(215 ILCS 123/20)

Sec. 20. HPG sponsors. Except as provided by Sections 15 and 25 of this Act, only a corporation authorized by the Secretary of State to transact business in Illinois may sponsor one or more HPGs with no more than 100,000 covered individuals by negotiating, soliciting, or servicing health insurance contracts for HPGs and their members. Such a corporation may assert and maintain authority to act as an HPG sponsor by complying with all of the following requirements:

(1) The principal officers and directors responsible for the conduct of the HPG sponsor must perform their HPG sponsor related functions in Illinois.

(2) No insurance risk may be borne or retained by the HPG sponsor; all health insurance contracts issued to HPGs through the HPG sponsor must be delivered in Illinois.

(3) No HPG sponsor may collect premium in its name or hold or manage premium or claim fund accounts unless duly qualified and licensed as a managing general agent pursuant to Section 141a of the Illinois Insurance Code or as a third party administrator pursuant to Section 511.105 of the Illinois Insurance Code.

(4) If the HPG gives an offer, application, notice, or proposal of insurance to an employer, it must disclose the total cost of the insurance. Dues, fees, or charges to be paid to the HPG, HPG sponsor, or any other entity as a condition to purchasing the insurance must be itemized. The HPG shall also disclose to its members the amount of any dividends, experience refunds, or other such payments it receives from the risk-bearer.

(5) An HPG sponsor must register with the Director before negotiating or soliciting any group or master health insurance contract for any HPG and must renew the registration annually on forms and at times prescribed by the Director in rules specifying, at minimum, (i) the identity of the officers and directors of the HPG sponsor corporation; (ii) a certification that those persons have not been convicted of any felony offense involving a breach of fiduciary duty or improper manipulation of accounts; (iii) the number of employer members then enrolled in each HPG sponsored; (iv) the date on which each HPG was issued a group or master health insurance contract, if any; and (v) the date on which each such contract, if any, was terminated.

(6) At the time of initial registration and each renewal thereof an HPG sponsor shall pay a fee of $200 to the Director.

(Source: P.A. 93-32, eff. 7-1-03.)