HB1129 EnrolledLRB097 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, 143, 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 5/143)  (from Ch. 73, par. 755)
15    Sec. 143. Policy forms.
16    (1) Life, accident and health. No company transacting the
17kind or kinds of business enumerated in Classes 1 (a), 1 (b)
18and 2 (a) of Section 4 shall issue or deliver in this State a
19policy or certificate of insurance or evidence of coverage,
20attach an endorsement or rider thereto, incorporate by
21reference bylaws or other matter therein or use an application
22blank in this State until the form and content of such policy,
23certificate, evidence of coverage, endorsement, rider, bylaw
24or other matter incorporated by reference or application blank
25has been filed electronically with the Director, either through

 

 

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1the System for Electronic Rate and Form Filing (SERFF) or as
2otherwise prescribed by the Director, and approved by the
3Director. The Department shall mail a quarterly invoice to the
4company for the appropriate filing fees required under Section
5408. Any such endorsement or rider that unilaterally reduces
6benefits and is to be attached to a policy subsequent to the
7date the policy is issued must be filed with, reviewed, and
8formally approved by the Director prior to the date it is
9attached to a policy issued or delivered in this State. It
10shall be the duty of the Director to withhold approval of any
11such policy, certificate, endorsement, rider, bylaw or other
12matter incorporated by reference or application blank filed
13with him if it contains provisions which encourage
14misrepresentation or are unjust, unfair, inequitable,
15ambiguous, misleading, inconsistent, deceptive, contrary to
16law or to the public policy of this State, or contains
17exceptions and conditions that unreasonably or deceptively
18affect the risk purported to be assumed in the general coverage
19of the policy. In all cases the Director shall approve or
20disapprove any such form within 60 days after submission unless
21the Director extends by not more than an additional 30 days the
22period within which he shall approve or disapprove any such
23form by giving written notice to the insurer of such extension
24before expiration of the initial 60 days period. The Director
25shall withdraw his approval of a policy, certificate, evidence
26of coverage, endorsement, rider, bylaw, or other matter

 

 

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1incorporated by reference or application blank if he
2subsequently determines that such policy, certificate,
3evidence of coverage, endorsement, rider, bylaw, other matter,
4or application blank is misrepresentative, unjust, unfair,
5inequitable, ambiguous, misleading, inconsistent, deceptive,
6contrary to law or public policy of this State, or contains
7exceptions or conditions which unreasonably or deceptively
8affect the risk purported to be assumed in the general coverage
9of the policy or evidence of coverage.
10    If a previously approved policy, certificate, evidence of
11coverage, endorsement, rider, bylaw or other matter
12incorporated by reference or application blank is withdrawn for
13use, the Director shall serve upon the company an order of
14withdrawal of use, either personally or by mail, and if by
15mail, such service shall be completed if such notice be
16deposited in the post office, postage prepaid, addressed to the
17company's last known address specified in the records of the
18Department of Insurance. The order of withdrawal of use shall
19take effect 30 days from the date of mailing but shall be
20stayed if within the 30-day period a written request for
21hearing is filed with the Director. Such hearing shall be held
22at such time and place as designated in the order given by the
23Director. The hearing may be held either in the City of
24Springfield, the City of Chicago or in the county where the
25principal business address of the company is located. The
26action of the Director in disapproving or withdrawing such form

 

 

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1shall be subject to judicial review under the Administrative
2Review Law.
3    This subsection shall not apply to riders or endorsements
4issued or made at the request of the individual policyholder
5relating to the manner of distribution of benefits or to the
6reservation of rights and benefits under his life insurance
7policy.
8    (2) Casualty, fire, and marine. The Director shall require
9the filing of all policy forms issued or delivered by any
10company transacting the kind or kinds of business enumerated in
11Classes 2 (except Class 2 (a)) and 3 of Section 4 in an
12electronic format either through the System for Electronic Rate
13and Form Filing (SERFF) or as otherwise prescribed and approved
14by the Director. In addition, he may require the filing of any
15generally used riders, endorsements, certificates, application
16blanks, and other matter incorporated by reference in any such
17policy or contract of insurance. The Department shall mail a
18quarterly invoice to the company for the appropriate filing
19fees required under Section 408. Companies that are members of
20an organization, bureau, or association may have the same filed
21for them by the organization, bureau, or association. If the
22Director shall find from an examination of any such policy
23form, rider, endorsement, certificate, application blank, or
24other matter incorporated by reference in any such policy so
25filed that it (i) violates any provision of this Code, (ii)
26contains inconsistent, ambiguous, or misleading clauses, or

