* Tribune…
Three Kemper Corp. life insurance companies have sued the Illinois state treasurer, claiming the office is improperly demanding records to identify families that are owed life insurance money after a death of a family member.
United Insurance Company of America, Reserve National Insurance Company and Reliable Life Insurance Company claim that Illinois Treasurer Michael Frerichs is overstepping his authority. Frerichs has been doing audits of about 40 life insurance companies to determine whether people in Illinois are entitled to money from life insurance policies that have been forgotten after the insured person has died.
Since 2013, Frerichs said, $195 million has been identified for grieving families that often did not know a family member had a life insurance policy.
While 22 companies have provided records related to insurance payments, the three Kemper insurance companies sued to prevent the inquiries, he said. The life insurance industry has been raising issues over audits for years, and a similar case has been ongoing in California.
* The Daily Chronicle editorialized…
Their suit has less to do with principle than with their bottom line, which the company acknowledged in a May 2015 10-Q filing with the Securities and Exchange Commission.
“… Such requirements could have a material adverse effect on the Company’s profitability, financial position and cash flows,” the company wrote. “The Company’s stance in opposition to the aforementioned actions by state legislators, Treasurers and insurance regulators, including the Life Company’s initiation of the litigation described above, also creates a risk of reputational damage to the Company … particularly if the Company’s position is not ultimately vindicated.”
Whether or not their lawsuit is successful, Kemper’s reputation should suffer a hit. They should not be fighting measures meant to help them honor their commitment to their policyholders. This is money they were supposed to have paid out, in some cases years ago. It’s only fitting that they make good on their obligation now, along with any interest that might be due.
Bereaved families in Illinois deserve the benefit of their loved ones’ life insurance, whether or not they are aware it existed. Hopefully, the courts will side with Frerichs. If not, legislators should change our state’s laws to ensure that benefits reach the people for whom they were intended when they need them most.
* But the US Chamber is very upset and weighed in this week…
Rogue State Treasurer Rewriting the Law for a Private Auditor’s Gain
In a massive overreach of authority, the Illinois state treasurer has superseded state law by imposing new standards on how life insurance policies are paid out, and in the process, may fundamentally change the role the state plays in the life insurance industry.
Illinois State Treasurer Michael Frerichs, along with the private company Verus, have been conducting audits of insurance companies and requiring them to pay out life insurance policies based on an unreliable list of the deceased in the state. If a beneficiary can’t be found, that payment goes directly to the state, creating what many see as a taking.
Even more troubling, the private auditing firm Verus will take its paycheck from these payouts. […]
This abuse no longer flies under the radar. This latest lawsuit spotlights the highly unconstitutional nature of promulgating a new requirement outside the regulatory and legislative process and forcing retroactive use of the DMF by insurers. Courts in West Virginia, Florida, Ohio, and the U.S. District Court for the District of Massachusetts all have rejected the private audit firms’ demand that insurers cross-reference against the DMF. It’s time for Illinois to follow suit and reign-in this rogue state treasurer.
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Moody’s: It’s really bad
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* Greg Hinz looks at a new study of the Chicago pension situation…
In the report, Moody’s says that despite the recent adoption of the biggest property tax in Chicago history—$543 million over four years—the unfunded liability in the city’s four pension funds will continue to rise for at least 10 years and, potentially, until some time after 2030. […]
Moody’s looks at four scenarios, assuming various possibilities about whether Gov. Bruce Rauner signs a bill that would allow the city to defer an additional $200 million a year or so needed for the police and fire funds, and whether the Illinois Supreme Court upholds a lower court ruling tossing out reforms in the laborers’ and municipal funds that cut benefits while requiring somewhat increased city contributions.
Under the “best” scenario, in Moody’s view, Rauner doesn’t sign, the courts say yes, and the city comes up with the additional hundreds of millions from, well, somewhere. Assuming City Hall doesn’t borrow the money, gross unfunded liability would top out at around $22 billion and begin dropping around 2022.
On the other hand, what many insiders believe is the most likely scenario—Rauner signs, and the courts say no—unfunded liabilities still will be rising in 2030, nearly doubling to just under $40 billion. That means the two funds would “deplete (their) assets in approximately 10 to 13 years.”
The full report is here.
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[The following is a paid advertisement.]
