State of Illinois
90th General Assembly
Legislation

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[ Introduced ][ Engrossed ]

90_SB0193enr

      215 ILCS 5/355a           from Ch. 73, par. 967a
      215 ILCS 5/408            from Ch. 73, par. 1020
      215 ILCS 5/531.03         from Ch. 73, par. 1065.80-3
      215 ILCS 5/1003           from Ch. 73, par. 1065.703
      215 ILCS 125/1-2          from Ch. 111 1/2, par. 1402
      215 ILCS 125/5-3          from Ch. 111 1/2, par. 1411.2
      215 ILCS 125/5-6          from Ch. 111 1/2, par. 1414
      215 ILCS 160/Act rep.
          Repeals   the   Vision   Service   Plan   Act.    Deletes
      cross-references. Effective immediately.
                                                     LRB9000079DPcd
SB193 Enrolled                                 LRB9000079DPcd
 1        AN ACT to repeal the Vision Service Plan Act.
 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:
 4        Section  5.   The  Illinois  Insurance Code is amended by
 5    changing Sections 355a, 408, 531.03, and 1003 as follows:
 6        (215 ILCS 5/355a) (from Ch. 73, par. 967a)
 7        Sec. 355a.  Standardization of terms and coverage.
 8        (1) The purpose of this Section shall be (a)  to  provide
 9    reasonable  standardization  and  simplification of terms and
10    coverages  of  individual  accident  and   health   insurance
11    policies  to facilitate public understanding and comparisons;
12    (b) to eliminate provisions contained in individual  accident
13    and  health  insurance  policies  which  may be misleading or
14    unreasonably confusing in connection either with the purchase
15    of such coverages or with the settlement of claims;  and  (c)
16    to  provide for reasonable disclosure in the sale of accident
17    and health coverages.
18        (2)  Definitions  applicable  to  this  Section  are   as
19    follows:
20             (a)  "Policy"  means  all  or  any part of the forms
21        constituting the contract between  the  insurer  and  the
22        insured,  including  the  policy, certificate, subscriber
23        contract, riders, endorsements, and  the  application  if
24        attached,  which  are subject to filing with and approval
25        by the Director.
26             (b)  "Service   corporations"    means    non-profit
27        hospital,  medical, voluntary health, vision, dental, and
28        pharmaceutical  corporations  organized   and   operating
29        respectively  under "the Non-Profit Hospital Service Plan
30        Act", "the Medical  Service  Plan  Act",  "the  Voluntary
31        Health  Services  Plans  Act",  "The  Vision Service Plan
SB193 Enrolled              -2-                LRB9000079DPcd
 1        Act",   "the  Dental  Service   Plan   Act",   and   "the
 2        Pharmaceutical Service Plan Act".
 3             (c)  "Accident and health insurance" means insurance
 4        written  under  Article  XX  of the Insurance Code, other
 5        than credit accident and health insurance, and  coverages
 6        provided   in  subscriber  contracts  issued  by  service
 7        corporations.  For purposes of this Section such  service
 8        corporations  shall  be  deemed to be insurers engaged in
 9        the business of insurance.
10        (3)  The Director shall issue such rules as he shall deem
11    necessary  or  desirable  to  establish  specific  standards,
12    including standards of full  and  fair  disclosure  that  set
13    forth  the form and content and required disclosure for sale,
14    of individual policies  of  accident  and  health  insurance,
15    which  rules  and  regulations shall be in addition to and in
16    accordance with the applicable laws of this State, and  which
17    may  cover  but  shall  not  be  limited  to:   (a)  terms of
18    renewability;  (b)  initial  and  subsequent  conditions   of
19    eligibility;  (c) non-duplication of coverage provisions; (d)
20    coverage of  dependents;  (e)  pre-existing  conditions;  (f)
21    termination  of  insurance;  (g)  probationary  periods;  (h)
22    limitation,   exceptions,  and  reductions;  (i)  elimination
23    periods;  (j)  requirements   regarding   replacements;   (k)
24    recurrent   conditions;  and  (l)  the  definition  of  terms
25    including  but  not  limited  to  the  following:   hospital,
26    accident,  sickness,  injury,  physician,  accidental  means,
27    total   disability,  partial  disability,  nervous  disorder,
28    guaranteed renewable, and non-cancellable.
29        The Director may  issue  rules  that  specify  prohibited
30    policy  provisions  not  otherwise specifically authorized by
31    statute which in the opinion  of  the  Director  are  unjust,
32    unfair  or  unfairly  discriminatory to the policyholder, any
33    person insured under the policy, or beneficiary.
