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91_HB2774eng
HB2774 Engrossed LRB9102646JSpc
1 AN ACT relating to insurance companies.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Insurance Code is amended by
5 changing Sections 245, 356h, 356v, 364, 367, and 367i as
6 follows:
7 (215 ILCS 5/245) (from Ch. 73, par. 857)
8 Sec. 245. Salaries; pensions.
9 (1) No domestic life company shall directly or
10 indirectly pay any salary, compensation or emolument to any
11 officer, trustee or director thereof, or any salary,
12 compensation or emolument amounting in any year to more than
13 $200,000 $100,000 to any person, firm or corporation, unless
14 such payment be first authorized by a vote of the board of
15 directors of such company, which vote shall be duly recorded
16 in the records of the company. No such domestic life company
17 shall make any agreement with any of its officers, trustees
18 or salaried employees whereby it agrees that for any services
19 rendered or to be rendered he shall receive any salary,
20 compensation or emolument, directly or indirectly, that will
21 extend beyond a period of three years from the date of such
22 agreement except that payment of an amount not in excess of
23 20% of the salary of any of its officers, trustees, or
24 salaried employees may by written agreement be deferred
25 beyond such period of three years, which agreement may
26 include conditions to be met by such officer, trustee, or
27 salaried employee before payment will be made. The limitation
28 as to time contained herein shall not apply to a contract for
29 renewal commissions with any such officer, trustee or
30 salaried employee who is also an agent of the company nor
31 shall such limitation be construed as preventing a domestic
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1 company from entering into contracts with its agents for the
2 payment of renewal commissions.
3 (2) No such life company shall grant any pension to any
4 officer, director or trustee thereof or to any member of his
5 family after his death except that it may provide a pension
6 pursuant to the terms of the uniform retirement plan adopted
7 by the board of directors and for any person who is or has
8 been a salaried officer or employee of such company and who
9 may retire by reason of age or disability.
10 (3) No such company shall hereafter create or establish
11 any account or fund for the purpose of promoting the health
12 or welfare of its employees except from annual accretions to
13 earned surplus computed in the manner provided by this Code.
14 Contributions to such fund by any company in any calendar
15 year shall not exceed 15% of the accretion to earned surplus
16 in such calendar year. Before such account or fund shall be
17 established, maintained or operated, the plan for such
18 account or fund and its method of operation shall be approved
19 by the board of directors of the company, and submitted to
20 the shareholders in the case of a stock company, or members
21 in the case of a mutual company, at a special meeting called
22 for the purpose of considering such plan. Contributions to
23 the fund from sources other than the company may be provided
24 for in the operation of the plan. No amount held in such fund
25 or account whether contributed by the company or from any
26 other source shall be considered an admitted asset as defined
27 in this Code, nor considered in determining the solvency of
28 such company, nor be subject to the provisions of this Code.
29 (Source: P.A. 86-384.)
30 (215 ILCS 5/356h) (from Ch. 73, par. 968h)
31 Sec. 356h. No individual or group policy of accident and
32 health insurance which covers the insured's immediate family
33 or children, as well as covering the insured, shall exclude a
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1 child from coverage or limit coverage for a child solely
2 because the child is an adopted child, or solely because the
3 child does not reside with the insured. For purposes of this
4 Section, a child who is in the custody of the insured,
5 pursuant to an interim court order of adoption or, in the
6 case of group insurance, placement of adoption, whichever
7 comes first, vesting temporary care of the child in the
8 insured, is an adopted child, regardless of whether a final
9 order granting adoption is ultimately issued.
10 (Source: P.A. 86-649.)
11 (215 ILCS 5/356v)
12 Sec. 356v. Use of information derived from genetic
13 testing. After the effective date of this amendatory Act of
14 1997, an insurer must comply with the provisions of the
15 Genetic Information Privacy Act in connection with the
16 amendment, delivery, issuance, or renewal of, or claims for
17 or denial of coverage under, an individual or group policy of
18 accident and health insurance. Additionally, genetic
19 information shall not be treated as a condition described in
20 item (1) of subsection (A) of Section 20 of the Illinois
21 Health Insurance Portability and Accountability Act in the
22 absence of a diagnosis of the condition related to that
23 genetic information.
24 (Source: P.A. 90-25, eff. 1-1-98; 90-655, eff. 7-30-98.)
25 (215 ILCS 5/364) (from Ch. 73, par. 976)
26 Sec. 364. Discrimination prohibited. Discrimination
27 between individuals of the same class of risk in the issuance
28 of its policies or in the amount of premiums or rates charged
29 for any insurance covered by this article, or in the benefits
30 payable thereon, or in any of the terms or conditions of such
31 policy, or in any other manner whatsoever is prohibited.
