HB5529 104TH GENERAL ASSEMBLY

LRB104 19839 BAB 33289 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5529

Introduced 2/13/2026, by Rep. Thaddeus Jones

SYNOPSIS AS INTRODUCED:

See Index

Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Creates the Strengthen Illinois Homes Fund. On or before July 1, 2028, and depending on availability of funds, provides that the Department of Insurance shall identify areas of need to administer a pilot grant program known as the Strengthen Illinois Homes Program. Requires the Department of Commerce and Economic Opportunity, in conjunction with the Department of Insurance, to develop a standard application and grant award rubric for the eligible program grantees. Establishes program requirements for contractors. Amends the State Finance Act to make a conforming change. Amends the Illinois Insurance Code. Establishes notice requirements for companies providing flood coverage. Creates the Climate Risk Disclosure Article, which may be referred to as the Climate Risk Disclosure Law. Requires all companies, corporations, and organizations subject to the Article to, upon direction from the Department, participate in climate surveys issued by the National Association of Insurance Commissioners. Creates the Strengthen Illinois Homes Article, which may be referred to as the Strengthen Illinois Homes Act. Provides that, for homeowners insurance policies, an insurer shall provide an actuarially justified premium discount or insurance rate reduction to a specified owner. Provides that the Director of Insurance may adopt rules that establish standard discount amounts, targets, or benchmarks for the coverage of insurable property meeting the specified mitigation program standards. Provides that an insurer writing homeowners insurance policies that provide coverage of an insurable property that is a nonfortified insurable property shall offer an optional rider, endorsement, or supplemental policy provision that provides the insured a right to receive claim payments for the cost to upgrade an insurable property to mitigation program standards for a specified claim. Makes other changes. Amends the Dental Service Plan Act, the Health Maintenance Organization Act, and the Limited Health Service Organization Act to establish conforming requirements.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 871 as follows:

(20 ILCS 605/871 new)

Sec. 871. Strengthen Illinois Homes Program.

(a) In this Section:

"Area of need" means regions throughout the State of Illinois at the highest risk of catastrophic wind and hail events based on historical data determined by the Department.

"County area median family income" means the county-specific area median family income guidelines published by the Illinois Housing Development Authority.

"Eligible grantee" means units of local government, local and regional economic development corporations, and not-for-profit organizations approved to receive grants under the requirements of the Grant Accountability and Transparency Act.

"IBHS" means the Insurance Institute for Business and Home Safety.

"Low-income limit" means the low-income limit guidelines published by the Illinois Housing Development Authority.

"State median family income" means the State median family income guidelines published by the Illinois Housing Development Authority.

"Very low-income limit" means the very low-income limit guidelines updated annually in the Federal Register by the United States Department of Housing and Urban Development and published by the Illinois Housing Development Authority.

(b) Terms not otherwise defined in this Section shall have the meanings given to those terms under Article XLIX of the Illinois Insurance Code.

(c) Subject to appropriation, the Department shall use moneys deposited into the Strengthen Illinois Homes Fund to make grants to eligible grantees for the purpose of providing financial grants to insurable property owners to assist and promote the mitigation of insurable property to resist losses due to catastrophic wind and hail events in accordance with mitigation program standards.

(d) The Strengthen Illinois Homes Fund is hereby created as a special fund in the State treasury. The Department may accept gifts, grants, donations, or other revenues or transfers for deposit into the Strengthen Illinois Homes Fund. Moneys in the fund shall be used by the Department for the purpose of implementing and administering the program established under this Section and may be used to contribute toward administrative and staffing needs of administering the program.

(e) Moneys in the fund not expended at the close of a fiscal year shall not lapse but shall be carried forward to the next fiscal year.

(f) To the extent funding is available, the Director shall implement and administer the program in accordance with this Section.

(g) On or before July 1, 2028, and depending on availability of funds, the Department of Insurance shall identify areas of need to administer a pilot grant program known as the Strengthen Illinois Homes Program. The Department of Insurance shall identify the determined areas of need by rule and by other communication to the public. Areas of need shall be determined based on the following factors:

(1) areas that, based on historical data, have a higher susceptibility of catastrophic wind and hail events;

(2) areas where the average written premium exceeds the median household income;

(3) areas where the average written premium exceeds the insurable property value; or

(4) any other factors the Director of Insurance determines to meet the purpose of the program.

