Capitol Fax.com - Your Illinois News Radar » Frerichs blasts Rauner’s AV
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Frerichs blasts Rauner’s AV

Wednesday, Aug 30, 2017

* Treasurer Frerichs’ office has some big problems with the governor’s amendatory veto of Frerichs’ life insurance bill, HB302…

* When trying to prohibit the use of contingent fee auditors by the Treasurer, the Governor proposes to amend the wrong Act.

    * The existing unclaimed property law is scheduled to be repealed and replace by a new law on January 1, 2018. HB 302 would also become effective on January 1, 2018.

    * So, the Governor is proposing to amend a law that will no longer exist.

* In support of his amendment to shorten the period that insurers must review to see if they owe benefits because their insured died, the Governor relies on 1) an Illinois insurance regulation; 2) a US Supreme Court case; 3) the unfairness of distinguishing between insurers

    * The insurance regulation was put in place in 2016 by the Rauner administration in order to help insurers destroy records; but, the underlying portion of the Insurance Code still provides for criminal penalties for insurers that destroy records. Further, the regulation still requires maintaining records with “legal or fiscal” value.

    * The US Supreme Court case cited does not say that you cannot distinguish between companies based on the condition of their records. The case is about artists who unsuccessfully challenged the NEA’s community standards for grants. It is about First Amendment rights – not due process rights. And, the government actually won the case by an 8 to 1 margin.

    * Further, the bill the Governor signed last year actually allows his Department of Insurance to differentiate between insurers based on their electronically searchable records. So, this wasn’t an issue for him last year.

Oops. BTIA™.

If you click here you’ll see the governor’s full AV language with commentary by the treasurer’s office. Click here for raw audio of Frerichs’ press conference.

* From Treasurer Frerichs’ press release

Currently, some life insurance companies do not pay death benefits when they know, or should have known, a customer died. Between 2011 and 2015, treasurer office audits found more than $550 million in death benefits that were not paid to grieving families in Illinois. Nationally, the figure is more than $7.4 billion, according to the Wall Street Journal.

Rauner’s veto outlaws the audits. Without this enforcement tool, life insurers can act with impunity. “This is clear evidence that Gov. Rauner is lining corporate pockets with this veto,” Frerichs said.

There are three commonsense reasons why Rauner’s veto is wrong and his focus on contingency-fee auditors is misplaced.

    1) Rauner’s amendatory veto makes Illinois the only state in the country to prohibit contingency-fee auditors and eliminates any hope that an unscrupulous company will pay 100 percent of what they owe to Illinois residents.
    2) Audits would not be necessary if life insurance companies made it a priority to pay death benefits when they know or should have known that a customer has died.
    3) Signing the legislation and requiring life insurance companies to review their records would move compliance away from the treasurer and into the Governor’s Department of Insurance, which has stronger enforcement tools, including the ability to suspend a company’s license to do business in Illinois. […]

Using contingency-fee auditors is a best-practice approach because it leverages expertise to maximize efficiency. Families receive every cent they are owed. Without the audits, insurance companies keep 100 percent of the death benefits.

“Rauner vetoed this bill because he wants to stop auditors who have successfully found hundreds of millions of dollars in unpaid life insurance benefits. However, auditors never get a penny of your loved one’s life insurance policy,” Frerichs said. “All Rauner did was take away the tool that allowed us to return $550 million to grieving families.”

More is at stake than just unpaid life insurance policies.

For example, without a veto override, the treasurer’s office would lose its ability to effectively look at the books of large banks, such as Wells Fargo, to confirm it did not inappropriately keep funds from bank customers. Or the ability to look at Sprint and Radio Shack to confirm each has paid out all rebate checks issued as an incentive to make a purchase.

- Posted by Rich Miller        

15 Comments
  1. - Harry - Wednesday, Aug 30, 17 @ 11:14 am:

    Is there any way to tell if GCR has a financial interrst in any life insurers doing business in Illinois?


  2. - Chicago Cynic - Wednesday, Aug 30, 17 @ 11:28 am:

    Best Team In America strikes again. This was kind of like the veto of the Comptroller’s transparency bill but with more incompetence.


  3. - Cubs in '16 - Wednesday, Aug 30, 17 @ 11:30 am:

    Assuming Frerichs is correct about Rauner’s motivation for the AV, an override ’should’ be a no-brainer.


  4. - How Ironic - Wednesday, Aug 30, 17 @ 11:34 am:

    Hmmmmmm….one has to wonder. Maybe GCR had it in with some unscrupulous insurance companies. Think of it, someone dies and it goes into some database. GCR collects 50% of the policy value, family (if any) gets 0%. No one the wiser….


  5. - How Ironic - Wednesday, Aug 30, 17 @ 11:36 am:

    @ myself at 11:34

    Meant to note that GCR had it in with the nursing homes they control. What better way to make a few bucks under the table, on top of what they had already hosed the families for.


  6. - nice - Wednesday, Aug 30, 17 @ 11:37 am:

    Great reporting, Rich. Really lets the reader get a sense of both sides of the issue.


