Full Text of SB1479 103rd General Assembly
SB1479sam001 103RD GENERAL ASSEMBLY | Sen. Laura Fine Filed: 4/17/2024 | | 10300SB1479sam001 | | LRB103 05817 RPS 72111 a |
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| 1 | | AMENDMENT TO SENATE BILL 1479
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1479 by replacing | 3 | | everything after the enacting clause with the following: | 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Sections 132, 132.5, 155.35, 402, 408, 511.109, | 6 | | 512-3, 512-5, and 513b3 and by adding Section 512-11 as | 7 | | follows: | | | | 8 | | (215 ILCS 5/132) (from Ch. 73, par. 744) | 9 | | Sec. 132. Market conduct actions and market analysis and | 10 | | non-financial examinations . | 11 | | (a) Definitions. As used in this Section: | 12 | | "Data call" means a written solicitation by the Director | 13 | | to 2 or more regulated companies or persons seeking existing | 14 | | data or other existing information to be provided within a | 15 | | reasonable time period for a narrow and targeted regulatory | 16 | | oversight purpose for market analysis. "Data call" does not |
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| 1 | | include an information request in a market conduct action or | 2 | | any data or information that the Director shall or may | 3 | | specifically require under any other law, except as provided | 4 | | by the other law. | 5 | | "Desk examination" means an examination that is conducted | 6 | | by market conduct surveillance personnel at a location other | 7 | | than the regulated company's or person's premises. "Desk | 8 | | examination" includes an examination performed at the | 9 | | Department's offices with the company or person providing | 10 | | requested documents by hard copy, microfiche, or discs or | 11 | | other electronic media for review without an on-site | 12 | | examination. | 13 | | "Market analysis" means a process whereby market conduct | 14 | | surveillance personnel collect and analyze information from | 15 | | filed schedules, surveys, required reports, data calls, and | 16 | | other sources to develop a baseline understanding of the | 17 | | marketplace and to identify patterns or practices of regulated | 18 | | persons that deviate significantly from the norm or that may | 19 | | pose a potential risk to insurance consumers. | 20 | | "Market conduct action" means any activity, other than | 21 | | market analysis, that the Director may initiate to assess and | 22 | | address the market and nonfinancial practices of regulated | 23 | | persons, including market conduct examinations. The | 24 | | Department's consumer complaint process outlined in 50 Ill. | 25 | | Adm. Code 926 is not a market conduct action for purposes of | 26 | | this Section; however, the Department may initiate market |
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| 1 | | conduct actions based on information gathered during that | 2 | | process. "Market conduct action" includes: | 3 | | (1) correspondence with the company or person; | 4 | | (2) interviews with the company or person; | 5 | | (3) information gathering; | 6 | | (4) policy and procedure reviews; | 7 | | (5) interrogatories; | 8 | | (6) review of company or person self-evaluations and | 9 | | voluntary compliance programs; | 10 | | (7) self-audits; and | 11 | | (8) market conduct examinations. | 12 | | "Market conduct examination" or "examination" means any | 13 | | type of examination, other than a financial examination, that | 14 | | assesses a regulated person's compliance with the laws, rules, | 15 | | and regulations applicable to the examinee. "Market conduct | 16 | | examination" includes comprehensive examinations, targeted | 17 | | examinations, and follow-up examinations, which may be | 18 | | conducted as desk examinations, on-site examinations, or a | 19 | | combination of those 2 methods. | 20 | | "Market conduct surveillance" means market analysis or a | 21 | | market conduct action. | 22 | | "Market conduct surveillance personnel" means those | 23 | | individuals employed or retained by the Department and | 24 | | designated by the Director to collect, analyze, review, or act | 25 | | on information in the insurance marketplace that identifies | 26 | | patterns or practices of persons subject to the Director's |
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| 1 | | jurisdiction. "Market conduct surveillance personnel" includes | 2 | | all persons identified as an examiner in the insurance laws or | 3 | | rules of this State if the Director has designated them to | 4 | | assist her or him in ascertaining the nonfinancial business | 5 | | practices, performance, and operations of a company or person | 6 | | subject to the Director's jurisdiction. | 7 | | "On-site examination" means an examination conducted at | 8 | | the company's or person's home office or the location where | 9 | | the records under review are stored. | 10 | | "SOFR rate" means the Secured Overnight Financing Rate | 11 | | published by the Federal Reserve Bank of New York every | 12 | | business day. | 13 | | (b) Companies and persons subject to surveillance. The | 14 | | Director, for the purposes of ascertaining the nonfinancial | 15 | | business practices, performance, and operations of any person | 16 | | subject to the Director's jurisdiction or within the | 17 | | marketplace, may engage in market conduct actions or market | 18 | | analysis relating to: | 19 | | (1) any company transacting or being organized to | 20 | | transact business in this State; | 21 | | (2) any person engaged in or proposing to be engaged | 22 | | in the organization, promotion, or solicitation of shares | 23 | | or capital contributions to or aiding in the formation of | 24 | | a company; | 25 | | (3) any person having a written or oral contract | 26 | | pertaining to the management or control of a company as |
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| 1 | | general agent, managing agent, or attorney-in-fact; | 2 | | (4) any licensed or registered producer, firm, | 3 | | pharmacy benefit manager, administrator, or any person | 4 | | making application for any license, certificate, or | 5 | | registration; | 6 | | (5) any person engaged in the business of adjusting | 7 | | losses or financing premiums; or | 8 | | (6) any person, organization, trust, or corporation | 9 | | having custody or control of information reasonably | 10 | | related to the operation, performance, or conduct of a | 11 | | company or person subject to the Director's jurisdiction, | 12 | | but only as to the operation, performance, or conduct of a | 13 | | company or person subject to the Director's jurisdiction. | 14 | | (c) Market analysis and market conduct actions. | 15 | | (1) The Director may perform market analysis by | 16 | | gathering and analyzing information from data currently | 17 | | available to the Director, information from surveys, data | 18 | | call responses, or reports that are submitted to the | 19 | | Director, information collected by the NAIC, and | 20 | | information from a variety of other sources to develop a | 21 | | baseline understanding of the marketplace and to identify | 22 | | for further review companies or practices that deviate | 23 | | from the norm or that may pose a potential risk to | 24 | | insurance consumers. The Director shall use the most | 25 | | recent NAIC Market Regulation Handbook as a guide in | 26 | | performing market analysis. The Director may also employ |
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| 1 | | other guidelines or procedures as the Director may deem | 2 | | appropriate. | 3 | | (2) The Director may initiate a market conduct action | 4 | | subject to the following: | 5 | | (A) If the Director determines that further | 6 | | inquiry into a particular person or practice is | 7 | | needed, then the Director may consider undertaking a | 8 | | market conduct action. The Director shall inform the | 9 | | examinee of the initiation of the market conduct | 10 | | action and shall use the most recent NAIC Market | 11 | | Regulation Handbook as a guide in performing the | 12 | | market conduct action. The Director may also employ | 13 | | other guidelines or procedures as the Director may | 14 | | deem appropriate. | 15 | | (B) For an examination, the Director shall conduct | 16 | | a pre-examination conference with the examinee to | 17 | | clarify expectations before commencement of the | 18 | | examination. At the pre-examination conference, the | 19 | | Director or the market conduct surveillance personnel | 20 | | shall disclose the basis of the examination, including | 21 | | the statutes, regulations, or business practices at | 22 | | issue. The Director shall provide at least 30 days' | 23 | | advance notice of the date of the pre-examination | 24 | | conference unless circumstances warrant that the | 25 | | examination proceed more quickly. | 26 | | (C) The Director may coordinate a market conduct |
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| 1 | | action and findings of this State with market conduct | 2 | | actions and findings of other states. | 3 | | (3) Nothing in this Section requires the Director to | 4 | | undertake market analysis before initiating any market | 5 | | conduct action. | 6 | | (4) Nothing in this Section restricts the Director to | 7 | | the type of market conduct action he or she initially | 8 | | selected. | 9 | | (5) A regulated person is required to respond to a | 10 | | market analysis data call or to an information request in | 11 | | a market conduct action on the terms and conditions | 12 | | established by the Director. The Department shall | 13 | | establish reasonable timelines that are commensurate with | 14 | | the volume and nature of the data required to be collected | 15 | | in the information request. | 16 | | (6) Without limiting the contents of any examination | 17 | | report, market conduct actions taken as a result of a | 18 | | market analysis shall focus primarily on the general | 19 | | business practices and compliance activities of companies | 20 | | or persons rather than identifying infrequent or | 21 | | unintentional random errors that do not cause significant | 22 | | consumer harm. The Director may give a company or person | 23 | | an opportunity to resolve matters that are identified as a | 24 | | result of a market analysis to the Director's satisfaction | 25 | | before undertaking a market conduct action against the | 26 | | company or person. |
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| 1 | | (d) Access to books and records. Every examinee and its | 2 | | officers, directors, and agents must provide to the Director | 3 | | convenient and free access at all reasonable hours at its | 4 | | office or location to all books, records, and documents and | 5 | | any or all papers relating to the business, performance, | 6 | | operations, and affairs of the examinee. The officers, | 7 | | directors, and agents of the examinee must facilitate the | 8 | | market conduct action and aid in the action so far as it is in | 9 | | their power to do so. The Director and any authorized market | 10 | | conduct surveillance personnel have the power to administer | 11 | | oaths and examine under oath any person relevant to the | 12 | | business of the examinee. A failure to produce requested | 13 | | books, records, or documents by the deadline shall not be a | 14 | | violation until after the later of: | 15 | | (1) 5 business days after the initial response | 16 | | deadline set by the Director or authorized personnel; or | 17 | | (2) an extended deadline granted by the Director or | 18 | | authorized personnel. | 19 | | (e) Examination report. The market conduct surveillance | 20 | | personnel designated by the Director under Section 402 must | 21 | | make a full and true report of every examination made by them | 22 | | that contains only facts ascertained from the books, papers, | 23 | | records, documents, and other evidence obtained by | 24 | | investigation and examined by them or ascertained from the | 25 | | testimony of officers, agents, or other persons examined under | 26 | | oath concerning the business, affairs, conduct, and |
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| 1 | | performance of the examinee. The report of examination must be | 2 | | verified by the oath of the examiner in charge thereof, and | 3 | | when so verified is prima facie evidence in any action or | 4 | | proceeding in the name of the State against the examinee, its | 5 | | officers, directors, or agents upon the facts stated therein. | 6 | | (f) Examinee response to examination report. The | 7 | | Department and the examinee shall comply with the following | 8 | | timeline, unless a mutual agreement is reached to modify the | 9 | | timeline: | 10 | | (1) The Department shall deliver a draft report to the | 11 | | examinee as soon as reasonably practicable. Nothing in | 12 | | this Section prevents the Department from sharing an | 13 | | earlier draft of the report with the examinee before | 14 | | confirming that the examination is completed. | 15 | | (2) If the examinee chooses to respond with written | 16 | | submissions or rebuttals, then the examinee must do so | 17 | | within 30 days after receipt of any draft report delivered | 18 | | after the completion of the examination. | 19 | | (3) As soon as reasonably practicable after receipt of | 20 | | any written submissions or rebuttals, the Department shall | 21 | | issue a final report. Whenever the Department has made | 22 | | substantive changes to a previously shared draft report, | 23 | | unless those changes remove part or all of an alleged | 24 | | violation or were proposed by the examinee, the Department | 25 | | shall deliver the revised version to the examinee as a new | 26 | | draft and shall allow the examinee 30 days to respond |
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| 1 | | before the Department issues a final report. | 2 | | (4) The examinee shall, within 10 days after the | 3 | | issuance of the final report, accept the final report or | 4 | | request a hearing in writing, unless granted an extension | 5 | | by mutual agreement. Failure to take either action within | 6 | | 10 days or the mutually agreed extension shall be deemed | 7 | | an acceptance of the final report. If the examinee accepts | 8 | | the examination report, the Director shall continue to | 9 | | hold the content of the examination report as private and | 10 | | confidential for a period of 30 days. Thereafter, the | 11 | | Director shall open the final report for public | 12 | | inspection. | 13 | | (g) Hearing; final examination report. Notwithstanding | 14 | | anything to the contrary in this Code or Department rules, if | 15 | | the examinee requests a hearing, then the following procedures | 16 | | apply: | 17 | | (1) The examinee must request the hearing in writing | 18 | | and must specify the issues in the final report that the | 19 | | examinee is challenging. The examinee is limited to | 20 | | challenging the issues that were previously challenged in | 21 | | the examinee's written submission and rebuttal or | 22 | | supplemental submission and rebuttal pursuant to | 23 | | paragraphs (2) and (3) of subsection (f). | 24 | | (2) Except as permitted in paragraphs (3) and (8) of | 25 | | this subsection, the hearing shall be limited to the | 26 | | written arguments submitted by the parties to the |