(h) Individual grant awards shall be determined based on availability of funds, the expected cost of the mitigation project, and the percentage of family income relative to either the county area median family income or the State median family income of the area of need, adjusted for family size as published by the Illinois Housing Development Authority, whichever is higher. Acceptance of individual grant awards applications shall be determined by the eligible grantee, in accordance with this Act. Applicants within an area of need whose income is equal to or less than 80% of the county area median family income adjusted for family size as published by the Illinois Housing Development Authority shall be prioritized by the eligible grantee. All other applications within an area of need shall be accepted on a first-come, first-served basis, depending on availability of funds by the eligible grantee.

(i) The Department, in conjunction with the Department of Insurance, shall develop a standard application and grant award rubric for the eligible grantees. No individual grant award shall exceed $15,000. If the cost of the mitigation project exceeds the amount of the grant award, the remaining cost of the mitigation project is the insurable property owner's responsibility. Grant awards must not be used for normal maintenance and repairs an insurable property owner is expected to perform but may be used in conjunction with repairs or reconstruction as necessitated by damages from a catastrophic weather event. An individual grant application must be approved by the eligible grantee before mitigation work on the insurable property is commenced to be eligible to receive a grant under this Section. After a grant application is approved by the eligible grantee, the contractor meeting the requirements of this Section selected by the insurable property owner may begin the work required to bring the insurable property into compliance with mitigation program standards.

(j) Once the mitigation work is completed, the contractor must submit a copy of the signed contract to the eligible grantee, along with an invoice seeking payment and an affidavit stating the mitigation program standards were met by the work completed. Grant money shall be disbursed by the eligible grantee only after a certificate of compliance has been issued for the insurable property and is provided to the eligible grantee. The eligible grantee may, on behalf of the insurable property owner, directly pay the contractor that performed the mitigation work. The Department may delineate a sliding scale of grant awards based on the requirements of subsection (h).

(k) After the first operating year of the program, the Department of Insurance may expand the program to additional areas of need, depending on availability of funds, at the Director of Insurance's discretion. If the program is expanded, applications shall continue to be prioritized according to subsection (h).

(l) Nothing in this Section shall be construed to create an entitlement for property owners or obligate the State of Illinois to pay for residential property in Illinois to be inspected or retrofitted. All mitigation under this Section is contingent upon securing all required local permits and applicable inspections to comply with local building codes and applicable FORTIFIED program standards. A mitigation project receiving a grant under this Section is subject to random reinspection at a later date.

(m) To be eligible to work as a contractor on a project funded by a grant under this Act, the contractor must meet all of the following program requirements and must maintain a current copy of all certificates, licenses, and proof of insurance coverage. The eligible contractor must:

(1) hold a valid residential building contractor and residential remodeler license issued by the appropriate local or State authority for the jurisdiction where the insurable property is located;

(2) not be subject to disciplinary action by the contractor's licensing authority;

(3) hold any other valid State or jurisdictional business license or work permits required by law;

(4) possess an in-force general liability policy with $1,000,000 in liability coverage;

(5) possess an in-force workers compensation policy;

(6) register the contractor's business with the Department of Revenue;

(7) register as a FORTIFIED certified contractor with the Department and maintain a valid email address on file with the Department; and

(8) successfully complete the FORTIFIED Roof for High Wind and Hail training provided by the IBHS and maintain an active certification. The training may be offered as separate courses.

(n) An eligible contractor must not have a financial interest, other than payment on behalf of the insurable property owner, in any project for which the eligible contractor performs work toward a FORTIFIED designation under the program. An eligible contractor is prohibited from acting as the evaluator for a mitigation program standard designation on any project funded by the program. An eligible contractor must report to the Department regarding any potential conflict of interest before work commences on any job funded by the program.

(o) The Department shall maintain a certified contractor database in order for eligible grantees to ensure certification before individual grant application approval.

(p) To be eligible to work as an evaluator on a project funded by a grant under this Act, the evaluator must meet all program eligibility requirements and must maintain a copy of all current certificates and licenses. The evaluator must:

(1) be in good standing with IBHS and maintain an active certification as a FORTIFIED home evaluator for high wind and hail or a successor certification;

(2) possess an Illinois business license and be registered with the Secretary of State; and

(3) successfully complete the program training.

(q) An evaluator must not have a financial interest in any project that the evaluator inspects for designation purposes for the program. An evaluator must not be an eligible contractor or supplier of any material, product, or system installed in any insurable property that the evaluator inspects for designation purposes for the program. An evaluator must not be a sales agent for any home being designated for the program. An evaluator must inform the Department of any potential conflict of interest impacting the evaluator's participation in the program.

(r) The Department may adopt rules to implement this Section.

Section 10. The State Finance Act is amended by adding Section 5.1038 as follows:

(30 ILCS 105/5.1038 new)

Sec. 5.1038. The Strengthen Illinois Homes Fund.

Section 15. The Illinois Insurance Code is amended by changing Sections 143.16 and 143.17 and by adding Section 143.21e, Article XLVIII, and Article XLIX as follows:

(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)

Sec. 143.16. Mailing of cancellation notice. All notices of cancellation of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation during the first 60 days of coverage. After the coverage has been effective for 61 days or more, all notices must be mailed at least 60 days prior to the effective date of cancellation. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation. All such notices shall include a specific explanation of the reason or reasons for cancellation and shall be mailed to the named insured at the last mailing address known to the company. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)

Sec. 143.17. Notice of intention not to renew.

a. No company shall fail to renew any policy of insurance, as defined in subsections (a), (b), (c), and (h) of Section 143.13, to which Section 143.11 applies, unless it shall send by mail to the named insured at least 60 30 days advance notice of its intention not to renew. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U. S. Post Office or other commercial mail delivery service. The nonrenewal shall not become effective until at least 60 30 days from the proof of mailing date of the notice to the name insured. Notification shall also be sent to the insured's broker, if known, or the agent of record, if known, and to the last known mortgagee or lien holder. For purposes of this Section, the mortgagee or lien holder, insured's broker, or the agent of record may opt to accept notification electronically. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation.

b. This Section does not apply if the company has manifested its willingness to renew directly to the named insured. Such written notice shall specify the premium amount payable, including any premium payment plan available, and the name of any person or persons, if any, authorized to receive payment on behalf of the company. If no person is so authorized, the premium notice shall so state.

b-5. This Section does not apply if the company manifested its willingness to renew directly to the named insured. However, no company may impose changes in deductibles or coverage for any policy forms applicable to an entire line of business enumerated in subsections (a), (b), (c), and (h) of Section 143.13 to which Section 143.11 applies unless the company mails to the named insured written notice of the change in deductible or coverage at least 60 days prior to the renewal or anniversary date. Notice shall also be sent to the insured's broker, if known, or the agent of record.

c. Should a company fail to comply with (a) or (b) of this Section, the policy shall terminate only on the effective date of any similar insurance procured by the insured with respect to the same subject or location designated in both policies.

d. Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.

e. In all notices of intention not to renew any policy of insurance, as defined in Section 143.11 the company shall provide the named insured a specific explanation of the reasons for nonrenewal.

f. For purposes of this Section, the insured's broker, if known, or the agent of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.21e new)

Sec. 143.21e. Flood coverage; notice.

(a) In response to all applications for a policy of fire and extended coverage, before the applicant agrees to a policy, the company shall provide, and the applicant and insurance producer shall sign, a written notice regarding:

(1) the flood coverage in the policy and the flood coverage that is available to the applicant through the company, including the coverage limits and costs thereof; and

(2) the availability of flood coverage through the National Flood Insurance Program, whether the company can write such coverage, and how the applicant can obtain coverage through the National Flood Insurance Program. The notice must contain attestation language that flood coverage options were explained to the applicant in plain language.

(b) At least 30 days prior to each renewal of any policy of fire and extended coverage, the company shall provide the insured with a written notice containing the same information required in subsection (a), except that a signature and the attestation language are not required.

(c) The Department may require insurers to use a standard form developed by the Department and published on the Department's website.

(215 ILCS 5/Art. XLVIII heading new)

ARTICLE XLVIII. CLIMATE RISK DISCLOSURE

(215 ILCS 5/1801 new)

Sec. 1801. Short title. This Article may be referred to as the Climate Risk Disclosure Law.

(215 ILCS 5/1805 new)

Sec. 1805. Purpose. The purpose of this Article is to enhance transparency about how insurers manage climate-related risks and to clarify the Department's authority to require companies to participate in climate surveys issued by entities, including, but not limited to, the Department and the National Association of Insurance Commissioners. This Article shall be liberally interpreted to carry into effect the intent of this Section.

(215 ILCS 5/1810 new)

Sec. 1810. Applicability. This Article applies to every company licensed in Illinois under Classes 1, 2, or 3 of Section 4 of this Code and every dental service plan corporation, health maintenance organization, or limited health service organization licensed in Illinois when such company, corporation, or organization writes $100,000,000 or more annually in direct premiums nationwide. This threshold may be altered by rule.

(215 ILCS 5/1815 new)

Sec. 1815. Climate disclosure survey participation. All companies, corporations, and organizations subject to this Article shall, upon direction from the Department, participate in climate surveys issued by the National Association of Insurance Commissioners.

(215 ILCS 5/Art. XLIX heading new)

ARTICLE XLIX. STRENGTHEN ILLINOIS HOMES

(215 ILCS 5/1901 new)

Sec. 1901. Short title. This Article may be referred to as the Strengthen Illinois Homes Act.

(215 ILCS 5/1902 new)

Sec. 1902. Purpose. The purpose of this Article is to create the Strengthen Illinois Homes Program to assist in and promote the mitigation of insurable property to resist losses due to catastrophic wind and hail events.

(215 ILCS 5/1905 new)

Sec. 1905. Applicability. This Article applies to applicable policies offered, issued, or renewed on or after January 1, 2028.

(215 ILCS 5/1910 new)

Sec. 1910. Definitions. In this Article:

"Certificate of compliance" means a certificate of compliance with the most recent version of mitigation program standards or any certificate of compliance that may be issued by other acceptable standards to be permitted by administrative rule.

"Homeowners insurance" means the personal multi-peril property coverages commonly known as homeowners insurance.

"Insurable property" means an owner-occupied dwelling in the State of Illinois that may be covered by homeowners insurance.

"Mitigation program standards" means a designation of either FORTIFIED Roof (Roof), FORTIFIED Silver (Silver), FORTIFIED Gold (Gold), or a successor designation, including a hail supplement, as administered by the Insurance Institute for Business and Home Safety (IBHS) or a successor entity. Other acceptable standards may be determined by the Director of Insurance by rule.

"Nonfortified insurable property" means an insurable property that does not otherwise comply with mitigation program standards.

(215 ILCS 5/1920 new)

Sec. 1920. Mitigation program insurance premium discounts.

(a) For homeowners insurance policies, an insurer shall provide an actuarially justified premium discount or insurance rate reduction to an owner who either:

(1) builds or locates a new insurable property in Illinois that meets the mitigation program standards; or

(2) retrofits an existing insurable property in Illinois to meet the mitigation program standards.

(b) The Director may by rule permit other acceptable standards by which insurers must provide a premium discount or an insurance rate reduction.

(c) An insurer shall differentiate the premium discount or insurance rate reduction according to which designation of mitigation program standards the policyholder achieves.

(d) Nothing in this Section is intended to restrict an insurer from implementing additional premium discounts or insurance rate reductions related to mitigation efforts that may not adhere to all mitigation program standards.

(e) An insurer shall provide the premium discount or insurance rate reduction on the coverage of the insured's insurable property after the insurer obtains or receives a certificate of compliance for that insurable property. An insurer is not required to obtain or receive a certificate of compliance in order to provide a premium discount or insurance rate reduction under subsection (a) of this Section.

(f) Upon initial implementation of this Section, companies must file with the Department a stand-alone rate filing showing compliance.

(g) The Director may adopt rules that establish standard discount amounts, targets, or benchmarks for the coverage of insurable property meeting the mitigation program standards outlined in subsection (a) of this Section. Any standard discount amounts, targets, or benchmarks adopted by rule shall be:

(1) optional; and

(2) primarily for the benefit of insurers that are unable to obtain actuarially valid data to provide a premium discount or rate reduction under subsection (a) of this Section due to inadequate resources or experience.

(h) An insurer operating in the State of Illinois shall make information regarding the availability of such a discount accessible on its website in a manner that is searchable and accessible to the general public without requiring an individual to create any account.

(215 ILCS 5/1925 new)

Sec. 1925. Mitigation program discount disclosure to policyholder.

(a) Upon the premium discount or insurance rate reduction described in subsection (a) of Section 1920 becoming effective to an insured's policy, an insurer shall, in plain language, provide the policyholder with information either in writing or electronically regarding the following:

(1) the premium discount or insurance rate reduction the policyholder will be receiving, either as a percentage or dollar amount; and

(2) specific information regarding whether the premium discount or insurance rate reduction was attributed to the policyholder's homeowners insurance or the policyholder's coverage for wind or hail damage or other peril-specific coverage as defined by the insurer.

(b) An insurer shall provide this disclosure in a separate notification to the policyholder on initial implementation of the premium discount or insurance rate reduction and maintain the information on the policyholder's declarations page.

(c) Nothing in this Section shall be construed to require an insurer to share proprietary information or trade secrets with the policyholder in the disclosure required by subsection (a) of this Section.

(215 ILCS 5/1930 new)

Sec. 1930. Endorsement offer to upgrade insurable property to mitigation program standards.

(a) An insurer writing homeowners insurance policies that provide coverage of an insurable property that is a nonfortified insurable property shall offer an optional rider, endorsement, or supplemental policy provision that provides the insured a right to receive claim payments for the cost to upgrade an insurable property to mitigation program standards for a claim that:

(1) is covered under the insurance policy contract; and

(2) requires total replacement of the covered insurable property's roof as defined by the insurance policy or contract.

(b) The rider, endorsement, or supplemental policy provision must upgrade the nonfortified insurable property consistent with any designation under mitigation program standards.

(c) The rider, endorsement, or supplemental policy offer must be made at the time that:

(1) a new policy on a nonfortified insurable property is written; and

(2) upon first renewal of an existing policy on a nonfortified insurable property.

(d) Upon initial implementation of this Section, companies must file with the Department a stand-alone rate filing showing compliance. Additional premiums associated with this feature shall be based on actuarially sound methods.

(e) An insurer operating in the State of Illinois shall make information regarding the availability of the rider, endorsement, or supplemental policy provision option accessible on its website in a manner that is searchable and accessible to the general public without requiring an individual to create any account.

(f) The Director may adopt rules necessary to implement this Section.

(215 ILCS 5/143.15 rep.)

Section 20. The Illinois Insurance Code is amended by repealing Section 143.15.

Section 25. The Dental Service Plan Act is amended by changing Section 25 as follows:

(215 ILCS 110/25) (from Ch. 32, par. 690.25)

Sec. 25. Application of Insurance Code provisions. Dental service plan corporations and all persons interested therein or dealing therewith shall be subject to the provisions of Articles IIA, XI, and XII 1/2, and XLVIII and Sections 3.1, 133, 136, 139, 140, 143, 143.31, 143c, 149, 155.49, 355.2, 355.3, 367.2, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and subsection (15) of Section 367 of the Illinois Insurance Code.

(Source: P.A. 103-426, eff. 8-4-23; 103-656, eff. 1-1-25.)

Section 30. The Health Maintenance Organization Act is amended by changing Section 5-3 as follows:

(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)

Sec. 5-3. Illinois Insurance Code provisions.

(a) Health Maintenance Organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143.31, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 155.49, 352c, 355.2, 355.3, 355.6, 355.7, 355b, 355c, 356f, 356g, 356g.5-1, 356m, 356q, 356u.10, 356v, 356w, 356x, 356z.2, 356z.3a, 356z.4, 356z.4a, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.20, 356z.21, 356z.22, 356z.23, 356z.24, 356z.25, 356z.26, 356z.28, 356z.29, 356z.30, 356z.31, 356z.32, 356z.33, 356z.34, 356z.35, 356z.36, 356z.37, 356z.38, 356z.39, 356z.40, 356z.40a, 356z.41, 356z.44, 356z.45, 356z.46, 356z.47, 356z.48, 356z.49, 356z.50, 356z.51, 356z.53, 356z.54, 356z.55, 356z.56, 356z.57, 356z.58, 356z.59, 356z.60, 356z.61, 356z.62, 356z.63, 356z.64, 356z.65, 356z.66, 356z.67, 356z.68, 356z.69, 356z.70, 356z.71, 356z.72, 356z.73, 356z.74, 356z.75, 356z.76, 356z.77, 356z.78, 356z.79, 356z.80, 356z.81, 356z.82, 356z.83, 356z.84, 356z.85, 364, 364.01, 364.3, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370a, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB, and XLVIII of the Illinois Insurance Code.

(b) For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in the following categories are deemed to be "domestic companies":

(1) a corporation authorized under the Dental Service Plan Act or the Voluntary Health Services Plans Act;

(2) a corporation organized under the laws of this State; or

(3) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.

(c) In considering the merger, consolidation, or other acquisition of control of a Health Maintenance Organization pursuant to Article VIII 1/2 of the Illinois Insurance Code,

(1) the Director shall give primary consideration to the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;

(2)(i) the criteria specified in subsection (1)(b) of Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;

(3) the Director shall have the power to require the following information:

(A) certification by an independent actuary of the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;

(B) pro forma financial statements reflecting the combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;

(C) a pro forma business plan detailing an acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and

(D) such other information as the Director shall require.

(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code and this Section 5-3 shall apply to the sale by any health maintenance organization of greater than 10% of its enrollee population (including, without limitation, the health maintenance organization's right, title, and interest in and to its health care certificates).

(e) In considering any management contract or service agreement subject to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in addition to the criteria specified in Section 141.2 of the Illinois Insurance Code, take into account the effect of the management contract or service agreement on the continuation of benefits to enrollees and the financial condition of the health maintenance organization to be managed or serviced, and (ii) need not take into account the effect of the management contract or service agreement on competition.

(f) Except for small employer groups as defined in the Small Employer Rating, Renewability and Portability Health Insurance Act and except for medicare supplement policies as defined in Section 363 of the Illinois Insurance Code, a Health Maintenance Organization may by contract agree with a group or other enrollment unit to effect refunds or charge additional premiums under the following terms and conditions:

(i) the amount of, and other terms and conditions with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and

(ii) the amount of the refund or additional premium shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)). The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.

The Health Maintenance Organization shall include a statement in the evidence of coverage issued to each enrollee describing the possibility of a refund or additional premium, and upon request of any group or enrollment unit, provide to the group or enrollment unit a description of the method used to calculate (1) the Health Maintenance Organization's profitable experience with respect to the group or enrollment unit and the resulting refund to the group or enrollment unit or (2) the Health Maintenance Organization's unprofitable experience with respect to the group or enrollment unit and the resulting additional premium to be paid by the group or enrollment unit.

In no event shall the Illinois Health Maintenance Organization Guaranty Association be liable to pay any contractual obligation of an insolvent organization to pay any refund authorized under this Section.

(g) Rulemaking authority to implement Public Act 95-1045, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized.

(Source: P.A. 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-123, eff. 1-1-24; 103-154, eff. 6-30-23; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-551, eff. 8-11-23; 103-605, eff. 7-1-24; 103-618, eff. 1-1-25; 103-649, eff. 1-1-25; 103-656, eff. 1-1-25; 103-700, eff. 1-1-25; 103-718, eff. 7-19-24; 103-751, eff. 8-2-24; 103-753, eff. 8-2-24; 103-758, eff. 1-1-25; 103-777, eff. 8-2-24; 103-808, eff. 1-1-26; 103-914, eff. 1-1-25; 103-918, eff. 1-1-25; 103-1024, eff. 1-1-25; 104-1, eff. 6-9-25; 104-28, eff. 1-1-26; 104-42, eff. 8-1-25; 104-68, eff. 1-1-26; 104-73, eff. 1-1-26; 104-98, eff. 1-1-26; 104-289, eff. 1-1-26; 104-324, eff. 1-1-26; 104-334, eff. 8-15-25; 104-379, eff. 1-1-26; 104-417, eff. 8-15-25; revised 11-21-25.)

Section 35. The Limited Health Service Organization Act is amended by changing Section 4003 as follows:

(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143.31, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 352c, 355.2, 355.3, 355b, 355d, 356m, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 356z.71, 356z.73, 356z.74, 356z.75, 356z.79, 356z.80, 356z.81, 356z.83, 356z.84, 356z.85, 364.3, 368a, 370a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB, and XLVIII of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-605, eff. 7-1-24; 103-649, eff. 1-1-25; 103-656, eff. 1-1-25; 103-700, eff. 1-1-25; 103-718, eff. 7-19-24; 103-751, eff. 8-2-24; 103-758, eff. 1-1-25; 103-832, eff. 1-1-25; 103-1024, eff. 1-1-25; 104-1, eff. 6-9-25; 104-42, eff. 8-1-25; 104-73, eff. 1-1-26; 104-98, eff. 1-1-26; 104-289, eff. 1-1-26; 104-324, eff. 1-1-26; 104-334, eff. 8-15-25; 104-379, eff. 1-1-26; 104-417, eff. 8-15-25; revised 11-21-25.)