HB1129 EngrossedLRB097 06759 RPM 46847 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 3. The Illinois Insurance Code is amended by
5changing Sections 136 and 408 as follows:
 
6    (215 ILCS 5/136)  (from Ch. 73, par. 748)
7    Sec. 136. Annual statement.
8    (1) Every company authorized to do business in this State
9or accredited by this State shall submit to file with the
10Director by March 1st in each year 2 copies of its financial
11statement for the year ending December 31st immediately
12preceding in such manner and in such form as on forms
13prescribed by the Director, which shall conform substantially
14to the form of statement adopted by the National Association of
15Insurance Commissioners. Unless the Director provides
16otherwise, the annual statement is to be prepared in accordance
17with the annual statement instructions and the Accounting
18Practices and Procedures Manual adopted by the National
19Association of Insurance Commissioners. The Director shall
20have power to make such modifications and additions in this
21form as he may deem desirable or necessary to ascertain the
22condition and affairs of the company. The Director shall have
23authority to extend the time for filing any statement by any

 

 

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1company for reasons which he considers good and sufficient. In
2every statement the admitted assets shall be shown at the
3actual values as of the last day of the preceding year, in
4accordance with Section 126.7. The statement shall be verified
5by oaths of the president and secretary of the company or, in
6their absence, by 2 other principal officers. In addition, any
7company may be required by the Director, when he considers that
8action to be necessary and appropriate for the protection of
9policyholders, creditors, shareholders, or claimants, to file,
10within 60 days after mailing to the company a notice that such
11is required, a supplemental summary statement as of the last
12day of any calendar month occurring during the 100 days next
13preceding the mailing of such notice designated by him on forms
14prescribed and furnished by the Director. The Director may
15require supplemental summary statements to be certified by an
16independent actuary deemed competent by the Director or by an
17independent certified public accountant.
18    (2) The statement of an alien company shall embrace only
19its condition and transactions in the United States and shall
20be verified by the oaths of its resident manager or principal
21representative in the United States, except that in the case of
22any life company organized under the laws of Canada or any
23province thereof, the statement may be verified by the oaths of
24any of its principal officers designated for that purpose by
25its board of directors.
26    (3) For the information of the public generally the

 

 

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1Director shall cause an abstract of the information contained
2in the annual statement to be made available to the public as
3soon as practicable after filing with the Department, by
4printing those abstracts in pamphlet tabular form for free
5general distribution by the Department, or by such other
6publication in the city of Springfield or in the city of
7Chicago as may be reasonably necessary more fully to inform the
8public of the financial condition of companies transacting
9business in this State.
10    (4) Each domestic, foreign, and alien insurer authorized to
11do business in this State or accredited by this State shall
12participate in the National Association of Insurance
13Commissioners' Insurance Regulatory Information System,
14including the payment of all fees and charges of the system.
15Each company shall, on or before March 1 of each year, file
16with the National Association of Insurance Commissioners a copy
17of its annual financial statement along with any additional
18filings prescribed by the Director for the preceding year. The
19statement filed with the National Association of Insurance
20Commissioners shall be in the same format and scope as that
21required by this Code and shall include a signed jurat page and
22actuarial certification. Any amendments and addendums to the
23annual statement shall also be filed with the National
24Association of Insurance Commissioners. Each company shall
25also file with the National Association of Insurance
26Commissioners annual and quarterly financial statement

 

 

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1information in computer readable format as required by the
2Insurance Regulatory Information System. Failure of a company
3to file financial statement information in computer readable
4format shall subject the company to the provisions of Section
5139.
6    (5) All financial analysis ratios and examination synopsis
7concerning insurance companies that are submitted to the
8Director by the National Association of Insurance
9Commissioners' Insurance Regulatory Information System are
10confidential and may not be disclosed by the Director.
11    (6) Every property and casualty insurance company doing
12business in this State, unless otherwise exempted by the
13Director, shall annually submit the opinion of an appointed
14actuary entitled "Statement of Actuarial Opinion". This
15opinion shall be filed in accordance with the appropriate
16National Association of Insurance Commissioners Property and
17Casualty Annual Statement Instructions.
18        (a) Every property and casualty insurance company
19    domiciled in this State that is required to submit a
20    Statement of Actuarial Opinion shall annually submit an
21    Actuarial Opinion Summary, written by the company's
22    appointed actuary. This Actuarial Opinion Summary shall be
23    filed in accordance with the appropriate National
24    Association of Insurance Commissioners Property and
25    Casualty Annual Statement Instructions and shall be
26    considered as a document supporting the Actuarial Opinion