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| 1 | | designated hearing officer. The designated hearing officer | 2 | | may, however, grant a live hearing upon the request of | 3 | | either party. | 4 | | (3) Discovery is limited to the market conduct | 5 | | surveillance personnel's work papers that are relevant to | 6 | | the issues the examinee is challenging. The relevant | 7 | | market conduct surveillance personnel's work papers shall | 8 | | be admitted into the record. No other forms of discovery, | 9 | | including depositions and interrogatories, are allowed, | 10 | | except upon written agreement of the examinee and the | 11 | | Department when necessary to conduct a fair hearing or as | 12 | | otherwise provided in this subsection. | 13 | | (4) Only the examinee and the Department may submit | 14 | | written arguments. | 15 | | (5) The examinee must submit its written argument and | 16 | | any supporting evidence within 30 days after the | 17 | | Department serves a formal notice of hearing. | 18 | | (6) The Department must submit its written response | 19 | | and any supporting evidence within 30 days after the | 20 | | examinee submits its written argument. | 21 | | (7) The designated hearing officer may allow | 22 | | additional written submissions if necessary or useful to | 23 | | the fair resolution of the hearing. | 24 | | (8) If either the examinee or the Department submit | 25 | | written testimony or affidavits, then the opposing party | 26 | | shall be given the opportunity to cross-examine the |
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| 1 | | witness and to submit the cross-examination to the hearing | 2 | | officer before a decision. | 3 | | (9) The Director shall issue a decision accompanied by | 4 | | findings and conclusions. The Director's order is a final | 5 | | administrative decision and shall be served upon the | 6 | | examinee together with a copy of the final report within | 7 | | 90 days after the conclusion of the hearing. The hearing | 8 | | is deemed concluded on the later of the last date of any | 9 | | live hearing or the final deadline date for written | 10 | | submissions to the hearing officer, including any | 11 | | continuances or supplemental briefings permitted by the | 12 | | hearing officer. | 13 | | (10) Any portion of the final examination report that | 14 | | was not challenged by the examinee is incorporated into | 15 | | the decision of the Director. | 16 | | (11) Findings of fact and conclusions of law in the | 17 | | Director's final administrative decision are prima facie | 18 | | evidence in any legal or regulatory action. | 19 | | (12) If an examinee has requested a hearing, then the | 20 | | Director shall continue to hold the final report and any | 21 | | related decision as private and confidential for a period | 22 | | of 49 days after the final administrative decision. After | 23 | | the 49-day period expires, the Director shall open the | 24 | | final report and any related decision for public | 25 | | inspection if a court of competent jurisdiction has not | 26 | | stayed its publication. |
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| 1 | | (h) Disclosure. So long as the recipient agrees to and | 2 | | verifies in writing its legal authority to hold the | 3 | | information confidential in a manner consistent with this | 4 | | Section, nothing in this Section prevents the Director from | 5 | | disclosing at any time the content of an examination report, | 6 | | preliminary examination report, or results, or any matter | 7 | | relating to a report or results, to: | 8 | | (1) the insurance regulatory authorities of any other | 9 | | state; or | 10 | | (2) any agency or office of the federal government. | 11 | | (i) Confidentiality. | 12 | | (1) The Director and any other person in the course of | 13 | | market conduct surveillance shall keep confidential all | 14 | | documents, including working papers, third-party models, | 15 | | or products; complaint logs; copies of any documents | 16 | | created, produced, obtained by, or disclosed to the | 17 | | Director, market conduct surveillance personnel, or any | 18 | | other person in the course of market conduct surveillance | 19 | | conducted pursuant to this Section; and all documents | 20 | | obtained by the NAIC pursuant to this Section. The | 21 | | documents shall remain confidential after the termination | 22 | | of the market conduct surveillance, are not subject to | 23 | | subpoena, are not subject to discovery or admissible as | 24 | | evidence in private civil litigation, are not subject to | 25 | | disclosure under the Freedom of Information Act, and must | 26 | | not be made public at any time or used by the Director or |
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| 1 | | any other person, except as provided in paragraphs (3), | 2 | | (4), and (6) of this subsection (i) and in subsection (k). | 3 | | (2) The Director and any other person in the course of | 4 | | market conduct surveillance shall keep confidential any | 5 | | self-evaluation or voluntary compliance program documents | 6 | | disclosed to the Director or other person by an examinee | 7 | | and the data collected via the NAIC market conduct annual | 8 | | statement. The documents are not subject to subpoena, are | 9 | | not subject to discovery or admissible as evidence in | 10 | | private civil litigation, are not subject to disclosure | 11 | | under the Freedom of Information Act, and they shall not | 12 | | be made public or used by the Director or any other person, | 13 | | except as provided in paragraphs (3) and (4) of this | 14 | | subsection (i), in subsection (k), or in Section 155.35. | 15 | | Nothing in this Section shall supersede the restrictions | 16 | | on disclosure under Section 155.35. | 17 | | (3) Notwithstanding paragraphs (1) and (2) of this | 18 | | subsection (i), and consistent with paragraph (5) of this | 19 | | subsection (i), in order to assist in the performance of | 20 | | the Director's duties, the Director may: | 21 | | (A) share documents, materials, communications, or | 22 | | other information, including the confidential and | 23 | | privileged documents, materials, or information | 24 | | described in this subsection (i), with other State, | 25 | | federal, alien, and international regulatory agencies | 26 | | and law enforcement authorities and the NAIC, its |
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| 1 | | affiliates, and subsidiaries, if the recipient agrees | 2 | | to and verifies in writing its legal authority to | 3 | | maintain the confidentiality and privileged status of | 4 | | the document, material, communication, or other | 5 | | information; | 6 | | (B) receive documents, materials, communications, | 7 | | or information, including otherwise confidential and | 8 | | privileged documents, materials, or information, from | 9 | | the NAIC and its affiliates or subsidiaries, and from | 10 | | regulatory and law enforcement officials of other | 11 | | State, federal, alien, or international jurisdictions, | 12 | | authorities, and agencies, and shall maintain as | 13 | | confidential or privileged any document, material, | 14 | | communication, or information received with notice or | 15 | | the understanding that it is confidential or | 16 | | privileged under the laws of the jurisdiction that is | 17 | | the source of the document, material, communication, | 18 | | or information; and | 19 | | (C) enter into agreements governing the sharing | 20 | | and use of information consistent with this Section. | 21 | | (4) Nothing in this Section limits: | 22 | | (A) the Director's authority to use, if consistent | 23 | | with subsection (5) of Section 188.1, as applicable, | 24 | | any final or preliminary examination report, any | 25 | | market conduct surveillance or examinee work papers or | 26 | | other documents, or any other information discovered |
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| 1 | | or developed during the course of any market conduct | 2 | | surveillance in the furtherance of any legal or | 3 | | regulatory action initiated by the Director that the | 4 | | Director may, in the Director's sole discretion, deem | 5 | | appropriate; however, confidential or privileged | 6 | | information about a company or person that is used in | 7 | | the legal or regulatory action shall not be made | 8 | | public except by order of a court of competent | 9 | | jurisdiction or with the written consent of the | 10 | | company or person; or | 11 | | (B) the ability of an examinee to conduct | 12 | | discovery in accordance with paragraph (3) of | 13 | | subsection (g). | 14 | | (5) Disclosure to or by the Director of documents, | 15 | | materials, communications, or information required as part | 16 | | of any type of market conduct surveillance does not waive | 17 | | any applicable privilege or claim of confidentiality in | 18 | | the documents, materials, communications, or information. | 19 | | (6) Notwithstanding the confidentiality requirements | 20 | | of this Section or otherwise imposed by State law, if the | 21 | | Director performs a data call, other than the collection | 22 | | of data for the NAIC market conduct annual statement, the | 23 | | Director may make the results of the data call available | 24 | | for public inspection in an aggregated format that does | 25 | | not disclose information or data attributed to any | 26 | | specific company or person, including the name of any |
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| 1 | | company or person who responded to the data call, so long | 2 | | as the Director provides all companies or persons that | 3 | | responded to the data call 15 days' notice identifying the | 4 | | information to be publicly released. Nothing in this | 5 | | Section requires the Director to publish results from any | 6 | | data call. | 7 | | (j) Corrective actions. | 8 | | (1) As a result of any market conduct action, the | 9 | | Director may take any action the Director considers | 10 | | necessary or appropriate in accordance with the report of | 11 | | examination or any hearing thereon for acts in violation | 12 | | of any law, rule, or prior lawful order of the Director. No | 13 | | corrective action, including a penalty, shall be ordered | 14 | | with respect to violations in transactions with consumers | 15 | | or other entities that are isolated occurrences or that | 16 | | occur with such low frequency as to fall below a | 17 | | reasonable margin of error. Such actions include, but are | 18 | | not limited to: | 19 | | (A) requiring the regulated person to undertake | 20 | | corrective actions to cease and desist an identified | 21 | | violation or institute processes and practices to | 22 | | comply with applicable standards; | 23 | | (B) requiring reimbursement or restitution of any | 24 | | actual losses or damages to persons harmed by the | 25 | | regulated person's violation with interest from the | 26 | | date that the actual loss or damage was incurred, |
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| 1 | | which shall be calculated at the SOFR rate applicable | 2 | | on the date that the actual loss or damage was incurred | 3 | | plus 2%; and | 4 | | (C) imposing civil penalties as provided in this | 5 | | subsection (j). | 6 | | (2) The Director may order a penalty of up to $2,000 | 7 | | for each violation of any law, rule, or prior lawful order | 8 | | of the Director. Any failure to respond to an information | 9 | | request in a market conduct action or violation of | 10 | | subsection (d) may carry a fine of up to $1,000 per day up | 11 | | to a maximum of $50,000. Fines and penalties shall be | 12 | | consistent, reasonable, and justifiable, and the Director | 13 | | may consider reasonable criteria in ordering the fines and | 14 | | penalties, including, but not limited to, the examinee's | 15 | | size, consumer harm, the intentionality of any violations, | 16 | | or remedial actions already undertaken by the examinee. | 17 | | The Director shall communicate to the examinee the basis | 18 | | for any assessed fine or penalty. | 19 | | (3) If any other provision of this Code or any other | 20 | | law or rule under the Director's jurisdiction prescribes | 21 | | an amount or range of monetary penalty for a violation of a | 22 | | particular statute or rule or a maximum penalty in the | 23 | | aggregate for repeated violations, the Director shall | 24 | | assess penalties pursuant to the terms of the statute or | 25 | | rule allowing the largest penalty. | 26 | | (4) If any other provision of this Code or any other |
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| 1 | | law or rule under the Director's jurisdiction prescribes | 2 | | or specifies a method by which the Director is to | 3 | | determine a violation, then compliance with the process | 4 | | set forth herein shall be deemed to comply with the method | 5 | | prescribed or specified in the other provision. | 6 | | (5) If the Director imposes any sanctions or | 7 | | corrective actions described in subparagraphs (A) through | 8 | | (C) of paragraph (1) of this subsection (j) based on the | 9 | | final report, the Director shall include those actions in | 10 | | a proposed stipulation and consent order enclosed with the | 11 | | final report issued to the examinee under subsection (f). | 12 | | The examinee shall have 10 days to sign the order or | 13 | | request a hearing in writing on the actions proposed in | 14 | | the order regardless of whether the examinee requests a | 15 | | hearing on the contents of the report under subsection | 16 | | (f). If the examinee does not sign the order or request a | 17 | | hearing on the proposed actions or the final report within | 18 | | 10 days, the Director may issue a final order imposing the | 19 | | sanctions or corrective actions. Nothing in this Section | 20 | | prevents the Department from sharing an earlier draft of | 21 | | the proposed order with the examinee before issuing the | 22 | | final report. | 23 | | (6) If the examinee accepts the order and the final | 24 | | report, the Director shall hold the content of the order | 25 | | and report as private and confidential for a period of 30 | 26 | | days. Thereafter, the Director shall open the order and |
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| 1 | | report for public inspection. | 2 | | (7) If the examinee makes a timely request for a | 3 | | hearing on the order, the request must specify the | 4 | | sanctions or corrective actions in the order that the | 5 | | examinee is challenging. Any hearing shall follow the | 6 | | procedures set forth in paragraphs (2) through (7) of | 7 | | subsection (g). | 8 | | (8) If the examinee has also requested a hearing on | 9 | | the contents of the report, then that hearing shall be | 10 | | consolidated with the hearing on the order. The Director | 11 | | shall not impose sanctions or corrective actions under | 12 | | this Section until the conclusion of the hearing. | 13 | | (9) The Director shall issue a decision accompanied by | 14 | | findings and conclusions along with any corrective actions | 15 | | or sanctions. Any sanctions or corrective actions shall be | 16 | | based on the final report accepted by the examinee or | 17 | | adopted by the Director under paragraph (9) of subsection | 18 | | (g). The Director's order is a final administrative | 19 | | decision and shall be served upon the examinee together | 20 | | with a copy of the final report within 90 days after the | 21 | | conclusion of the hearing or within 10 days after the | 22 | | examinee's acceptance of the proposed order and final | 23 | | report, as applicable. The hearing is deemed concluded on | 24 | | the later of the last date of any live hearing or the final | 25 | | deadline date for written submissions to the hearing | 26 | | officer, including any continuances or supplemental |
