SB2876 EnrolledLRB097 16449 RPM 61613 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 5. If and only if House Bill 3443 of the 97th
5General Assembly becomes law in the form in which it left the
6House, then the Illinois Insurance Code is amended by changing
7Section 4 as follows:
 
8    (215 ILCS 5/4)  (from Ch. 73, par. 616)
9    Sec. 4. Classes of insurance. Insurance and insurance
10business shall be classified as follows:
11    Class 1. Life, Accident and Health.
12    (a) Life. Insurance on the lives of persons and every
13insurance appertaining thereto or connected therewith and
14granting, purchasing or disposing of annuities. Policies of
15life or endowment insurance or annuity contracts or contracts
16supplemental thereto which contain provisions for additional
17benefits in case of death by accidental means and provisions
18operating to safeguard such policies or contracts against
19lapse, to give a special surrender value, or special benefit,
20or an annuity, in the event, that the insured or annuitant
21shall become totally and permanently disabled as defined by the
22policy or contract, or which contain benefits providing
23acceleration of life or endowment or annuity benefits in

 

 

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1advance of the time they would otherwise be payable, as an
2indemnity for long term care which is certified or ordered by a
3physician, including but not limited to, professional nursing
4care, medical care expenses, custodial nursing care,
5non-nursing custodial care provided in a nursing home or at a
6residence of the insured, or which contain benefits providing
7acceleration of life or endowment or annuity benefits in
8advance of the time they would otherwise be payable, at any
9time during the insured's lifetime, as an indemnity for a
10terminal illness shall be deemed to be policies of life or
11endowment insurance or annuity contracts within the intent of
12this clause.
13    Also to be deemed as policies of life or endowment
14insurance or annuity contracts within the intent of this clause
15shall be those policies or riders that provide for the payment
16of up to 75% of the face amount of benefits in advance of the
17time they would otherwise be payable upon a diagnosis by a
18physician licensed to practice medicine in all of its branches
19that the insured has incurred a covered condition listed in the
20policy or rider.
21    "Covered condition", as used in this clause, means: heart
22attack, stroke, coronary artery surgery, life threatening
23cancer, renal failure, alzheimer's disease, paraplegia, major
24organ transplantation, total and permanent disability, and any
25other medical condition that the Department may approve for any
26particular filing.

 

 

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1    The Director may issue rules that specify prohibited policy
2provisions, not otherwise specifically prohibited by law,
3which in the opinion of the Director are unjust, unfair, or
4unfairly discriminatory to the policyholder, any person
5insured under the policy, or beneficiary.
6    (b) Accident and health. Insurance against bodily injury,
7disablement or death by accident and against disablement
8resulting from sickness or old age and every insurance
9appertaining thereto, including stop-loss insurance. Stop-loss
10insurance is insurance against the risk of economic loss issued
11to a single employer self-funded employee disability benefit
12plan or an employee welfare benefit plan as described in 29
13U.S.C. 100 et seq. The insurance laws of this State, including
14this Code, do not apply to arrangements between a religious
15organization and the organization's members or participants
16when the arrangement and organization meet all of the following
17criteria:
18        (i) the organization is described in Section 501(c)(3)
19    of the Internal Revenue Code and is exempt from taxation
20    under Section 501(a) of the Internal Revenue Code;
21        (ii) members of the organization share a common set of
22    ethical or religious beliefs and share medical expenses
23    among members in accordance with those beliefs and without
24    regard to the state in which a member resides or is
25    employed;
26        (iii) no funds that have been given for the purpose of

 

 

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1    the sharing of medical expenses among members described in
2    paragraph (ii) of this subsection (b) are held by the
3    organization in an off-shore trust or bank account;
4        (iv) the organization provides at least monthly to all
5    of its members a written statement listing the dollar
6    amount of qualified medical expenses that members have
7    submitted for sharing, as well as the amount of expenses
8    actually shared among the members;
9        (v) (iii) members of the organization retain
10    membership even after they develop a medical condition;
11        (vi) (iv) the organization or a predecessor
12    organization has been in existence at all times since
13    December 31, 1999, and medical expenses of its members have
14    been shared continuously and without interruption since at
15    least December 31, 1999;
16        (vii) (v) the organization conducts an annual audit
17    that is performed by an independent certified public
18    accounting firm in accordance with generally accepted
19    accounting principles and is made available to the public
20    upon request;
21        (viii) (vi) the organization includes the following
22    statement, in writing, on or accompanying all applications
23    and guideline materials:
24        "Notice: The organization facilitating the sharing of
25        medical expenses is not an insurance company, and
26        neither its guidelines nor plan of operation

