CHICAGO, March 14 -- The Property Casualty Insurers Association of America issued the following news release:
The Property Casualty Insurers Association of America (PCI) opposes HB 2919, a bill to create a state workers' compensation insurance fund, which cleared the Illinois State House'sCommittee on State Government Administration late Wednesday.
"This proposal would put the state in the business of operating an insurance company that would compete with private carriers," said Deirdre Manna, PCI's vice president of industry, regulatory and political affairs. "This legislation is unnecessary and harmful to taxpayers, injured workers and employers."
There are three key reasons why PCI opposes the legislation:
* With the numerous and unending economic crises already confronting Illinois taxpayers, and with Illinois having the worst credit rating of any state, the legislature must not take on such a huge cash flow drain and new future liabilities. Illinois already faces a pension crisis that burdens taxpayers for generations. It makes no sense to then add the potentially limitless liability of long-term and often lifelong medical claims for injured workers, as well as lost wages. Can the state guarantee these payments?
* Second, with 324 workers compensation insurers, there is no lack of workers compensation options for Illinois employers. Equally important, the state's record of competing with the private sector does not inspire confidence; witness the struggles of College Illinois, the state's failed college tuition plan.
* Third, there is no credible evidence that creating a state fund will lower the cost of coverage, and there are other ways to lower costs that do work. Compensation costs are lower in Indiana and Wisconsin, but neither of those states has a state workers compensation fund either. Moreover, self-insured employers have the same cost drivers in Illinois as private insurers, but both have lower operating costs.
"Illinois public policy must encourage private enterprise and free markets," Manna said. "The best way to address escalating costs is to attack the cost drivers, not to create a state program that will harm workers and employers."
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