Illinois General Assembly - Full Text of HB0103
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Full Text of HB0103  93rd General Assembly

HB0103 93rd General Assembly


                                     LRB093 03680 JLS 03710 b

 1        AN ACT relating to insurance.

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

 4        Section  5.   The  Illinois  Insurance Code is amended by
 5    changing Section 224.1 as follows:

 6        (215 ILCS 5/224.1) (from Ch. 73, par. 836.1)
 7        Sec. 224.1. Employer insurable interest.  Notwithstanding
 8    any other Section of this Code, an employer  or  an  employer
 9    sponsored  trust  for  the  benefit  of  its employees has an
10    insurable interest in the lives of the employer's  directors,
11    officers,  managers,  nonmanagement  employees,  and  retired
12    employees  and  may  insure  those  lives on an individual or
13    group basis with the consent of the insured. On a prospective
14    basis, employers must obtain  the  written  consent  of  each
15    individual  being  insured.   The  consent  must  include  an
16    acknowledgement  that  the  employer  may  maintain  the life
17    insurance  coverage  even  after  the  insured   individual's
18    employment  has  terminated.  The consent requirement will be
19    satisfied if the insured is provided written  notice  of  the
20    coverage  and does not reject such coverage within 30 days of
21    receipt of such notice. The extent of the employer's  or  the
22    trust's  insurable  interest  for  nonmanagement  and retired
23    employees shall be limited to an amount commensurate with the
24    employer's projected unfunded  liabilities  to  nonmanagement
25    and  retired  employees for welfare benefit plans, as defined
26    by the Employee  Retirement  Income  Security  Act  of  1974,
27    Public  Law  93-406,  88  Stat.  829, calculated according to
28    accepted actuarial principles.  An  insurable  interest  must
29    exist  at  the  time  the  contract  of  life  or  disability
30    insurance  becomes  effective, but need not exist at the time
31    the loss occurs.  An employer  shall  not  retaliate  in  any
                            -2-      LRB093 03680 JLS 03710 b
 1    manner against an employee or a retired employee for refusing
 2    consent  to  be  insured.   The  proceeds  of  any  policy or
 3    certificate issued pursuant to this Section are  exempt  from
 4    the  claims  of any creditor or dependent of the insured.  As
 5    used   herein,   "employer"   means   an   individual,   sole
 6    proprietorship, partnership, firm, corporation,  association,
 7    or  any other legal entity that has one or more employees and
 8    is legally doing business in this State.
 9    (Source: P.A. 87-936.)