34        (4)  The Director shall issue such rules as he shall deem
SB193 Enrolled              -3-                LRB9000079DPcd
 1    necessary or desirable to  establish  minimum  standards  for
 2    benefits  under  each  category  of  coverage  in  individual
 3    accident  and health policies, other than conversion policies
 4    issued pursuant to a contractual conversion privilege under a
 5    group policy, including but  not  limited  to  the  following
 6    categories:   (a)  basic hospital expense coverage; (b) basic
 7    medical-surgical expense coverage; (c)  hospital  confinement
 8    indemnity  coverage;  (d) major medical expense coverage; (e)
 9    disability income  protection  coverage;  (f)  accident  only
10    coverage;  and  (g)  specified  disease or specified accident
11    coverage.
12        Nothing  in  this  subsection  (4)  shall  preclude   the
13    issuance  of  any  policy  which  combines two or more of the
14    categories  of  coverage  enumerated  in  subparagraphs   (a)
15    through (f) of this subsection.
16        No  policy  shall  be delivered or issued for delivery in
17    this  State  which  does  not  meet  the  prescribed  minimum
18    standards for the  categories  of  coverage  listed  in  this
19    subsection  unless  the  Director  finds  that such policy is
20    necessary to meet specific needs of individuals or groups and
21    such individuals or groups will be adequately  informed  that
22    such  policy  does not meet the prescribed minimum standards,
23    and such policy  meets  the  requirement  that  the  benefits
24    provided  therein  are  reasonable in relation to the premium
25    charged. The  standards  and  criteria  to  be  used  by  the
26    Director  in approving such policies shall be included in the
27    rules required under this Section with as much specificity as
28    practicable.
29        The Director  shall  prescribe  by  rule  the  method  of
30    identification of policies based upon coverages provided.
31        (5) (a)  In order to provide for full and fair disclosure
32    in  the  sale  of  individual  accident  and health insurance
33    policies, no such policy shall be  delivered  or  issued  for
34    delivery  in  this  State  unless  the  outline  of  coverage
SB193 Enrolled              -4-                LRB9000079DPcd
 1    described   in   paragraph  (b)  of  this  subsection  either
 2    accompanies the policy, or is delivered to the  applicant  at
 3    the  time  the  application  is  made,  and an acknowledgment
 4    signed by  the  insured,  of  receipt  of  delivery  of  such
 5    outline, is provided to the insurer.  In the event the policy
 6    is issued on a basis other than that applied for, the outline
 7    of coverage properly describing the policy must accompany the
 8    policy  when  it  is delivered and such outline shall clearly
 9    state that the policy differs, and to what extent, from  that
10    for  which  application  was  originally  made. All policies,
11    except single  premium  nonrenewal  policies,  shall  have  a
12    notice prominently printed on the first page of the policy or
13    attached  thereto stating in substance, that the policyholder
14    shall have the right to return the  policy  within  ten  (10)
15    days  of  its  delivery  and  to have the premium refunded if
16    after examination of  the  policy  the  policyholder  is  not
17    satisfied for any reason.
18        (b)  The Director shall issue such rules as he shall deem
19    necessary or desirable to prescribe the format and content of
20    the  outline  of  coverage  required by paragraph (a) of this
21    subsection. "Format" means style,  arrangement,  and  overall
22    appearance,  including  such  items  as  the size, color, and
23    prominence of type and the arrangement of text and  captions.
24    "Content"   shall   include   without   limitation   thereto,
25    statements  relating  to  the  particular  policy  as  to the
26    applicable category of coverage prescribed  under  subsection
27    4;    principal    benefits;   exceptions,   reductions   and
28    limitations;   and   renewal   provisions,   including    any
29    reservation  by  the  insurer  of a right to change premiums.
30    Such  outline  of  coverage  shall  clearly  state  that   it
31    constitutes a summary of the policy issued or applied for and
32    that  the  policy  should be consulted to determine governing
33    contractual provisions.
34        (6)  Prior to the issuance  of  rules  pursuant  to  this
SB193 Enrolled              -5-                LRB9000079DPcd
 1    Section,  the Director shall afford the public, including the
 2    companies  affected  thereby,  reasonable   opportunity   for
 3    comment.   Such  rulemaking  is  subject to the provisions of
 4    "The Illinois Administrative Procedure Act".
 5        (7)  When a rule  has  been  adopted,  pursuant  to  this
 6    Section,  all  policies  of insurance or subscriber contracts
 7    which are not in compliance  with such rule  shall,  when  so
 8    provided  in  such  rule, be deemed to be disapproved as of a
 9    date specified in such rule not less than 120 days  following
10    its  effective date, without any further or additional notice
11    other than the adoption of the rule.