EXELON CEO CHRIS CRANE – “A PHENOMENAL YEAR FOR US”
Today, Exelon announced third quarter 2015 profits of $629 MILLION. Yes, you read that right. Exelon has made more than $2.0 BILLION in the first nine months of this year. And yet despite their good fortune, Exelon still demands a corporate bailout even as our state budget crisis goes from bad to horrendous. They have promised to return to the ILGA with a full court bailout push in 2016!
IN THE THIRD QUARTER, EXELON MADE NEARLY SEVEN MILLION DOLLARS A DAY or $284,873 AN HOUR
On this morning’s earnings call, Exelon CEO Chris Crane described 2015 and said, “This is a phenomenal year for us.”
OTHER EXELON NEWS: ALL ILLINOIS PLANTS TO REMAIN OPEN
- Yesterday, Exelon announced that Clinton would remain open through at least 2017.
- Exelon previously announced that because Quad Cities and Byron cleared the PJM auctions, Quad will remain open through at least 2017 and Byron will remain open through at least 2018.
Struggling Illinois ratepayers have had enough.
Just say no to the Exelon Bailout.
www.noexelonbailout.com
BEST Coalition is a 501C4 nonprofit group of dozens of business, consumer and government groups, as well as large and small businesses.
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A happy update to the Ashley Goodwin story
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* From the Illinois Policy Institute…
On Oct. 30, Anthony Goodwin couldn’t stop shaking.
It wasn’t because the gas was shut off in his family’s mobile home, even though that was the case. It wasn’t from frustration with the electric company that was coming to turn off the lights in a few days time.
It was because the Goodwins were watching thousands of dollars in donations roll in on the heels of the publication of their story.
Anthony and Ashley Goodwin, as well as their two children, were stuck between a rock and a hard place that is disturbingly unique to Illinois: a worst-in-the-Midwest jobs climate and budget gridlock due to politicians’ refusal to address the state’s fundamental economic problems.
Thankfully, their GoFundMe page had racked up nearly $5,000 in donations from across the globe in a matter of hours.
“We were astonished, dumbfounded,” Ashley said. “Dumbfounded is the best word to use.”
“I know it might [be a] cliché, but this has totally changed our lives,” Anthony said.
“There are so many more opportunities, and so much less worry. It might not seem like much, but in a low-income community like this it makes a huge difference.”
The money raised ensured the Goodwins can keep their lights on, reinstall their gas, buy groceries for their children, and make rent for at least the next year. One donor who wished to remain anonymous also offered to give the Goodwins a car.
“Special thanks to the car donor,” Anthony said. “I might hug the guy, and I’m not a huggy person.”
In case you missed it, the background is here. Thanks to everyone from this blog who donated. Y’all never cease to amaze me.
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* Subscribers were told about this earlier today…
Gov. Bruce Rauner is compromising over the state’s budget mess, indicating he’s OK with Democrats’ legislation to disburse tax dollars already collected to local governments and lottery winners.
A memo Tuesday from a Rauner staffer to lawmakers says the Republican now supports the legislation and even suggested adding money, such as for road salt with winter around the corner.
The plan includes $1.9 billion collected in motor fuel tax for cities, wireless phone tax for 911 services and lottery dollars to pay winners. Rauner and Democrats have feuded over a spending plan since the fiscal year began July 1.
* From the memo…
From: Richard Goldberg, Deputy Chief of Staff for Legislative Affairs
To: Members of the General Assembly
Date: November 10, 2015
Re: HB 4305: Another Opportunity for Compromise
While we continue to urge legislative leaders to enact a complete balanced budget rather than taking a piece - meal approach, Governor Rauner is comfortable with HB 4305 proceeding as an effort to build on the compromises announced yesterday regarding Unemployment Insurance, Child Care Assistance Program and DON Score. In addition, to further strengthen the progress made over the last few days, legislators can – and should - fund the public safety and critical services currently excluded from HB 4305, including salt for snow - covered roads, funds for veterans in state - run homes and debt service payments that would ensure Illinois avoids a debt default. While adding these line items will not help balance the budget, doing so will ensure important services paid for by “Other State Funds” are funded while negotiations continue on how to reform state government and balance our “General Revenue Fund” budget.
That is not your usual Goldberg memo.
Once again, Rauner was facing a floor defeat so he abruptly changed course. He can be moved. Moderate House Republicans demanded a resolution and they’re the big winners here. The pressure is working. Take advantage of it.
Now would be a good time to make some reasonable counter-proposals on the Turnaround Agenda.