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| 1 | | briefings permitted by the hearing officer. | 2 | | (10) If an examinee has requested a hearing under this | 3 | | subsection (i), the Director shall continue to hold the | 4 | | final order and examination report as private and | 5 | | confidential for a period of 49 days after the final | 6 | | administrative decision. After the 49-day period expires, | 7 | | the Director shall open the final order and examination | 8 | | report if a court of competent jurisdiction has not stayed | 9 | | their publication. | 10 | | (k) National market conduct databases. The Director shall | 11 | | collect and report market data to the NAIC's market | 12 | | information systems, including, but not limited to, the | 13 | | Complaint Database System, the Examination Tracking System, | 14 | | and the Regulatory Information Retrieval System, or other | 15 | | successor NAIC products as determined by the Director. | 16 | | Information collected and maintained by the Department for | 17 | | inclusion in these NAIC market information systems shall be | 18 | | compiled in a manner that meets the requirements of the NAIC. | 19 | | Confidential or privileged information collected, reported, or | 20 | | maintained under this subsection (k) shall be subject to the | 21 | | protections and restrictions on disclosure in subsection (i). | 22 | | (l) Immunity of market conduct surveillance personnel. | 23 | | (1) No cause of action shall arise nor shall any | 24 | | liability be imposed against the Director, the Director's | 25 | | authorized representatives, market conduct surveillance | 26 | | personnel, or an examiner appointed by the Director for |
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| 1 | | any statements made or conduct performed in good faith | 2 | | while carrying out the provisions of this Section. | 3 | | (2) No cause of action shall arise nor shall any | 4 | | liability be imposed against any person for the act of | 5 | | communicating or delivering information or data to the | 6 | | Director, the Director's authorized representative, market | 7 | | conduct surveillance personnel, or examiner pursuant to an | 8 | | examination made under this Section, if the act of | 9 | | communication or delivery was performed in good faith and | 10 | | without fraudulent intent or the intent to deceive. | 11 | | (3) A person identified in paragraph (1) of this | 12 | | subsection (l) shall be entitled to an award of attorney's | 13 | | fees and costs if he or she is the prevailing party in a | 14 | | civil cause of action for libel, slander, or any other | 15 | | relevant tort arising out of activities in carrying out | 16 | | the provisions of this Section and the party bringing the | 17 | | action was not substantially justified in doing so. As | 18 | | used in this paragraph, a proceeding is substantially | 19 | | justified if it had a reasonable basis in law or fact at | 20 | | the time it was initiated. | 21 | | (4) This subsection (l) does not abrogate or modify in | 22 | | any way any common law or statutory privilege or immunity | 23 | | heretofore enjoyed by any person identified in paragraph | 24 | | (1) of this subsection (l). | 25 | | (1) The Director, for the purposes of ascertaining the | 26 | | non-financial business practices, performance, and operations |
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| 1 | | of any company, may make examinations of: | 2 | | (a) any company transacting or being organized to | 3 | | transact business in this State; | 4 | | (b) any person engaged in or proposing to be engaged | 5 | | in the organization, promotion, or solicitation of shares | 6 | | or capital contributions to or aiding in the formation of | 7 | | a company; | 8 | | (c) any person having a contract, written or oral, | 9 | | pertaining to the management or control of a company as | 10 | | general agent, managing agent, or attorney-in-fact; | 11 | | (d) any licensed or registered producer, firm, or | 12 | | administrator, or any person, organization, or corporation | 13 | | making application for any licenses or registration; | 14 | | (e) any person engaged in the business of adjusting | 15 | | losses or financing premiums; or | 16 | | (f) any person, organization, trust, or corporation | 17 | | having custody or control of information reasonably | 18 | | related to the operation, performance, or conduct of a | 19 | | company or person subject to the jurisdiction of the | 20 | | Director. | 21 | | (2) Every company or person being examined and its | 22 | | officers, directors, and agents must provide to the Director | 23 | | convenient and free access at all reasonable hours at its | 24 | | office or location to all books, records, documents, and any | 25 | | or all papers relating to the business, performance, | 26 | | operations, and affairs of the company. The officers, |
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| 1 | | directors, and agents of the company or person must facilitate | 2 | | the examination and aid in the examination so far as it is in | 3 | | their power to do so. | 4 | | The Director and any authorized examiner have the power to | 5 | | administer oaths and examine under oath any person relative to | 6 | | the business of the company being examined. | 7 | | (3) The examiners designated by the Director under Section | 8 | | 402 must make a full and true report of every examination made | 9 | | by them, which contains only facts ascertained from the books, | 10 | | papers, records, or documents, and other evidence obtained by | 11 | | investigation and examined by them or ascertained from the | 12 | | testimony of officers or agents or other persons examined | 13 | | under oath concerning the business, affairs, conduct, and | 14 | | performance of the company or person. The report of | 15 | | examination must be verified by the oath of the examiner in | 16 | | charge thereof, and when so verified is prima facie evidence | 17 | | in any action or proceeding in the name of the State against | 18 | | the company, its officers, or agents upon the facts stated | 19 | | therein. | 20 | | (4) The Director must notify the company or person made | 21 | | the subject of any examination hereunder of the contents of | 22 | | the verified examination report before filing it and making | 23 | | the report public of any matters relating thereto, and must | 24 | | afford the company or person an opportunity to demand a | 25 | | hearing with reference to the facts and other evidence therein | 26 | | contained. |
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| 1 | | The company or person may request a hearing within 10 days | 2 | | after receipt of the examination report by giving the Director | 3 | | written notice of that request, together with a statement of | 4 | | its objections. The Director must then conduct a hearing in | 5 | | accordance with Sections 402 and 403. He must issue a written | 6 | | order based upon the examination report and upon the hearing | 7 | | within 90 days after the report is filed or within 90 days | 8 | | after the hearing. | 9 | | If the examination reveals that the company is operating | 10 | | in violation of any law, regulation, or prior order, the | 11 | | Director in the written order may require the company or | 12 | | person to take any action he considers necessary or | 13 | | appropriate in accordance with the report of examination or | 14 | | any hearing thereon. The order is subject to judicial review | 15 | | under the Administrative Review Law. The Director may withhold | 16 | | any report from public inspection for such time as he may deem | 17 | | proper and may, after filing the same, publish any part or all | 18 | | of the report as he considers to be in the interest of the | 19 | | public, in one or more newspapers in this State, without | 20 | | expense to the company. | 21 | | (5) Any company which or person who violates or aids and | 22 | | abets any violation of a written order issued under this | 23 | | Section shall be guilty of a business offense and may be fined | 24 | | not more than $5,000. The penalty shall be paid into the | 25 | | General Revenue fund of the State of Illinois. | 26 | | (Source: P.A. 87-108.) | | | |
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| 1 | | (215 ILCS 5/132.5) (from Ch. 73, par. 744.5) | 2 | | Sec. 132.5. Examination reports. | 3 | | (a) General description. All examination reports shall be | 4 | | comprised of only facts appearing upon the books, records, or | 5 | | other documents of the company, its agents, or other persons | 6 | | examined or as ascertained from the testimony of its officers, | 7 | | agents, or other persons examined concerning its affairs and | 8 | | the conclusions and recommendations as the examiners find | 9 | | reasonably warranted from those facts. | 10 | | (b) Filing of examination report. No later than 60 days | 11 | | following completion of the examination, the examiner in | 12 | | charge shall file with the Department a verified written | 13 | | report of examination under oath. Upon receipt of the verified | 14 | | report, the Department shall transmit the report to the | 15 | | company examined, together with a notice that affords the | 16 | | company examined a reasonable opportunity of not more than 30 | 17 | | days to make a written submission or rebuttal with respect to | 18 | | any matters contained in the examination report. | 19 | | (c) Adoption of the report on examination. Within 30 days | 20 | | of the end of the period allowed for the receipt of written | 21 | | submissions or rebuttals, the Director shall fully consider | 22 | | and review the report, together with any written submissions | 23 | | or rebuttals and any relevant portions of the examiners work | 24 | | papers and enter an order: | 25 | | (1) Adopting the examination report as filed or with |
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| 1 | | modification or corrections. If the examination report | 2 | | reveals that the company is operating in violation of any | 3 | | law, regulation, or prior order of the Director, the | 4 | | Director may order the company to take any action the | 5 | | Director considers necessary and appropriate to cure the | 6 | | violation. | 7 | | (2) Rejecting the examination report with directions | 8 | | to the examiners to reopen the examination for purposes of | 9 | | obtaining additional data, documentation, or information | 10 | | and refiling under subsection (b). | 11 | | (3) Calling for an investigatory hearing with no less | 12 | | than 20 days notice to the company for purposes of | 13 | | obtaining additional documentation, data, information, and | 14 | | testimony. | 15 | | (d) Order and procedures. All orders entered under | 16 | | paragraph (1) of subsection (c) shall be accompanied by | 17 | | findings and conclusions resulting from the Director's | 18 | | consideration and review of the examination report, relevant | 19 | | examiner work papers, and any written submissions or | 20 | | rebuttals. The order shall be considered a final | 21 | | administrative decision and may be appealed in accordance with | 22 | | the Administrative Review Law. The order shall be served upon | 23 | | the company by certified mail, together with a copy of the | 24 | | adopted examination report. Within 30 days of the issuance of | 25 | | the adopted report, the company shall file affidavits executed | 26 | | by each of its directors stating under oath that they have |
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| 1 | | received a copy of the adopted report and related orders. | 2 | | Any hearing conducted under paragraph (3) of subsection | 3 | | (c) by the Director or an authorized representative shall be | 4 | | conducted as a nonadversarial confidential investigatory | 5 | | proceeding as necessary for the resolution of any | 6 | | inconsistencies, discrepancies, or disputed issues apparent | 7 | | upon the face of the filed examination report or raised by or | 8 | | as a result of the Director's review of relevant work papers or | 9 | | by the written submission or rebuttal of the company. Within | 10 | | 20 days of the conclusion of any hearing, the Director shall | 11 | | enter an order under paragraph (1) of subsection (c). | 12 | | The Director shall not appoint an examiner as an | 13 | | authorized representative to conduct the hearing. The hearing | 14 | | shall proceed expeditiously with discovery by the company | 15 | | limited to the examiner's work papers that tend to | 16 | | substantiate any assertions set forth in any written | 17 | | submission or rebuttal. The Director or his representative may | 18 | | issue subpoenas for the attendance of any witnesses or the | 19 | | production of any documents deemed relevant to the | 20 | | investigation, whether under the control of the Department, | 21 | | the company, or other persons. The documents produced shall be | 22 | | included in the record, and testimony taken by the Director or | 23 | | his representative shall be under oath and preserved for the | 24 | | record. Nothing contained in this Section shall require the | 25 | | Department to disclose any information or records that would | 26 | | indicate or show the existence or content of any investigation |
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| 1 | | or activity of a criminal justice agency. | 2 | | The hearing shall proceed with the Director or his | 3 | | representative posing questions to the persons subpoenaed. | 4 | | Thereafter , the company and the Department may present | 5 | | testimony relevant to the investigation. Cross-examination | 6 | | shall be conducted only by the Director or his representative. | 7 | | The company and the Department shall be permitted to make | 8 | | closing statements and may be represented by counsel of their | 9 | | choice. | 10 | | (e) Publication and use. Upon the adoption of the | 11 | | examination report under paragraph (1) of subsection (c), the | 12 | | Director shall continue to hold the content of the examination | 13 | | report as private and confidential information for a period of | 14 | | 35 days, except to the extent provided in subsection (b). | 15 | | Thereafter, the Director may open the report for public | 16 | | inspection so long as no court of competent jurisdiction has | 17 | | stayed its publication. | 18 | | Nothing contained in this Code shall prevent or be | 19 | | construed as prohibiting the Director from disclosing the | 20 | | content of an examination report, preliminary examination | 21 | | report or results, or any matter relating thereto, to the | 22 | | insurance department of any other state or country or to law | 23 | | enforcement officials of this or any other state or agency of | 24 | | the federal government at any time, so long as the agency or | 25 | | office receiving the report or matters relating thereto agrees | 26 | | in writing to hold it confidential and in a manner consistent |
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| 1 | | with this Code. | 2 | | In the event the Director determines that regulatory | 3 | | action is appropriate as a result of any examination, he may | 4 | | initiate any proceedings or actions as provided by law. | 5 | | (f) Confidentiality of ancillary information. All working | 6 | | papers, recorded information, documents, and copies thereof | 7 | | produced by, obtained by, or disclosed to the Director or any | 8 | | other person in the course of any examination must be given | 9 | | confidential treatment, are not subject to subpoena, and may | 10 | | not be made public by the Director or any other persons, except | 11 | | to the extent provided in subsection (e). Access may also be | 12 | | granted to the National Association of Insurance | 13 | | Commissioners. Those parties must agree in writing before | 14 | | receiving the information to provide to it the same | 15 | | confidential treatment as required by this Section, unless the | 16 | | prior written consent of the company to which it pertains has | 17 | | been obtained. | 18 | | This subsection (f) applies to market conduct examinations | 19 | | described in Section 132 of this Code. | 20 | | (g) Disclosure. Nothing contained in this Code shall | 21 | | prevent or be construed as prohibiting the Director from | 22 | | disclosing the information described in subsections (e) and | 23 | | (f) to the Illinois Insurance Guaranty Fund regarding any | 24 | | member company defined in Section 534.5 if the member company | 25 | | has an authorized control level event as defined in Section | 26 | | 35A-25. The Director may disclose the information described in |