32 Nothing in this provision shall prohibit an insurer from
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1 providing incentives for insureds to utilize the services of
2 a particular hospital or person. It is hereby expressly
3 provided that whenever the terms "physician" or "doctor"
4 appear or are used in any way in any policy of accident or
5 health insurance issued in this state, said terms shall
6 include within their meaning persons licensed to practice
7 dentistry under the Illinois Dental Practice Act with regard
8 to benefits payable for services performed by a person so
9 licensed, which such services are within the coverage
10 provided by the particular policy or contract of insurance
11 and are within the professional services authorized to be
12 performed by such person under and in accordance with the
13 said Act.
14 No company, in any policy of accident or health insurance
15 issued in this State, shall make or permit any distinction or
16 discrimination against individuals solely because of
17 handicaps or disabilities in the amount of payment of
18 premiums or rates charged for policies of insurance, in the
19 amount of any dividends or other benefits payable thereon, or
20 in any other terms and conditions of the contract it makes,
21 except where the distinction or discrimination is based on
22 sound actuarial principles or is related to actual or
23 reasonably anticipated experience.
24 No company shall refuse to insure, or refuse to continue
25 to insure, or limit the amount or extent or kind of coverage
26 available to an individual, or charge an individual a
27 different rate for the same coverage solely because of
28 blindness or partial blindness. With respect to all other
29 conditions, including the underlying cause of the blindness
30 or partial blindness, persons who are blind or partially
31 blind shall be subject to the same standards of sound
32 actuarial principles or actual or reasonably anticipated
33 experience as are sighted persons. Refusal to insure includes
34 denial by an insurer of disability insurance coverage on the
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1 grounds that the policy defines "disability" as being
2 presumed in the event that the insured loses his or her
3 eyesight. However, an insurer may exclude from coverage
4 disabilities consisting solely of blindness or partial
5 blindness when such condition existed at the time the policy
6 was issued.
7 (Source: P.A. 85-1209.)
8 (215 ILCS 5/367) (from Ch. 73, par. 979)
9 Sec. 367. Group accident and health insurance.
10 (1) Group accident and health insurance is hereby
11 declared to be that form of accident and health insurance
12 covering not less than 2 10 employees, members, or employees
13 of members, (except in case of volunteer fire departments the
14 number shall not be less than 5 members) written under a
15 master policy issued to any governmental corporation, unit,
16 agency or department thereof, or to any corporation,
17 copartnership, individual employer, or to any association
18 upon application of an executive officer or trustee of such
19 association having a constitution or bylaws and formed in
20 good faith for purposes other than that of obtaining
21 insurance, where officers, members, employees, employees of
22 members or classes or department thereof, may be insured for
23 their individual benefit. In addition a group accident and
24 health policy may be written to insure any group which may be
25 insured under a group life insurance policy. The term
26 "employees" shall include the officers, managers and
27 employees of subsidiary or affiliated corporations, and the
28 individual proprietors, partners and employees of affiliated
29 individuals and firms, when the business of such subsidiary
30 or affiliated corporations, firms or individuals, is
31 controlled by a common employer through stock ownership,
32 contract or otherwise.
33 (2) Any insurance company authorized to write accident
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1 and health insurance in this State shall have power to issue
2 group accident and health policies. No policy of group
3 accident and health insurance may be issued or delivered in
4 this State unless a copy of the form thereof shall have been
5 filed with the department and approved by it in accordance
6 with Section 355, and it contains in substance those
7 provisions contained in Sections 357.1 through 357.30 as may
8 be applicable to group accident and health insurance and the
9 following provisions:
10 (a) A provision that the policy, the application of
11 the employer, or executive officer or trustee of any
12 association, and the individual applications, if any, of
13 the employees, members or employees of members insured
14 shall constitute the entire contract between the parties,
15 and that all statements made by the employer, or the
16 executive officer or trustee, or by the individual
17 employees, members or employees of members shall (in the
18 absence of fraud) be deemed representations and not
19 warranties, and that no such statement shall be used in
20 defense to a claim under the policy, unless it is
21 contained in a written application.
22 (b) A provision that the insurer will issue to the
23 employer, or to the executive officer or trustee of the
24 association, for delivery to the employee, member or
25 employee of a member, who is insured under such policy,
26 an individual certificate setting forth a statement as to
27 the insurance protection to which he is entitled and to
28 whom payable.
29 (c) A provision that to the group or class thereof
30 originally insured shall be added from time to time all
31 new employees of the employer, members of the association
32 or employees of members eligible to and applying for
33 insurance in such group or class.
