Public Act 102-0929
 
HB4313 EnrolledLRB102 21390 BMS 30506 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
    Section 5. The Illinois Insurance Code is amended  by 
changing Sections 131.22, 132.5, and 547 as follows:
 
 

    (215 ILCS 5/131.22)

 
    (Text of Section before amendment by P.A. 102-578)
    Sec. 131.22. Confidential treatment. 
    (a) Documents, materials, or other information in the 
possession or control of the Department that are obtained by 
or disclosed to the Director or any other person in the course 
of an examination or investigation made pursuant to this 
Article and all information reported or provided to the 
Department pursuant to paragraphs (12) and (13) of Section 
131.5 and Sections 131.13 through 131.21 shall be confidential 
by law and privileged, shall not be subject to the Illinois 
Freedom of Information Act, shall not be subject to subpoena, 
and shall not be subject to discovery or admissible in 
evidence in any private civil action. However, the Director is 
authorized to use the documents, materials, or other 
information in the furtherance of any regulatory or legal 
action brought as a part of the Director's official duties. 
The Director shall not otherwise make the documents, 
materials, or other information public without the prior 
written consent of the company to which it pertains unless the 
Director, after giving the company and its affiliates who 
would be affected thereby prior written notice and an 
opportunity to be heard, determines that the interest of 
policyholders, shareholders, or the public shall be served by 
the publication thereof, in which event the Director may 
publish all or any part in such manner as may be deemed 
appropriate.
    (b) Neither the Director nor any person who received 
documents, materials, or other information while acting under 
the authority of the Director or with whom such documents, 
materials, or other information are shared pursuant to this 
Article shall be permitted or required to testify in any 
private civil action concerning any confidential documents, 
materials, or information subject to subsection (a) of this 
Section.
    (c) In order to assist in the performance of the 
Director's duties, the Director:
        (1) may share documents, materials, or other 
    information, including the confidential and privileged 
    documents, materials, or information subject to subsection 
    (a) of this Section, with other state, federal, and 
    international regulatory agencies, with the NAIC and its 
    affiliates and subsidiaries, and with third-party

    consultants, and with state, federal, and international 
    law enforcement authorities and regulatory agencies, 
    including members of any supervisory college allowed by 
    this Article, provided that the recipient agrees in 
    writing to maintain the confidentiality and privileged 
    status of the document, material, or other information, 
    and has verified in writing the legal authority to 
    maintain confidentiality;
        (1.5) notwithstanding paragraph (1) of this subsection 
    (c), may only share confidential and privileged documents, 
    material, or information reported pursuant to Section 
    131.14b with commissioners of states having statutes or 
    regulations substantially similar to subsection (a) of 
    this Section and who have agreed in writing not to 
    disclose such information; and 
        (1.7) notwithstanding paragraph (1) of this subsection 
    (c), may only share confidential and privileged documents, 
    material, or information reported pursuant to Section 
    131.14b with the Illinois Insurance Guaranty Fund 
    regarding any member company defined in Section 534.5 if 
    the member company has an authorized control level event 
    as defined in Section 35A-25; the Director may disclose 
    the information described in this subsection so long as 
    the Fund agrees in writing to hold that information 
    confidential, in a manner consistent with this Code, and 
    uses that information to prepare for the possible 
    liquidation of the member company; access to the 
    information disclosed by the Director to the Fund shall be 
    limited to the Fund's staff and its counsel; the board of 
    directors of the Fund may have access to the information 
    disclosed by the Director to the Fund once the member 
    company is subject to a delinquency proceeding under 
    Article XIII subject to any terms and conditions 
    established by the Director; and 
        (2) may receive documents, materials, or information, 
    including otherwise confidential and privileged documents, 
    materials, or information from the NAIC and its affiliates 
    and subsidiaries and from regulatory and law enforcement 
    officials of other foreign or domestic jurisdictions, and 
    shall maintain as confidential or privileged any document, 
    material, or information received with notice or the 
    understanding that it is confidential or privileged under 
    the laws of the jurisdiction that is the source of the 
    document, material, or information; any such documents,

    materials, or information, while in the Director's 
    possession, shall not be subject to the
Illinois Freedom 
    of Information Act and shall not be subject to subpoena.
    (c-5) Written agreements with the NAIC or third-party 
consultants governing sharing and use of information provided 
pursuant to this Article consistent with this subsection (c) 
shall:

