Full Text of HB0502 100th General Assembly
HB0502ham001 100TH GENERAL ASSEMBLY | Rep. Laura Fine Filed: 3/9/2017
| | 10000HB0502ham001 | | LRB100 06034 SMS 22344 a |
|
| 1 | | AMENDMENT TO HOUSE BILL 502
| 2 | | AMENDMENT NO. ______. Amend House Bill 502 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 231.1 and by adding Sections 231.2 as follows:
| 6 | | (215 ILCS 5/231.1) (from Ch. 73, par. 843.1)
| 7 | | Sec. 231.1. Group Life Insurance Standard Provision. No | 8 | | policy of group
life insurance shall be delivered in this State | 9 | | unless it contains in substance
the following provisions, or | 10 | | provisions which in the opinion of the Director
are more | 11 | | favorable to the persons insured, or at least as favorable to | 12 | | the
persons insured and more favorable to the policyholder, | 13 | | provided, however,
(a) that provisions (F) to (K) inclusive | 14 | | shall not apply to policies insuring
the lives of debtors; (b) | 15 | | that the standard provisions
required for individual life | 16 | | insurance policies shall not apply to group
life insurance |
| | | 10000HB0502ham001 | - 2 - | LRB100 06034 SMS 22344 a |
|
| 1 | | policies; and (c) that if the group life insurance policy
is on | 2 | | a plan of insurance other than the term plan, it shall contain | 3 | | a nonforfeiture
provision which in the opinion of the Director | 4 | | is equitable to the insured
persons and to the policyholder, | 5 | | but nothing herein shall be construed to
require that group | 6 | | life insurance policies contain the same nonforfeiture
| 7 | | provisions as are required for individual life insurance | 8 | | policies:
| 9 | | (A) A provision that the policyholder is entitled to a | 10 | | grace period of
31 days for the payment of any premium due | 11 | | except the first, during which
grace period the death benefit | 12 | | coverage shall continue in force, unless
the policyholder shall | 13 | | have given the insurer written notice of discontinuance
in | 14 | | advance of the date of discontinuance and in accordance with | 15 | | the terms
of the policy. The policy may provide that the | 16 | | policyholder shall be liable
to the insurer for the payment of | 17 | | a pro rata premium for the time the policy
was in force during | 18 | | such grace period.
| 19 | | (B) A provision that validity of the policy shall not be | 20 | | contested, except
for nonpayment of premiums, after it has been | 21 | | in force for two years from
its date of issue; and that no | 22 | | statement made by any person insured under
the policy relating | 23 | | to his insurability shall be used in contesting the
validity of | 24 | | the insurance with respect to which such statement was made
| 25 | | after such insurance has been in force prior to the contest for | 26 | | a period
of two years during such person's lifetime nor unless |
| | | 10000HB0502ham001 | - 3 - | LRB100 06034 SMS 22344 a |
|
| 1 | | it is contained in
a written instrument signed by him; | 2 | | provided, however, that no such provision
shall preclude the | 3 | | assertion at any time of defenses based upon provisions
in the | 4 | | policy which relate to eligibility for coverage.
| 5 | | (C) A provision that a copy of the application, if any, of | 6 | | the policyholder
shall be attached to the policy when issued, | 7 | | and that all statements made by
the policyholder shall be | 8 | | deemed representations and not warranties, and
that no | 9 | | statement made by any person insured shall be used in any | 10 | | contest
unless a copy of the instrument containing the | 11 | | statement
is or has been furnished to such person or, in the | 12 | | event of death or incapacity
of the insured person, to his | 13 | | beneficiary or personal representative.
| 14 | | (D) A provision setting forth the conditions, if any, under | 15 | | which the
insurer reserves the right to require a person | 16 | | eligible for insurance to
furnish evidence of individual | 17 | | insurability satisfactory to the insurer
as a condition to part | 18 | | or all of his coverage.
| 19 | | (E) A provision specifying an equitable adjustment of | 20 | | premiums or of benefits
or of both to be made in the event the | 21 | | age of a person insured has been
misstated, such provision to | 22 | | contain a clear statement of the method of
adjustment to be | 23 | | made.
