The reform of Illinois’ captive regulatory framework is back on track following the state Senate’s unanimous vote to override governor Bruce Rauner’s amendatory veto of SB 1737.
The bill, which proposed a number of amendments to the Illinois Insurance Code’s regulatory framework that would provide a substantially improved environment for companies looking for captive solutions, was vetoed by Rauner in August.
The governor was in support of the updates to the captive regulatory structure but took issue with the “concerning” regulatory barriers the legislation imposed on short-term limited-duration health plans and workers’ compensation insurance.
SB 1737, which was passed with bipartisan support by the Illinois General Assembly on 31 May, would see Illinois follow in the footsteps of domiciles like Vermont, Hawaii and South Carolina in terms of captive framework reform.
Additionally, the bill would substantially drop the premium tax rate of self-procured insurance from 3.5 percent to 0.5 percent of gross premium.
The legislation is supported by the Illinois Department of Insurance, key industry groups, and several large Illinois-based taxpayers.
If the Illinois House does not follow the Senate’s lead and vote to override the amendatory veto, thereby assuring the legislation’s enactment during the remaining three days of the Illinois General Assembly’s veto session remain, between 27 and 29 November, the bill will fail.
That would mean the bill would have to be reintroduced and reapproved in the next legislative session, which will begin in January 2019 with the new state Governor, JB Pritzker.