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| 1 | | this subsection so long as the Fund agrees in writing to hold | 2 | | that information confidential, in a manner consistent with | 3 | | this Code, and uses that information to prepare for the | 4 | | possible liquidation of the member company. Access to the | 5 | | information disclosed by the Director to the Fund shall be | 6 | | limited to the Fund's staff and its counsel. The Board of | 7 | | Directors of the Fund may have access to the information | 8 | | disclosed by the Director to the Fund once the member company | 9 | | is subject to a delinquency proceeding under Article XIII | 10 | | subject to any terms and conditions established by the | 11 | | Director. | 12 | | (Source: P.A. 102-929, eff. 5-27-22.) | | | | 13 | | (215 ILCS 5/155.35) | 14 | | Sec. 155.35. Insurance compliance self-evaluative | 15 | | privilege. | 16 | | (a) To encourage insurance companies and persons | 17 | | conducting activities regulated under this Code, both to | 18 | | conduct voluntary internal audits of their compliance programs | 19 | | and management systems and to assess and improve compliance | 20 | | with State and federal statutes, rules, and orders, an | 21 | | insurance compliance self-evaluative privilege is recognized | 22 | | to protect the confidentiality of communications relating to | 23 | | voluntary internal compliance audits. The General Assembly | 24 | | hereby finds and declares that protection of insurance | 25 | | consumers is enhanced by companies' voluntary compliance with |
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| 1 | | this State's insurance and other laws and that the public will | 2 | | benefit from incentives to identify and remedy insurance and | 3 | | other compliance issues. It is further declared that limited | 4 | | expansion of the protection against disclosure will encourage | 5 | | voluntary compliance and improve insurance market conduct | 6 | | quality and that the voluntary provisions of this Section will | 7 | | not inhibit the exercise of the regulatory authority by those | 8 | | entrusted with protecting insurance consumers. | 9 | | (b)(1) An insurance compliance self-evaluative audit | 10 | | document is privileged information and is not admissible as | 11 | | evidence in any legal action in any civil, criminal, or | 12 | | administrative proceeding, except as provided in subsections | 13 | | (c) and (d) of this Section. Documents, communications, data, | 14 | | reports, or other information created as a result of a claim | 15 | | involving personal injury or workers' compensation made | 16 | | against an insurance policy are not insurance compliance | 17 | | self-evaluative audit documents and are admissible as evidence | 18 | | in civil proceedings as otherwise provided by applicable rules | 19 | | of evidence or civil procedure, subject to any applicable | 20 | | statutory or common law privilege, including , but not limited | 21 | | to , the work product doctrine, the attorney-client privilege, | 22 | | or the subsequent remedial measures exclusion. | 23 | | (2) If any company, person, or entity performs or directs | 24 | | the performance of an insurance compliance audit, an officer | 25 | | or employee involved with the insurance compliance audit, or | 26 | | any consultant who is hired for the purpose of performing the |
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| 1 | | insurance compliance audit, may not be examined in any civil, | 2 | | criminal, or administrative proceeding as to the insurance | 3 | | compliance audit or any insurance compliance self-evaluative | 4 | | audit document, as defined in this Section. This subsection | 5 | | (b)(2) does not apply if the privilege set forth in subsection | 6 | | (b)(1) of this Section is determined under subsection (c) or | 7 | | (d) not to apply. | 8 | | (3) A company may voluntarily submit, in connection with | 9 | | examinations conducted under this Article, an insurance | 10 | | compliance self-evaluative audit document to the Director, or | 11 | | his or her designee, as a confidential document under | 12 | | subsection (i) of Section 132 or subsection (f) of Section | 13 | | 132.5 of this Code without waiving the privilege set forth in | 14 | | this Section to which the company would otherwise be entitled; | 15 | | provided, however, that the provisions in Sections 132 and | 16 | | subsection (f) of Section 132.5 permitting the Director to | 17 | | make confidential documents public pursuant to subsection (e) | 18 | | of Section 132.5 and grant access to the National Association | 19 | | of Insurance Commissioners shall not apply to the insurance | 20 | | compliance self-evaluative audit document so voluntarily | 21 | | submitted. Nothing contained in this subsection shall give the | 22 | | Director any authority to compel a company to disclose | 23 | | involuntarily or otherwise provide an insurance compliance | 24 | | self-evaluative audit document. | 25 | | (c)(1) The privilege set forth in subsection (b) of this | 26 | | Section does not apply to the extent that it is expressly |
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| 1 | | waived by the company that prepared or caused to be prepared | 2 | | the insurance compliance self-evaluative audit document. | 3 | | (2) In a civil or administrative proceeding, a court of | 4 | | record may, after an in camera review, require disclosure of | 5 | | material for which the privilege set forth in subsection (b) | 6 | | of this Section is asserted, if the court determines one of the | 7 | | following: | 8 | | (A) the privilege is asserted for a fraudulent | 9 | | purpose; | 10 | | (B) the material is not subject to the privilege; or | 11 | | (C) even if subject to the privilege, the material | 12 | | shows evidence of noncompliance with State and federal | 13 | | statutes, rules and orders and the company failed to | 14 | | undertake reasonable corrective action or eliminate the | 15 | | noncompliance within a reasonable time. | 16 | | (3) In a criminal proceeding, a court of record may, after | 17 | | an in camera review, require disclosure of material for which | 18 | | the privilege described in subsection (b) of this Section is | 19 | | asserted, if the court determines one of the following: | 20 | | (A) the privilege is asserted for a fraudulent | 21 | | purpose; | 22 | | (B) the material is not subject to the privilege; | 23 | | (C) even if subject to the privilege, the material | 24 | | shows evidence of noncompliance with State and federal | 25 | | statutes, rules and orders and the company failed to | 26 | | undertake reasonable corrective action or eliminate such |
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| 1 | | noncompliance within a reasonable time; or | 2 | | (D) the material contains evidence relevant to | 3 | | commission of a criminal offense under this Code, and all | 4 | | of the following factors are present: | 5 | | (i) the Director, State's Attorney, or Attorney | 6 | | General has a compelling need for the information; | 7 | | (ii) the information is not otherwise available; | 8 | | and | 9 | | (iii) the Director, State's Attorney, or Attorney | 10 | | General is unable to obtain the substantial equivalent | 11 | | of the information by any means without incurring | 12 | | unreasonable cost and delay. | 13 | | (d)(1) Within 30 days after the Director, State's | 14 | | Attorney, or Attorney General makes a written request by | 15 | | certified mail for disclosure of an insurance compliance | 16 | | self-evaluative audit document under this subsection, the | 17 | | company that prepared or caused the document to be prepared | 18 | | may file with the appropriate court a petition requesting an | 19 | | in camera hearing on whether the insurance compliance | 20 | | self-evaluative audit document or portions of the document are | 21 | | privileged under this Section or subject to disclosure. The | 22 | | court has jurisdiction over a petition filed by a company | 23 | | under this subsection requesting an in camera hearing on | 24 | | whether the insurance compliance self-evaluative audit | 25 | | document or portions of the document are privileged or subject | 26 | | to disclosure. Failure by the company to file a petition |
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| 1 | | waives the privilege. | 2 | | (2) A company asserting the insurance compliance | 3 | | self-evaluative privilege in response to a request for | 4 | | disclosure under this subsection shall include in its request | 5 | | for an in camera hearing all of the information set forth in | 6 | | subsection (d)(5) of this Section. | 7 | | (3) Upon the filing of a petition under this subsection, | 8 | | the court shall issue an order scheduling, within 45 days | 9 | | after the filing of the petition, an in camera hearing to | 10 | | determine whether the insurance compliance self-evaluative | 11 | | audit document or portions of the document are privileged | 12 | | under this Section or subject to disclosure. | 13 | | (4) The court, after an in camera review, may require | 14 | | disclosure of material for which the privilege in subsection | 15 | | (b) of this Section is asserted if the court determines, based | 16 | | upon its in camera review, that any one of the conditions set | 17 | | forth in subsection (c)(2)(A) through (C) is applicable as to | 18 | | a civil or administrative proceeding or that any one of the | 19 | | conditions set forth in subsection (c)(3)(A) through (D) is | 20 | | applicable as to a criminal proceeding. Upon making such a | 21 | | determination, the court may only compel the disclosure of | 22 | | those portions of an insurance compliance self-evaluative | 23 | | audit document relevant to issues in dispute in the underlying | 24 | | proceeding. Any compelled disclosure will not be considered to | 25 | | be a public document or be deemed to be a waiver of the | 26 | | privilege for any other civil, criminal, or administrative |
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| 1 | | proceeding. A party unsuccessfully opposing disclosure may | 2 | | apply to the court for an appropriate order protecting the | 3 | | document from further disclosure. | 4 | | (5) A company asserting the insurance compliance | 5 | | self-evaluative privilege in response to a request for | 6 | | disclosure under this subsection (d) shall provide to the | 7 | | Director, State's Attorney, or Attorney General, as the case | 8 | | may be, at the time of filing any objection to the disclosure, | 9 | | all of the following information: | 10 | | (A) The date of the insurance compliance | 11 | | self-evaluative audit document. | 12 | | (B) The identity of the entity conducting the audit. | 13 | | (C) The general nature of the activities covered by | 14 | | the insurance compliance audit. | 15 | | (D) An identification of the portions of the insurance | 16 | | compliance self-evaluative audit document for which the | 17 | | privilege is being asserted. | 18 | | (e) (1) A company asserting the insurance compliance | 19 | | self-evaluative privilege set forth in subsection (b) of this | 20 | | Section has the burden of demonstrating the applicability of | 21 | | the privilege. Once a company has established the | 22 | | applicability of the privilege, a party seeking disclosure | 23 | | under subsections (c)(2)(A) or (C) of this Section has the | 24 | | burden of proving that the privilege is asserted for a | 25 | | fraudulent purpose or that the company failed to undertake | 26 | | reasonable corrective action or eliminate the noncompliance |
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| 1 | | with a reasonable time. The Director, State's Attorney, or | 2 | | Attorney General seeking disclosure under subsection (c)(3) of | 3 | | this Section has the burden of proving the elements set forth | 4 | | in subsection (c)(3) of this Section. | 5 | | (2) The parties may at any time stipulate in proceedings | 6 | | under subsections (c) or (d) of this Section to entry of an | 7 | | order directing that specific information contained in an | 8 | | insurance compliance self-evaluative audit document is or is | 9 | | not subject to the privilege provided under subsection (b) of | 10 | | this Section. | 11 | | (f) The privilege set forth in subsection (b) of this | 12 | | Section shall not extend to any of the following: | 13 | | (1) documents, communications, data, reports, or other | 14 | | information required to be collected, developed, | 15 | | maintained, reported, or otherwise made available to a | 16 | | regulatory agency pursuant to this Code, or other federal | 17 | | or State law, rule, or order; | 18 | | (2) information obtained by observation or monitoring | 19 | | by any regulatory agency; or | 20 | | (3) information obtained from a source independent of | 21 | | the insurance compliance audit. | 22 | | (g) As used in this Section: | 23 | | (1) "Insurance compliance audit" means a voluntary, | 24 | | internal evaluation, review, assessment, or audit not | 25 | | otherwise expressly required by law of a company or an | 26 | | activity regulated under this Code, or other State or |
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| 1 | | federal law applicable to a company, or of management | 2 | | systems related to the company or activity, that is | 3 | | designed to identify and prevent noncompliance and to | 4 | | improve compliance with those statutes, rules, or orders. | 5 | | An insurance compliance audit may be conducted by the | 6 | | company, its employees, or by independent contractors. | 7 | | (2) "Insurance compliance self-evaluative audit | 8 | | document" means documents prepared as a result of or in | 9 | | connection with and not prior to an insurance compliance | 10 | | audit. An insurance compliance self-evaluation audit | 11 | | document may include a written response to the findings of | 12 | | an insurance compliance audit. An insurance compliance | 13 | | self-evaluative audit document may include, but is not | 14 | | limited to, as applicable, field notes and records of | 15 | | observations, findings, opinions, suggestions, | 16 | | conclusions, drafts, memoranda, drawings, photographs, | 17 | | computer-generated or electronically recorded | 18 | | information, phone records, maps, charts, graphs, and | 19 | | surveys, provided this supporting information is collected | 20 | | or developed for the primary purpose and in the course of | 21 | | an insurance compliance audit. An insurance compliance | 22 | | self-evaluative audit document may also include any of the | 23 | | following: | 24 | | (A) an insurance compliance audit report prepared | 25 | | by an auditor, who may be an employee of the company or | 26 | | an independent contractor, which may include the scope |
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| 1 | | of the audit, the information gained in the audit, and | 2 | | conclusions and recommendations, with exhibits and | 3 | | appendices; | 4 | | (B) memoranda and documents analyzing portions or | 5 | | all of the insurance compliance audit report and | 6 | | discussing potential implementation issues; | 7 | | (C) an implementation plan that addresses | 8 | | correcting past noncompliance, improving current | 9 | | compliance, and preventing future noncompliance; or | 10 | | (D) analytic data generated in the course of | 11 | | conducting the insurance compliance audit. | 12 | | (3) "Company" has the same meaning as provided in | 13 | | Section 2 of this Code. | 14 | | (h) Nothing in this Section shall limit, waive, or | 15 | | abrogate the scope or nature of any statutory or common law | 16 | | privilege including, but not limited to, the work product | 17 | | doctrine, the attorney-client privilege, or the subsequent | 18 | | remedial measures exclusion. | 19 | | (Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.) | | | | 20 | | (215 ILCS 5/402) (from Ch. 73, par. 1014) | 21 | | Sec. 402. Examinations, investigations and hearings. (1) | 22 | | All examinations, investigations and hearings provided for by | 23 | | this Code may be conducted either by the Director personally, | 24 | | or by one or more of the actuaries, technical advisors, | 25 | | deputies, supervisors or examiners employed or retained by the |
