simply no need for the government to enter the market,” Schneider said.
This article was first published by Insurance Journal.