 

 

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1(iii) contains exceptions and conditions that will
2unreasonably or deceptively affect the risks that are purported
3to be assumed by the policy, he shall order the company or
4companies issuing these forms to discontinue their use. Nothing
5in this subsection shall require a company transacting the kind
6or kinds of business enumerated in Classes 2 (except Class 2
7(a)) and 3 of Section 4 to obtain approval of these forms
8before they are issued nor in any way affect the legality of
9any policy that has been issued and found to be in conflict
10with this subsection, but such policies shall be subject to the
11provisions of Section 442.
12    (3) This Section shall not apply (i) to surety contracts or
13fidelity bonds, (ii) to policies issued to an industrial
14insured as defined in Section 121-2.08 except for workers'
15compensation policies, nor (iii) to riders or endorsements
16prepared to meet special, unusual, peculiar, or extraordinary
17conditions applying to an individual risk.
18(Source: P.A. 93-1083, eff. 2-7-05.)
 
19    (215 ILCS 5/408)  (from Ch. 73, par. 1020)
20    Sec. 408. Fees and charges.
21    (1) The Director shall charge, collect and give proper
22acquittances for the payment of the following fees and charges:
23        (a) For filing all documents submitted for the
24    incorporation or organization or certification of a
25    domestic company, except for a fraternal benefit society,

 

 

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1    $2,000.
2        (b) For filing all documents submitted for the
3    incorporation or organization of a fraternal benefit
4    society, $500.
5        (c) For filing amendments to articles of incorporation
6    and amendments to declaration of organization, except for a
7    fraternal benefit society, a mutual benefit association, a
8    burial society or a farm mutual, $200.
9        (d) For filing amendments to articles of incorporation
10    of a fraternal benefit society, a mutual benefit
11    association or a burial society, $100.
12        (e) For filing amendments to articles of incorporation
13    of a farm mutual, $50.
14        (f) For filing bylaws or amendments thereto, $50.
15        (g) For filing agreement of merger or consolidation:
16            (i) for a domestic company, except for a fraternal
17        benefit society, a mutual benefit association, a
18        burial society, or a farm mutual, $2,000.
19            (ii) for a foreign or alien company, except for a
20        fraternal benefit society, $600.
21            (iii) for a fraternal benefit society, a mutual
22        benefit association, a burial society, or a farm
23        mutual, $200.
24        (h) For filing agreements of reinsurance by a domestic
25    company, $200.
26        (i) For filing all documents submitted by a foreign or

 

 

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1    alien company to be admitted to transact business or
2    accredited as a reinsurer in this State, except for a
3    fraternal benefit society, $5,000.
4        (j) For filing all documents submitted by a foreign or
5    alien fraternal benefit society to be admitted to transact
6    business in this State, $500.
7        (k) For filing declaration of withdrawal of a foreign
8    or alien company, $50.
9        (l) For filing annual statement by a domestic company,
10    except a fraternal benefit society, a mutual benefit
11    association, a burial society, or a farm mutual, $200.
12        (m) For filing annual statement by a domestic fraternal
13    benefit society, $100.
14        (n) For filing annual statement by a farm mutual, a
15    mutual benefit association, or a burial society, $50.
16        (o) For issuing a certificate of authority or renewal
17    thereof except to a foreign fraternal benefit society, $400
18    $200.
19        (p) For issuing a certificate of authority or renewal
20    thereof to a foreign fraternal benefit society, $200 $100.
21        (q) For issuing an amended certificate of authority,
22    $50.
23        (r) For each certified copy of certificate of
24    authority, $20.
25        (s) For each certificate of deposit, or valuation, or
26    compliance or surety certificate, $20.

