Illinois Governor Names Messmore Acting Insurance Director

Following the departure of Illinois Insurance Director Michael McRaith, who stepped down on June 3 to become the first director of the newly created Federal Insurance Office, Gov. Pat Quinn has tapped Jack Messmore to serve as acting director of the State Department of Insurance.

Messmore, who has worked for the department for 25 years, most recently served as the insurance department's chief deputy director. He has also served as assistant deputy director and examiner-in-charge. He stepped into the role of acting director on June 3.

McRaith will take over as director of the FIO on June 13 after serving as Illinois' top insurance regulator since 2005. McRaith marked his departure with a final victory, seeing the state legislature pass a highly contested workers' compensation reform package that included many provisions he had supported. The bill passed by a 55-39 vote on May 31 after it appeared to have died in the House when lawmakers voted it down over the Memorial Day weekend. Lawmakers revived the bill in time for it to pass both chambers before the end of the legislative session after Illinois Democrats threatened to pass a separate bill that would have killed the state workers' compensation system entirely.

Among the changes to the state's workers' compensation system included in H.B. 1698, is a measure that would reduce the fees businesses must pay to doctors by 30%. Supporters of the legislation have estimated the reduction would save companies between $500 million and $700 million each year.

The bill also sets up a pilot program in which arbitrators hearing cases related to specific industries would be required to use American Medical Association guidelines when evaluating the level of impairment caused by a workers' injury (BestWeek, June 1, 2011).

Despite those changes, Michelle Baurkot, an A.M. Best assistant vice president who follows the workers' compensation market, said the legislation may not go far enough in addressing one of the key problems insurers face in Illinois -- a highly unfriendly judicial system where jury awards can vary significantly with little merit. According to the American Tort Reform Foundation, Illinois'Cook County, which encompasses Chicago, is among the nation's leading "judicial hellholes" and has become "a magnet for plaintiffs not only from Illinois, but from all across the country."

Baurkot said while the AMA guideline program may help stem the employers' and insurance carriers' exposure to large settlement payments, it may not be enough, given a number of other challenges facing the state's workers compensation system (BestWire, June 6, 2011).

Regardless, McRaith said in a June 3 interview with BestWire that he was "extremely pleased with the contents of the bill," adding, "It was not the wish list for any of the interested paries in the discussion. But as a negotiated bill, it's a milestone watershed improvement for workers' comp." Quinn has said he will sign H.B. 1698 into law.

(By Jeff Jeffrey, Washington Correspondent: [email protected])