…Adding… And I mostly agree again with the Tribune editorial board…
We do know that until the Democrats negotiate with Rauner on a new budget, say what new tax revenue they want to collect and compromise on parts of his economic agenda, there will be more fights over spending cuts. The damages caused under prior management have left Illinois vulnerable to job losses and ruined state finances. Springfield has a growing pile of unpaid bills and a looming pension payment that the state comptroller says her office cannot make.
Our question post-Monday: Wouldn’t it be easier for all sides to negotiate in good faith on these bigger issues instead of embracing stalemate? We’re looking at you, House Speaker Michael Madigan.
Monday’s three developments do show that compromise is possible.
Not to jinx this, but: More agreements, please.
Say what you want about their ridiculously over the top screaming editorials of the past year, that one was fairly reasonable.
…Adding More… From comments…
Come on Rich just because the hostage taker sends you pics that the hostage is still a live does not mean you start to legitimize his demands. Creating a crisis and then attempt to frame his change as a compromise is a trick you are falling for hook line and sinker.
This is a common refrain in comments today. It’s been a long war. People refuse to get beyond the past. The only way this war’s ever gonna end is if people start looking at the future. This shouldn’t be allowed to last forever.
*** UPDATE 1 *** AP…
A spokesman says Illinois House Democrats will not immediately consider Gov. Bruce Rauner’s suggested changes to legislation that would send collected tax dollars to cities and lottery winners. […]
Steve Brown is spokesman for House Democrats. He says Rep. Martin Moylan might add some money to the bill for police training and other purposes but not Rauner’s ideas until they’re evaluated.
The only reason to do it this way is to force the Republicans to vote “No” on the bill.
That ain’t cool.
*** UPDATE 2 *** The Rauner folks ought to file an amendment to Moylan’s bill…
Moylan said he plans to ask for a vote on his $1.9 billion plan today but hadn’t heard from Rauner’s staff about changes in the weeks preceding a possible vote.
“If he wants to propose something, he needs to file a bill,” Moylan said.
*** UPDATE 3 *** I’m told that the governor’s office gave Speaker Madigan the language last week at the Speaker’s request.
*** UPDATE 4 *** The governor’s brick is off, regardless of whether the Democrats add the requested amendment, I’m told.
*** UPDATE 5 *** I’ve seen some pretty solid evidence that the governor’s budget office did, indeed, deliver the Speaker’s staff some appropriations language on November 8th.
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*** UPDATED x1 *** Let’s get it done already!
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* Sophia Tareen with the AP…
The governor announced an agreement with labor and business groups on proposed unemployment insurance changes. He also said the administration would ease restrictions on who qualifies for state-subsidized child care and drop plans to curb which elderly and disabled Illinoisans can get state-funded services, two issues that were heavily protested by advocacy groups.
“You’re seeing lots of legislative movement and compromise,” Rauner spokesman Mike Schrimpf said. “All of these issues … took serious and lengthy negotiations with multiple parties.”
However, it’s unclear which moves will stick in a Democratic-controlled Legislature that’s been at odds with Rauner for months over a spending plan. Rauner wants pro-business reforms and other changes aimed at curbing union power before a budget for the fiscal year that began July 1. Democrats want him to sign off on new taxes, among other things.
Senate President John Cullerton’s spokeswoman Rikeesha Phelon said the chamber was “hopeful” the moves were a sign the administration was ready to resolve “larger budget issues.” But House Speaker Michael Madigan’s spokesman Steve Brown was unconvinced, saying some unemployment insurance ideas had already been settled and legislation restoring funding to the child care assistance program was likely to emerge today.
How about not looking a gift horse in the mouth and start working on some freaking solutions?
This impasse needs to end. I really don’t care what motivated Rauner yesterday. He moved off the dime. That’s encouraging no matter what the haters believe.
*** UPDATE *** Mark Brown is not wrong…
Faced with the prospect of an embarrassing legislative defeat, Gov. Bruce Rauner caved in Monday and promised to undo his indefensible crippling of the state’s child care assistance program.
The governor called it a “compromise,” although it was closer to a full retreat. He was clearly the one who gave up the most. […]
The counter-argument is that Rauner only showed an ability to work with legislators when he was on the verge of a vote that could have been seen as a stinging rebuke. Rauner was particularly upset by the prospect of taking away his emergency rule-making authority over the program, limiting his power to govern.
Obviously there is a political element to going ahead with a vote. Madigan may be eager to prove he can still put all 71 Democrats on a bill when necessary to thwart the governor, having come up short in a key September vote.
All true. Every word.
But he’s on the move. Why stop the momentum? Capitalize on the victories and push him harder on everything else.