 

 

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1    required in this subsection (6). Each foreign and alien
2    property and casualty company authorized to do business in
3    this State shall provide the Actuarial Opinion Summary upon
4    request.
5        (b) An Actuarial Report and underlying workpapers as
6    required by the appropriate National Association of
7    Insurance Commissioners Property and Casualty Annual
8    Statement Instructions shall be prepared to support each
9    Actuarial Opinion. If the insurance company fails to
10    provide a supporting Actuarial Report or workpapers at the
11    request of the Director or the Director determines that the
12    supporting Actuarial Report or workpapers provided by the
13    insurance company is otherwise unacceptable to the
14    Director, the Director may engage a qualified actuary at
15    the expense of the company to review the opinion and the
16    basis for the opinion and prepare the supporting Actuarial
17    Report or workpapers.
18        (c) The appointed actuary shall not be liable for
19    damages to any person (other than the insurance company and
20    the Director) for any act, error, omission, decision, or
21    conduct with respect to the actuary's opinion, except in
22    cases of fraud or willful misconduct on the part of the
23    appointed actuary.
24        (d) The Statement of Actuarial Opinion shall be
25    provided with the Annual Statement in accordance with the
26    appropriate National Association of Insurance

 

 

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1    Commissioners Property and Casualty Annual Statement
2    Instructions and shall be treated as a public document.
3    Documents, materials, or other information in the
4    possession or control of the Director that are considered
5    an Actuarial Report, workpapers, or Actuarial Opinion
6    Summary provided in support of the opinion, and any other
7    material provided by the company to the Director in
8    connection with the Actuarial Report, workpapers or
9    Actuarial Opinion Summary, must be given confidential
10    treatment, are not subject to subpoena, and may not be made
11    public by the Director or any other persons. This paragraph
12    (d) shall not be construed to limit the Director's
13    authority to release the documents to the Actuarial Board
14    for Counseling and Discipline (ABCD), so long as the
15    material is required for the purpose of professional
16    disciplinary proceedings and that the ABCD establishes
17    procedures satisfactory to the Director for preserving the
18    confidentiality of the documents, nor shall this paragraph
19    (d) be construed to limit the Director's authority to use
20    the documents, materials or other information in
21    furtherance of any regulatory or legal action brought as
22    part of the Director's official duties. Neither the
23    Director nor any person who received documents, materials,
24    or other information while acting under the authority of
25    the Director shall be permitted or required to testify in
26    any private civil action concerning any confidential

 

 

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1    documents, materials, or information subject to this
2    subsection (6). Except where another provision of this Code
3    expressly prohibits a disclosure of confidential
4    information to the specific officials or organizations
5    described in this subsection, the Director may:
6            (i) share documents, materials, or other
7        information, including the confidential and privileged
8        documents, materials or information subject to this
9        paragraph (d) with the insurance department of any
10        other state or country or with law enforcement
11        officials of this or any other state or agency of the
12        federal government at any time, as long as the agency
13        or office receiving the document, material, or other
14        information agrees in writing to hold it confidential
15        and in a manner consistent with this Code;
16            (ii) receive documents, materials, or information,
17        including otherwise confidential and privileged
18        documents, materials, or information, from the
19        National Association of Insurance Commissioners and
20        its affiliates and subsidiaries, and from regulatory
21        and law enforcement officials of other foreign or
22        domestic jurisdictions, and shall maintain as
23        confidential or privileged any document, material, or
24        information received with notice or the understanding
25        that it is confidential or privileged under the laws of
26        the jurisdiction that is the source of the document,

 

 

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1        material, or information; and
2            (iii) enter into agreements governing sharing and
3        use of information consistent with paragraph (d).
4        (e) No waiver of any applicable privilege or claim of
5    confidentiality in the documents, materials or information
6    shall occur as a result of disclosure to the Director under
7    this Section or as a result of sharing as authorized in
8    subparagraphs (i), (ii), and (iii) of paragraph (d) of
9    subsection (6) of this Section. All 2008 Annual Statements,
10    which are filed in 2009, and all subsequent Annual
11    Statement filings shall be done in accordance with
12    subsection (6) of this Section.
13(Source: P.A. 96-145, eff. 8-7-09.)
 