  7. - thechampaignlife - Wednesday, Aug 30, 17 @ 11:41 am:

    “Sure, the effect may have been fleeting. But, for a brief moment one cold January morning, our prohibition on the use of contingent fee auditors was glorious.”

    -BTIA


  8. - Mama - Wednesday, Aug 30, 17 @ 11:50 am:

    “$550 million in death benefits that were not paid to grieving families in Illinois.”

    Is it to late for the legislature over-turn the governor’s AV on life insurance bill?

    It took me almost 5- years with the help of IL’s State Insurance Dept to get my parent’s life insurance. The legislature need to over-ride Rauner’s AV!


  9. - Norseman - Wednesday, Aug 30, 17 @ 11:56 am:

    Another goofy AV that will kill the bill.


  10. - 4 percent - Wednesday, Aug 30, 17 @ 12:40 pm:

    Serious question - contingency fee auditors generally receive a portion of the money that they identify and collect. Yet, the Treasurer’s release says that “families receive every cent they are owed.”

    Would the auditors receive a portion of the life insurance proceeds as payment or does the state assume that cost so the family receives the entire life insurance benefit?


  11. - nice - Wednesday, Aug 30, 17 @ 1:20 pm:

    @4 percent

    Great question! Unfortunately not the type of nuance that’s tolerated in a blog post containing a copy/pasted press release and a joke.


  12. - Rich Miller - Wednesday, Aug 30, 17 @ 1:24 pm:

    nice, nobody’s stopping you from commenting even though you’re masking your IP address via the Netherlands.


  13. - nice - Wednesday, Aug 30, 17 @ 2:12 pm:

    in amsterdam for the week. want me to bring some greenery back to springfield?


  14. - walker - Wednesday, Aug 30, 17 @ 2:24 pm:

    Nice: That type of “nuance” is obviously “tolerated” here or you wouldn’t have seen it above. Very common experience on this blog, where much detailed expertise is expressed.

    Would you like to occasionally add something of value?


  15. - impartialthinker - Thursday, Aug 31, 17 @ 8:59 am:

    Yes, there are some insurance companies that are holding death benefits while awaiting a claim. Not sure that is impunity. Let’s not forget that Illinois uses Unclaimed Property funds to fund the public employee’s pension trust which has a deficit recently reported at $251 Billion. Are all motivations/drivers of this legislation on the table and being discussed?


TrackBack URI

Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* Amazon HQ2 site list unveiled
* Out of sight out of mind?
* Frerichs tries to use state investments to prod Facebook into cleaning up its act
* The rise of the billionaire governors
* Camelot promises to grow lottery sales by 40 percent
* Munger tries to defend Rauner veto of Debt Transparency Act
* Rauner: "I can’t comment on any business disputes"
* Question of the day
* Rauner finally takes a stand on a federal issue
* Moody's says "political backlash" against pop tax could make other tax hikes more difficult
* Report: Amazon subsidy could add up to $2 billion
* *** UPDATED x1 *** 10,800 jobs lost in a single month, but Illinois media barely notices
* SUBSCRIBERS ONLY - Supplement to today’s edition
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* MLB open thread
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............
<


Loading


* Chicago releases list of possible Amazon headqu.....
* Compare possible Amazon sites as Chicago's HQ2 .....


* EXCHANGE: Encounter group spawns group of lifelong friends
* EXCHANGE: Woman finds meaning in helping animals in need
* Medical students in limbo as young immigrant program ends
* Chicago releases list of possible Amazon headquarters sites
* Chicago Public Schools enrollment declines by about 10,000
* Police end investigation of Illinois woman's freezer death
* Group works to reopen Civil War museum in Illinois
* Rauner outlines $200 million in cuts to Illinois budget
* 2nd school forfeits football game at Chicago due to safety
* 2nd school forfeits football game at Chicago due to safety

* Illinois Lottery's new manager projects $4B in sales
* UIS students could study at newly proposed Chicago research center
* Aaron Schock attorneys contest federal claims on misstatements
* Under the Dome Podcast: Will lawmakers address gun control during the veto session?
* Chicago lawyer announces bid for Illinois attorney general
* Illinois borrows $1.5B at reduced interest to pay down debt
* Rauner cuts human services, other area in state budget
* Pritzker makes list of richest Americans; Rauner releases tax returns
* Pritzker makes list of richest Americans; Gov. Rauner doesn't
* Pritzker makes list of richest Americans, Gov. Rauner doesn't

* Is Dem primary over? No, but Pritzker rivals need to pick up pace
* The biggest Chicago-area building sales
* Here are the sites Chicago is pitching to Amazon
* Emanuel's challenges are far from over
* Clarification


* 2 charged after thousands of illegal cigarettes found in Skokie raid
* 3 people shot in Greektown
* Man shot in East Garfield Park
* 24-year-old man shot in Humboldt Park
* Man, 21, seriously wounded in Fernwood shooting
* Man, 42, wounded in Humboldt Park shooting
* Man, 21, shot during armed robbery in Belmont Cragin
* Man grazed by bullet in Oakland
* Re-envisioned ‘Dracula’ a hysteria of blood-letting
* Georgia Nicols horoscopes for Oct. 21, 2017