| 24 | | (F) A provision that any sum becoming due by reason of the | 25 | | death of the
person insured shall be payable to the beneficiary | 26 | | designated by the person
insured, except that where the policy |
| | | 10000HB0502ham001 | - 4 - | LRB100 06034 SMS 22344 a |
|
| 1 | | contains conditions pertaining to
family status the | 2 | | beneficiary may be the family member specified by the
policy | 3 | | terms, subject to the provisions of the policy in the event | 4 | | there
is no designated beneficiary, as to all or any part of | 5 | | such sum, living
at the death of the person insured, and | 6 | | subject to any right reserved by
the insurer in the policy and | 7 | | set forth in the certificate to pay at its
option a part of | 8 | | such sum not exceeding $2,000 to any person appearing to
the | 9 | | insurer to be equitably entitled thereto by reason of having | 10 | | incurred
funeral or other expenses incident to the last illness | 11 | | or death of the person insured.
| 12 | | (G) A provision that the insurer will issue to the | 13 | | policyholder for delivery
to each person insured a certificate | 14 | | setting forth a statement as to the
insurance protection to | 15 | | which he is entitled, to whom the insurance benefits
are | 16 | | payable, a statement as to any dependent's coverage included in | 17 | | such
certificate, and the rights and conditions set forth in | 18 | | provisions (H),
(I), (J) and (K) following.
| 19 | | (H) A provision that if the insurance, or any portion of | 20 | | it, on a person
covered under the policy or on the dependent of | 21 | | a person covered, ceases
because of termination of employment | 22 | | or of membership in the class or classes
eligible for coverage | 23 | | under the policy, such person shall be entitled to
have issued | 24 | | to him by the insurer, without evidence of insurability, an
| 25 | | individual policy of life insurance without disability or other | 26 | | supplementary
benefits, unless such right to convert such |
| | | 10000HB0502ham001 | - 5 - | LRB100 06034 SMS 22344 a |
|
| 1 | | coverage was provided for
in the group policy and is applied | 2 | | for in the application for conversion,
provided that an | 3 | | application for the individual policy shall be made,
and the | 4 | | first premium paid to the insurer, within 31 days after such | 5 | | termination,
and provided further that:
| 6 | | (1) the individual policy may, at the option of such | 7 | | person, be on any
one of the forms then customarily issued | 8 | | by the insurer at the age and for
the amount applied for, | 9 | | except that the group policy may exclude the option
to | 10 | | elect term insurance;
| 11 | | (2) the individual policy shall be in an amount equal | 12 | | to, unless such
person chooses to elect a lesser amount, | 13 | | the amount
of life insurance which ceases because of such | 14 | | termination, less the amount of any
life insurance for | 15 | | which such person becomes eligible under the same or
any | 16 | | other group policy within 31 days after such termination, | 17 | | provided that
any amount of insurance which shall have | 18 | | matured on or before the date of
such termination as an | 19 | | endowment payable to the person insured, whether
in one sum | 20 | | or in installments or in the form of an annuity, shall not, | 21 | | for
the purposes of this provision, be included in the | 22 | | amount which is considered
to cease because of such | 23 | | termination; and
| 24 | | (3) the premium on the individual policy shall be at | 25 | | the insurer's then
customary rate applicable to the form | 26 | | and amount of the individual policy,
to the class of risk |
| | | 10000HB0502ham001 | - 6 - | LRB100 06034 SMS 22344 a |
|
| 1 | | to which such person then belongs,
and to such person's
age | 2 | | attained on the effective date of the individual policy.
| 3 | | (4) If any individual insured under a group life | 4 | | insurance policy becomes
entitled under the terms of such | 5 | | policy to have an individual policy of
life insurance | 6 | | issued and if such individual is not given notice of the
| 7 | | existence of such right at least 15 days prior to the | 8 | | expiration date of
such period, then in such event the | 9 | | individual shall have an additional
period within which to | 10 | | exercise such right, but nothing herein contained
shall be | 11 | | construed to continue any insurance beyond the period | 12 | | provided
in such policy. This additional period shall | 13 | | expire 15 days next after
the individual is given such | 14 | | notice but in no event shall such additional
period extend | 15 | | beyond 60 days next after the expiration date of the period
| 16 | | provided in such policy. Written notice presented to the | 17 | | individual or
mailed by the policyholder to the last known | 18 | | address of the individual or
mailed by the insurer to the | 19 | | last known address of the individual as furnished
by the | 20 | | policyholder shall constitute notice for the purpose of | 21 | | this Section.