 

 

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1        constitute or create an insurance policy. Any
2        assistance you receive with your medical bills will be
3        totally voluntary. Neither the organization nor any
4        other participant can be compelled by law to contribute
5        toward your medical bills. As such, participation in
6        the organization or a subscription to any of its
7        documents should never be considered to be insurance.
8        Whether or not you receive any payments for medical
9        expenses and whether or not this organization
10        continues to operate, you are always personally
11        responsible for the payment of your own medical
12        bills."; and
13        (ix) (vii) any membership card or similar document
14    issued by the organization and any written communication
15    sent by the organization to a hospital, physician, or other
16    health care provider shall include a statement that the
17    organization does not issue health insurance and that the
18    member or participant is personally liable for payment of
19    his or her medical bills; .
20        (x) the organization provides to a participant, within
21    30 days after the participant joins, a complete set of its
22    rules for the sharing of medical expenses, appeals of
23    decisions made by the organization, and the filing of
24    complaints;
25        (xi) the organization does not offer any other services
26    that are regulated under any provision of the Illinois

 

 

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1    Insurance Code or other insurance laws of this State; and
2        (xii) the organization does not amass funds as reserves
3    intended for payment of medical services, rather the
4    organization facilitates the payments provided for in this
5    subsection (b) through payments made directly from one
6    participant to another.
7    (c) Legal Expense Insurance. Insurance which involves the
8assumption of a contractual obligation to reimburse the
9beneficiary against or pay on behalf of the beneficiary, all or
10a portion of his fees, costs, or expenses related to or arising
11out of services performed by or under the supervision of an
12attorney licensed to practice in the jurisdiction wherein the
13services are performed, regardless of whether the payment is
14made by the beneficiaries individually or by a third person for
15them, but does not include the provision of or reimbursement
16for legal services incidental to other insurance coverages. The
17insurance laws of this State, including this Act do not apply
18to:
19        (i) Retainer contracts made by attorneys at law with
20    individual clients with fees based on estimates of the
21    nature and amount of services to be provided to the
22    specific client, and similar contracts made with a group of
23    clients involved in the same or closely related legal
24    matters;
25        (ii) Plans owned or operated by attorneys who are the
26    providers of legal services to the plan;

 

 

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1        (iii) Plans providing legal service benefits to groups
2    where such plans are owned or operated by authority of a
3    state, county, local or other bar association;
4        (iv) Any lawyer referral service authorized or
5    operated by a state, county, local or other bar
6    association;
7        (v) The furnishing of legal assistance by labor unions
8    and other employee organizations to their members in
9    matters relating to employment or occupation;
10        (vi) The furnishing of legal assistance to members or
11    dependents, by churches, consumer organizations,
12    cooperatives, educational institutions, credit unions, or
13    organizations of employees, where such organizations
14    contract directly with lawyers or law firms for the
15    provision of legal services, and the administration and
16    marketing of such legal services is wholly conducted by the
17    organization or its subsidiary;
18        (vii) Legal services provided by an employee welfare
19    benefit plan defined by the Employee Retirement Income
20    Security Act of 1974;
21        (viii) Any collectively bargained plan for legal
22    services between a labor union and an employer negotiated
23    pursuant to Section 302 of the Labor Management Relations
24    Act as now or hereafter amended, under which plan legal
25    services will be provided for employees of the employer
26    whether or not payments for such services are funded to or

 

 