14    (215 ILCS 5/408)  (from Ch. 73, par. 1020)
15    Sec. 408. Fees and charges.
16    (1) The Director shall charge, collect and give proper
17acquittances for the payment of the following fees and charges:
18        (a) For filing all documents submitted for the
19    incorporation or organization or certification of a
20    domestic company, except for a fraternal benefit society,
21    $2,000.
22        (b) For filing all documents submitted for the
23    incorporation or organization of a fraternal benefit
24    society, $500.
25        (c) For filing amendments to articles of incorporation

 

 

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1    and amendments to declaration of organization, except for a
2    fraternal benefit society, a mutual benefit association, a
3    burial society or a farm mutual, $200.
4        (d) For filing amendments to articles of incorporation
5    of a fraternal benefit society, a mutual benefit
6    association or a burial society, $100.
7        (e) For filing amendments to articles of incorporation
8    of a farm mutual, $50.
9        (f) For filing bylaws or amendments thereto, $50.
10        (g) For filing agreement of merger or consolidation:
11            (i) for a domestic company, except for a fraternal
12        benefit society, a mutual benefit association, a
13        burial society, or a farm mutual, $2,000.
14            (ii) for a foreign or alien company, except for a
15        fraternal benefit society, $600.
16            (iii) for a fraternal benefit society, a mutual
17        benefit association, a burial society, or a farm
18        mutual, $200.
19        (h) For filing agreements of reinsurance by a domestic
20    company, $200.
21        (i) For filing all documents submitted by a foreign or
22    alien company to be admitted to transact business or
23    accredited as a reinsurer in this State, except for a
24    fraternal benefit society, $5,000.
25        (j) For filing all documents submitted by a foreign or
26    alien fraternal benefit society to be admitted to transact

 

 

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1    business in this State, $500.
2        (k) For filing declaration of withdrawal of a foreign
3    or alien company, $50.
4        (l) For filing annual statement by a domestic company,
5    except a fraternal benefit society, a mutual benefit
6    association, a burial society, or a farm mutual, $200.
7        (m) For filing annual statement by a domestic fraternal
8    benefit society, $100.
9        (n) For filing annual statement by a farm mutual, a
10    mutual benefit association, or a burial society, $50.
11        (o) For issuing a certificate of authority or renewal
12    thereof except to a foreign fraternal benefit society, $400
13    $200.
14        (p) For issuing a certificate of authority or renewal
15    thereof to a foreign fraternal benefit society, $200 $100.
16        (q) For issuing an amended certificate of authority,
17    $50.
18        (r) For each certified copy of certificate of
19    authority, $20.
20        (s) For each certificate of deposit, or valuation, or
21    compliance or surety certificate, $20.
22        (t) For copies of papers or records per page, $1.
23        (u) For each certification to copies of papers or
24    records, $10.
25        (v) For multiple copies of documents or certificates
26    listed in subparagraphs (r), (s), and (u) of paragraph (1)

 

 

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1    of this Section, $10 for the first copy of a certificate of
2    any type and $5 for each additional copy of the same
3    certificate requested at the same time, unless, pursuant to
4    paragraph (2) of this Section, the Director finds these
5    additional fees excessive.
6        (w) For issuing a permit to sell shares or increase
7    paid-up capital:
8            (i) in connection with a public stock offering,
9        $300;
10            (ii) in any other case, $100.
11        (x) For issuing any other certificate required or
12    permissible under the law, $50.
13        (y) For filing a plan of exchange of the stock of a
14    domestic stock insurance company, a plan of
15    demutualization of a domestic mutual company, or a plan of
16    reorganization under Article XII, $2,000.
17        (z) For filing a statement of acquisition of a domestic
18    company as defined in Section 131.4 of this Code, $2,000.
19        (aa) For filing an agreement to purchase the business
20    of an organization authorized under the Dental Service Plan
21    Act or the Voluntary Health Services Plans Act or of a
22    health maintenance organization or a limited health
23    service organization, $2,000.
24        (bb) For filing a statement of acquisition of a foreign
25    or alien insurance company as defined in Section 131.12a of
26    this Code, $1,000.

 

 

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1        (cc) For filing a registration statement as required in
2    Sections 131.13 and 131.14, the notification as required by
3    Sections 131.16, 131.20a, or 141.4, or an agreement or
4    transaction required by Sections 124.2(2), 141, 141a, or
5    141.1, $200.
6        (dd) For filing an application for licensing of:
7            (i) a religious or charitable risk pooling trust or
8        a workers' compensation pool, $1,000;
9            (ii) a workers' compensation service company,
10        $500;
11            (iii) a self-insured automobile fleet, $200; or
12            (iv) a renewal of or amendment of any license
13        issued pursuant to (i), (ii), or (iii) above, $100.
14        (ee) For filing articles of incorporation for a
15    syndicate to engage in the business of insurance through
16    the Illinois Insurance Exchange, $2,000.
17        (ff) For filing amended articles of incorporation for a
18    syndicate engaged in the business of insurance through the
19    Illinois Insurance Exchange, $100.
20        (gg) For filing articles of incorporation for a limited
21    syndicate to join with other subscribers or limited
22    syndicates to do business through the Illinois Insurance
23    Exchange, $1,000.
24        (hh) For filing amended articles of incorporation for a
25    limited syndicate to do business through the Illinois
26    Insurance Exchange, $100.