| 22 | | Subject to the same conditions set forth above the | 23 | | conversion privilege
shall be available (i) to a surviving | 24 | | dependent, if any, at the death of
the employee or member, with | 25 | | respect to the coverage under the group policy
which terminates | 26 | | by reason of such death and (ii) to the dependent of the
|
| | | 10000HB0502ham001 | - 7 - | LRB100 06034 SMS 22344 a |
|
| 1 | | employee or member upon termination of coverage of the | 2 | | dependent, while
the employee or member remains under the group | 3 | | policy, by reason of the
dependent ceasing to be a qualified | 4 | | family member under the group policy.
| 5 | | (I) A provision, except in the case of a policy described | 6 | | in paragraph
(B) of Section 230.1, that the termination of the | 7 | | employment of an employee
or the membership of a member shall | 8 | | not terminate the insurance of such
employee or member under | 9 | | the group policy until the expiration of such period
for which | 10 | | the premium for such employee or member has been paid, not | 11 | | exceeding 31 days.
| 12 | | (J) A provision that from time to time all new employees or | 13 | | members eligible
for insurance and desiring the same shall be | 14 | | added to the group or class
thereof originally insured.
| 15 | | (K) A provision that if the group policy terminates or is
| 16 | | amended so as to terminate the insurance of any class of | 17 | | insured persons,
every person insured thereunder at the date of | 18 | | such termination whose insurance
terminates, including the | 19 | | insured dependent of a covered person, and who
has been so | 20 | | insured for at least five years prior to such termination date | 21 | | shall be
entitled to have issued by the insurer an individual | 22 | | policy of life insurance,
subject to the same conditions and | 23 | | limitations as are provided by provision
(H) above, except that | 24 | | the group policy may provide that the amount of such
individual | 25 | | policy shall not exceed the smaller of (a) the amount of the
| 26 | | person's life insurance protection ceasing because of the |
| | | 10000HB0502ham001 | - 8 - | LRB100 06034 SMS 22344 a |
|
| 1 | | termination or amendment of
the group policy, less the amount | 2 | | of any life insurance for which he is
or becomes eligible under | 3 | | a group policy issued or reinstated by the same
or another | 4 | | insurer within 31 days after such termination, or (b) $10,000.
| 5 | | (L) A provision that if a person insured under the group | 6 | | policy, or the
insured dependent of a covered person, dies | 7 | | during the period within which
the individual would have been | 8 | | entitled to have an individual policy issued
in accordance with | 9 | | provisions (H) or (I) above and before such an individual
| 10 | | policy shall have become effective, the amount of life | 11 | | insurance which he
would have been entitled to have issued | 12 | | under such individual policy shall
be payable as a claim under | 13 | | the group policy, whether or not application
for the individual | 14 | | policy or the payment of the first premium therefor has been | 15 | | made.
| 16 | | (M) (Blank). If active employment is a condition of | 17 | | insurance, a provision
that an insured may continue coverage | 18 | | during the insured's total disability
by timely payment to the | 19 | | policyholder of that portion, if any, of the premium
that would | 20 | | have been required from the insured had total disability not
| 21 | | occurred. The continuation shall be on a premium paying basis | 22 | | for a period
of six months from the date on which the total | 23 | | disability started, but not
beyond the earlier of (a) approval | 24 | | by the insurer of continuation of the
coverage under any | 25 | | disability provision which the group insurance policy
may | 26 | | contain or (b) the discontinuance of the group insurance |
| | | 10000HB0502ham001 | - 9 - | LRB100 06034 SMS 22344 a |
|
| 1 | | policy.
| 2 | | (N) In the case of a policy insuring the lives of debtors,
| 3 | | a provision that the insurer will furnish to the policyholder | 4 | | for delivery
to each debtor insured under the policy a | 5 | | certificate of insurance describing
the coverage and | 6 | | specifying that the death benefit shall first be applied
to | 7 | | reduce or extinguish the indebtedness. Whenever the amount of | 8 | | insurance
payable exceeds the amount of outstanding | 9 | | indebtedness the excess benefit
shall be payable to the person | 10 | | otherwise contractually or legally entitled
thereto; if there | 11 | | be no person determined to be so entitled, such excess
shall be | 12 | | paid to the estate of the insured person.
| 13 | | (Source: P.A. 83-1465.)