        (1)
specify procedures and protocols regarding the 
    confidentiality and security of information shared with 
    the NAIC and its affiliates and subsidiaries or 
    third-party consultants pursuant to this Article, 
    including procedures and protocols for sharing by the NAIC 
    with other state, federal, or international regulators;

        (2)
specify that ownership of information shared with 
    the NAIC and its affiliates and subsidiaries or 
    third-party consultants pursuant to this Article remains 
    with the Director and the NAIC's or third-party 
    consultant's use of the information is subject to the 
    direction of the Director;

        (3)
require prompt notice to be given to a company 
    whose confidential information in the possession of the 
    NAIC or third-party consultant pursuant to this Article is 
    subject to a request or subpoena for disclosure or 
    production; and

        (4)
require the NAIC and its affiliates and 
    subsidiaries or third-party consultants to consent to 
    intervention by a company in any judicial or 
    administrative action in which the NAIC and its affiliates 
    and subsidiaries or third-party consultants may be 
    required to disclose confidential information about the 
    company shared with the NAIC and its affiliates and 
    subsidiaries or third-party consultants pursuant to this 
    Article.
    (d) The sharing of documents, materials, or information by 
the Director pursuant to this Article shall not constitute a 
delegation of regulatory authority or rulemaking, and the 
Director is solely responsible for the administration, 
execution, and enforcement of the provisions of this Article.
    (e) No waiver of any applicable privilege or claim of 
confidentiality in the documents, materials, or information 
shall occur as a result of disclosure to the Director under 
this Section or as a result of sharing as authorized in 
subsection (c) of this Section.
    (f) Documents, materials, or other information in the 
possession or control of the NAIC or a third-party consultant 
pursuant to this Article shall be confidential by law and 
privileged, shall not be subject to the Illinois Freedom of 
Information Act, shall not be subject to subpoena, and shall 
not be subject to discovery or admissible in evidence in any 
private civil action.


(Source: P.A. 102-394, eff. 8-16-21.)
 
    (Text of Section after amendment by P.A. 102-578)
  
    Sec. 131.22. Confidential treatment. 
    (a) Documents, materials, or other information in the 
possession or control of the Department that are obtained by 
or disclosed to the Director or any other person in the course 
of an examination or investigation made pursuant to this 
Article and all information reported or provided to the 
Department pursuant to paragraphs (12) and (13) of Section 
131.5 and Sections 131.13 through 131.21 are recognized by 
this State as being proprietary and to contain trade secrets, 
and  shall be confidential by law and privileged, shall not be 
subject to the Illinois Freedom of Information Act, shall not 
be subject to subpoena, and shall not be subject to discovery 
or admissible in evidence in any private civil action. 
However, the Director is authorized to use the documents, 
materials, or other information in the furtherance of any 
regulatory or legal action brought as a part of the Director's 
official duties. The Director shall not otherwise make the 
documents, materials, or other information public without the 
prior written consent of the company to which it pertains 
unless the Director, after giving the company and its 
affiliates who would be affected thereby prior written notice 
and an opportunity to be heard, determines that the interest 
of policyholders, shareholders, or the public shall be served 
by the publication thereof, in which event the Director may 
publish all or any part in such manner as may be deemed 
appropriate.
    (b) Neither the Director nor any person who received 
documents, materials, or other information while acting under 
the authority of the Director or with whom such documents, 
materials, or other information are shared pursuant to this 
Article shall be permitted or required to testify in any 
private civil action concerning any confidential documents, 
materials, or information subject to subsection (a) of this 
Section.
    (c) In order to assist in the performance of the 
Director's duties, the Director:
        (1) may share documents, materials, or other 
    information, including the confidential and privileged 
    documents, materials, or information subject to subsection 
    (a) of this Section, including proprietary and trade 
    secret documents and materials, with other state, federal, 
    and international regulatory agencies, with the NAIC and 
    its affiliates and subsidiaries, and with third-party