 

 

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1        (ii) For a permit to solicit subscriptions to a
2    syndicate or limited syndicate, $100.
3        (jj) For the filing of each form as required in Section
4    143 of this Code, $50 per form. The fee for advisory and
5    rating organizations shall be $200 per form.
6            (i) For the purposes of the form filing fee,
7        filings made on insert page basis will be considered
8        one form at the time of its original submission.
9        Changes made to a form subsequent to its approval shall
10        be considered a new filing.
11            (ii) Only one fee shall be charged for a form,
12        regardless of the number of other forms or policies
13        with which it will be used.
14            (iii) (Blank).
15            (iv) The Director may by rule exempt forms from
16        such fees.
17        (kk) For filing an application for licensing of a
18    reinsurance intermediary, $500.
19        (ll) For filing an application for renewal of a license
20    of a reinsurance intermediary, $200.
21    (2) When printed copies or numerous copies of the same
22paper or records are furnished or certified, the Director may
23reduce such fees for copies if he finds them excessive. He may,
24when he considers it in the public interest, furnish without
25charge to state insurance departments and persons other than
26companies, copies or certified copies of reports of

 

 

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1examinations and of other papers and records.
2    (3) The expenses incurred in any performance examination
3authorized by law shall be paid by the company or person being
4examined. The charge shall be reasonably related to the cost of
5the examination including but not limited to compensation of
6examiners, electronic data processing costs, supervision and
7preparation of an examination report and lodging and travel
8expenses. All lodging and travel expenses shall be in accord
9with the applicable travel regulations as published by the
10Department of Central Management Services and approved by the
11Governor's Travel Control Board, except that out-of-state
12lodging and travel expenses related to examinations authorized
13under Section 132 shall be in accordance with travel rates
14prescribed under paragraph 301-7.2 of the Federal Travel
15Regulations, 41 C.F.R. 301-7.2, for reimbursement of
16subsistence expenses incurred during official travel. All
17lodging and travel expenses may be reimbursed directly upon
18authorization of the Director. With the exception of the direct
19reimbursements authorized by the Director, all performance
20examination charges collected by the Department shall be paid
21to the Insurance Producers Administration Fund, however, the
22electronic data processing costs incurred by the Department in
23the performance of any examination shall be billed directly to
24the company being examined for payment to the Statistical
25Services Revolving Fund.
26    (4) At the time of any service of process on the Director

 

 

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1as attorney for such service, the Director shall charge and
2collect the sum of $20, which may be recovered as taxable costs
3by the party to the suit or action causing such service to be
4made if he prevails in such suit or action.
5    (5) (a) The costs incurred by the Department of Insurance
6in conducting any hearing authorized by law shall be assessed
7against the parties to the hearing in such proportion as the
8Director of Insurance may determine upon consideration of all
9relevant circumstances including: (1) the nature of the
10hearing; (2) whether the hearing was instigated by, or for the
11benefit of a particular party or parties; (3) whether there is
12a successful party on the merits of the proceeding; and (4) the
13relative levels of participation by the parties.
14    (b) For purposes of this subsection (5) costs incurred
15shall mean the hearing officer fees, court reporter fees, and
16travel expenses of Department of Insurance officers and
17employees; provided however, that costs incurred shall not
18include hearing officer fees or court reporter fees unless the
19Department has retained the services of independent
20contractors or outside experts to perform such functions.
21    (c) The Director shall make the assessment of costs
22incurred as part of the final order or decision arising out of
23the proceeding; provided, however, that such order or decision
24shall include findings and conclusions in support of the
25assessment of costs. This subsection (5) shall not be construed
26as permitting the payment of travel expenses unless calculated

 

 

