* Insurance companies which charge higher premiums to their most loyal customers, and are being stopped in other states, but not in Illinois…

Last month, Connecticut became the 16th state to issue a bulletin barring insurers from using “price optimization” in ways that would charge customers with the same risk profile different rates based on their propensity to shop or their likelihood to switch providers. Indiana took similar action in July.

Anne Melissa Dowling, Gov. Bruce Rauner’s choice in May as insurance director, came from Connecticut, where she had been acting director of that state’s Insurance Department.

In a statement, the Illinois department says: “As there is no agreed-upon definition as to what is entailed in the term ‘price optimization,’ we don’t plan to address an undefined notion. We are, however, aware of many new and innovative pricing models, responding to the market demand for more individualized pricing.”

* Crain’s looks at a growing “industry”…

In 2013, though, Keller stepped off the path again, this time with Adam Gerchen, whom he had met at Alyeska Investment Group, a Chicago hedge fund. Together they founded Gerchen Keller Capital to finance litigation in exchange for a cut of the resulting judgment or settlement. Gerchen, 34, is CEO, and Keller, 36, managing director. Travis Lenkner, 36, joined soon after as a partner and managing director.

Gerchen was a former Goldman Sachs banker and Harvard Law School graduate who had never practiced law, while Lenkner, a senior counsel at Boeing, knew Keller from their time clerking together for Supreme Court Justice Anthony Kennedy. The trio’s collective background was dubbed “resume porn” by David Lat, founder of legal news and gossip website Above the Law.

Today, Gerchen Keller Capital is the largest firm of its kind in the world. Starting out with $100 million from a dozen investors (two were anchors), the Chicago-based business has grown to $1.4 billion in assets under management. In addition to funding early stage lawsuits, it buys legal fee, judgment and settlement receivables from finished cases. It has invested an average of $6.7 million per case since inception and an average of $10 million per case in the past year. The pension fund for Michigan’s state employees has invested $3.5 million with it, and Texas’ pension fund has put in $28.7 million. The firm is profitable, Lenkner says.

The rise in litigation financing in the last decade has attracted attention from lawyers, investors, clients, business lobbyists and the U.S. Senate. There’s the potential to make serious money: Burford Capital and IMF Bentham, public companies based in the United Kingdom, boast respective returns of 71 and 158 percent. There’s also the potential for serious humble pie: Juridica Investments in Guernsey announced in November it would stop investing in new cases after it poured $3.5 million into a trade secrets case expected to yield $9.4 million—and got $2 million back instead. In August, Republican Sens. Chuck Grassley of Iowa and John Cornyn of Texas sent a letter to Burford Capital execs demanding to know the scope of its investment in U.S. cases.

* And Pro Publica looks at workers’ comp “cost containment” companies…

While lawmakers have clamped down on payments to workers, doctors and lawyers, little scrutiny has been given to these “cost containment” firms — even though today they arguably have more influence on how injury benefits are handled than insurers and employers.

Highlighting the bounty, there are now more than 150 workers’ comp conferences a year. There’s one for the American Society of Workers Comp Professionals, one for the Association of Workers’ Compensation Professionals and one for the Association of Workers’ Compensation Claims Professionals. At least 26 have golf tournaments. […]

Last year, workers’ comp insurers in California spent 36 percent of premiums on overhead — more than they spent on medical care. That’s over twice what group health plans can spend on administrative costs under the Affordable Care Act.

A glimpse of the Vegas expo shows why. There were companies that provide networks of doctors and companies that review medical bills, firms that provide expert medical opinions and firms that specialize in complex claims. There were defense lawyers, data processing firms, rehab facilities, surveillance companies, outside claims shops, occupational medicine clinics, pain management services, translators, schedulers, headhunters and associations promoting other conferences.

There were labs that test injured workers’ urine for illegal drugs. There were even labs that test urine to ensure workers are taking the prescribed drugs instead of selling them.

In California, the amount of money that insurers spend on medical cost containment programs has more than doubled from $197 million in 2005 to $471 million in 2014, according to the state workers’ comp ratings bureau.