 

 

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

 

 

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1    health maintenance organization or a limited health
2    service organization, $2,000.
3        (bb) For filing a statement of acquisition of a foreign
4    or alien insurance company as defined in Section 131.12a of
5    this Code, $1,000.
6        (cc) For filing a registration statement as required in
7    Sections 131.13 and 131.14, the notification as required by
8    Sections 131.16, 131.20a, or 141.4, or an agreement or
9    transaction required by Sections 124.2(2), 141, 141a, or
10    141.1, $200.
11        (dd) For filing an application for licensing of:
12            (i) a religious or charitable risk pooling trust or
13        a workers' compensation pool, $1,000;
14            (ii) a workers' compensation service company,
15        $500;
16            (iii) a self-insured automobile fleet, $200; or
17            (iv) a renewal of or amendment of any license
18        issued pursuant to (i), (ii), or (iii) above, $100.
19        (ee) For filing articles of incorporation for a
20    syndicate to engage in the business of insurance through
21    the Illinois Insurance Exchange, $2,000.
22        (ff) For filing amended articles of incorporation for a
23    syndicate engaged in the business of insurance through the
24    Illinois Insurance Exchange, $100.
25        (gg) For filing articles of incorporation for a limited
26    syndicate to join with other subscribers or limited

 

 

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1    syndicates to do business through the Illinois Insurance
2    Exchange, $1,000.
3        (hh) For filing amended articles of incorporation for a
4    limited syndicate to do business through the Illinois
5    Insurance Exchange, $100.
6        (ii) For a permit to solicit subscriptions to a
7    syndicate or limited syndicate, $100.
8        (jj) For the filing of each form as required in Section
9    143 of this Code, $50 per form. The fee for advisory and
10    rating organizations shall be $200 per form.
11            (i) For the purposes of the form filing fee,
12        filings made on insert page basis will be considered
13        one form at the time of its original submission.
14        Changes made to a form subsequent to its approval shall
15        be considered a new filing.
16            (ii) Only one fee shall be charged for a form,
17        regardless of the number of other forms or policies
18        with which it will be used.
19            (iii) (Blank).
20            (iv) The Director may by rule exempt forms from
21        such fees.
22        (kk) For filing an application for licensing of a
23    reinsurance intermediary, $500.
24        (ll) For filing an application for renewal of a license
25    of a reinsurance intermediary, $200.
26    (2) When printed copies or numerous copies of the same

 

 

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1paper or records are furnished or certified, the Director may
2reduce such fees for copies if he finds them excessive. He may,
3when he considers it in the public interest, furnish without
4charge to state insurance departments and persons other than
5companies, copies or certified copies of reports of
6examinations and of other papers and records.
7    (3) The expenses incurred in any performance examination
8authorized by law shall be paid by the company or person being
9examined. The charge shall be reasonably related to the cost of
10the examination including but not limited to compensation of
11examiners, electronic data processing costs, supervision and
12preparation of an examination report and lodging and travel
13expenses. All lodging and travel expenses shall be in accord
14with the applicable travel regulations as published by the
15Department of Central Management Services and approved by the
16Governor's Travel Control Board, except that out-of-state
17lodging and travel expenses related to examinations authorized
18under Section 132 shall be in accordance with travel rates
19prescribed under paragraph 301-7.2 of the Federal Travel
20Regulations, 41 C.F.R. 301-7.2, for reimbursement of
21subsistence expenses incurred during official travel. All
22lodging and travel expenses may be reimbursed directly upon
23authorization of the Director. With the exception of the direct
24reimbursements authorized by the Director, all performance
25examination charges collected by the Department shall be paid
26to the Insurance Producers Administration Fund, however, the

 

 

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

 

 

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

 

 