    consultants, and with state, federal, and international 
    law enforcement authorities and regulatory agencies, 
    including members of any supervisory college allowed by 
    this Article, provided that the recipient agrees in 
    writing to maintain the confidentiality and privileged 
    status of the document, material, or other information, 
    and has verified in writing the legal authority to 
    maintain confidentiality;
        (1.5) notwithstanding paragraph (1) of this subsection 
    (c), may only share confidential and privileged documents, 
    material, or information reported pursuant to subsection 
    (a) of Section 131.14b with commissioners of states having 
    statutes or regulations substantially similar to 
    subsection (a) of this Section and who have agreed in 
    writing not to disclose such information; and
        (1.7) notwithstanding paragraph (1) of this subsection 
    (c), may only share confidential and privileged documents, 
    material, or information reported pursuant to Section 
    131.14b with the Illinois Insurance Guaranty Fund 
    regarding any member company defined in Section 534.5 if 
    the member company has an authorized control level event 
    as defined in Section 35A-25; the Director may disclose 
    the information described in this subsection so long as 
    the Fund agrees in writing to hold that information 
    confidential, in a manner consistent with this Code, and 
    uses that information to prepare for the possible 
    liquidation of the member company; access to the 
    information disclosed by the Director to the Fund shall be 
    limited to the Fund's staff and its counsel; the board of 
    directors of the Fund may have access to the information 
    disclosed by the Director to the Fund once the member 
    company is subject to a delinquency proceeding under 
    Article XIII subject to any terms and conditions 
    established by the Director; and 
        (2) may receive documents, materials, or information, 
    including otherwise confidential and privileged documents, 
    materials, or information, including proprietary and trade 
    secret information, from the NAIC and its affiliates and 
    subsidiaries and from regulatory and law enforcement 
    officials of other foreign or domestic jurisdictions, and 
    shall maintain as confidential or privileged any document, 
    material, or information received with notice or the 
    understanding that it is confidential or privileged under 
    the laws of the jurisdiction that is the source of the 
    document, material, or information; any such documents,

    materials, or information, while in the Director's 
    possession, shall not be subject to the
Illinois Freedom 
    of Information Act and shall not be subject to subpoena.
        (blank). 
    (c-5) Written agreements with the NAIC or third-party 
consultants governing sharing and use of information provided 
pursuant to this Article consistent with subsection (c) shall:

        (1)
specify procedures and protocols regarding the 
    confidentiality and security of information shared with 
    the NAIC and its affiliates and subsidiaries or 
    third-party consultants pursuant to this Article, 
    including procedures and protocols for sharing by the NAIC 
    with other state, federal, or international regulators; 
    the agreement shall provide that the recipient agrees in 
    writing to maintain the confidentiality and privileged 
    status of the documents, materials, or other information 
    and has verified in writing the legal authority to 
    maintain such confidentiality;

        (2)
specify that ownership of information shared with 
    the NAIC and its affiliates and subsidiaries or 
    third-party consultants pursuant to this Article remains 
    with the Director and the NAIC's or third-party 
    consultant's use of the information is subject to the 
    direction of the Director;

        (3)
require prompt notice to be given to a company 
    whose confidential information in the possession of the 
    NAIC or third-party consultant pursuant to this Article is 
    subject to a request or subpoena for disclosure or 
    production;

        (4)
require the NAIC and its affiliates and 
    subsidiaries or third-party consultants to consent to 
    intervention by a company in any judicial or 
    administrative action in which the NAIC and its affiliates 
    and subsidiaries or third-party consultants may be 
    required to disclose confidential information about the 
    company shared with the NAIC and its affiliates and 
    subsidiaries or third-party consultants pursuant to this 
    Article; and
        (5)    excluding documents, material, or information   
    reported pursuant to subsection (c) of Section 131.14b, 
    prohibit the NAIC or third-party consultant from storing 
    the information shared pursuant to this Code in a 
    permanent database after the underlying analysis is 
    completed. 
    (d) The sharing of documents, materials, or information by 
the Director pursuant to this Article shall not constitute a 
delegation of regulatory authority or rulemaking, and the 
Director is solely responsible for the administration, 
execution, and enforcement of the provisions of this Article.
    (e) No waiver of any applicable privilege or claim of 
confidentiality in the documents, materials, or information 
shall occur as a result of disclosure to the Director under 
this Section or as a result of sharing as authorized in 
subsection (c) of this Section.
    (f) Documents, materials, or other information in the 
possession or control of the NAIC or third-party consultant 
pursuant to this Article shall be confidential by law and 
privileged, shall not be subject to the Illinois Freedom of 
Information Act, shall not be subject to subpoena, and shall 
not be subject to discovery or admissible in evidence in any 
private civil action.


(Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 12-31-22; 
revised 9-22-21.)
 


    (215 ILCS 5/132.5)  (from Ch. 73, par. 744.5)




    Sec. 132.5. Examination reports. 

    (a) General description. All examination reports shall be 
comprised of
only facts appearing upon the books, records, or 
other documents of the
company, its agents, or other persons 
examined or as ascertained from the
testimony of its officers, 
agents, or other persons examined concerning its
affairs and 
the conclusions and recommendations as the examiners find

reasonably warranted from those facts.

    (b) Filing of examination report. No later than 60 days 
following
completion of the examination, the examiner in 
charge shall file with the
Department a verified written 
report of examination under oath. Upon
receipt of the verified 
report, the Department shall transmit the report to
the 
company examined, together with a notice that affords the 
company examined
a reasonable opportunity of not more than 30 
days to make a written
submission or rebuttal with respect to 
any matters contained in the examination report.

    (c) Adoption of the report on examination.  Within 30 days 
of the end of the
period allowed for the receipt of written 
submissions or rebuttals, the
Director shall fully consider 
and review the report, together with any
written submissions 
or rebuttals and any relevant portions of the examiners
work 
papers and enter an order:

        (1) Adopting the examination report as filed or with 
    modification or
corrections. If the examination report 
    reveals that the company is
operating in violation of any 
    law, regulation, or prior order of the
Director, the 
    Director may order the company to take any action the

    Director considers necessary and appropriate to cure the 
    violation.

        (2) Rejecting the examination report with directions 
    to the examiners
to reopen the examination for purposes of 
    obtaining additional data,
documentation, or information 
    and refiling under subsection (b).

        (3) Calling for an investigatory hearing with no less 
    than 20 days
notice to the company for purposes of 
    obtaining additional documentation,
data, information, and 
    testimony.

    (d) Order and procedures. All orders entered under 
paragraph (1) of
subsection (c) shall be accompanied by 
findings and conclusions resulting
from the Director's 
consideration and review of the examination report,
relevant 
examiner work papers, and any written submissions or 
rebuttals.
The order shall be considered a final 
administrative decision and may be
appealed in accordance with 
the Administrative Review Law. The order shall
be served upon 
the company by certified mail, together with a copy of the

adopted examination report. Within 30 days of the issuance of 
the adopted
report, the company shall file affidavits executed 
by each of its directors
stating under oath that they have 
received a copy of the adopted report and
related orders.

    Any hearing conducted under paragraph (3) of subsection 
(c) by the
Director or an authorized representative shall be 
conducted as a
nonadversarial confidential investigatory 
proceeding as necessary for the
resolution of any 
inconsistencies, discrepancies, or disputed issues
apparent 
upon the face of the filed examination report or raised by or 
as a
result of the Director's review of relevant work papers or 
by the written
submission or rebuttal of the company.
Within 
20 days of the conclusion of any hearing, the Director shall 
enter
an order under paragraph (1) of subsection (c).

    The Director shall not appoint an examiner as an 
authorized
representative to conduct the hearing. The hearing 
shall proceed
expeditiously with discovery by the company 
limited to the examiner's work
papers that tend to 
substantiate any assertions set forth in any written

submission or rebuttal. The Director or his representative may 
issue
subpoenas for the attendance of any witnesses or the 
production of any
documents deemed relevant to the 
investigation, whether under the control
of the Department, 
the company, or other persons. The documents produced
shall be 
included in the record, and testimony taken by the Director or 
his
representative shall be under oath and preserved for the 
record. Nothing
contained in this Section shall require the 
Department to disclose any
information or records that would 
indicate or show the existence or content
of any investigation 
or activity of a criminal justice agency.