12        (8)  When a rule adopted  pursuant  to  this  Section  so
13    provides,  a policy of insurance or subscriber contract which
14    does not comply with the rule shall not less  than  120  days
15    from  the  effective date of such rule, be construed, and the
16    insurer or service corporation shall be  liable,  as  if  the
17    policy or contract did comply with the rule.
18        (9)  Violation  of  any  rule  adopted  pursuant  to this
19    Section shall  be  a  violation  of  the  insurance  law  for
20    purposes of Sections 370 and 446 of the Insurance Code.
21    (Source: P.A. 81-0657; 81-0722; 81-1509.)
22        (215 ILCS 5/408) (from Ch. 73, par. 1020)
23        Sec. 408.  Fees and charges.
24        (1)  The  Director  shall charge, collect and give proper
25    acquittances for  the  payment  of  the  following  fees  and
26    charges:
27             (a)  For  filing  all  documents  submitted  for the
28        incorporation  or  organization  or  certification  of  a
29        domestic company, except for a fraternal benefit society,
30        $1,000.
31             (b)  For filing  all  documents  submitted  for  the
32        incorporation  or  organization  of  a  fraternal benefit
33        society, $250.
SB193 Enrolled              -6-                LRB9000079DPcd
 1             (c)  For   filing   amendments   to   articles    of
 2        incorporation    and   amendments   to   declaration   of
 3        organization, except for a fraternal benefit  society,  a
 4        mutual  benefit  association,  a burial society or a farm
 5        mutual, $100.
 6             (d)  For   filing   amendments   to   articles    of
 7        incorporation  of  a  fraternal benefit society, a mutual
 8        benefit association or a burial society, $50.
 9             (e)  For   filing   amendments   to   articles    of
10        incorporation of a farm mutual, $25.
11             (f)  For filing bylaws or amendments thereto, $25.
12             (g)  For    filing    agreement    of    merger   or
13        consolidation:
14                  (i)  for  a  domestic  company,  except  for  a
15             fraternal  benefit   society,   a   mutual   benefit
16             association,  a  burial  society,  or a farm mutual,
17             $1,000.
18                  (ii)  for a foreign or  alien  company,  except
19             for a fraternal benefit society, $300.
20                  (iii)  for   a  fraternal  benefit  society,  a
21             mutual benefit association, a burial society,  or  a
22             farm mutual, $100.
23             (h)  For  filing  agreements  of  reinsurance  by  a
24        domestic company, $100.
25             (i)  For filing all documents submitted by a foreign
26        or  alien  company to be admitted to transact business or
27        accredited as a reinsurer in this  State,  except  for  a
28        fraternal benefit society, $2,500.
29             (j)  For filing all documents submitted by a foreign
30        or  alien  fraternal  benefit  society  to be admitted to
31        transact business in this State, $250.
32             (k)  For  filing  declaration  of  withdrawal  of  a
33        foreign or alien company, $25.
34             (l)  For filing annual statement, except a fraternal
SB193 Enrolled              -7-                LRB9000079DPcd
 1        benefit society, a mutual benefit association,  a  burial
 2        society, or a farm mutual, $100.
 3             (m)  For  filing  annual  statement  by  a fraternal
 4        benefit society, $50.
 5             (n)  For filing annual statement by a farm mutual, a
 6        mutual benefit association, or a burial society, $25.
 7             (o)  For  issuing  a  certificate  of  authority  or
 8        renewal thereof except to a  fraternal  benefit  society,
 9        $100.
10             (p)  For  issuing  a  certificate  of  authority  or
11        renewal thereof to a fraternal benefit society, $50.
12             (q)  For   issuing   an   amended   certificate   of
13        authority, $25.
14             (r)  For  each  certified  copy  of  certificate  of
15        authority, $10.
16             (s)  For  each certificate of deposit, or valuation,
17        or compliance or surety certificate, $10.
18             (t)  For copies of papers or records per page, $1.
19             (u)  For each certification to copies of  papers  or
20        records, $10.
21             (v)  For    multiple    copies   of   documents   or
22        certificates listed in subparagraphs (r), (s), and (u) of
23        paragraph (1) of this Section, $10 for the first copy  of
24        a certificate of any type and $5 for each additional copy
25        of  the  same  certificate  requested  at  the same time,
26        unless, pursuant to paragraph (2) of  this  Section,  the
27        Director finds these additional fees excessive.
28             (w)  For issuing a permit to sell shares or increase
29        paid-up capital:
30                  (i)  in   connection   with   a   public  stock
31             offering, $150;
32                  (ii)  in any other case, $50.