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1based upon the combination of nationwide direct premium income
2and nationwide reinsurance assumed premium income or upon
3admitted assets calculated under this subsection as follows:
4        (a) Combination of nationwide direct premium income
5    and nationwide reinsurance assumed premium.
6            (i) $150, if the premium is less than $500,000 and
7        there is no reinsurance assumed premium;
8            (ii) $750, if the premium is $500,000 or more, but
9        less than $5,000,000 and there is no reinsurance
10        assumed premium; or if the premium is less than
11        $5,000,000 and the reinsurance assumed premium is less
12        than $10,000,000;
13            (iii) $3,750, if the premium is less than
14        $5,000,000 and the reinsurance assumed premium is
15        $10,000,000 or more;
16            (iv) $7,500, if the premium is $5,000,000 or more,
17        but less than $10,000,000;
18            (v) $18,000, if the premium is $10,000,000 or more,
19        but less than $25,000,000;
20            (vi) $22,500, if the premium is $25,000,000 or
21        more, but less than $50,000,000;
22            (vii) $30,000, if the premium is $50,000,000 or
23        more, but less than $100,000,000;
24            (viii) $37,500, if the premium is $100,000,000 or
25        more.
26        (b) Admitted assets.

 

 

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1            (i) $150, if admitted assets are less than
2        $1,000,000;
3            (ii) $750, if admitted assets are $1,000,000 or
4        more, but less than $5,000,000;
5            (iii) $3,750, if admitted assets are $5,000,000 or
6        more, but less than $25,000,000;
7            (iv) $7,500, if admitted assets are $25,000,000 or
8        more, but less than $50,000,000;
9            (v) $18,000, if admitted assets are $50,000,000 or
10        more, but less than $100,000,000;
11            (vi) $22,500, if admitted assets are $100,000,000
12        or more, but less than $500,000,000;
13            (vii) $30,000, if admitted assets are $500,000,000
14        or more, but less than $1,000,000,000;
15            (viii) $37,500, if admitted assets are
16        $1,000,000,000 or more.
17        (c) The sum of financial regulation fees charged to the
18    domestic companies of the same affiliated group shall not
19    exceed $250,000 in the aggregate in any single year and
20    shall be billed by the Director to the member company
21    designated by the group.
22    (7) The Director shall charge and collect an annual
23financial regulation fee from every foreign or alien company,
24except fraternal benefit societies, for the examination and
25analysis of its financial condition and to fund the internal
26costs and expenses of the Interstate Insurance Receivership

 

 

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1Commission as may be allocated to the State of Illinois and
2companies doing an insurance business in this State pursuant to
3Article X of the Interstate Insurance Receivership Compact. The
4fee shall be a fixed amount based upon Illinois direct premium
5income and nationwide reinsurance assumed premium income in
6accordance with the following schedule:
7        (a) $150, if the premium is less than $500,000 and
8    there is no reinsurance assumed premium;
9        (b) $750, if the premium is $500,000 or more, but less
10    than $5,000,000 and there is no reinsurance assumed
11    premium; or if the premium is less than $5,000,000 and the
12    reinsurance assumed premium is less than $10,000,000;
13        (c) $3,750, if the premium is less than $5,000,000 and
14    the reinsurance assumed premium is $10,000,000 or more;
15        (d) $7,500, if the premium is $5,000,000 or more, but
16    less than $10,000,000;
17        (e) $18,000, if the premium is $10,000,000 or more, but
18    less than $25,000,000;
19        (f) $22,500, if the premium is $25,000,000 or more, but
20    less than $50,000,000;
21        (g) $30,000, if the premium is $50,000,000 or more, but
22    less than $100,000,000;
23        (h) $37,500, if the premium is $100,000,000 or more.
24    The sum of financial regulation fees under this subsection
25(7) charged to the foreign or alien companies within the same
26affiliated group shall not exceed $250,000 in the aggregate in

 

 

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1any single year and shall be billed by the Director to the
2member company designated by the group.
3    (8) Beginning January 1, 1992, the financial regulation
4fees imposed under subsections (6) and (7) of this Section
5shall be paid by each company or domestic affiliated group
6annually. After January 1, 1994, the fee shall be billed by
7Department invoice based upon the company's premium income or
8admitted assets as shown in its annual statement for the
9preceding calendar year. The invoice is due upon receipt and
10must be paid no later than June 30 of each calendar year. All
11financial regulation fees collected by the Department shall be
12paid to the Insurance Financial Regulation Fund. The Department
13may not collect financial examiner per diem charges from
14companies subject to subsections (6) and (7) of this Section
15undergoing financial examination after June 30, 1992.
16    (9) In addition to the financial regulation fee required by
17this Section, a company undergoing any financial examination
18authorized by law shall pay the following costs and expenses
19incurred by the Department: electronic data processing costs,
20the expenses authorized under Section 131.21 and subsection (d)
21of Section 132.4 of this Code, and lodging and travel expenses.
22    Electronic data processing costs incurred by the
23Department in the performance of any examination shall be
24billed directly to the company undergoing examination for
25payment to the Statistical Services Revolving Fund. Except for
26direct reimbursements authorized by the Director or direct