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1    through an insurance company.
2    Class 2. Casualty, Fidelity and Surety.
3    (a) Accident and health. Insurance against bodily injury,
4disablement or death by accident and against disablement
5resulting from sickness or old age and every insurance
6appertaining thereto, including stop-loss insurance. Stop-loss
7insurance is insurance against the risk of economic loss issued
8to a single employer self-funded employee disability benefit
9plan or an employee welfare benefit plan as described in 29
10U.S.C. 1001 et seq.
11    (b) Vehicle. Insurance against any loss or liability
12resulting from or incident to the ownership, maintenance or use
13of any vehicle (motor or otherwise), draft animal or aircraft.
14Any policy insuring against any loss or liability on account of
15the bodily injury or death of any person may contain a
16provision for payment of disability benefits to injured persons
17and death benefits to dependents, beneficiaries or personal
18representatives of persons who are killed, including the named
19insured, irrespective of legal liability of the insured, if the
20injury or death for which benefits are provided is caused by
21accident and sustained while in or upon or while entering into
22or alighting from or through being struck by a vehicle (motor
23or otherwise), draft animal or aircraft, and such provision
24shall not be deemed to be accident insurance.
25    (c) Liability. Insurance against the liability of the
26insured for the death, injury or disability of an employee or

 

 

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1other person, and insurance against the liability of the
2insured for damage to or destruction of another person's
3property.
4    (d) Workers' compensation. Insurance of the obligations
5accepted by or imposed upon employers under laws for workers'
6compensation.
7    (e) Burglary and forgery. Insurance against loss or damage
8by burglary, theft, larceny, robbery, forgery, fraud or
9otherwise; including all householders' personal property
10floater risks.
11    (f) Glass. Insurance against loss or damage to glass
12including lettering, ornamentation and fittings from any
13cause.
14    (g) Fidelity and surety. Become surety or guarantor for any
15person, copartnership or corporation in any position or place
16of trust or as custodian of money or property, public or
17private; or, becoming a surety or guarantor for the performance
18of any person, copartnership or corporation of any lawful
19obligation, undertaking, agreement or contract of any kind,
20except contracts or policies of insurance; and underwriting
21blanket bonds. Such obligations shall be known and treated as
22suretyship obligations and such business shall be known as
23surety business.
24    (h) Miscellaneous. Insurance against loss or damage to
25property and any liability of the insured caused by accidents
26to boilers, pipes, pressure containers, machinery and

 

 

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1apparatus of any kind and any apparatus connected thereto, or
2used for creating, transmitting or applying power, light, heat,
3steam or refrigeration, making inspection of and issuing
4certificates of inspection upon elevators, boilers, machinery
5and apparatus of any kind and all mechanical apparatus and
6appliances appertaining thereto; insurance against loss or
7damage by water entering through leaks or openings in
8buildings, or from the breakage or leakage of a sprinkler,
9pumps, water pipes, plumbing and all tanks, apparatus, conduits
10and containers designed to bring water into buildings or for
11its storage or utilization therein, or caused by the falling of
12a tank, tank platform or supports, or against loss or damage
13from any cause (other than causes specifically enumerated under
14Class 3 of this Section) to such sprinkler, pumps, water pipes,
15plumbing, tanks, apparatus, conduits or containers; insurance
16against loss or damage which may result from the failure of
17debtors to pay their obligations to the insured; and insurance
18of the payment of money for personal services under contracts
19of hiring.
20    (i) Other casualty risks. Insurance against any other
21casualty risk not otherwise specified under Classes 1 or 3,
22which may lawfully be the subject of insurance and may properly
23be classified under Class 2.
24    (j) Contingent losses. Contingent, consequential and
25indirect coverages wherein the proximate cause of the loss is
26attributable to any one of the causes enumerated under Class 2.

 

 

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1Such coverages shall, for the purpose of classification, be
2included in the specific grouping of the kinds of insurance
3wherein such cause is specified.
4    (k) Livestock and domestic animals. Insurance against
5mortality, accident and health of livestock and domestic
6animals.
7    (l) Legal expense insurance. Insurance against risk
8resulting from the cost of legal services as defined under
9Class 1(c).
10    Class 3. Fire and Marine, etc.
11    (a) Fire. Insurance against loss or damage by fire, smoke
12and smudge, lightning or other electrical disturbances.
13    (b) Elements. Insurance against loss or damage by
14earthquake, windstorms, cyclone, tornado, tempests, hail,
15frost, snow, ice, sleet, flood, rain, drought or other weather
16or climatic conditions including excess or deficiency of
17moisture, rising of the waters of the ocean or its tributaries.
18    (c) War, riot and explosion. Insurance against loss or
19damage by bombardment, invasion, insurrection, riot, strikes,
20civil war or commotion, military or usurped power, or explosion
21(other than explosion of steam boilers and the breaking of fly
22wheels on premises owned, controlled, managed, or maintained by
23the insured.)
24    (d) Marine and transportation. Insurance against loss or
25damage to vessels, craft, aircraft, vehicles of every kind,
26(excluding vehicles operating under their own power or while in