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1in accordance with the applicable travel regulations of the
2Department of Central Management Services, as approved by the
3Governor's Travel Control Board. The Director as part of such
4order or decision shall require all assessments for hearing
5officer fees and court reporter fees, if any, to be paid
6directly to the hearing officer or court reporter by the
7party(s) assessed for such costs. The assessments for travel
8expenses of Department officers and employees shall be
9reimbursable to the Director of Insurance for deposit to the
10fund out of which those expenses had been paid.
11    (d) The provisions of this subsection (5) shall apply in
12the case of any hearing conducted by the Director of Insurance
13not otherwise specifically provided for by law.
14    (6) The Director shall charge and collect an annual
15financial regulation fee from every domestic company for
16examination and analysis of its financial condition and to fund
17the internal costs and expenses of the Interstate Insurance
18Receivership Commission as may be allocated to the State of
19Illinois and companies doing an insurance business in this
20State pursuant to Article X of the Interstate Insurance
21Receivership Compact. The fee shall be the greater fixed amount
22based upon the combination of nationwide direct premium income
23and nationwide reinsurance assumed premium income or upon
24admitted assets calculated under this subsection as follows:
25        (a) Combination of nationwide direct premium income
26    and nationwide reinsurance assumed premium.

 

 

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1            (i) $150, if the premium is less than $500,000 and
2        there is no reinsurance assumed premium;
3            (ii) $750, if the premium is $500,000 or more, but
4        less than $5,000,000 and there is no reinsurance
5        assumed premium; or if the premium is less than
6        $5,000,000 and the reinsurance assumed premium is less
7        than $10,000,000;
8            (iii) $3,750, if the premium is less than
9        $5,000,000 and the reinsurance assumed premium is
10        $10,000,000 or more;
11            (iv) $7,500, if the premium is $5,000,000 or more,
12        but less than $10,000,000;
13            (v) $18,000, if the premium is $10,000,000 or more,
14        but less than $25,000,000;
15            (vi) $22,500, if the premium is $25,000,000 or
16        more, but less than $50,000,000;
17            (vii) $30,000, if the premium is $50,000,000 or
18        more, but less than $100,000,000;
19            (viii) $37,500, if the premium is $100,000,000 or
20        more.
21        (b) Admitted assets.
22            (i) $150, if admitted assets are less than
23        $1,000,000;
24            (ii) $750, if admitted assets are $1,000,000 or
25        more, but less than $5,000,000;
26            (iii) $3,750, if admitted assets are $5,000,000 or

 

 

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1        more, but less than $25,000,000;
2            (iv) $7,500, if admitted assets are $25,000,000 or
3        more, but less than $50,000,000;
4            (v) $18,000, if admitted assets are $50,000,000 or
5        more, but less than $100,000,000;
6            (vi) $22,500, if admitted assets are $100,000,000
7        or more, but less than $500,000,000;
8            (vii) $30,000, if admitted assets are $500,000,000
9        or more, but less than $1,000,000,000;
10            (viii) $37,500, if admitted assets are
11        $1,000,000,000 or more.
12        (c) The sum of financial regulation fees charged to the
13    domestic companies of the same affiliated group shall not
14    exceed $250,000 in the aggregate in any single year and
15    shall be billed by the Director to the member company
16    designated by the group.
17    (7) The Director shall charge and collect an annual
18financial regulation fee from every foreign or alien company,
19except fraternal benefit societies, for the examination and
20analysis of its financial condition and to fund the internal
21costs and expenses of the Interstate Insurance Receivership
22Commission as may be allocated to the State of Illinois and
23companies doing an insurance business in this State pursuant to
24Article X of the Interstate Insurance Receivership Compact. The
25fee shall be a fixed amount based upon Illinois direct premium
26income and nationwide reinsurance assumed premium income in

 

 

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1accordance with the following schedule:
2        (a) $150, if the premium is less than $500,000 and
3    there is no reinsurance assumed premium;
4        (b) $750, if the premium is $500,000 or more, but less
5    than $5,000,000 and there is no reinsurance assumed
6    premium; or if the premium is less than $5,000,000 and the
7    reinsurance assumed premium is less than $10,000,000;
8        (c) $3,750, if the premium is less than $5,000,000 and
9    the reinsurance assumed premium is $10,000,000 or more;
10        (d) $7,500, if the premium is $5,000,000 or more, but
11    less than $10,000,000;
12        (e) $18,000, if the premium is $10,000,000 or more, but
13    less than $25,000,000;
14        (f) $22,500, if the premium is $25,000,000 or more, but
15    less than $50,000,000;
16        (g) $30,000, if the premium is $50,000,000 or more, but
17    less than $100,000,000;
18        (h) $37,500, if the premium is $100,000,000 or more.
19    The sum of financial regulation fees under this subsection
20(7) charged to the foreign or alien companies within the same
21affiliated group shall not exceed $250,000 in the aggregate in
22any single year and shall be billed by the Director to the
23member company designated by the group.
24    (8) Beginning January 1, 1992, the financial regulation
25fees imposed under subsections (6) and (7) of this Section
26shall be paid by each company or domestic affiliated group