 

 

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1payments made under Section 131.21 or subsection (d) of Section
2132.4 of this Code, all financial regulation fees and all
3financial examination charges collected by the Department
4shall be paid to the Insurance Financial Regulation Fund.
5    All lodging and travel expenses shall be in accordance with
6applicable travel regulations published by the Department of
7Central Management Services and approved by the Governor's
8Travel Control Board, except that out-of-state lodging and
9travel expenses related to examinations authorized under
10Sections 132.1 through 132.7 shall be in accordance with travel
11rates prescribed under paragraph 301-7.2 of the Federal Travel
12Regulations, 41 C.F.R. 301-7.2, for reimbursement of
13subsistence expenses incurred during official travel. All
14lodging and travel expenses may be reimbursed directly upon the
15authorization of the Director.
16    In the case of an organization or person not subject to the
17financial regulation fee, the expenses incurred in any
18financial examination authorized by law shall be paid by the
19organization or person being examined. The charge shall be
20reasonably related to the cost of the examination including,
21but not limited to, compensation of examiners and other costs
22described in this subsection.
23    (10) Any company, person, or entity failing to make any
24payment of $150 or more as required under this Section shall be
25subject to the penalty and interest provisions provided for in
26subsections (4) and (7) of Section 412.

 

 

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1    (11) Unless otherwise specified, all of the fees collected
2under this Section shall be paid into the Insurance Financial
3Regulation Fund.
4    (12) For purposes of this Section:
5        (a) "Domestic company" means a company as defined in
6    Section 2 of this Code which is incorporated or organized
7    under the laws of this State, and in addition includes a
8    not-for-profit corporation authorized under the Dental
9    Service Plan Act or the Voluntary Health Services Plans
10    Act, a health maintenance organization, and a limited
11    health service organization.
12        (b) "Foreign company" means a company as defined in
13    Section 2 of this Code which is incorporated or organized
14    under the laws of any state of the United States other than
15    this State and in addition includes a health maintenance
16    organization and a limited health service organization
17    which is incorporated or organized under the laws of any
18    state of the United States other than this State.
19        (c) "Alien company" means a company as defined in
20    Section 2 of this Code which is incorporated or organized
21    under the laws of any country other than the United States.
22        (d) "Fraternal benefit society" means a corporation,
23    society, order, lodge or voluntary association as defined
24    in Section 282.1 of this Code.
25        (e) "Mutual benefit association" means a company,
26    association or corporation authorized by the Director to do

 

 

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1    business in this State under the provisions of Article
2    XVIII of this Code.
3        (f) "Burial society" means a person, firm,
4    corporation, society or association of individuals
5    authorized by the Director to do business in this State
6    under the provisions of Article XIX of this Code.
7        (g) "Farm mutual" means a district, county and township
8    mutual insurance company authorized by the Director to do
9    business in this State under the provisions of the Farm
10    Mutual Insurance Company Act of 1986.
11(Source: P.A. 93-32, eff. 7-1-03; 93-1083, eff. 2-7-05.)
 
12    Section 5. The Dental Service Plan Act is amended by
13changing Section 25 as follows:
 
14    (215 ILCS 110/25)  (from Ch. 32, par. 690.25)
15    Sec. 25. Application of Insurance Code provisions. Dental
16service plan corporations and all persons interested therein or
17dealing therewith shall be subject to the provisions of
18Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
19143, 143c, 149, 355.2, 367.2, 401, 401.1, 402, 403, 403A, 408,
20408.2, and 412, and subsection (15) of Section 367 of the
21Illinois Insurance Code.
22(Source: P.A. 91-549, eff. 8-14-99.)
 