 

 

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1storage not incidental to transportation) as well as all goods,
2freights, cargoes, merchandise, effects, disbursements,
3profits, moneys, bullion, precious stones, securities, chooses
4in action, evidences of debt, valuable papers, bottomry and
5respondentia interests and all other kinds of property and
6interests therein, in respect to, appertaining to or in
7connection with any or all risks or perils of navigation,
8transit, or transportation, including war risks, on or under
9any seas or other waters, on land or in the air, or while being
10assembled, packed, crated, baled, compressed or similarly
11prepared for shipment or while awaiting the same or during any
12delays, storage, transshipment, or reshipment incident
13thereto, including marine builder's risks and all personal
14property floater risks; and for loss or damage to persons or
15property in connection with or appertaining to marine, inland
16marine, transit or transportation insurance, including
17liability for loss of or damage to either arising out of or in
18connection with the construction, repair, operation,
19maintenance, or use of the subject matter of such insurance,
20(but not including life insurance or surety bonds); but, except
21as herein specified, shall not mean insurances against loss by
22reason of bodily injury to the person; and insurance against
23loss or damage to precious stones, jewels, jewelry, gold,
24silver and other precious metals whether used in business or
25trade or otherwise and whether the same be in course of
26transportation or otherwise, which shall include jewelers'

 

 

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1block insurance; and insurance against loss or damage to
2bridges, tunnels and other instrumentalities of transportation
3and communication (excluding buildings, their furniture and
4furnishings, fixed contents and supplies held in storage)
5unless fire, tornado, sprinkler leakage, hail, explosion,
6earthquake, riot and civil commotion are the only hazards to be
7covered; and to piers, wharves, docks and slips, excluding the
8risks of fire, tornado, sprinkler leakage, hail, explosion,
9earthquake, riot and civil commotion; and to other aids to
10navigation and transportation, including dry docks and marine
11railways, against all risk.
12    (e) Vehicle. Insurance against loss or liability resulting
13from or incident to the ownership, maintenance or use of any
14vehicle (motor or otherwise), draft animal or aircraft,
15excluding the liability of the insured for the death, injury or
16disability of another person.
17    (f) Property damage, sprinkler leakage and crop. Insurance
18against the liability of the insured for loss or damage to
19another person's property or property interests from any cause
20enumerated in this class; insurance against loss or damage by
21water entering through leaks or openings in buildings, or from
22the breakage or leakage of a sprinkler, pumps, water pipes,
23plumbing and all tanks, apparatus, conduits and containers
24designed to bring water into buildings or for its storage or
25utilization therein, or caused by the falling of a tank, tank
26platform or supports or against loss or damage from any cause

 

 

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1to such sprinklers, pumps, water pipes, plumbing, tanks,
2apparatus, conduits or containers; insurance against loss or
3damage from insects, diseases or other causes to trees, crops
4or other products of the soil.
5    (g) Other fire and marine risks. Insurance against any
6other property risk not otherwise specified under Classes 1 or
72, which may lawfully be the subject of insurance and may
8properly be classified under Class 3.
9    (h) Contingent losses. Contingent, consequential and
10indirect coverages wherein the proximate cause of the loss is
11attributable to any of the causes enumerated under Class 3.
12Such coverages shall, for the purpose of classification, be
13included in the specific grouping of the kinds of insurance
14wherein such cause is specified.
15    (i) Legal expense insurance. Insurance against risk
16resulting from the cost of legal services as defined under
17Class 1(c).
18(Source: 09700HB3443eng.)