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| 1 | | Department and designated by the Director for such purpose. | 2 | | When necessary to supplement its examination procedures, the | 3 | | Department may retain independent actuaries deemed competent | 4 | | by the Director, independent certified public accountants, or | 5 | | qualified examiners of insurance companies , or other qualified | 6 | | outside professional assistance deemed competent by the | 7 | | Director, or any combination of the foregoing, the cost of | 8 | | which shall be borne by the company or person being examined. | 9 | | The Director may compensate independent actuaries, certified | 10 | | public accountants , and qualified examiners , and other | 11 | | qualified outside professional assistance retained for | 12 | | supplementing examination procedures in amounts not to exceed | 13 | | the reasonable and customary charges for such services. The | 14 | | Director may also accept as a part of the Department's | 15 | | examination of any company or person (a) a report by an | 16 | | independent actuary deemed competent by the Director or (b) a | 17 | | report of an audit made by an independent certified public | 18 | | accountant. Neither those persons so designated nor any | 19 | | members of their immediate families shall be officers of, | 20 | | connected with, or financially interested in any company other | 21 | | than as policyholders, nor shall they be financially | 22 | | interested in any other corporation or person affected by the | 23 | | examination, investigation or hearing. | 24 | | (2) All hearings provided for in this Code shall, unless | 25 | | otherwise specially provided, be held at such time and place | 26 | | as shall be designated in a notice which shall be given by the |
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| 1 | | Director in writing to the person or company whose interests | 2 | | are affected, at least 10 days before the date designated | 3 | | therein. The notice shall state the subject of inquiry and the | 4 | | specific charges, if any. The hearings shall be held in the | 5 | | City of Springfield, the City of Chicago, or in the county | 6 | | where the principal business address of the person or company | 7 | | affected is located. | 8 | | (Source: P.A. 87-757.) | | | | 9 | | (215 ILCS 5/408) (from Ch. 73, par. 1020) | 10 | | (Text of Section before amendment by P.A. 103-75 ) | 11 | | Sec. 408. Fees and charges. | 12 | | (1) The Director shall charge, collect and give proper | 13 | | acquittances for the payment of the following fees and | 14 | | charges: | 15 | | (a) For filing all documents submitted for the | 16 | | incorporation or organization or certification of a | 17 | | domestic company, except for a fraternal benefit society, | 18 | | $2,000. | 19 | | (b) For filing all documents submitted for the | 20 | | incorporation or organization of a fraternal benefit | 21 | | society, $500. | 22 | | (c) For filing amendments to articles of incorporation | 23 | | and amendments to declaration of organization, except for | 24 | | a fraternal benefit society, a mutual benefit association, | 25 | | a burial society or a farm mutual, $200. |
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| 1 | | (d) For filing amendments to articles of incorporation | 2 | | of a fraternal benefit society, a mutual benefit | 3 | | association or a burial society, $100. | 4 | | (e) For filing amendments to articles of incorporation | 5 | | of a farm mutual, $50. | 6 | | (f) For filing bylaws or amendments thereto, $50. | 7 | | (g) For filing agreement of merger or consolidation: | 8 | | (i) for a domestic company, except for a fraternal | 9 | | benefit society, a mutual benefit association, a | 10 | | burial society, or a farm mutual, $2,000. | 11 | | (ii) for a foreign or alien company, except for a | 12 | | fraternal benefit society, $600. | 13 | | (iii) for a fraternal benefit society, a mutual | 14 | | benefit association, a burial society, or a farm | 15 | | mutual, $200. | 16 | | (h) For filing agreements of reinsurance by a domestic | 17 | | company, $200. | 18 | | (i) For filing all documents submitted by a foreign or | 19 | | alien company to be admitted to transact business or | 20 | | accredited as a reinsurer in this State, except for a | 21 | | fraternal benefit society, $5,000. | 22 | | (j) For filing all documents submitted by a foreign or | 23 | | alien fraternal benefit society to be admitted to transact | 24 | | business in this State, $500. | 25 | | (k) For filing declaration of withdrawal of a foreign | 26 | | or alien company, $50. |
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| 1 | | (l) For filing annual statement by a domestic company, | 2 | | except a fraternal benefit society, a mutual benefit | 3 | | association, a burial society, or a farm mutual, $200. | 4 | | (m) For filing annual statement by a domestic | 5 | | fraternal benefit society, $100. | 6 | | (n) For filing annual statement by a farm mutual, a | 7 | | mutual benefit association, or a burial society, $50. | 8 | | (o) For issuing a certificate of authority or renewal | 9 | | thereof except to a foreign fraternal benefit society, | 10 | | $400. | 11 | | (p) For issuing a certificate of authority or renewal | 12 | | thereof to a foreign fraternal benefit society, $200. | 13 | | (q) For issuing an amended certificate of authority, | 14 | | $50. | 15 | | (r) For each certified copy of certificate of | 16 | | authority, $20. | 17 | | (s) For each certificate of deposit, or valuation, or | 18 | | compliance or surety certificate, $20. | 19 | | (t) For copies of papers or records per page, $1. | 20 | | (u) For each certification to copies of papers or | 21 | | records, $10. | 22 | | (v) For multiple copies of documents or certificates | 23 | | listed in subparagraphs (r), (s), and (u) of paragraph (1) | 24 | | of this Section, $10 for the first copy of a certificate of | 25 | | any type and $5 for each additional copy of the same | 26 | | certificate requested at the same time, unless, pursuant |
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| 1 | | to paragraph (2) of this Section, the Director finds these | 2 | | additional fees excessive. | 3 | | (w) For issuing a permit to sell shares or increase | 4 | | paid-up capital: | 5 | | (i) in connection with a public stock offering, | 6 | | $300; | 7 | | (ii) in any other case, $100. | 8 | | (x) For issuing any other certificate required or | 9 | | permissible under the law, $50. | 10 | | (y) For filing a plan of exchange of the stock of a | 11 | | domestic stock insurance company, a plan of | 12 | | demutualization of a domestic mutual company, or a plan of | 13 | | reorganization under Article XII, $2,000. | 14 | | (z) For filing a statement of acquisition of a | 15 | | domestic company as defined in Section 131.4 of this Code, | 16 | | $2,000. | 17 | | (aa) For filing an agreement to purchase the business | 18 | | of an organization authorized under the Dental Service | 19 | | Plan Act or the Voluntary Health Services Plans Act or of a | 20 | | health maintenance organization or a limited health | 21 | | service organization, $2,000. | 22 | | (bb) For filing a statement of acquisition of a | 23 | | foreign or alien insurance company as defined in Section | 24 | | 131.12a of this Code, $1,000. | 25 | | (cc) For filing a registration statement as required | 26 | | in Sections 131.13 and 131.14, the notification as |
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| 1 | | required by Sections 131.16, 131.20a, or 141.4, or an | 2 | | agreement or transaction required by Sections 124.2(2), | 3 | | 141, 141a, or 141.1, $200. | 4 | | (dd) For filing an application for licensing of: | 5 | | (i) a religious or charitable risk pooling trust | 6 | | or a workers' compensation pool, $1,000; | 7 | | (ii) a workers' compensation service company, | 8 | | $500; | 9 | | (iii) a self-insured automobile fleet, $200; or | 10 | | (iv) a renewal of or amendment of any license | 11 | | issued pursuant to (i), (ii), or (iii) above, $100. | 12 | | (ee) For filing articles of incorporation for a | 13 | | syndicate to engage in the business of insurance through | 14 | | the Illinois Insurance Exchange, $2,000. | 15 | | (ff) For filing amended articles of incorporation for | 16 | | a syndicate engaged in the business of insurance through | 17 | | the Illinois Insurance Exchange, $100. | 18 | | (gg) For filing articles of incorporation for a | 19 | | limited syndicate to join with other subscribers or | 20 | | limited syndicates to do business through the Illinois | 21 | | Insurance Exchange, $1,000. | 22 | | (hh) For filing amended articles of incorporation for | 23 | | a limited syndicate to do business through the Illinois | 24 | | Insurance Exchange, $100. | 25 | | (ii) For a permit to solicit subscriptions to a | 26 | | syndicate or limited syndicate, $100. |
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| 1 | | (jj) For the filing of each form as required in | 2 | | Section 143 of this Code, $50 per form. Informational and | 3 | | advertising filings shall be $25 per filing. The fee for | 4 | | advisory and rating organizations shall be $200 per form. | 5 | | (i) For the purposes of the form filing fee, | 6 | | filings made on insert page basis will be considered | 7 | | one form at the time of its original submission. | 8 | | Changes made to a form subsequent to its approval | 9 | | shall be considered a new filing. | 10 | | (ii) Only one fee shall be charged for a form, | 11 | | regardless of the number of other forms or policies | 12 | | with which it will be used. | 13 | | (iii) Fees charged for a policy filed as it will be | 14 | | issued regardless of the number of forms comprising | 15 | | that policy shall not exceed $1,500. For advisory or | 16 | | rating organizations, fees charged for a policy filed | 17 | | as it will be issued regardless of the number of forms | 18 | | comprising that policy shall not exceed $2,500. | 19 | | (iv) The Director may by rule exempt forms from | 20 | | such fees. | 21 | | (kk) For filing an application for licensing of a | 22 | | reinsurance intermediary, $500. | 23 | | (ll) For filing an application for renewal of a | 24 | | license of a reinsurance intermediary, $200. | 25 | | (mm) For filing a plan of division of a domestic stock | 26 | | company under Article IIB, $10,000. |
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| 1 | | (nn) For filing all documents submitted by a foreign | 2 | | or alien company to be a certified reinsurer in this | 3 | | State, except for a fraternal benefit society, $1,000. | 4 | | (oo) For filing a renewal by a foreign or alien | 5 | | company to be a certified reinsurer in this State, except | 6 | | for a fraternal benefit society, $400. | 7 | | (pp) For filing all documents submitted by a reinsurer | 8 | | domiciled in a reciprocal jurisdiction, $1,000. | 9 | | (qq) For filing a renewal by a reinsurer domiciled in | 10 | | a reciprocal jurisdiction, $400. | 11 | | (rr) For registering a captive management company or | 12 | | renewal thereof, $50. | 13 | | (2) When printed copies or numerous copies of the same | 14 | | paper or records are furnished or certified, the Director may | 15 | | reduce such fees for copies if he finds them excessive. He may, | 16 | | when he considers it in the public interest, furnish without | 17 | | charge to state insurance departments and persons other than | 18 | | companies, copies or certified copies of reports of | 19 | | examinations and of other papers and records. | 20 | | (3) (a) The expenses incurred in any performance | 21 | | examination authorized by law shall be paid by the company or | 22 | | person being examined. The charge shall be consistent with | 23 | | that otherwise authorized by law and shall be reasonably | 24 | | related to the cost of the examination including but not | 25 | | limited to compensation of examiners, electronic data | 26 | | processing costs, supervision and preparation of an |
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| 1 | | examination report and lodging and travel expenses. All | 2 | | lodging and travel expenses shall be in accord with the | 3 | | applicable travel regulations as published by the Department | 4 | | of Central Management Services and approved by the Governor's | 5 | | Travel Control Board, except that out-of-state lodging and | 6 | | travel expenses related to examinations authorized under | 7 | | Section 132 shall be in accordance with travel rates | 8 | | prescribed under paragraph 301-7.2 of the Federal Travel | 9 | | Regulations, 41 C.F.R. 301-7.2, for reimbursement of | 10 | | subsistence expenses incurred during official travel. All | 11 | | lodging and travel expenses may be reimbursed directly upon | 12 | | authorization of the Director. With the exception of the | 13 | | direct reimbursements authorized by the Director, all | 14 | | performance examination charges collected by the Department | 15 | | shall be paid to the Insurance Producer Administration Fund, | 16 | | however, the electronic data processing costs incurred by the | 17 | | Department in the performance of any examination shall be | 18 | | billed directly to the company being examined for payment to | 19 | | the Technology Management Revolving Fund. | 20 | | (b) The costs and fees incurred in a market conduct | 21 | | examination shall be itemized and bills shall be provided to | 22 | | the examinee on a monthly basis for review prior to submission | 23 | | for payment. The Director shall review and affirmatively | 24 | | endorse detailed billings from any contracted, qualified | 25 | | outside professional assistance retained under Section 402 for | 26 | | market conduct examinations before the detailed billings are |
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| 1 | | sent to the examinee. Before any qualified outside | 2 | | professional assistance conducts billable work on an | 3 | | examination, the Department shall disclose to the examinee the | 4 | | terms of the contracts with the qualified outside professional | 5 | | assistance that will be used, including the fees and hourly | 6 | | rates that can be charged. | 7 | | (4) At the time of any service of process on the Director | 8 | | as attorney for such service, the Director shall charge and | 9 | | collect the sum of $40, which may be recovered as taxable costs | 10 | | by the party to the suit or action causing such service to be | 11 | | made if he prevails in such suit or action. | 12 | | (5) (a) The costs incurred by the Department of Insurance | 13 | | in conducting any hearing authorized by law shall be assessed | 14 | | against the parties to the hearing in such proportion as the | 15 | | Director of Insurance may determine upon consideration of all | 16 | | relevant circumstances including: (1) the nature of the | 17 | | hearing; (2) whether the hearing was instigated by, or for the | 18 | | benefit of a particular party or parties; (3) whether there is | 19 | | a successful party on the merits of the proceeding; and (4) the | 20 | | relative levels of participation by the parties. | 21 | | (b) For purposes of this subsection (5) costs incurred | 22 | | shall mean the hearing officer fees, court reporter fees, and | 23 | | travel expenses of Department of Insurance officers and | 24 | | employees; provided however, that costs incurred shall not | 25 | | include hearing officer fees or court reporter fees unless the | 26 | | Department has retained the services of independent |