    The hearing shall proceed with the Director or his 
representative
posing questions to the persons subpoenaed. 
Thereafter the company and the
Department may present 
testimony relevant to the investigation.
Cross-examination 
shall be conducted only by the Director or his representative.

The company and the Department shall be permitted to make 
closing
statements and may be represented by counsel of their 
choice.

    (e) Publication and use.  Upon the adoption of the 
examination report
under paragraph (1) of subsection (c), the 
Director shall continue to hold
the content of the examination 
report as private and confidential
information for a period of 
35 days, except to the extent provided in
subsection (b). 
Thereafter, the Director may open the report for public

inspection so long as no court of competent jurisdiction has 
stayed its publication.

    Nothing contained in this Code shall prevent or be 
construed as
prohibiting the Director from disclosing the 
content of an examination
report, preliminary examination 
report or results, or any matter relating
thereto, to the 
insurance department of any other state or country or to law

enforcement officials of this or any other state or agency of 
the federal
government at any time, so long as the agency or 
office receiving the
report or matters relating thereto agrees 
in writing to hold it
confidential and in a manner consistent 
with this Code.

    In the event the Director determines that regulatory 
action is
appropriate as a result of any examination, he may 
initiate any
proceedings or actions as provided by law.

    (f) Confidentiality of ancillary information.  All working 
papers,
recorded information, documents, and copies
thereof 
produced by, obtained by, or disclosed to the Director or any 
other
person in the course of any examination must be given 
confidential
treatment, are not subject to subpoena, and may 
not be made public by the
Director or any other persons, except 
to the extent provided in subsection
(e). Access may also be 
granted to the National Association of Insurance 
Commissioners.
Those parties must agree in writing before 
receiving the information to
provide to it the same 
confidential treatment as required by this Section,
unless the 
prior written consent of the company to which it pertains has 
been obtained.

    This subsection (f) applies to market conduct examinations 
described in Section 132 of this Code. 
    (g) Disclosure. Nothing contained in this Code shall 
prevent or be construed as prohibiting the Director from 
disclosing the information described in subsections (e) and 
(f) to the Illinois Insurance Guaranty Fund regarding any 
member company defined in Section 534.5 if the member company 
has an authorized control level event as defined in Section 
35A-25. The Director may disclose the information described in 
this subsection so long as the Fund agrees in writing to hold 
that information confidential, in a manner consistent with 
this Code, and uses that information to prepare for the 
possible liquidation of the member company. Access to the 
information disclosed by the Director to the Fund shall be 
limited to the Fund's staff and its counsel. The Board of 
Directors of the Fund may have access to the information 
disclosed by the Director to the Fund once the member company 
is subject to a delinquency proceeding under Article XIII 
subject to any terms and conditions established by the 
Director. 
(Source: P.A. 100-475, eff. 1-1-18.)

 



    (215 ILCS 5/547)  (from Ch. 73, par. 1065.97)



    Sec. 547. Prevention of insolvencies. To aid in the 
detection and prevention of company insolvencies:

    (a) The board of directors may, upon majority vote, make 
recommendations
to the Director on matters pertaining to 
regulation for solvency.

    (b) The board of directors may prepare a report on the 
history and causes
of any company
insolvency in which the Fund 
was obligated to pay covered claims, based on the
information 
available to the Fund, and submit such report to the Director.

    (c) The Director may disclose to the Fund the information 
described in subsection (g) of Section 132.5 as well as the 
information described in subsection (c) of Section 131.22, and 
the Fund may use that information to prepare for the possible 
liquidation of a member company subject to the requirements 
and restrictions set forth in Section 132.5. 
(Source: P.A. 85-576.)

 
    Section 95. No acceleration or delay. Where this Act makes 
changes in a statute that is represented in this Act by text 
that is not yet or no longer in effect (for example, a Section 
represented by multiple versions), the use of that text does 
not accelerate or delay the taking effect of (i) the changes 
made by this Act or (ii) provisions derived from any other 
Public Act.
 

    Section 99. Effective date. This Act takes effect upon 
becoming law.