Last month, the Illinois House of Representatives passed a bill that would again supposedly set up a tiny government insurer for the residual market.

Eugene Keefe

I have repeatedly attacked this silliness and I promise not to stop. Illinois Republican Gov. Bruce Rauner vetoed a similar bill last year and is expected to do so again if HB 4595 makes it to his desk. We bet the Illinois Senate will wisely futz around until after the November elections to see if the “other billionaire,” JB Pritzker, might approve of this kooky idea.

The bill, sponsored by state Rep. Laura Fine, D-Glenview, passed the House 62-43 April 26 but has not seen any action in the Senate.

The bill would create a public insurer to address the troubled market of last resort, for employers who can't obtain affordable workers' compensation insurance from commercial carriers. The bill would do this in part by requiring the Illinois Workers' Compensation Committee to lend $10 million from the Workers' Compensation Commission operations fund to create the Illinois Employers Mutual Insurance Co. 

Understanding I am not shy about this one, my view is that this concept is complete hogwash. Again, in my view, this is a total legislative public relations push generated by the state trial lawyers. Some obvious issues:

• The money is supposed to come from the Workers' Compensation Commission’s budget. The commission has 150 workers or so and a $30 million annual budget. How would it “lend” a third of that money for this effort and not have to lay off staff? The use of the IWCC’s money for this odd purpose would impair hearings for seriously injured workers and other important IWCC actions.
• The money would create a truly tiny, almost miniscule state insurance carrier. Please note that one of the insurance carriers listed in the next sentence is worth more than $33 billion dollars. The tiny state carrier would have only $10 million in funds and then supposedly “compete” with multi-billion dollar international insurers like Travelers, Zurich, The Hartford and AIG.
• The impact of a $10 million insurance carrier in relation to the multi-billion dollar giants of that business is not going to be statistically measurable.

Illinois Democrats have been stupidly claiming that this is all about the major insurers “colluding,” or getting together to raise comp premiums and not passing along savings to their customers. There are more than 300 WC insurers in the Illinois insurance market. They strongly compete with each other to provide the lowest possible premiums and grab all the business they can.

Draw your own conclusions. If this bill becomes law, I would bet that the money never moves as they claim and nothing will ever come of it. In short, this is legislative sleight of hand. You can worry about it, but I bet your time is better used to make sure other more important things in your life are taken care of.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted, with permission, from the firm's client newsletter.