33             (x)  For issuing any other certificate  required  or
34        permissible under the law, $25.
SB193 Enrolled              -8-                LRB9000079DPcd
 1             (y)  For filing a plan of exchange of the stock of a
 2        domestic    stock    insurance   company,   a   plan   of
 3        demutualization of a domestic mutual company, or  a  plan
 4        of reorganization under Article XII, $1,000.
 5             (z)  For  filing  a  statement  of  acquisition of a
 6        domestic company as defined  in  Section  131.4  of  this
 7        Code, $1,000.
 8             (aa)  For   filing  an  agreement  to  purchase  the
 9        business of an organization authorized under  the  Dental
10        Service  Plan  Act,  the  Vision Service Plan Act, or the
11        Voluntary Health  Services  Plans  Act  or  of  a  health
12        maintenance  organization  or  a  limited  health service
13        organization, $1,000.
14             (bb)  For filing a statement  of  acquisition  of  a
15        foreign  or alien insurance company as defined in Section
16        131.12a of this Code, $500.
17             (cc)  For  filing  a   registration   statement   as
18        required  in Sections 131.13 and 131.14, the notification
19        as required by Sections 131.16, 131.20a, or 141.4, or  an
20        agreement  or  transaction required by Sections 124.2(2),
21        141, 141a, or 141.1, $100.
22             (dd)  For filing an application for licensing of:
23                  (i)  a religious  or  charitable  risk  pooling
24             trust or a workers' compensation pool, $500;
25                  (ii)  a  workers' compensation service company,
26             $250;
27                  (iii)  a self-insured automobile  fleet,  $100;
28             or
29                  (iv)  a  renewal of or amendment of any license
30             issued pursuant to (i), (ii), or (iii) above, $50.
31             (ee)  For filing articles  of  incorporation  for  a
32        syndicate  to engage in the business of insurance through
33        the Illinois Insurance Exchange, $1,000.
34             (ff)  For filing amended articles  of  incorporation
SB193 Enrolled              -9-                LRB9000079DPcd
 1        for  a  syndicate  engaged  in  the business of insurance
 2        through the Illinois Insurance Exchange, $50.
 3             (gg)  For filing articles  of  incorporation  for  a
 4        limited  syndicate  to  join  with  other  subscribers or
 5        limited syndicates to do business  through  the  Illinois
 6        Insurance Exchange, $500.
 7             (hh)  For  filing  amended articles of incorporation
 8        for a  limited  syndicate  to  do  business  through  the
 9        Illinois Insurance Exchange, $50.
10             (ii)  For  a  permit  to  solicit subscriptions to a
11        syndicate or limited syndicate, $50.
12             (jj)  For the filing of each  form  as  required  in
13        Section  143  of  this  Code,  $25 per form.  The fee for
14        advisory and rating organizations shall be $100 per form.
15                  (i)  For the purposes of the form  filing  fee,
16             filings made on insert page basis will be considered
17             one  form  at  the  time of its original submission.
18             Changes made to a form subsequent  to  its  approval
19             shall be considered a new filing.
20                  (ii)  Only one fee shall be charged for a form,
21             regardless  of the number of other forms or policies
22             with which it will be used.
23                  (iii)  Fees charged for a policy  filed  as  it
24             will  be  issued  regardless  of the number of forms
25             comprising that policy  shall  not  exceed  $500  or
26             $1000 for advisory or rating organizations.
27                  (iv)  The  Director  may  by  rule exempt forms
28             from such fees.
29             (kk)  For filing an application for licensing  of  a
30        reinsurance intermediary, $250.
31             (ll)  For  filing  an  application  for renewal of a
32        license of a reinsurance intermediary, $100.
33        (2)  When printed copies or numerous copies of  the  same
34    paper or records are furnished or certified, the Director may
SB193 Enrolled              -10-               LRB9000079DPcd
 1    reduce  such  fees for copies if he finds them excessive.  He
 2    may, when he considers it in  the  public  interest,  furnish
 3    without  charge  to  state  insurance departments and persons
 4    other than companies, copies or certified copies  of  reports
 5    of examinations and of other papers and records.
 6        (3)  The expenses incurred in any performance examination
 7    authorized  by  law  shall  be  paid by the company or person
 8    being examined. The charge shall be reasonably related to the
 9    cost  of  the  examination  including  but  not  limited   to
10    compensation  of examiners, electronic data processing costs,
11    supervision and preparation  of  an  examination  report  and
12    lodging  and travel expenses. All lodging and travel expenses
13    shall be in accord with the applicable travel regulations  as
14    published  by  the  Department of Central Management Services
15    and approved by the Governor's Travel Control  Board,  except
16    that  out-of-state  lodging  and  travel  expenses related to
17    examinations  authorized  under  Section  132  shall  be   in
18    accordance  with  travel  rates  prescribed  under  paragraph
19    301-7.2 of the Federal Travel Regulations, 41 C.F.R. 301-7.2,
20    for  reimbursement  of  subsistence  expenses incurred during
21    official travel.  All lodging  and  travel  expenses  may  be
22    reimbursed  directly upon authorization of the Director. With
23    the exception of the direct reimbursements authorized by  the
24    Director,  all  performance  examination charges collected by
25    the Department shall  be  paid  to  the  Insurance  Producers
26    Administration  Fund, however, the electronic data processing
27    costs incurred by the Department in the  performance  of  any
28    examination  shall  be  billed  directly to the company being
29    examined for payment to the  Statistical  Services  Revolving
30    Fund.
31        (4)  At  the  time  of  any  service  of  process  on the
32    Director as attorney for such  service,  the  Director  shall
33    charge  and collect the sum of $10.00, which may be recovered
34    as taxable costs by the party to the suit or  action  causing
SB193 Enrolled              -11-               LRB9000079DPcd
 1    such  service  to  be  made  if  he  prevails in such suit or
 2    action.
 3        (5) (a)  The  costs  incurred  by   the   Department   of
 4    Insurance  in  conducting any hearing authorized by law shall
 5    be assessed against  the  parties  to  the  hearing  in  such
 6    proportion  as  the  Director of Insurance may determine upon
 7    consideration of all relevant circumstances  including:   (1)
 8    the  nature  of  the  hearing;  (2)  whether  the hearing was
 9    instigated by, or for the benefit of a  particular  party  or
10    parties;  (3)  whether  there  is  a  successful party on the
11    merits of the proceeding; and  (4)  the  relative  levels  of
12    participation by the parties.
13        (b)  For  purposes  of this subsection (5) costs incurred
14    shall mean the hearing officer fees, court reporter fees, and
15    travel expenses  of  Department  of  Insurance  officers  and
16    employees;  provided  however,  that costs incurred shall not
17    include hearing officer fees or court  reporter  fees  unless
18    the  Department  has  retained  the  services  of independent
19    contractors or outside experts to perform such functions.
20        (c)  The Director shall  make  the  assessment  of  costs
21    incurred  as  part of the final order or decision arising out
22    of the proceeding; provided,  however,  that  such  order  or
23    decision shall include findings and conclusions in support of
24    the  assessment  of  costs.  This subsection (5) shall not be
25    construed as permitting the payment of travel expenses unless
26    calculated  in  accordance   with   the   applicable   travel
27    regulations of the Department of Central Management Services,
28    as  approved  by  the  Governor's  Travel Control Board.  The
29    Director as part of such order or decision shall require  all
30    assessments for hearing officer fees and court reporter fees,
31    if  any,  to be paid directly to the hearing officer or court
32    reporter  by  the  party(s)  assessed  for  such  costs.  The
33    assessments for travel expenses of  Department  officers  and
34    employees  shall be reimbursable to the Director of Insurance
SB193 Enrolled              -12-               LRB9000079DPcd
 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
 5    Insurance 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
12    in  this  State  pursuant  to  Article  X  of  the Interstate
13    Insurance Receivership Compact.  The fee shall be the greater
14    fixed amount based upon the combination of nationwide  direct
15    premium  income  and  nationwide  reinsurance assumed premium
16    income  or  upon  admitted  assets  calculated   under   this
17    subsection as follows:
18             (a)  Combination of nationwide direct premium income
19        and nationwide reinsurance assumed premium.
20                  (i)  $100, if the premium is less than $500,000
21             and there is no reinsurance assumed premium;
22                  (ii)  $500, if the premium is $500,000 or more,
23             but 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
26             less than $10,000,000;
27                  (iii)  $2,500,  if  the  premium  is  less than
28             $5,000,000 and the reinsurance  assumed  premium  is
29             $10,000,000 or more;
30                  (iv)  $5,000,  if  the premium is $5,000,000 or
31             more, but less than $10,000,000;
32                  (v)  $7,500, if the premium is  $10,000,000  or
33             more, but less than $25,000,000;
34                  (vi)  $10,000, if the premium is $25,000,000 or
SB193 Enrolled              -13-               LRB9000079DPcd
 1             more, but less than $50,000,000;
 2                  (vii)  $14,000,  if  the premium is $50,000,000
 3             or more, but less than $100,000,000;
 4                  (viii)  $16,000, if the premium is $100,000,000
 5             or more.
 6             (b)  Admitted assets.
 7                  (i)  $100, if admitted  assets  are  less  than
 8             $1,000,000;
 9                  (ii)  $500,  if  admitted assets are $1,000,000
10             or more, but less than $5,000,000;
11                  (iii)  2,500, if admitted assets are $5,000,000
12             or more, but less than $25,000,000;
13                  (iv)  $5,000,   if    admitted    assets    are
14             $25,000,000 or more, but less than $50,000,000;
15                  (v)  $7,500, if admitted assets are $50,000,000
16             or more, but less than $100,000,000;
17                  (vi)  $10,000,    if    admitted   assets   are
18             $100,000,000 or more, but less than $500,000,000;
19                  (vii)  $14,000,   if   admitted   assets    are
20             $500,000,000 or more, but less than $1,000,000,000;
21                  (viii)  $16,000,   if   admitted   assets   are
22             $1,000,000,000 or more.
23             (c)  The sum of financial regulation fees charged to
24        the  domestic  companies  of the same domestic affiliated
25        group shall not exceed $100,000 and shall  be  billed  by
26        the  Director  to  the  member  company designated by the
27        group.
28        (7)  The Director shall  charge  and  collect  an  annual
29    financial regulation fee from every foreign or alien company,
30    except  fraternal  benefit societies, for the examination and
31    analysis of its financial condition and to fund the  internal
32    costs  and  expenses of the Interstate Insurance Receivership
33    Commission as may be allocated to the State of  Illinois  and
34    companies  doing an insurance business in this State pursuant
SB193 Enrolled              -14-               LRB9000079DPcd
 1    to  Article  X  of  the  Interstate  Insurance   Receivership
 2    Compact.  The fee shall be a fixed amount based upon Illinois
 3    direct  premium  income  and  nationwide  reinsurance assumed
 4    premium income in accordance with the following schedule:
 5             (a)  $100, if the premium is less than $500,000  and
 6        there is no reinsurance assumed premium;
 7             (b)  $500,  if  the premium is $500,000 or more, but
 8        less than $5,000,000 and there is no reinsurance  assumed
 9        premium;  or  if  the premium is less than $5,000,000 and
10        the reinsurance assumed premium is less than $10,000,000;
11             (c)  $2,500, if the premium is less than  $5,000,000
12        and  the  reinsurance  assumed  premium is $10,000,000 or
13        more;
14             (d)  $5,000, if the premium is $5,000,000  or  more,
15        but less than $10,000,000;
16             (e)  $12,000, if the premium is $10,000,000 or more,
17        but less than $25,000,000;
18             (f)  $15,000, if the premium is $25,000,000 or more,
19        but less than $50,000,000;
20             (g)  $20,000, if the premium is $50,000,000 or more,
21        but less than $100,000,000;
22             (h)  $25,000,  if  the  premium  is  $100,000,000 or
23        more.
24        (8)  Beginning January 1, 1992, the financial  regulation
25    fees  imposed  under  subsections (6) and (7) of this Section
26    shall be paid by each company or  domestic  affiliated  group
27    annually.   After January 1, 1994, the fee shall be billed by
28    Department invoice based upon the company's premium income or
29    admitted assets as shown in  its  annual  statement  for  the
30    preceding calendar year.  The invoice is due upon receipt and
31    must  be  paid  no  later than June 30 of each calendar year.
32    All financial regulation fees  collected  by  the  Department
33    shall  be  paid  to  the Insurance Financial Regulation Fund.
34    The Department may not collect financial  examiner  per  diem
SB193 Enrolled              -15-               LRB9000079DPcd
 1    charges  from companies subject to subsections (6) and (7) of
 2    this Section undergoing financial examination after June  30,
 3    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
 9    131.21 and subsection (d) of Section 132.4 of this Code,  and
10    lodging 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 Statistical Services Revolving  Fund.   Except
15    for  direct  reimbursements  authorized  by  the  Director or
16    direct payments made under Section 131.21 or  subsection  (d)
17    of  Section 132.4 of this Code, all financial regulation fees
18    and  all  financial  examination  charges  collected  by  the
19    Department  shall  be  paid  to   the   Insurance   Financial
20    Regulation Fund.
21        All  lodging  and  travel expenses shall be in accordance
22    with  applicable  travel   regulations   published   by   the
23    Department of Central Management Services and approved by the
24    Governor's  Travel  Control  Board,  except that out-of-state
25    lodging  and  travel   expenses   related   to   examinations
26    authorized  under  Sections  132.1  through 132.7 shall be in
27    accordance  with  travel  rates  prescribed  under  paragraph
28    301-7.2 of the Federal Travel Regulations, 41 C.F.R. 301-7.2,
29    for reimbursement of  subsistence  expenses  incurred  during
30    official  travel.    All  lodging  and travel expenses may be
31    reimbursed directly upon the authorization of the Director.
32        In the case of an organization or person not  subject  to
33    the  financial  regulation  fee, the expenses incurred in any
34    financial examination authorized by law shall be paid by  the
SB193 Enrolled              -16-               LRB9000079DPcd
 1    organization  or  person being examined.  The charge shall be
 2    reasonably related to the cost of the examination  including,
 3    but not limited to, compensation of examiners and other costs
 4    described in this subsection.
 5        (10)  Any  company, person, or entity failing to make any
 6    payment of $100 or more as required under this Section  shall
 7    be  subject  to  the penalty and interest provisions provided
 8    for in subsections (4) and (7) of Section 412.
 9        (11)  Unless  otherwise  specified,  all  of   the   fees
10    collected under this Section shall be paid into the Insurance
11    Financial Regulation Fund.
12        (12)  For purposes of this Section:
13             (a)  "domestic  company"  means a company as defined
14        in Section 2  of  this  Code  which  is  incorporated  or
15        organized  under  the laws of this State, and in addition
16        includes a not-for-profit  corporation  authorized  under
17        the  Dental,  Vision, Pharmaceutical, or Voluntary Health
18        Service Plan Acts, and a health maintenance  organization
19        and a limited health service organization;
20             (b)  "foreign company" means a company as defined in
21        Section 2 of this Code which is incorporated or organized
22        under  the  laws  of any state of the United States other
23        than  this  State  and  in  addition  includes  a  health
24        maintenance organization and  a  limited  health  service
25        organization which is incorporated or organized under the
26        laws  of  any  state of the United States other than this
27        State;
28             (c)  "alien company" means a company as  defined  in
29        Section 2 of this Code which is incorporated or organized
30        under  the  laws  of  any  country  other than the United
31        States;
32             (d)  "fraternal    benefit    society"    means    a
33        corporation,   society,   order,   lodge   or   voluntary
34        association as defined in Section 282.1 of this Code;
SB193 Enrolled              -17-               LRB9000079DPcd
 1             (e)  "mutual benefit association" means  a  company,
 2        association  or corporation authorized by the Director to
 3        do business in this State under the provisions of Article
 4        XVIII of this Code;
 5             (f)  "burial  society"   means   a   person,   firm,
 6        corporation,   society   or  association  of  individuals
 7        authorized by the Director to do business in  this  State
 8        under the provisions of Article XIX of this Code; and
 9             (g)  "farm  mutual"  means  a  district,  county and
10        township  mutual  insurance  company  authorized  by  the
11        Director  to  do  business  in  this  State   under   the
12        provisions  of  the  Farm Mutual Insurance Company Act of
13        1986.
14    (Source: P.A.  88-364;  89-97,  eff.  7-7-95;  89-247,   eff.
15    1-1-96; 89-626, eff. 8-9-96.)
16        (215 ILCS 5/531.03) (from Ch. 73, par. 1065.80-3)
17        Sec. 531.03.  Coverage and limitations.
18        (1)  This Article shall provide coverage for the policies
19    and contracts specified in paragraph (2) of this Section:
20             (a)  to persons who, regardless of where they reside
21        (except  for non-resident certificate holders under group
22        policies or contracts), are the beneficiaries,  assignees
23        or  payees  of  the  persons  covered  under subparagraph
24        (1)(b), and
25             (b)  to persons who are  owners  of  or  certificate
26        holders under such policies or contracts; or, in the case
27        of  unallocated annuity contracts, to the persons who are
28        the contract holders, and who
29                  (i)  are residents of this State, or
30                  (ii)  are not residents, but only under all  of
31             the following conditions:
32                       (A)  the   insurers   which   issued  such
33                  policies or contracts  are  domiciled  in  this
SB193 Enrolled              -18-               LRB9000079DPcd
 1                  State;
 2                       (B)  such insurers never held a license or
 3                  certificate of authority in the states in which
 4                  such persons reside;
 5                       (C)  such states have associations similar
 6                  to the association created by this Act; and
 7                       (D)  such  persons  are  not  eligible for
 8                  coverage by such associations.