23    Section 10. The Health Maintenance Organization Act is

 

 

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1amended by changing Section 5-3 as follows:
 
2    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
3    Sec. 5-3. Insurance Code provisions.
4    (a) Health Maintenance Organizations shall be subject to
5the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
6141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
7154.5, 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m,
8356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8,
9356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15,
10356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
11368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
12409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
13Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
14XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
15    (b) For purposes of the Illinois Insurance Code, except for
16Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
17Maintenance Organizations in the following categories are
18deemed to be "domestic companies":
19        (1) a corporation authorized under the Dental Service
20    Plan Act or the Voluntary Health Services Plans Act;
21        (2) a corporation organized under the laws of this
22    State; or
23        (3) a corporation organized under the laws of another
24    state, 30% or more of the enrollees of which are residents
25    of this State, except a corporation subject to

 

 

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1    substantially the same requirements in its state of
2    organization as is a "domestic company" under Article VIII
3    1/2 of the Illinois Insurance Code.
4    (c) In considering the merger, consolidation, or other
5acquisition of control of a Health Maintenance Organization
6pursuant to Article VIII 1/2 of the Illinois Insurance Code,
7        (1) the Director shall give primary consideration to
8    the continuation of benefits to enrollees and the financial
9    conditions of the acquired Health Maintenance Organization
10    after the merger, consolidation, or other acquisition of
11    control takes effect;
12        (2)(i) the criteria specified in subsection (1)(b) of
13    Section 131.8 of the Illinois Insurance Code shall not
14    apply and (ii) the Director, in making his determination
15    with respect to the merger, consolidation, or other
16    acquisition of control, need not take into account the
17    effect on competition of the merger, consolidation, or
18    other acquisition of control;
19        (3) the Director shall have the power to require the
20    following information:
21            (A) certification by an independent actuary of the
22        adequacy of the reserves of the Health Maintenance
23        Organization sought to be acquired;
24            (B) pro forma financial statements reflecting the
25        combined balance sheets of the acquiring company and
26        the Health Maintenance Organization sought to be

 

 

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1        acquired as of the end of the preceding year and as of
2        a date 90 days prior to the acquisition, as well as pro
3        forma financial statements reflecting projected
4        combined operation for a period of 2 years;
5            (C) a pro forma business plan detailing an
6        acquiring party's plans with respect to the operation
7        of the Health Maintenance Organization sought to be
8        acquired for a period of not less than 3 years; and
9            (D) such other information as the Director shall
10        require.
11    (d) The provisions of Article VIII 1/2 of the Illinois
12Insurance Code and this Section 5-3 shall apply to the sale by
13any health maintenance organization of greater than 10% of its
14enrollee population (including without limitation the health
15maintenance organization's right, title, and interest in and to
16its health care certificates).
17    (e) In considering any management contract or service
18agreement subject to Section 141.1 of the Illinois Insurance
19Code, the Director (i) shall, in addition to the criteria
20specified in Section 141.2 of the Illinois Insurance Code, take
21into account the effect of the management contract or service
22agreement on the continuation of benefits to enrollees and the
23financial condition of the health maintenance organization to
24be managed or serviced, and (ii) need not take into account the
25effect of the management contract or service agreement on
26competition.

 

 

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1    (f) Except for small employer groups as defined in the
2Small Employer Rating, Renewability and Portability Health
3Insurance Act and except for medicare supplement policies as
4defined in Section 363 of the Illinois Insurance Code, a Health
5Maintenance Organization may by contract agree with a group or
6other enrollment unit to effect refunds or charge additional
7premiums under the following terms and conditions:
8        (i) the amount of, and other terms and conditions with
9    respect to, the refund or additional premium are set forth
10    in the group or enrollment unit contract agreed in advance
11    of the period for which a refund is to be paid or
12    additional premium is to be charged (which period shall not
13    be less than one year); and
14        (ii) the amount of the refund or additional premium
15    shall not exceed 20% of the Health Maintenance
16    Organization's profitable or unprofitable experience with
17    respect to the group or other enrollment unit for the
18    period (and, for purposes of a refund or additional
19    premium, the profitable or unprofitable experience shall
20    be calculated taking into account a pro rata share of the
21    Health Maintenance Organization's administrative and
22    marketing expenses, but shall not include any refund to be
23    made or additional premium to be paid pursuant to this
24    subsection (f)). The Health Maintenance Organization and
25    the group or enrollment unit may agree that the profitable
26    or unprofitable experience may be calculated taking into