 

 

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1annually. After January 1, 1994, the fee shall be billed by
2Department invoice based upon the company's premium income or
3admitted assets as shown in its annual statement for the
4preceding calendar year. The invoice is due upon receipt and
5must be paid no later than June 30 of each calendar year. All
6financial regulation fees collected by the Department shall be
7paid to the Insurance Financial Regulation Fund. The Department
8may not collect financial examiner per diem charges from
9companies subject to subsections (6) and (7) of this Section
10undergoing financial examination after June 30, 1992.
11    (9) In addition to the financial regulation fee required by
12this Section, a company undergoing any financial examination
13authorized by law shall pay the following costs and expenses
14incurred by the Department: electronic data processing costs,
15the expenses authorized under Section 131.21 and subsection (d)
16of Section 132.4 of this Code, and lodging and travel expenses.
17    Electronic data processing costs incurred by the
18Department in the performance of any examination shall be
19billed directly to the company undergoing examination for
20payment to the Statistical Services Revolving Fund. Except for
21direct reimbursements authorized by the Director or direct
22payments made under Section 131.21 or subsection (d) of Section
23132.4 of this Code, all financial regulation fees and all
24financial examination charges collected by the Department
25shall be paid to the Insurance Financial Regulation Fund.
26    All lodging and travel expenses shall be in accordance with

 

 

HB1129 Engrossed- 21 -LRB097 06759 RPM 46847 b

1applicable travel regulations published by the Department of
2Central Management Services and approved by the Governor's
3Travel Control Board, except that out-of-state lodging and
4travel expenses related to examinations authorized under
5Sections 132.1 through 132.7 shall be in accordance with travel
6rates prescribed under paragraph 301-7.2 of the Federal Travel
7Regulations, 41 C.F.R. 301-7.2, for reimbursement of
8subsistence expenses incurred during official travel. All
9lodging and travel expenses may be reimbursed directly upon the
10authorization of the Director.
11    In the case of an organization or person not subject to the
12financial regulation fee, the expenses incurred in any
13financial examination authorized by law shall be paid by the
14organization or person being examined. The charge shall be
15reasonably related to the cost of the examination including,
16but not limited to, compensation of examiners and other costs
17described in this subsection.
18    (10) Any company, person, or entity failing to make any
19payment of $150 or more as required under this Section shall be
20subject to the penalty and interest provisions provided for in
21subsections (4) and (7) of Section 412.
22    (11) Unless otherwise specified, all of the fees collected
23under this Section shall be paid into the Insurance Financial
24Regulation Fund.
25    (12) For purposes of this Section:
26        (a) "Domestic company" means a company as defined in

 

 

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1    Section 2 of this Code which is incorporated or organized
2    under the laws of this State, and in addition includes a
3    not-for-profit corporation authorized under the Dental
4    Service Plan Act or the Voluntary Health Services Plans
5    Act, a health maintenance organization, and a limited
6    health service organization.
7        (b) "Foreign company" means a company as defined in
8    Section 2 of this Code which is incorporated or organized
9    under the laws of any state of the United States other than
10    this State and in addition includes a health maintenance
11    organization and a limited health service organization
12    which is incorporated or organized under the laws of any
13    state of the United States other than this State.
14        (c) "Alien company" means a company as defined in
15    Section 2 of this Code which is incorporated or organized
16    under the laws of any country other than the United States.
17        (d) "Fraternal benefit society" means a corporation,
18    society, order, lodge or voluntary association as defined
19    in Section 282.1 of this Code.
20        (e) "Mutual benefit association" means a company,
21    association or corporation authorized by the Director to do
22    business in this State under the provisions of Article
23    XVIII of this Code.
24        (f) "Burial society" means a person, firm,
25    corporation, society or association of individuals
26    authorized by the Director to do business in this State

 

 

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1    under the provisions of Article XIX of this Code.
2        (g) "Farm mutual" means a district, county and township
3    mutual insurance company authorized by the Director to do
4    business in this State under the provisions of the Farm
5    Mutual Insurance Company Act of 1986.
6(Source: P.A. 93-32, eff. 7-1-03; 93-1083, eff. 2-7-05.)
 