* How to talk to Holocaust survivors in the future? In Take a Stand's holograms, an answer
* 3 shot at Taco Burrito King in Greektown
* The kindest team in the major leagues
* For Cubs, once may not be enough, but twice had better hurry
* Five key questions facing the Cubs this offseason
* Reputation restoration: Bears rebuilding defense and rediscovering pride
* Reader wonders if parental jealousy is normal
* Georgia lawmaker, the wife of ex-HHS Secretary, asks about quarantining HIV patients
* Judge tosses $417 million award in Johnson & Johnson baby powder cancer case
* Cubs will try to protect pitching prospects while bridging gap to majors


» Lawmaker Says Facebook Refuses To Fact Check Ads
» State Week: Chasing Amazon, Bonding Debt
» Teaching Kids To ‘Say Something’ In An Era of School Shootings
» Illinois Issues: Cities Lose Out On Retail Tax As Online Shopping Booms
» What Could Hurt Chicago’s Bid For Amazon’s HQ2?
» At CPS, More Special Education Dollars Go To White, Wealthier Students
» Illinois Bond Sale To Help Pay $16bn Debts
» Mayor To Propose Higher Prices For Ridesharing, Big Concerts
» WBEZ Investigation: CPS Secretly Overhauled Special Education At Students’ Expense
» How's The Illinois Economy? For Rauner Administration, Depends On The Audience


* Guest Column: What taxpayers should demand from next attorney general
* Ed Rogers: The Democratic Party's obsession with Hollywood celebrities was bound to blow up
* Illinois Lottery's new manager projects $4B in sales
* Counterpoint: Updating antiquated systems will open door to transparency
* Point: Taxpayers deserve a better look at the state’s bills
* Thumbs Up: To recent acts of kindness in Springfield
* Eugene Robinson: Trump's the one who didn't know 'what he was signing up for'
* UIS students could study at newly proposed Chicago research center
* Aaron Schock attorneys contest federal claims on misstatements
* Illinois Trial Lawyers Association: U.S. Chamber Poll is another attack on the rights of Illinois citizens


* Safe driving: Fatal teen accidents halved in last decade
* Photo: Light in the dark
* Morgan County sees population increase between 2011-2015
* Police Beat
* Reader photo: Color of night
* Illinois Lottery
* Upcoming Services for Oct. 21
* Pearl Zanotti
* Irene Astin
* Karrie K. Sims


* The Latest: Munich police arrest suspect, say motive unknown
* With single weekly flight, remote St. Helena extends welcome
* WHO chief selects Zimbabwe's Mugabe as 'goodwill ambassador'
* The Latest: Spanish Cabinet meets to act on Catalonia
* Germany: Police say several people stabbed in Munich

* Naperville's Lauren Underwood to run for R...
* Rival: Kinzinger not conservative - MyWebT...
* Measure extends term of FSOC independent m...
* Helsinki Commission urges Erdogan to end p...
* Dissident artist Ai Weiwei and US Rep. Ran...
* Hultgren 'disappointed' about potential re...
* Democratic 14th Congressional District can...
* GOP congressmen say Rauner 'let down' Illi...
* Bipartisan group of lawmakers pushes job t...
* Hundreds of high school students tour Smit...

* Rock Island gets $971183 in federal grants......

* Rock Island gets $971183 in federal grants......
* Rock Island gets $971,183 in federal grant......

* Do knee-jerk pols put any thought into votes they cast on govt. business?
* Chicago Design Week’s best events
* Illinois teacher retirees: What the hell is Walgreen’s up to?
* Raimondo and Rahm make an offer to Amazon. It’s a secret.
* Will Third Time Be The Charm For 4537 N. Clark?
* The Chicago Trib’s scab columnist John Kass calls me a fanatic.
* Hitting Left with the Klonsky Brothers episode #37. Charles Thomas.
* Live From the Green Mill... It's Saturday Night!
* Forgotten Chicago Talks About Chicago's Arcade History, Saturday At The Bezazian
* Positive Loitering At Wilson/Broadway Tonight 6PM - 7PM


* Illinois Awarded Funds to Offer Advanced Training on Detecting Impaired Driving
* Illinois EPA Announces Upcoming Household Hazardous Waste Collection Events
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May - Ready Illinois website offers preparedness tips for people, caregivers
* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* Redesigning the TechCrunch app
* JerryRigEverything slams Pixel 2 durability
* Google Pixel 2: A Fantastic First Impression (Video)
* Google Home Mini starts shipping, Verizon promotes JBL Link 300
* Sharp AQUOS R compact tucks selfie camera into under-5-inch display
* Google kicks off Playtime 2017 for app developers
* Better pictures of OnePlus 5T leak with 2:1 display in clear view

* Petricka undergoes surgery on right elbow
* Avisail sees similarities in rebuild, stellar year
* White Sox Arizona Fall League overview
* Ron Gardenhire’s second chance back in AL Central
* Jimenez among prospects in winter leagues
* The five longest White Sox home runs of 2017
* We may as well talk radical realignment


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller