SB3448 104TH GENERAL ASSEMBLY

LRB104 18172 BAB 31611 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3448

Introduced 2/4/2026, by Sen. David Koehler

SYNOPSIS AS INTRODUCED:

New Act

Creates the Not-for-Profit Health Insurance Reserve Cap Act. Prohibits a not-for-profit health insurance company from maintaining reserves in excess of 125% of the minimum solvency standards required by the Department of Insurance by the end of each calendar year. Requires each not-for-profit health insurance company to submit an annual financial report to the Department detailing the company's reserve levels. Provides that any excess reserves shall be utilized for all the specified purposes during the applicable calendar year. Provides that the Department shall monitor and enforce compliance with the Act.

A BILL FOR

AN ACT concerning regulation.

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

Section 1. Short title. This Act may be cited as the Not-for-Profit Health Insurance Reserve Cap Act.

Section 5. Purpose. The purpose of this Act is to limit excessive accumulation of reserves by not-for-profit health insurance companies in order to ensure that surplus funds are used to improve health care services in Illinois, fairly compensate Illinois medical providers, and benefit policyholders and the policyholders' employees, retirees, and dependents.

Section 10. Definitions. In this Act:

"Department" means the Department of Insurance.

"Excess reserves" means any amount of reserves maintained by a not-for-profit health insurance company that exceeds 125% of the regulatory minimum solvency requirement established by the Department.

"Health insurance issuer" has the meaning given to that term in Section 5 of the Illinois Health Insurance Portability and Accountability Act.

"Not-for-profit health insurance company" means any health insurance issuer organized and operated as a not-for-profit under applicable State and federal laws.

"Reserves" means any surplus funds or financial assets held by a not-for-profit health insurance company that exceed the minimum amount required by the Department to endure solvency and operational stability.

Section 15. Limitations on reserves. By the end of each calendar year, no not-for-profit health insurance company shall maintain reserves in excess of 125% of the minimum solvency reserve standards required by the Department. Each not-for-profit health insurance company shall submit an annual financial report to the Department detailing the company's reserve levels, including any reserves held in excess of the prescribed cap.

Section 20. Use of excess reserves. Any excess reserves shall be utilized for all the following purposes during the applicable calendar year:

(1) market level compensation for health care providers currently in the insurer's network;

(2) expansion of access to health care for underserved populations; and

(3) reduction in premiums for current policyholders.

Section 25. Enforcement and penalties. The Department shall monitor compliance with this Act. This monitoring shall include, but not be limited to, conducting audits, reviewing financial disclosures required by this Act, issuing subpoenas, and other judicial processes. Any not-for-profit health insurance company in violation of this Act shall be subject to fines, penalties, and other corrective action, including, but not limited to:

(1) imposition of a monetary fine not exceeding 50% of the excess reserve held; and

(2) suspension or revocation of its license to operate in Illinois.