7    Section 5. The Dental Service Plan Act is amended by
8changing Section 25 as follows:
 
9    (215 ILCS 110/25)  (from Ch. 32, par. 690.25)
10    Sec. 25. Application of Insurance Code provisions. Dental
11service plan corporations and all persons interested therein or
12dealing therewith shall be subject to the provisions of
13Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
14143, 143c, 149, 355.2, 367.2, 401, 401.1, 402, 403, 403A, 408,
15408.2, and 412, and subsection (15) of Section 367 of the
16Illinois Insurance Code.
17(Source: P.A. 91-549, eff. 8-14-99.)
 
18    Section 10. The Health Maintenance Organization Act is
19amended by changing Section 5-3 as follows:
 
20    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
21    Sec. 5-3. Insurance Code provisions.
22    (a) Health Maintenance Organizations shall be subject to

 

 

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1the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
2141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
3154.5, 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m,
4356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8,
5356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15,
6356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
7368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
8409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
9Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
10XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
11    (b) For purposes of the Illinois Insurance Code, except for
12Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
13Maintenance Organizations in the following categories are
14deemed to be "domestic companies":
15        (1) a corporation authorized under the Dental Service
16    Plan Act or the Voluntary Health Services Plans Act;
17        (2) a corporation organized under the laws of this
18    State; or
19        (3) a corporation organized under the laws of another
20    state, 30% or more of the enrollees of which are residents
21    of this State, except a corporation subject to
22    substantially the same requirements in its state of
23    organization as is a "domestic company" under Article VIII
24    1/2 of the Illinois Insurance Code.
25    (c) In considering the merger, consolidation, or other
26acquisition of control of a Health Maintenance Organization

 

 

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1pursuant to Article VIII 1/2 of the Illinois Insurance Code,
2        (1) the Director shall give primary consideration to
3    the continuation of benefits to enrollees and the financial
4    conditions of the acquired Health Maintenance Organization
5    after the merger, consolidation, or other acquisition of
6    control takes effect;
7        (2)(i) the criteria specified in subsection (1)(b) of
8    Section 131.8 of the Illinois Insurance Code shall not
9    apply and (ii) the Director, in making his determination
10    with respect to the merger, consolidation, or other
11    acquisition of control, need not take into account the
12    effect on competition of the merger, consolidation, or
13    other acquisition of control;
14        (3) the Director shall have the power to require the
15    following information:
16            (A) certification by an independent actuary of the
17        adequacy of the reserves of the Health Maintenance
18        Organization sought to be acquired;
19            (B) pro forma financial statements reflecting the
20        combined balance sheets of the acquiring company and
21        the Health Maintenance Organization sought to be
22        acquired as of the end of the preceding year and as of
23        a date 90 days prior to the acquisition, as well as pro
24        forma financial statements reflecting projected
25        combined operation for a period of 2 years;
26            (C) a pro forma business plan detailing an

 

 

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1        acquiring party's plans with respect to the operation
2        of the Health Maintenance Organization sought to be
3        acquired for a period of not less than 3 years; and
4            (D) such other information as the Director shall
5        require.
6    (d) The provisions of Article VIII 1/2 of the Illinois
7Insurance Code and this Section 5-3 shall apply to the sale by
8any health maintenance organization of greater than 10% of its
9enrollee population (including without limitation the health
10maintenance organization's right, title, and interest in and to
11its health care certificates).
12    (e) In considering any management contract or service
13agreement subject to Section 141.1 of the Illinois Insurance
14Code, the Director (i) shall, in addition to the criteria
15specified in Section 141.2 of the Illinois Insurance Code, take
16into account the effect of the management contract or service
17agreement on the continuation of benefits to enrollees and the
18financial condition of the health maintenance organization to
19be managed or serviced, and (ii) need not take into account the
20effect of the management contract or service agreement on
21competition.
22    (f) Except for small employer groups as defined in the
23Small Employer Rating, Renewability and Portability Health
24Insurance Act and except for medicare supplement policies as
25defined in Section 363 of the Illinois Insurance Code, a Health
26Maintenance Organization may by contract agree with a group or

 

 