This ain’t brain surgery.
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Don’t get your hopes up
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* I was out with a top Madigan guy and a top Rauner guy last night when Oswego Willy texted me this tweet…
They both had a nice chuckle.
Wish it was true, though.
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The tiny town that said “No”
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* The Terre Haute Tribune Star updates its Marshall story…
The City of Marshall, Ill., will meet with representatives from the state today in hopes of arranging payment on outstanding utility bills for Illinois Department of Transportation facilities in Clark County.
Meeting details were arranged moments before Mayor Camie Sanders planned to announce Monday the city would shut off services for all state-owned properties in Marshall. Illinois has operated without a budget since July 1, and utility bills have gone unpaid while a budget impasse continues in Springfield.
Utilities will be kept on at IDOT’s garage and offices on Edgewood Street as both sides discuss a solution. IDOT closed the Cumberland Road Rest Area along Interstate 70 Monday morning.
The ranger at Lincoln Trail State Park has shut off water to all buildings, except his residence, and has personally offered to cover the bill until the state resumes paying, Sanders said.
Marshall — which operates its own utilities — provides electric, water, sewer and gas services to the local IDOT offices, while the highway garage receives electricity. Both the rest area and state park only receive water.
Gov. Bruce Rauner’s office called city hall late yesterday morning about the situation, and Sanders will travel to Springfield today and sit down with senior representatives from IDOT and Rauner’s office. […]
“It seems like you do not get a response until you’re willing to pull that plug,” he said. “And it shouldn’t be that way.”
Background is here.
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A Clean Energy Policy for All Customers
Tuesday, Nov 10, 2015 - Posted by Advertising Department
[The following is a paid advertisement.]
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*** UPDATED x1 *** Oops
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* Remember this story from October 1st?…
Illinois Republican Party Chairman Tim Schneider, who is remaining neutral, tells POLITICO that while potential delegates for Bush, Kasich and Rubio have called the state’s GOP HQ raising their hands for those campaigns. “I can’t tell you we know right now, who to contact if someone wants to be a Trump delegate … I’m not sure the Trump campaign understands the complexity of having delegates in every congressional district.” Petitions start circulating Oct. 3 and candidates have until January to get them in.
Mitt Romney “basically sealed the nomination in Illinois last time,” Brady, then GOP chair, contends. Rick Santorum, who was leading polls at the time, didn’t make it on the ballot in more conservative Illinois districts that would have supported him, Brady says.
‘REAL CONTENDERS’ UP AND RUNNING: In some states, getting on the ballot is a breeze. “Not in Illinois — probably because somebody is making money off the petition printing contract,” Brady said. “It is a brutal process here. Anybody who’s a real contender has to have an operation up and running now.”
QUOTABLE: “He asked all the usual suspects. They all turned him down.” — Pat Brady on Trump’s attempt to drop roots in Illinois.
You would think that a bunch of guys who backed another wealthy man (Bruce Rauner) for governor would’ve been a bit less smug about a rich outsider.
* From last night…
“Ladies and gentlemen, the holder of the largest event ever at the Prairie Capitol Convention center, and the next President of the United States … Donald Trump!” an announced yelled, as Trump — in a bright red tie and neatly pressed suit came on stage. Twisted Sister’s rock anthem “We’re Not Gonna Take It” played. Trump began his seemingly off-the-cuff speech before a convention record of more than 10,000 people boasting about his highly-rated turn hosting Saturday Night Life, and getting in some digs at his competition. But he soon transitioned into more political, and international affairs.
The largest event ever.
Who’s the “real contender” now? I mean, do you think Bush or Kasich could fill that room?
Like Rauner, Trump doesn’t need the establishment.
Not saying he’s gonna win the nomination, mind you. I have my hands full with Illinois, so I don’t follow national politics closely enough to make that call.
Just sayin…
*** UPDATE *** From Trump’s Illinois director Kent Gray…
We signed up thousands of new volunteers and supporters. Our petition passers that worked the crowd prior to the event really knocked it out of the park.
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* Sun-Times…
If a strike vote were held tomorrow, the Chicago Teachers Union would likely walk off the job, the union reported Monday in preliminary results of a practice strike vote taken late last week.
About 97 percent of members voting — with 95 percent participation among the 27,000 CTU members casting ballots in the mock vote last Thursday — said to strike.