| 14 | | (215 ILCS 5/231.2 new) | 15 | | Sec. 231.2. Extension of coverage under authorized | 16 | | absence; liability. | 17 | | (a) In this Section, "authorized absence" means an absence | 18 | | that is administratively approved and does not result in a | 19 | | charge to leave of any kind or in loss of basic salary. | 20 | | (b) A group policy shall, if a covered employee or | 21 | | dependent is on authorized absence at the date of termination | 22 | | of the policy, provide an extension of coverage for the | 23 | | individual, beginning at the date of termination of the group | 24 | | policy and continuing during the period of authorized absence. | 25 | | (c) Under a group policy of life insurance that contains a |
| | | 10000HB0502ham001 | - 10 - | LRB100 06034 SMS 22344 a |
|
| 1 | | disability benefit extension of any type, such as premium | 2 | | waiver extension, extended death benefit in the event of total | 3 | | disability, or payment of income for a specified period during | 4 | | total disability, the termination of the group policy shall not | 5 | | operate to terminate the extension. | 6 | | (d) A provision for extending coverage shall be contained | 7 | | in each group policy as well as in corresponding certificates. | 8 | | (e) The benefits payable during any period of extended | 9 | | coverage shall be subject to the group policy's regular | 10 | | coverage limits. The extended coverage shall terminate at the | 11 | | end of a normal benefit period or when the maximum benefit | 12 | | amount has been paid. | 13 | | (f) The prior insurer shall be liable only to the extent of | 14 | | its extensions of coverage. Its liability shall be the same | 15 | | whether the group policyholder secures replacement coverage | 16 | | from another insurer, self-insures, or declines to provide the | 17 | | group with insurance. | 18 | | (g) The succeeding insurer shall be liable as provided in | 19 | | this subsection (g) where its group policy replaces another | 20 | | providing similar coverage: | 21 | | (1) Regular coverage shall be provided under the | 22 | | succeeding insurer's group policy to: | 23 | | (A) each employee who is eligible for coverage in | 24 | | accordance with the succeeding insurer's group policy | 25 | | provisions regarding classes eligible and actively at | 26 | | work requirements; |
| | | 10000HB0502ham001 | - 11 - | LRB100 06034 SMS 22344 a |
|
| 1 | | (B) each dependent who is eligible for coverage in | 2 | | accordance with the succeeding insurer's group policy | 3 | | provisions regarding classes eligible; and | 4 | | (C) a dependent of a disabled employee if the | 5 | | dependent is eligible for coverage in accordance with | 6 | | the succeeding insurer's group policy provisions | 7 | | regarding classes eligible if the disabled employee is | 8 | | covered under the succeeding insurer's group policy. | 9 | | (2) Each employee or dependent not covered under the | 10 | | succeeding insurer's group policy in accordance with | 11 | | paragraph (1) of this subsection (g) shall be provided with | 12 | | temporary coverage by the succeeding insurer, for losses | 13 | | occurring or beginning under the replacement policy, | 14 | | subject to the following: | 15 | | (A) Temporary coverage need be provided only if the | 16 | | individual was validly covered under the prior group | 17 | | policy on the date of its termination and meets the | 18 | | requirements necessary to be a member of an eligible | 19 | | class under the succeeding insurer's group policy, | 20 | | other than requirements for working full time, part | 21 | | time, or a stated number of hours. | 22 | | (B) The coverage to be provided by the succeeding | 23 | | insurer shall be the coverage of the prior group policy | 24 | | reduced by any benefits payable under such policy. The | 25 | | benefits of the succeeding insurer's group policy | 26 | | shall be determined after the benefits of the prior |
| | | 10000HB0502ham001 | - 12 - | LRB100 06034 SMS 22344 a |
|
| 1 | | group policy have been determined. | 2 | | (C) Temporary coverage shall be provided by the | 3 | | succeeding insurer until the first of: | 4 | | (i) the date the individual becomes eligible | 5 | | under the coverage and under the circumstances | 6 | | described in paragraph (1) of this subsection (g); | 7 | | (ii) the date the individual's coverage would | 8 | | terminate in accordance with the succeeding | 9 | | insurer's group policy provisions regarding | 10 | | individual termination of coverage, such as at | 11 | | termination of employment or when ceasing to be an | 12 | | eligible dependent; or | 13 | | (iii) for an individual who is on authorized | 14 | | absence on the effective date of the succeeding | 15 | | group policy, under a type of coverage for which | 16 | | this Section requires an extension of coverage, | 17 | | the end of any period of extended coverage required | 18 | | of the prior insurer or, if the prior insurer's | 19 | | group policy was not subject to this Section, would | 20 | | have been required of the prior insurer had its | 21 | | group policy been so subject.
| 22 | | Section 99. Effective date. This Act takes effect upon | 23 | | becoming law.".
|
|