34 (3) Anything in this code to the contrary
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1 notwithstanding, any group accident and health policy may
2 provide that all or any portion of any indemnities provided
3 by any such policy on account of hospital, nursing, medical
4 or surgical services, may, at the insurer's option, be paid
5 directly to the hospital or person rendering such services;
6 but the policy may not require that the service be rendered
7 by a particular hospital or person. Payment so made shall
8 discharge the insurer's obligation with respect to the amount
9 of insurance so paid. Nothing in this subsection (3) shall
10 prohibit an insurer from providing incentives for insureds to
11 utilize the services of a particular hospital or person.
12 (4) Special group policies may be issued to school
13 districts providing medical or hospital service, or both, for
14 pupils of the district injured while participating in any
15 athletic activity under the jurisdiction of or sponsored or
16 controlled by the district or the authorities of any school
17 thereof. The provisions of this Section governing the
18 issuance of group accident and health insurance shall,
19 insofar as applicable, control the issuance of such policies
20 issued to schools.
21 (5) No policy of group accident and health insurance may
22 be issued or delivered in this State unless it provides that
23 upon the death of the insured employee or group member the
24 dependents' coverage, if any, continues for a period of at
25 least 90 days subject to any other policy provisions relating
26 to termination of dependents' coverage.
27 (6) No group hospital policy covering miscellaneous
28 hospital expenses issued or delivered in this State shall
29 contain any exception or exclusion from coverage which would
30 preclude the payment of expenses incurred for the processing
31 and administration of blood and its components.
32 (7) No policy of group accident and health insurance,
33 delivered in this State more than 120 days after the
34 effective day of the Section, which provides inpatient
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1 hospital coverage for sicknesses shall exclude from such
2 coverage the treatment of alcoholism. This subsection shall
3 not apply to a policy which covers only specified sicknesses.
4 (8) No policy of group accident and health insurance,
5 which provides benefits for hospital or medical expenses
6 based upon the actual expenses incurred, issued or delivered
7 in this State shall contain any specific exception to
8 coverage which would preclude the payment of actual expenses
9 incurred in the examination and testing of a victim of an
10 offense defined in Sections 12-13 through 12-16 of the
11 Criminal Code of 1961, or an attempt to commit such offense,
12 to establish that sexual contact did occur or did not occur,
13 and to establish the presence or absence of sexually
14 transmitted disease or infection, and examination and
15 treatment of injuries and trauma sustained by the victim of
16 such offense, arising out of the offense. Every group policy
17 of accident and health insurance which specifically provides
18 benefits for routine physical examinations shall provide full
19 coverage for expenses incurred in the examination and testing
20 of a victim of an offense defined in Sections 12-13 through
21 12-16 of the Criminal Code of 1961, or an attempt to commit
22 such offense, as set forth in this Section. This subsection
23 shall not apply to a policy which covers hospital and medical
24 expenses for specified illnesses and injuries only.
25 (9) For purposes of enabling the recovery of State
26 funds, any insurance carrier subject to this Section shall
27 upon reasonable demand by the Department of Public Health
28 disclose the names and identities of its insureds entitled to
29 benefits under this provision to the Department of Public
30 Health whenever the Department of Public Health has
31 determined that it has paid, or is about to pay, hospital or
32 medical expenses for which an insurance carrier is liable
33 under this Section. All information received by the
34 Department of Public Health under this provision shall be
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1 held on a confidential basis and shall not be subject to
2 subpoena and shall not be made public by the Department of
3 Public Health or used for any purpose other than that
4 authorized by this Section.
5 (10) Whenever the Department of Public Health finds that
6 it has paid all or part of any hospital or medical expenses
7 which an insurance carrier is obligated to pay under this
8 Section, the Department of Public Health shall be entitled to
9 receive reimbursement for its payments from such insurance
10 carrier provided that the Department of Public Health has
11 notified the insurance carrier of its claim before the
12 carrier has paid the benefits to its insureds or the
13 insureds' assignees.
14 (11) (a) No group hospital, medical or surgical expense
15 policy shall contain any provision whereby benefits
16 otherwise payable thereunder are subject to reduction
17 solely on account of the existence of similar benefits
18 provided under other group or group-type accident and
19 sickness insurance policies where such reduction would
20 operate to reduce total benefits payable under these
21 policies below an amount equal to 100% of total allowable
22 expenses provided under these policies.