“We are very pleased and not at all surprised by what we’ve learned,” CTU spokeswoman Stephanie Gadlin said in an email Monday. She called the poll an “internal union exercise” that was “designed to test the CTU’s organizational bandwidth.” She added that final analysis was still being prepared.
* Um, OK, but Sharon Schmidt over at Substance News published the CTU’s actual “Yes or No” questions…
The Chicago Teachers Union and the Board of Education are in ongoing negotiations over our next contract and remain far apart on many issues.
Indicate your choice by putting an X in the appropriate box.
1) In negotiations, Board of Education negotiators demand that CTU members agree to pay cuts, increased health care charges, elimination of minimum staffing levels and contract changes which will remove hundreds of CPS employees from our schools to help balance the Board’s budget. CTU’s Bargaining Team categorically rejects these proposals.
Do you agree with the bargaining team?
2) The Mayor and Board of Ed refuse to stand up to corporations like Bank of America and to super rich individuals like Bruce Rauner who underfund our schools by refusing to pay their fair share in taxes. Should CTU highlight the real cause of CPS budget challenges by organizing boycotts, corporate campaigns and legislative efforts to retrieve that money?
3) Forrest Claypool, Rahm’s hand-picked CEO, has earned a reputation as a privatizer and an anti-union manager at the Chicago Park District and the Chicago Transit Authority. He supports school vouchers, charter school expansion, and has made massive cuts to special education and is threatening 5,000 layoffs. Do you support a vote of no-confidence in Forrest Claypool as CEO of the Chicago Public Schools?
4) CTU’s demands include: A librarian, nurse, art, music, and PE teacher in every school, expansion of Early Childhood programs, funded homeless and restorative justice coordinators, strengthening of special education, grievable class size limits, a minimum wage of $15 an hours for all Board employees, limitations on paperwork, improvements to the evaluation system, protection for paraprofessionals, and an expansion of the Grow Your Own program which supports community members who become teachers.
Do you support these demands which will strengthen our schools and provide better programming to meet the needs of all students?
A scanned version of the document is here.
Anybody ever seen a push poll that blatant?
Also, where’s the strike question?
And in case you haven’t heard of Substance News, click here to see its front page. It is most definitely not on the side of management.
*** UPDATE *** The CTU responds…
CTU Vice President Jesse Sharkey said the polling strategy was the same one used in the runup to the 2012 teachers’ strike.
“In a nutshell, our legal counsel advised us to stay away from the word ’strike’ in the practice poll, which is why we called it a ‘practice,’ ” Sharkey said.
“The law keeps us from asking questions twice, so what we do is we ask a series of questions that cover the four corners of our bargaining proposals,” he said. “Really what we’re saying is we’re trying to stake out the four corners of our bargaining positions and check the sentiment of that in our schools.”
Not buying it.
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Rauner again peels off Dunkin
Tuesday, Nov 10, 2015 - Posted by Rich Miller
* Subscribers know a bit more about this…
The Illinois House on Tuesday is expected to vote to limit the governor’s ability to change requirements for people receiving state childcare assistance, despite a compromise Gov. Bruce Rauner’s administration announced on Monday in hopes of scuttling the bill.
However, a key Democrat — state Rep. Ken Dunkin — is expected to side with Republicans on Tuesday, fueling tensions between the governor’s office and House Democrats.
On Monday, Rauner announced he reversed restrictive requirements he put in place over the summer that severely reduced state day care assistance to the working poor. His changes meant that a mother of two must earn less than $838 a month in order to receive subsidies. The compromise language raises that requirement to more than $2,700 a month. Saying he reached bipartisan compromise on the matter, Rauner deemed SB570 moot. Rauner opposes the bill, saying it too severely restricts the powers of the governor. Politically, Rauner does not want to be put into the position of vetoing day care assistance bill. […]
“He helped set the table to get the child care deal done,” a senior administration official told POLITICO Illinois. “The fact is that thousands of families are eligible for child care today because of Ken Dunkin’s efforts on these important issues.” […]
“The governor and I came up with an agreement last week,” Dunkin told POLITICO. “What occurred is, I suggested he talk with the House and Senate sponsors and get their take on it. It’s a good agreement so there’s really no reason for that bill to be called.”
Governors have a lot of tools. Pat Quinn didn’t use many of them, Rod Blagojevich bungled his use of them, but Bruce Rauner appears to have found the instruction book.
And scream all you want about Dunkin, but he’s positioned himself pretty darned well here.
We’ll see what Madigan does now, but if he can’t get any Republicans to vote for this childcare bill today, his king may be in check.
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