 

 

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1    account the refund period and the immediately preceding 2
2    plan years.
3    The Health Maintenance Organization shall include a
4statement in the evidence of coverage issued to each enrollee
5describing the possibility of a refund or additional premium,
6and upon request of any group or enrollment unit, provide to
7the group or enrollment unit a description of the method used
8to calculate (1) the Health Maintenance Organization's
9profitable experience with respect to the group or enrollment
10unit and the resulting refund to the group or enrollment unit
11or (2) the Health Maintenance Organization's unprofitable
12experience with respect to the group or enrollment unit and the
13resulting additional premium to be paid by the group or
14enrollment unit.
15    In no event shall the Illinois Health Maintenance
16Organization Guaranty Association be liable to pay any
17contractual obligation of an insolvent organization to pay any
18refund authorized under this Section.
19    (g) Rulemaking authority to implement Public Act 95-1045,
20if any, is conditioned on the rules being adopted in accordance
21with all provisions of the Illinois Administrative Procedure
22Act and all rules and procedures of the Joint Committee on
23Administrative Rules; any purported rule not so adopted, for
24whatever reason, is unauthorized.
25(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
2695-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;

 

 

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195-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
21-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
36-1-10; 96-1000, eff. 7-2-10.)
 
4    Section 15. The Limited Health Service Organization Act is
5amended by changing Section 4003 as follows:
 
6    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
7    Sec. 4003. Illinois Insurance Code provisions. Limited
8health service organizations shall be subject to the provisions
9of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3,
10143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6,
11154.7, 154.8, 155.04, 155.37, 355.2, 356v, 356z.10, 368a, 401,
12401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
13Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
14XXVI of the Illinois Insurance Code. For purposes of the
15Illinois Insurance Code, except for Sections 444 and 444.1 and
16Articles XIII and XIII 1/2, limited health service
17organizations in the following categories are deemed to be
18domestic companies:
19        (1) a corporation under the laws of this State; or
20        (2) a corporation organized under the laws of another
21    state, 30% of more of the enrollees of which are residents
22    of this State, except a corporation subject to
23    substantially the same requirements in its state of
24    organization as is a domestic company under Article VIII

 

 

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1    1/2 of the Illinois Insurance Code.
2(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
 
3    Section 20. The Voluntary Health Services Plans Act is
4amended by changing Section 10 as follows:
 
5    (215 ILCS 165/10)  (from Ch. 32, par. 604)
6    Sec. 10. Application of Insurance Code provisions. Health
7services plan corporations and all persons interested therein
8or dealing therewith shall be subject to the provisions of
9Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
10143, 143c, 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1,
11356r, 356t, 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2,
12356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11,
13356z.12, 356z.13, 356z.14, 356z.15, 356z.18, 364.01, 367.2,
14368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
15paragraphs (7) and (15) of Section 367 of the Illinois
16Insurance Code.
17    Rulemaking authority to implement Public Act 95-1045, if
18any, is conditioned on the rules being adopted in accordance
19with all provisions of the Illinois Administrative Procedure
20Act and all rules and procedures of the Joint Committee on
21Administrative Rules; any purported rule not so adopted, for
22whatever reason, is unauthorized.
23(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
2495-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.

 

 

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18-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
2eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
396-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
47-2-10.)
 
5    (215 ILCS 110/36 rep.)
6    (215 ILCS 110/37 rep.)
7    Section 25. The Dental Service Plan Act is amended by
8repealing Sections 36 and 37.
 
9    (215 ILCS 125/2-7 rep.)
10    Section 30. The Health Maintenance Organization Act is
11amended by repealing Section 2-7.
 
12    (215 ILCS 130/2007 rep.)
13    Section 35. The Limited Health Service Organization Act is
14amended by repealing Section 2007.
 
15    (215 ILCS 165/21 rep.)
16    (215 ILCS 165/22 rep.)
17    Section 40. The Voluntary Health Services Plans Act is
18amended by repealing Sections 21 and 22.