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| 1 | | contractors or outside experts to perform such functions. | 2 | | (c) The Director shall make the assessment of costs | 3 | | incurred as part of the final order or decision arising out of | 4 | | the proceeding; provided, however, that such order or decision | 5 | | shall include findings and conclusions in support of the | 6 | | assessment of costs. This subsection (5) shall not be | 7 | | construed as permitting the payment of travel expenses unless | 8 | | calculated in accordance with the applicable travel | 9 | | regulations of the Department of Central Management Services, | 10 | | as approved by the Governor's Travel Control Board. The | 11 | | Director as part of such order or decision shall require all | 12 | | assessments for hearing officer fees and court reporter fees, | 13 | | if any, to be paid directly to the hearing officer or court | 14 | | reporter by the party(s) assessed for such costs. The | 15 | | assessments for travel expenses of Department officers and | 16 | | employees shall be reimbursable to the Director of Insurance | 17 | | for deposit to the fund out of which those expenses had been | 18 | | paid. | 19 | | (d) The provisions of this subsection (5) shall apply in | 20 | | the case of any hearing conducted by the Director of Insurance | 21 | | not otherwise specifically provided for by law. | 22 | | (6) The Director shall charge and collect an annual | 23 | | financial regulation fee from every domestic company for | 24 | | examination and analysis of its financial condition and to | 25 | | fund the internal costs and expenses of the Interstate | 26 | | Insurance Receivership Commission as may be allocated to the |
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| 1 | | State of Illinois and companies doing an insurance business in | 2 | | this State pursuant to Article X of the Interstate Insurance | 3 | | Receivership Compact. The fee shall be the greater fixed | 4 | | amount based upon the combination of nationwide direct premium | 5 | | income and nationwide reinsurance assumed premium income or | 6 | | upon admitted assets calculated under this subsection as | 7 | | follows: | 8 | | (a) Combination of nationwide direct premium income | 9 | | and nationwide reinsurance assumed premium. | 10 | | (i) $150, if the premium is less than $500,000 and | 11 | | there is no reinsurance assumed premium; | 12 | | (ii) $750, if the premium is $500,000 or more, but | 13 | | less than $5,000,000 and there is no reinsurance | 14 | | assumed premium; or if the premium is less than | 15 | | $5,000,000 and the reinsurance assumed premium is less | 16 | | than $10,000,000; | 17 | | (iii) $3,750, if the premium is less than | 18 | | $5,000,000 and the reinsurance assumed premium is | 19 | | $10,000,000 or more; | 20 | | (iv) $7,500, if the premium is $5,000,000 or more, | 21 | | but less than $10,000,000; | 22 | | (v) $18,000, if the premium is $10,000,000 or | 23 | | more, but less than $25,000,000; | 24 | | (vi) $22,500, if the premium is $25,000,000 or | 25 | | more, but less than $50,000,000; | 26 | | (vii) $30,000, if the premium is $50,000,000 or |
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| 1 | | more, but less than $100,000,000; | 2 | | (viii) $37,500, if the premium is $100,000,000 or | 3 | | more. | 4 | | (b) Admitted assets. | 5 | | (i) $150, if admitted assets are less than | 6 | | $1,000,000; | 7 | | (ii) $750, if admitted assets are $1,000,000 or | 8 | | more, but less than $5,000,000; | 9 | | (iii) $3,750, if admitted assets are $5,000,000 or | 10 | | more, but less than $25,000,000; | 11 | | (iv) $7,500, if admitted assets are $25,000,000 or | 12 | | more, but less than $50,000,000; | 13 | | (v) $18,000, if admitted assets are $50,000,000 or | 14 | | more, but less than $100,000,000; | 15 | | (vi) $22,500, if admitted assets are $100,000,000 | 16 | | or more, but less than $500,000,000; | 17 | | (vii) $30,000, if admitted assets are $500,000,000 | 18 | | or more, but less than $1,000,000,000; | 19 | | (viii) $37,500, if admitted assets are | 20 | | $1,000,000,000 or more. | 21 | | (c) The sum of financial regulation fees charged to | 22 | | the domestic companies of the same affiliated group shall | 23 | | not exceed $250,000 in the aggregate in any single year | 24 | | and shall be billed by the Director to the member company | 25 | | designated by the group. | 26 | | (7) The Director shall charge and collect an annual |
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| 1 | | financial regulation fee from every foreign or alien company, | 2 | | except fraternal benefit societies, for the examination and | 3 | | analysis of its financial condition and to fund the internal | 4 | | costs and expenses of the Interstate Insurance Receivership | 5 | | Commission as may be allocated to the State of Illinois and | 6 | | companies doing an insurance business in this State pursuant | 7 | | to Article X of the Interstate Insurance Receivership Compact. | 8 | | The fee shall be a fixed amount based upon Illinois direct | 9 | | premium income and nationwide reinsurance assumed premium | 10 | | income in accordance with the following schedule: | 11 | | (a) $150, if the premium is less than $500,000 and | 12 | | there is no reinsurance assumed premium; | 13 | | (b) $750, if the premium is $500,000 or more, but less | 14 | | than $5,000,000 and there is no reinsurance assumed | 15 | | premium; or if the premium is less than $5,000,000 and the | 16 | | reinsurance assumed premium is less than $10,000,000; | 17 | | (c) $3,750, if the premium is less than $5,000,000 and | 18 | | the reinsurance assumed premium is $10,000,000 or more; | 19 | | (d) $7,500, if the premium is $5,000,000 or more, but | 20 | | less than $10,000,000; | 21 | | (e) $18,000, if the premium is $10,000,000 or more, | 22 | | but less than $25,000,000; | 23 | | (f) $22,500, if the premium is $25,000,000 or more, | 24 | | but less than $50,000,000; | 25 | | (g) $30,000, if the premium is $50,000,000 or more, | 26 | | but less than $100,000,000; |
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| 1 | | (h) $37,500, if the premium is $100,000,000 or more. | 2 | | The sum of financial regulation fees under this subsection | 3 | | (7) charged to the foreign or alien companies within the same | 4 | | affiliated group shall not exceed $250,000 in the aggregate in | 5 | | any single year and shall be billed by the Director to the | 6 | | member company designated by the group. | 7 | | (8) Beginning January 1, 1992, the financial regulation | 8 | | fees imposed under subsections (6) and (7) of this Section | 9 | | shall be paid by each company or domestic affiliated group | 10 | | annually. After January 1, 1994, the fee shall be billed by | 11 | | Department invoice based upon the company's premium income or | 12 | | admitted assets as shown in its annual statement for the | 13 | | preceding calendar year. The invoice is due upon receipt and | 14 | | must be paid no later than June 30 of each calendar year. All | 15 | | financial regulation fees collected by the Department shall be | 16 | | paid to the Insurance Financial Regulation Fund. The | 17 | | Department may not collect financial examiner per diem charges | 18 | | from companies subject to subsections (6) and (7) of this | 19 | | Section undergoing financial examination after June 30, 1992. | 20 | | (9) In addition to the financial regulation fee required | 21 | | by this Section, a company undergoing any financial | 22 | | examination authorized by law shall pay the following costs | 23 | | and expenses incurred by the Department: electronic data | 24 | | processing costs, the expenses authorized under Section 131.21 | 25 | | and subsection (d) of Section 132.4 of this Code, and lodging | 26 | | and travel expenses. |
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| 1 | | Electronic data processing costs incurred by the | 2 | | Department in the performance of any examination shall be | 3 | | billed directly to the company undergoing examination for | 4 | | payment to the Technology Management Revolving Fund. Except | 5 | | for direct reimbursements authorized by the Director or direct | 6 | | payments made under Section 131.21 or subsection (d) of | 7 | | Section 132.4 of this Code, all financial regulation fees and | 8 | | all financial examination charges collected by the Department | 9 | | shall be paid to the Insurance Financial Regulation Fund. | 10 | | All lodging and travel expenses shall be in accordance | 11 | | with applicable travel regulations published by the Department | 12 | | of Central Management Services and approved by the Governor's | 13 | | Travel Control Board, except that out-of-state lodging and | 14 | | travel expenses related to examinations authorized under | 15 | | Sections 132.1 through 132.7 shall be in accordance with | 16 | | travel rates prescribed under paragraph 301-7.2 of the Federal | 17 | | Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of | 18 | | subsistence expenses incurred during official travel. All | 19 | | lodging and travel expenses may be reimbursed directly upon | 20 | | the authorization of the Director. | 21 | | In the case of an organization or person not subject to the | 22 | | financial regulation fee, the expenses incurred in any | 23 | | financial examination authorized by law shall be paid by the | 24 | | organization or person being examined. The charge shall be | 25 | | reasonably related to the cost of the examination including, | 26 | | but not limited to, compensation of examiners and other costs |
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| 1 | | described in this subsection. | 2 | | (10) Any company, person, or entity failing to make any | 3 | | payment of $150 or more as required under this Section shall be | 4 | | subject to the penalty and interest provisions provided for in | 5 | | subsections (4) and (7) of Section 412. | 6 | | (11) Unless otherwise specified, all of the fees collected | 7 | | under this Section shall be paid into the Insurance Financial | 8 | | Regulation Fund. | 9 | | (12) For purposes of this Section: | 10 | | (a) "Domestic company" means a company as defined in | 11 | | Section 2 of this Code which is incorporated or organized | 12 | | under the laws of this State, and in addition includes a | 13 | | not-for-profit corporation authorized under the Dental | 14 | | Service Plan Act or the Voluntary Health Services Plans | 15 | | Act, a health maintenance organization, and a limited | 16 | | health service organization. | 17 | | (b) "Foreign company" means a company as defined in | 18 | | Section 2 of this Code which is incorporated or organized | 19 | | under the laws of any state of the United States other than | 20 | | this State and in addition includes a health maintenance | 21 | | organization and a limited health service organization | 22 | | which is incorporated or organized under the laws of any | 23 | | state of the United States other than this State. | 24 | | (c) "Alien company" means a company as defined in | 25 | | Section 2 of this Code which is incorporated or organized | 26 | | under the laws of any country other than the United |
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| 1 | | States. | 2 | | (d) "Fraternal benefit society" means a corporation, | 3 | | society, order, lodge or voluntary association as defined | 4 | | in Section 282.1 of this Code. | 5 | | (e) "Mutual benefit association" means a company, | 6 | | association or corporation authorized by the Director to | 7 | | do business in this State under the provisions of Article | 8 | | XVIII of this Code. | 9 | | (f) "Burial society" means a person, firm, | 10 | | corporation, society or association of individuals | 11 | | authorized by the Director to do business in this State | 12 | | under the provisions of Article XIX of this Code. | 13 | | (g) "Farm mutual" means a district, county and | 14 | | township mutual insurance company authorized by the | 15 | | Director to do business in this State under the provisions | 16 | | of the Farm Mutual Insurance Company Act of 1986. | 17 | | (Source: P.A. 102-775, eff. 5-13-22.) | 18 | | (Text of Section after amendment by P.A. 103-75 ) | 19 | | Sec. 408. Fees and charges. | 20 | | (1) The Director shall charge, collect and give proper | 21 | | acquittances for the payment of the following fees and | 22 | | 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 | 7 | | a fraternal benefit society, a mutual benefit association, | 8 | | a 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 | 13 | | fraternal 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, | 18 | | $400. | 19 | | (p) For issuing a certificate of authority or renewal | 20 | | thereof to a foreign fraternal benefit society, $200. | 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 | 9 | | to 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 | 23 | | domestic company as defined in Section 131.4 of this Code, | 24 | | $2,000. | 25 | | (aa) For filing an agreement to purchase the business | 26 | | of an organization authorized under the Dental Service |
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| 1 | | Plan Act or the Voluntary Health Services Plans Act or of a | 2 | | health maintenance organization or a limited health | 3 | | service organization, $2,000. | 4 | | (bb) For filing a statement of acquisition of a | 5 | | foreign or alien insurance company as defined in Section | 6 | | 131.12a of this Code, $1,000. | 7 | | (cc) For filing a registration statement as required | 8 | | in Sections 131.13 and 131.14, the notification as | 9 | | required by Sections 131.16, 131.20a, or 141.4, or an | 10 | | agreement or transaction required by Sections 124.2(2), | 11 | | 141, 141a, or 141.1, $200. | 12 | | (dd) For filing an application for licensing of: | 13 | | (i) a religious or charitable risk pooling trust | 14 | | or a workers' compensation pool, $1,000; | 15 | | (ii) a workers' compensation service company, | 16 | | $500; | 17 | | (iii) a self-insured automobile fleet, $200; or | 18 | | (iv) a renewal of or amendment of any license | 19 | | issued pursuant to (i), (ii), or (iii) above, $100. | 20 | | (ee) For filing articles of incorporation for a | 21 | | syndicate to engage in the business of insurance through | 22 | | the Illinois Insurance Exchange, $2,000. | 23 | | (ff) For filing amended articles of incorporation for | 24 | | a syndicate engaged in the business of insurance through | 25 | | the Illinois Insurance Exchange, $100. | 26 | | (gg) For filing articles of incorporation for a |
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| 1 | | limited syndicate to join with other subscribers or | 2 | | limited syndicates to do business through the Illinois | 3 | | Insurance Exchange, $1,000. | 4 | | (hh) For filing amended articles of incorporation for | 5 | | a limited syndicate to do business through the Illinois | 6 | | Insurance Exchange, $100. | 7 | | (ii) For a permit to solicit subscriptions to a | 8 | | syndicate or limited syndicate, $100. | 9 | | (jj) For the filing of each form as required in | 10 | | Section 143 of this Code, $50 per form. Informational and | 11 | | advertising filings shall be $25 per filing. The fee for | 12 | | advisory and rating organizations shall be $200 per form. | 13 | | (i) For the purposes of the form filing fee, | 14 | | filings made on insert page basis will be considered | 15 | | one form at the time of its original submission. | 16 | | Changes made to a form subsequent to its approval | 17 | | shall be considered a new filing. | 18 | | (ii) Only one fee shall be charged for a form, | 19 | | regardless of the number of other forms or policies | 20 | | with which it will be used. | 21 | | (iii) Fees charged for a policy filed as it will be | 22 | | issued regardless of the number of forms comprising | 23 | | that policy shall not exceed $1,500. For advisory or | 24 | | rating organizations, fees charged for a policy filed | 25 | | as it will be issued regardless of the number of forms | 26 | | comprising that policy shall not exceed $2,500. |