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1other enrollment unit to effect refunds or charge additional
2premiums under the following terms and conditions:
3        (i) the amount of, and other terms and conditions with
4    respect to, the refund or additional premium are set forth
5    in the group or enrollment unit contract agreed in advance
6    of the period for which a refund is to be paid or
7    additional premium is to be charged (which period shall not
8    be less than one year); and
9        (ii) the amount of the refund or additional premium
10    shall not exceed 20% of the Health Maintenance
11    Organization's profitable or unprofitable experience with
12    respect to the group or other enrollment unit for the
13    period (and, for purposes of a refund or additional
14    premium, the profitable or unprofitable experience shall
15    be calculated taking into account a pro rata share of the
16    Health Maintenance Organization's administrative and
17    marketing expenses, but shall not include any refund to be
18    made or additional premium to be paid pursuant to this
19    subsection (f)). The Health Maintenance Organization and
20    the group or enrollment unit may agree that the profitable
21    or unprofitable experience may be calculated taking into
22    account the refund period and the immediately preceding 2
23    plan years.
24    The Health Maintenance Organization shall include a
25statement in the evidence of coverage issued to each enrollee
26describing the possibility of a refund or additional premium,

 

 

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1and upon request of any group or enrollment unit, provide to
2the group or enrollment unit a description of the method used
3to calculate (1) the Health Maintenance Organization's
4profitable experience with respect to the group or enrollment
5unit and the resulting refund to the group or enrollment unit
6or (2) the Health Maintenance Organization's unprofitable
7experience with respect to the group or enrollment unit and the
8resulting additional premium to be paid by the group or
9enrollment unit.
10    In no event shall the Illinois Health Maintenance
11Organization Guaranty Association be liable to pay any
12contractual obligation of an insolvent organization to pay any
13refund authorized under this Section.
14    (g) Rulemaking authority to implement Public Act 95-1045,
15if any, is conditioned on the rules being adopted in accordance
16with all provisions of the Illinois Administrative Procedure
17Act and all rules and procedures of the Joint Committee on
18Administrative Rules; any purported rule not so adopted, for
19whatever reason, is unauthorized.
20(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
2195-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
2295-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
231-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
246-1-10; 96-1000, eff. 7-2-10.)
 
25    Section 15. The Limited Health Service Organization Act is

 

 

HB1129 Engrossed- 29 -LRB097 06759 RPM 46847 b

1amended by changing Section 4003 as follows:
 
2    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
3    Sec. 4003. Illinois Insurance Code provisions. Limited
4health service organizations shall be subject to the provisions
5of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3,
6143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6,
7154.7, 154.8, 155.04, 155.37, 355.2, 356v, 356z.10, 368a, 401,
8401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
9Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
10XXVI of the Illinois Insurance Code. For purposes of the
11Illinois Insurance Code, except for Sections 444 and 444.1 and
12Articles XIII and XIII 1/2, limited health service
13organizations in the following categories are deemed to be
14domestic companies:
15        (1) a corporation under the laws of this State; or
16        (2) a corporation organized under the laws of another
17    state, 30% of more of the enrollees of which are residents
18    of this State, except a corporation subject to
19    substantially the same requirements in its state of
20    organization as is a domestic company under Article VIII
21    1/2 of the Illinois Insurance Code.
22(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
 
23    Section 20. The Voluntary Health Services Plans Act is
24amended by changing Section 10 as follows:
 

 

 

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1    (215 ILCS 165/10)  (from Ch. 32, par. 604)
2    Sec. 10. Application of Insurance Code provisions. Health
3services plan corporations and all persons interested therein
4or dealing therewith shall be subject to the provisions of
5Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
6143, 143c, 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1,
7356r, 356t, 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2,
8356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11,
9356z.12, 356z.13, 356z.14, 356z.15, 356z.18, 364.01, 367.2,
10368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
11paragraphs (7) and (15) of Section 367 of the Illinois
12Insurance Code.
13    Rulemaking authority to implement Public Act 95-1045, if
14any, is conditioned on the rules being adopted in accordance
15with all provisions of the Illinois Administrative Procedure
16Act and all rules and procedures of the Joint Committee on
17Administrative Rules; any purported rule not so adopted, for
18whatever reason, is unauthorized.
19(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
2095-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
218-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
22eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
2396-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
247-2-10.)
 

 

 

HB1129 Engrossed- 31 -LRB097 06759 RPM 46847 b

1    (215 ILCS 110/36 rep.)
2    (215 ILCS 110/37 rep.)
3    Section 25. The Dental Service Plan Act is amended by
4repealing Sections 36 and 37.
 
5    (215 ILCS 125/2-7 rep.)
6    Section 30. The Health Maintenance Organization Act is
7amended by repealing Section 2-7.
 
8    (215 ILCS 130/2007 rep.)
9    Section 35. The Limited Health Service Organization Act is
10amended by repealing Section 2007.
 
11    (215 ILCS 165/21 rep.)
12    (215 ILCS 165/22 rep.)
13    Section 40. The Voluntary Health Services Plans Act is
14amended by repealing Sections 21 and 22.