23 (b) When dependents of insureds are covered under 2
24 policies, both of which contain coordination of benefits
25 provisions, benefits of the policy of the insured whose
26 birthday falls earlier in the year are determined before
27 those of the policy of the insured whose birthday falls
28 later in the year. Birthday, as used herein, refers only
29 to the month and day in a calendar year, not the year in
30 which the person was born. The Department of Insurance
31 shall promulgate rules defining the order of benefit
32 determination pursuant to this paragraph (b).
33 (12) Every group policy under this Section shall be
34 subject to the provisions of Sections 356g and 356n of this
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1 Code.
2 (13) No accident and health insurer providing coverage
3 for hospital or medical expenses on an expense incurred basis
4 shall deny reimbursement for an otherwise covered expense
5 incurred for any organ transplantation procedure solely on
6 the basis that such procedure is deemed experimental or
7 investigational unless supported by the determination of the
8 Office of Health Care Technology Assessment within the Agency
9 for Health Care Policy and Research within the federal
10 Department of Health and Human Services that such procedure
11 is either experimental or investigational or that there is
12 insufficient data or experience to determine whether an organ
13 transplantation procedure is clinically acceptable. If an
14 accident and health insurer has made written request, or had
15 one made on its behalf by a national organization, for
16 determination by the Office of Health Care Technology
17 Assessment within the Agency for Health Care Policy and
18 Research within the federal Department of Health and Human
19 Services as to whether a specific organ transplantation
20 procedure is clinically acceptable and said organization
21 fails to respond to such a request within a period of 90
22 days, the failure to act may be deemed a determination that
23 the procedure is deemed to be experimental or
24 investigational.
25 (14) Whenever a claim for benefits by an insured under a
26 dental prepayment program is denied or reduced, based on the
27 review of x-ray films, such review must be performed by a
28 dentist.
29 (Source: P.A. 89-187, eff. 7-19-95.)
30 (215 ILCS 5/367i) (from Ch. 73, par. 979i)
31 Sec. 367i. Discontinuance and replacement of coverage.
32 Group health insurance policies issued, amended, delivered or
33 renewed on and after the effective date of this amendatory
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1 Act of 1989, shall provide a reasonable extension of benefits
2 in the event of total disability on the date the policy is
3 discontinued for any reason.
4 Any applicable extension of benefits or accrued liability
5 shall be described in the policy and group certificate.
6 Benefits payable during any extension of benefits may be
7 subject to the policy's regular benefit limits.
8 Any insurer discontinuing a group health insurance policy
9 shall provide to the policyholder for delivery to covered
10 employees or members a notice as to the date such
11 discontinuation is to be effective and urging them to refer
12 to their group certificates to determine what contract
13 rights, if any, are available to them.
14 In the event a discontinued policy is replaced by another
15 group policy, the prior insurer or plan shall be liable only
16 to the extent of its accrued liabilities and extension of
17 benefits. Persons eligible for coverage under the succeeding
18 insurer's plan or policy shall include all employees and
19 dependents covered under the prior insurer's plan, including
20 disabled individuals covered under the prior plan but absent
21 from work on the effective date and thereafter. The prior
22 insurer shall provide extension of benefits for an insured's
23 disabling condition when no coverage is available under the
24 succeeding insurer's plan whether due to the absence of
25 coverage in the contract or lack of required creditable
26 coverage for a preexisting condition. be covered by that
27 policy. Persons not eligible for coverage under the
28 succeeding insurer's policy shall, until such time as such
29 person becomes eligible, be covered by the succeeding
30 insurer's policy in such a way as to ensure that such persons
31 shall be treated no less favorably than had the change in
32 insurers not occurred.
33 The Director shall promulgate reasonable rules as
34 necessary to carry out this Section.
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1 (Source: P.A. 86-537.)
2 Section 10. The Health Maintenance Organization Act is
3 amended by changing Section 4-9 as follows:
4 (215 ILCS 125/4-9) (from Ch. 111 1/2, par. 1409.2)
5 Sec. 4-9. Adopted children. No contract or evidence of
6 coverage issued by a Health Maintenance Organization which
7 provides for coverage of dependents of the principal
8 enrollees shall exclude a child from coverage or eligibility
9 for coverage or limit coverage for a child solely on the
10 basis that he or she is an adopted child. For purposes of
11 this Section, a child who is in the custody of a principal
12 enrollee, pursuant to an interim court order of adoption or,
13 in the case of group insurance, placement of adoption,
14 whichever comes first, vesting temporary care of the child in
15 the enrollee, is an adopted child, regardless of whether a
16 final order granting adoption is ultimately issued.
17 (Source: P.A. 86-620.)
18 Section 99. Effective date. This Act takes effect upon
19 becoming law.
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