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| 1 | | (iv) The Director may by rule exempt forms from | 2 | | such fees. | 3 | | (kk) For filing an application for licensing of a | 4 | | reinsurance intermediary, $500. | 5 | | (ll) For filing an application for renewal of a | 6 | | license of a reinsurance intermediary, $200. | 7 | | (mm) For filing a plan of division of a domestic stock | 8 | | company under Article IIB, $10,000. | 9 | | (nn) For filing all documents submitted by a foreign | 10 | | or alien company to be a certified reinsurer in this | 11 | | State, except for a fraternal benefit society, $1,000. | 12 | | (oo) For filing a renewal by a foreign or alien | 13 | | company to be a certified reinsurer in this State, except | 14 | | for a fraternal benefit society, $400. | 15 | | (pp) For filing all documents submitted by a reinsurer | 16 | | domiciled in a reciprocal jurisdiction, $1,000. | 17 | | (qq) For filing a renewal by a reinsurer domiciled in | 18 | | a reciprocal jurisdiction, $400. | 19 | | (rr) For registering a captive management company or | 20 | | renewal thereof, $50. | 21 | | (ss) For filing an insurance business transfer plan | 22 | | under Article XLVII, $25,000. | 23 | | (2) When printed copies or numerous copies of the same | 24 | | paper or records are furnished or certified, the Director may | 25 | | reduce such fees for copies if he finds them excessive. He may, | 26 | | when he considers it in the public interest, furnish without |
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| 1 | | charge to state insurance departments and persons other than | 2 | | companies, copies or certified copies of reports of | 3 | | examinations and of other papers and records. | 4 | | (3) (a) The expenses incurred in any performance | 5 | | examination authorized by law shall be paid by the company or | 6 | | person being examined. The charge shall be consistent with | 7 | | that otherwise authorized by law and shall be reasonably | 8 | | related to the cost of the examination including but not | 9 | | limited to compensation of examiners, electronic data | 10 | | processing costs, supervision and preparation of an | 11 | | examination report and lodging and travel expenses. All | 12 | | lodging and travel expenses shall be in accord with the | 13 | | applicable travel regulations as published by the Department | 14 | | of Central Management Services and approved by the Governor's | 15 | | Travel Control Board, except that out-of-state lodging and | 16 | | travel expenses related to examinations authorized under | 17 | | Section 132 shall be in accordance with travel rates | 18 | | prescribed under paragraph 301-7.2 of the Federal Travel | 19 | | Regulations, 41 C.F.R. 301-7.2, for reimbursement of | 20 | | subsistence expenses incurred during official travel. All | 21 | | lodging and travel expenses may be reimbursed directly upon | 22 | | authorization of the Director. With the exception of the | 23 | | direct reimbursements authorized by the Director, all | 24 | | performance examination charges collected by the Department | 25 | | shall be paid to the Insurance Producer Administration Fund, | 26 | | however, the electronic data processing costs incurred by the |
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| 1 | | Department in the performance of any examination shall be | 2 | | billed directly to the company being examined for payment to | 3 | | the Technology Management Revolving Fund. | 4 | | (b) The costs and fees incurred in a market conduct | 5 | | examination shall be itemized and bills shall be provided to | 6 | | the examinee on a monthly basis for review prior to submission | 7 | | for payment. The Director shall review and affirmatively | 8 | | endorse detailed billings from any contracted, qualified | 9 | | outside professional assistance retained under Section 402 for | 10 | | market conduct examinations before the detailed billings are | 11 | | sent to the examinee. Before any qualified outside | 12 | | professional assistance conducts billable work on an | 13 | | examination, the Department shall disclose to the examinee the | 14 | | terms of the contracts with the qualified outside professional | 15 | | assistance that will be used, including the fees and hourly | 16 | | rates that can be charged. | 17 | | (4) At the time of any service of process on the Director | 18 | | as attorney for such service, the Director shall charge and | 19 | | collect the sum of $40, which may be recovered as taxable costs | 20 | | by the party to the suit or action causing such service to be | 21 | | made if he prevails in such suit or action. | 22 | | (5) (a) The costs incurred by the Department of Insurance | 23 | | in conducting any hearing authorized by law shall be assessed | 24 | | against the parties to the hearing in such proportion as the | 25 | | Director of Insurance may determine upon consideration of all | 26 | | relevant circumstances including: (1) the nature of the |
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| 1 | | hearing; (2) whether the hearing was instigated by, or for the | 2 | | benefit of a particular party or parties; (3) whether there is | 3 | | a successful party on the merits of the proceeding; and (4) the | 4 | | relative levels of participation by the parties. | 5 | | (b) For purposes of this subsection (5) costs incurred | 6 | | shall mean the hearing officer fees, court reporter fees, and | 7 | | travel expenses of Department of Insurance officers and | 8 | | employees; provided however, that costs incurred shall not | 9 | | include hearing officer fees or court reporter fees unless the | 10 | | Department has retained the services of independent | 11 | | contractors or outside experts to perform such functions. | 12 | | (c) The Director shall make the assessment of costs | 13 | | incurred as part of the final order or decision arising out of | 14 | | the proceeding; provided, however, that such order or decision | 15 | | shall include findings and conclusions in support of the | 16 | | assessment of costs. This subsection (5) shall not be | 17 | | construed as permitting the payment of travel expenses unless | 18 | | calculated in accordance with the applicable travel | 19 | | regulations of the Department of Central Management Services, | 20 | | as approved by the Governor's Travel Control Board. The | 21 | | Director as part of such order or decision shall require all | 22 | | assessments for hearing officer fees and court reporter fees, | 23 | | if any, to be paid directly to the hearing officer or court | 24 | | reporter by the party(s) assessed for such costs. The | 25 | | assessments for travel expenses of Department officers and | 26 | | employees shall be reimbursable to the Director of Insurance |
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| 1 | | for deposit to the fund out of which those expenses had been | 2 | | paid. | 3 | | (d) The provisions of this subsection (5) shall apply in | 4 | | the case of any hearing conducted by the Director of Insurance | 5 | | not otherwise specifically provided for by law. | 6 | | (6) The Director shall charge and collect an annual | 7 | | financial regulation fee from every domestic company for | 8 | | examination and analysis of its financial condition and to | 9 | | fund the internal costs and expenses of the Interstate | 10 | | Insurance Receivership Commission as may be allocated to the | 11 | | State of Illinois and companies doing an insurance business in | 12 | | this State pursuant to Article X of the Interstate Insurance | 13 | | Receivership Compact. The fee shall be the greater fixed | 14 | | amount based upon the combination of nationwide direct premium | 15 | | income and nationwide reinsurance assumed premium income or | 16 | | upon admitted assets calculated under this subsection as | 17 | | follows: | 18 | | (a) Combination of nationwide direct premium income | 19 | | and nationwide reinsurance assumed premium. | 20 | | (i) $150, if the premium is less than $500,000 and | 21 | | there is no reinsurance assumed premium; | 22 | | (ii) $750, if the premium is $500,000 or more, but | 23 | | less than $5,000,000 and there is no reinsurance | 24 | | assumed premium; or if the premium is less than | 25 | | $5,000,000 and the reinsurance assumed premium is less | 26 | | than $10,000,000; |
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| 1 | | (iii) $3,750, if the premium is less than | 2 | | $5,000,000 and the reinsurance assumed premium is | 3 | | $10,000,000 or more; | 4 | | (iv) $7,500, if the premium is $5,000,000 or more, | 5 | | but less than $10,000,000; | 6 | | (v) $18,000, if the premium is $10,000,000 or | 7 | | more, but less than $25,000,000; | 8 | | (vi) $22,500, if the premium is $25,000,000 or | 9 | | more, but less than $50,000,000; | 10 | | (vii) $30,000, if the premium is $50,000,000 or | 11 | | more, but less than $100,000,000; | 12 | | (viii) $37,500, if the premium is $100,000,000 or | 13 | | more. | 14 | | (b) Admitted assets. | 15 | | (i) $150, if admitted assets are less than | 16 | | $1,000,000; | 17 | | (ii) $750, if admitted assets are $1,000,000 or | 18 | | more, but less than $5,000,000; | 19 | | (iii) $3,750, if admitted assets are $5,000,000 or | 20 | | more, but less than $25,000,000; | 21 | | (iv) $7,500, if admitted assets are $25,000,000 or | 22 | | more, but less than $50,000,000; | 23 | | (v) $18,000, if admitted assets are $50,000,000 or | 24 | | more, but less than $100,000,000; | 25 | | (vi) $22,500, if admitted assets are $100,000,000 | 26 | | or more, but less than $500,000,000; |
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| 1 | | (vii) $30,000, if admitted assets are $500,000,000 | 2 | | or more, but less than $1,000,000,000; | 3 | | (viii) $37,500, if admitted assets are | 4 | | $1,000,000,000 or more. | 5 | | (c) The sum of financial regulation fees charged to | 6 | | the domestic companies of the same affiliated group shall | 7 | | not exceed $250,000 in the aggregate in any single year | 8 | | and shall be billed by the Director to the member company | 9 | | designated by the group. | 10 | | (7) The Director shall charge and collect an annual | 11 | | financial regulation fee from every foreign or alien company, | 12 | | except fraternal benefit societies, for the examination and | 13 | | analysis of its financial condition and to fund the internal | 14 | | costs and expenses of the Interstate Insurance Receivership | 15 | | Commission as may be allocated to the State of Illinois and | 16 | | companies doing an insurance business in this State pursuant | 17 | | to Article X of the Interstate Insurance Receivership Compact. | 18 | | The fee shall be a fixed amount based upon Illinois direct | 19 | | premium income and nationwide reinsurance assumed premium | 20 | | income in accordance with the following schedule: | 21 | | (a) $150, if the premium is less than $500,000 and | 22 | | there is no reinsurance assumed premium; | 23 | | (b) $750, if the premium is $500,000 or more, but less | 24 | | than $5,000,000 and there is no reinsurance assumed | 25 | | premium; or if the premium is less than $5,000,000 and the | 26 | | reinsurance assumed premium is less than $10,000,000; |
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| 1 | | (c) $3,750, if the premium is less than $5,000,000 and | 2 | | the reinsurance assumed premium is $10,000,000 or more; | 3 | | (d) $7,500, if the premium is $5,000,000 or more, but | 4 | | less than $10,000,000; | 5 | | (e) $18,000, if the premium is $10,000,000 or more, | 6 | | but less than $25,000,000; | 7 | | (f) $22,500, if the premium is $25,000,000 or more, | 8 | | but less than $50,000,000; | 9 | | (g) $30,000, if the premium is $50,000,000 or more, | 10 | | but less than $100,000,000; | 11 | | (h) $37,500, if the premium is $100,000,000 or more. | 12 | | The sum of financial regulation fees under this subsection | 13 | | (7) charged to the foreign or alien companies within the same | 14 | | affiliated group shall not exceed $250,000 in the aggregate in | 15 | | any single year and shall be billed by the Director to the | 16 | | member company designated by the group. | 17 | | (8) Beginning January 1, 1992, the financial regulation | 18 | | fees imposed under subsections (6) and (7) of this Section | 19 | | shall be paid by each company or domestic affiliated group | 20 | | annually. After January 1, 1994, the fee shall be billed by | 21 | | Department invoice based upon the company's premium income or | 22 | | admitted assets as shown in its annual statement for the | 23 | | preceding calendar year. The invoice is due upon receipt and | 24 | | must be paid no later than June 30 of each calendar year. All | 25 | | financial regulation fees collected by the Department shall be | 26 | | paid to the Insurance Financial Regulation Fund. The |
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| 1 | | Department may not collect financial examiner per diem charges | 2 | | from companies subject to subsections (6) and (7) of this | 3 | | Section undergoing financial examination after June 30, 1992. | 4 | | (9) In addition to the financial regulation fee required | 5 | | by this Section, a company undergoing any financial | 6 | | examination authorized by law shall pay the following costs | 7 | | and expenses incurred by the Department: electronic data | 8 | | processing costs, the expenses authorized under Section 131.21 | 9 | | and subsection (d) of Section 132.4 of this Code, and lodging | 10 | | and travel expenses. | 11 | | Electronic data processing costs incurred by the | 12 | | Department in the performance of any examination shall be | 13 | | billed directly to the company undergoing examination for | 14 | | payment to the Technology Management Revolving Fund. Except | 15 | | for direct reimbursements authorized by the Director or direct | 16 | | payments made under Section 131.21 or subsection (d) of | 17 | | Section 132.4 of this Code, all financial regulation fees and | 18 | | all financial examination charges collected by the Department | 19 | | shall be paid to the Insurance Financial Regulation Fund. | 20 | | All lodging and travel expenses shall be in accordance | 21 | | with applicable travel regulations published by the Department | 22 | | of Central Management Services and approved by the Governor's | 23 | | Travel Control Board, except that out-of-state lodging and | 24 | | travel expenses related to examinations authorized under | 25 | | Sections 132.1 through 132.7 shall be in accordance with | 26 | | travel rates prescribed under paragraph 301-7.2 of the Federal |
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| 1 | | Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of | 2 | | subsistence expenses incurred during official travel. All | 3 | | lodging and travel expenses may be reimbursed directly upon | 4 | | the authorization of the Director. | 5 | | In the case of an organization or person not subject to the | 6 | | financial regulation fee, the expenses incurred in any | 7 | | financial examination authorized by law shall be paid by the | 8 | | organization or person being examined. The charge shall be | 9 | | reasonably related to the cost of the examination including, | 10 | | but not limited to, compensation of examiners and other costs | 11 | | described in this subsection. | 12 | | (10) Any company, person, or entity failing to make any | 13 | | payment of $150 or more as required under this Section shall be | 14 | | subject to the penalty and interest provisions provided for in | 15 | | subsections (4) and (7) of Section 412. | 16 | | (11) Unless otherwise specified, all of the fees collected | 17 | | under this Section shall be paid into the Insurance Financial | 18 | | Regulation Fund. | 19 | | (12) For purposes of this Section: | 20 | | (a) "Domestic company" means a company as defined in | 21 | | Section 2 of this Code which is incorporated or organized | 22 | | under the laws of this State, and in addition includes a | 23 | | not-for-profit corporation authorized under the Dental | 24 | | Service Plan Act or the Voluntary Health Services Plans | 25 | | Act, a health maintenance organization, and a limited | 26 | | health service organization. |
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| 1 | | (b) "Foreign company" means a company as defined in | 2 | | Section 2 of this Code which is incorporated or organized | 3 | | under the laws of any state of the United States other than | 4 | | this State and in addition includes a health maintenance | 5 | | organization and a limited health service organization | 6 | | which is incorporated or organized under the laws of any | 7 | | state of the United States other than this State. | 8 | | (c) "Alien company" means a company as defined in | 9 | | Section 2 of this Code which is incorporated or organized | 10 | | under the laws of any country other than the United | 11 | | States. | 12 | | (d) "Fraternal benefit society" means a corporation, | 13 | | society, order, lodge or voluntary association as defined | 14 | | in Section 282.1 of this Code. | 15 | | (e) "Mutual benefit association" means a company, | 16 | | association or corporation authorized by the Director to | 17 | | do business in this State under the provisions of Article | 18 | | XVIII of this Code. | 19 | | (f) "Burial society" means a person, firm, | 20 | | corporation, society or association of individuals | 21 | | authorized by the Director to do business in this State | 22 | | under the provisions of Article XIX of this Code. | 23 | | (g) "Farm mutual" means a district, county and | 24 | | township mutual insurance company authorized by the | 25 | | Director to do business in this State under the provisions | 26 | | of the Farm Mutual Insurance Company Act of 1986. |
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| 1 | | (Source: P.A. 102-775, eff. 5-13-22; 103-75, eff. 1-1-25.) | | | | 2 | | (215 ILCS 5/511.109) (from Ch. 73, par. 1065.58-109) | 3 | | (Section scheduled to be repealed on January 1, 2027) | 4 | | Sec. 511.109. Examination. | 5 | | (a) The Director or the Director's his designee may | 6 | | examine any applicant for or holder of an administrator's | 7 | | license in accordance with Sections 132 through 132.7. If the | 8 | | Director or the examiners find that the administrator has | 9 | | violated this Article or any other insurance-related laws, | 10 | | rules, or regulations under the Director's jurisdiction | 11 | | because of the manner in which the administrator has conducted | 12 | | business on behalf of an insurer or plan sponsor, then, unless | 13 | | the insurer or plan sponsor is included in the examination and | 14 | | has been afforded the same opportunity to request or | 15 | | participate in a hearing on the examination report, the | 16 | | examination report shall not allege a violation by the insurer | 17 | | or plan sponsor and the Director's order based on the report | 18 | | shall not impose any requirements, prohibitions, or penalties | 19 | | on the insurer or plan sponsor. Nothing in this Section shall | 20 | | prevent the Director from using any information obtained | 21 | | during the examination of an administrator to examine, | 22 | | investigate, or take other appropriate regulatory or legal | 23 | | action with respect to an insurer or plan sponsor . | 24 | | (b) Any administrator being examined shall provide to the | 25 | | Director or his designee convenient and free access, at all |
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| 1 | | reasonable hours at their offices, to all books, records, | 2 | | documents and other papers relating to such administrator's | 3 | | business affairs. | 4 | | (c) The Director or his designee may administer oaths and | 5 | | thereafter examine any individual about the business of the | 6 | | administrator. | 7 | | (d) The examiners designated by the Director pursuant to | 8 | | this Section may make reports to the Director. Any report | 9 | | alleging substantive violations of this Article, any | 10 | | applicable provisions of the Illinois Insurance Code, or any | 11 | | applicable Part of Title 50 of the Illinois Administrative | 12 | | Code shall be in writing and be based upon facts obtained by | 13 | | the examiners. The report shall be verified by the examiners. | 14 | | (e) If a report is made, the Director shall either deliver | 15 | | a duplicate thereof to the administrator being examined or | 16 | | send such duplicate by certified or registered mail to the | 17 | | administrator's address specified in the records of the | 18 | | Department. The Director shall afford the administrator an | 19 | | opportunity to request a hearing to object to the report. The | 20 | | administrator may request a hearing within 30 days after | 21 | | receipt of the duplicate of the examination report by giving | 22 | | the Director written notice of such request together with | 23 | | written objections to the report. Any hearing shall be | 24 | | conducted in accordance with Sections 402 and 403 of this | 25 | | Code. The right to hearing is waived if the delivery of the | 26 | | report is refused or the report is otherwise undeliverable or |
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| 1 | | the administrator does not timely request a hearing. After the | 2 | | hearing or upon expiration of the time period during which an | 3 | | administrator may request a hearing, if the examination | 4 | | reveals that the administrator is operating in violation of | 5 | | any applicable provision of the Illinois Insurance Code, any | 6 | | applicable Part of Title 50 of the Illinois Administrative | 7 | | Code or prior order, the Director, in the written order, may | 8 | | require the administrator to take any action the Director | 9 | | considers necessary or appropriate in accordance with the | 10 | | report or examination hearing. If the Director issues an | 11 | | order, it shall be issued within 90 days after the report is | 12 | | filed, or if there is a hearing, within 90 days after the | 13 | | conclusion of the hearing. The order is subject to review | 14 | | under the Administrative Review Law. | 15 | | (Source: P.A. 84-887 .) | | | | 16 | | (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3) | 17 | | Sec. 512-3. Definitions. For the purposes of this Article, | 18 | | unless the context otherwise requires, the terms defined in | 19 | | this Article have the meanings ascribed to them herein: | 20 | | "Health care payer" means an insurance company, health | 21 | | maintenance organization, limited health service organization, | 22 | | health services plan corporation, or dental service plan | 23 | | corporation authorized to do business in this State. | 24 | | (a) "Third party prescription program" or "program" means | 25 | | any system of providing for the reimbursement of |
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| 1 | | pharmaceutical services and prescription drug products offered | 2 | | or operated in this State under a contractual arrangement or | 3 | | agreement between a provider of such services and another | 4 | | party who is not the consumer of those services and products. | 5 | | Such programs may include, but need not be limited to, | 6 | | employee benefit plans whereby a consumer receives | 7 | | prescription drugs or other pharmaceutical services and those | 8 | | services are paid for by an agent of the employer or others. | 9 | | (b) "Third party program administrator" or "administrator" | 10 | | means any person, partnership or corporation who issues or | 11 | | causes to be issued any payment or reimbursement to a provider | 12 | | for services rendered pursuant to a third party prescription | 13 | | program, but does not include the Director of Healthcare and | 14 | | Family Services or any agent authorized by the Director to | 15 | | reimburse a provider of services rendered pursuant to a | 16 | | program of which the Department of Healthcare and Family | 17 | | Services is the third party. | 18 | | (Source: P.A. 95-331, eff. 8-21-07.) | | | | 19 | | (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5) | 20 | | Sec. 512-5. Fiduciary and Bonding Requirements. A third | 21 | | party prescription program administrator shall (1) establish | 22 | | and maintain a fiduciary account, separate and apart from any | 23 | | and all other accounts, for the receipt and disbursement of | 24 | | funds for reimbursement of providers of services under the | 25 | | program, or (2) post, or cause to be posted, a bond of |
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| 1 | | indemnity in an amount equal to not less than 10% of the total | 2 | | estimated annual reimbursements under the program. | 3 | | The establishment of such fiduciary accounts and bonds | 4 | | shall be consistent with applicable State law. If a bond of | 5 | | indemnity is posted, it shall be held by the Director of | 6 | | Insurance for the benefit and indemnification of the providers | 7 | | of services under the third party prescription program. | 8 | | An administrator who operates more than one third party | 9 | | prescription program may establish and maintain a separate | 10 | | fiduciary account or bond of indemnity for each such program, | 11 | | or may operate and maintain a consolidated fiduciary account | 12 | | or bond of indemnity for all such programs. | 13 | | The requirements of this Section do not apply to any third | 14 | | party prescription program administered by or on behalf of any | 15 | | health care payer insurance company, Health Care Service Plan | 16 | | Corporation or Pharmaceutical Service Plan Corporation | 17 | | authorized to do business in the State of Illinois . | 18 | | (Source: P.A. 82-1005.) | | | | 19 | | (215 ILCS 5/512-11 new) | 20 | | Sec. 512-11. Examination. The Director or the Director's | 21 | | designee may examine any applicant for or holder of an | 22 | | administrator's registration in accordance with Sections 132 | 23 | | through 132.7 of this Code. If the Director or the examiners | 24 | | find that the administrator has violated this Article or any | 25 | | other insurance-related laws or regulations under the |
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| 1 | | Director's jurisdiction because of the manner in which the | 2 | | administrator has conducted business on behalf of a separately | 3 | | incorporated health care payer, then, unless the health care | 4 | | payer is included in the examination and has been afforded the | 5 | | same opportunity to request or participate in a hearing on the | 6 | | examination report, the examination report shall not allege a | 7 | | violation by the health care payer and the Director's order | 8 | | based on the report shall not impose any requirements, | 9 | | prohibitions, or penalties on the health care payer. Nothing | 10 | | in this Section shall prevent the Director from using any | 11 | | information obtained during the examination of an | 12 | | administrator to examine, investigate, or take other | 13 | | appropriate regulatory or legal action with respect to a | 14 | | health care payer. | | | | 15 | | (215 ILCS 5/513b3) | 16 | | Sec. 513b3. Examination. (a) The Director, or his or her | 17 | | designee, may examine a registered pharmacy benefit manager in | 18 | | accordance with Sections 132-132.7. If the Director or the | 19 | | examiners find that the pharmacy benefit manager has violated | 20 | | this Article or any other insurance-related laws, rules, or | 21 | | regulations under the Director's jurisdiction because of the | 22 | | manner in which the pharmacy benefit manager has conducted | 23 | | business on behalf of a health insurer or plan sponsor, then, | 24 | | unless the health insurer or plan sponsor is included in the | 25 | | examination and has been afforded the same opportunity to |
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| 1 | | request or participate in a hearing on the examination report, | 2 | | the examination report shall not allege a violation by the | 3 | | health insurer or plan sponsor and the Director's order based | 4 | | on the report shall not impose any requirements, prohibitions, | 5 | | or penalties on the health insurer or plan sponsor. Nothing in | 6 | | this Section shall prevent the Director from using any | 7 | | information obtained during the examination of an | 8 | | administrator to examine, investigate, or take other | 9 | | appropriate regulatory or legal action with respect to a | 10 | | health insurer or plan sponsor . | 11 | | (b) Any pharmacy benefit manager being examined shall | 12 | | provide to the Director, or his or her designee, convenient | 13 | | and free access to all books, records, documents, and other | 14 | | papers relating to such pharmacy benefit manager's business | 15 | | affairs at all reasonable hours at its offices. | 16 | | (c) The Director, or his or her designee, may administer | 17 | | oaths and thereafter examine the pharmacy benefit manager's | 18 | | designee, representative, or any officer or senior manager as | 19 | | listed on the license or registration certificate about the | 20 | | business of the pharmacy benefit manager. | 21 | | (d) The examiners designated by the Director under this | 22 | | Section may make reports to the Director. Any report alleging | 23 | | substantive violations of this Article, any applicable | 24 | | provisions of this Code, or any applicable Part of Title 50 of | 25 | | the Illinois Administrative Code shall be in writing and be | 26 | | based upon facts obtained by the examiners. The report shall |
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| 1 | | be verified by the examiners. | 2 | | (e) If a report is made, the Director shall either deliver | 3 | | a duplicate report to the pharmacy benefit manager being | 4 | | examined or send such duplicate by certified or registered | 5 | | mail to the pharmacy benefit manager's address specified in | 6 | | the records of the Department. The Director shall afford the | 7 | | pharmacy benefit manager an opportunity to request a hearing | 8 | | to object to the report. The pharmacy benefit manager may | 9 | | request a hearing within 30 days after receipt of the | 10 | | duplicate report by giving the Director written notice of such | 11 | | request together with written objections to the report. Any | 12 | | hearing shall be conducted in accordance with Sections 402 and | 13 | | 403 of this Code. The right to a hearing is waived if the | 14 | | delivery of the report is refused or the report is otherwise | 15 | | undeliverable or the pharmacy benefit manager does not timely | 16 | | request a hearing. After the hearing or upon expiration of the | 17 | | time period during which a pharmacy benefit manager may | 18 | | request a hearing, if the examination reveals that the | 19 | | pharmacy benefit manager is operating in violation of any | 20 | | applicable provision of this Code, any applicable Part of | 21 | | Title 50 of the Illinois Administrative Code, a provision of | 22 | | this Article, or prior order, the Director, in the written | 23 | | order, may require the pharmacy benefit manager to take any | 24 | | action the Director considers necessary or appropriate in | 25 | | accordance with the report or examination hearing. If the | 26 | | Director issues an order, it shall be issued within 90 days |
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| 1 | | after the report is filed, or if there is a hearing, within 90 | 2 | | days after the conclusion of the hearing. The order is subject | 3 | | to review under the Administrative Review Law. | 4 | | (Source: P.A. 101-452, eff. 1-1-20 .) | 5 | | Section 95. No acceleration or delay. Where this Act makes | 6 | | changes in a statute that is represented in this Act by text | 7 | | that is not yet or no longer in effect (for example, a Section | 8 | | represented by multiple versions), the use of that text does | 9 | | not accelerate or delay the taking effect of (i) the changes | 10 | | made by this Act or (ii) provisions derived from any other | 11 | | Public Act. | 12 | | Section 99. Effective date. This Act takes effect January | 13 | | 1, 2025.". |
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