 9        (2)(a)  This  Article  shall  provide  coverage  to   the
10    persons  specified  in  paragraph  (l)  of  this  Section for
11    direct, (i) nongroup life, health, annuity  and  supplemental
12    policies,  or  contracts,  (ii) for certificates under direct
13    group policies or contracts, (iii)  for  unallocated  annuity
14    contracts  and  (iv)  for  contracts  to  furnish health care
15    services and subscription certificates for medical or  health
16    care   services   issued  by  persons  licensed  to  transact
17    insurance business in this State under the Illinois Insurance
18    Code. Annuity contracts and certificates under group  annuity
19    contracts   include   but   are  not  limited  to  guaranteed
20    investment  contracts,  deposit   administration   contracts,
21    unallocated funding agreements, allocated funding agreements,
22    structured  settlement  agreements, lottery contracts and any
23    immediate or deferred annuity contracts.
24        (b)  This Article shall not provide coverage for:
25             (i)  that  portion  or  part  of  such  policies  or
26        contracts  under  which  the  risk  is   borne   by   the
27        policyholder;  provided  however,  that  nothing  in this
28        subparagraph (i) shall make this Article inapplicable  to
29        assessment   life   and  accident  and  health  insurance
30        policies or contracts; or
31             (ii)  any such policy or contract  or  part  thereof
32        assumed  by  the  impaired  or  insolvent insurer under a
33        contract of reinsurance, other than reinsurance for which
34        assumption certificates have been issued; or
SB193 Enrolled              -19-               LRB9000079DPcd
 1             (iii)  any portion of a policy or  contract  to  the
 2        extent  such portion represents an accrued value that the
 3        rate of interest on which it is accrued
 4                  (A)  averaged over the  period  of  four  years
 5             prior  to  the date on which the Association becomes
 6             obligated with respect to such policy  or  contract,
 7             exceeds a rate of interest determined by subtracting
 8             two  percentage  points  from Moody's Corporate Bond
 9             Yield Average  averaged  for  that  same  four  year
10             period  or  for  such lesser period if the policy or
11             contract was issued less than four years before  the
12             Association became obligated; and
13                  (B)  on   and  after  the  date  on  which  the
14             Association becomes obligated with respect  to  such
15             policy  or  contract,  exceeds  the rate of interest
16             determined by subtracting  three  percentage  points
17             from  Moody's  Corporate  Bond Yield Average as most
18             recently available;
19             (iv)  any unallocated annuity contract issued to  an
20        employee benefit plan protected under the federal Pension
21        Benefit Guaranty Corporation; and
22             (v)  any portion of any unallocated annuity contract
23        which  is  not issued to or in connection with a specific
24        employee, union or association of natural persons benefit
25        plan or a government lottery.
26             (vi)  any burial society organized under Article XIX
27        of this Act,  any  fraternal  benefit  society  organized
28        under  Article  XVII  of  this  Act,  any  mutual benefit
29        association organized under Article XVIII  of  this  Act,
30        and  any foreign fraternal benefit society licensed under
31        Article VI of this Act; or
32             (vii)  any    health    maintenance     organization
33        established    pursuant   to   the   Health   Maintenance
34        Organization  Act  including   any   health   maintenance
SB193 Enrolled              -20-               LRB9000079DPcd
 1        organization business of a member insurer; or
 2             (viii)  any   health   services   plan   corporation
 3        established  pursuant  to  the  Voluntary Health Services
 4        Plans Act; or
 5             (ix)  (blank); any vision service  plan  corporation
 6        established pursuant to the Vision Service Plan Act; or
 7             (x)  any dental service plan corporation established
 8        pursuant to the Dental Service Plan Act; or
 9             (xi)  any  stop-loss insurance, as defined in clause
10        (b) of Class 1 or clause (a) of Class 2 of Section 4, and
11        further defined in subsection (d) of Section 352; or
12             (xii)  that portion  or  part  of  a  variable  life
13        insurance  or variable annuity contract not guaranteed by
14        an insurer.
15        (3)  The benefits for which the  Association  may  become
16    liable shall in no event exceed the lesser of:
17             (a)  the   contractual  obligations  for  which  the
18        insurer is liable or would have been liable  if  it  were
19        not an impaired or insolvent insurer, or
20             (b)(i)  with  respect to any one life, regardless of
21        the number of policies or contracts:
22                  (A)  $300,000 in life insurance death benefits,
23             but not more than $100,000 in net cash surrender and
24             net cash withdrawal values for life insurance;
25                  (B)  $300,000  in  health  insurance  benefits,
26             including  any  net  cash  surrender  and  net  cash
27             withdrawal values;
28                  (C)  $100,000 in the present value  of  annuity
29             benefits,  including net cash surrender and net cash
30             withdrawal values;
31             (ii)  with respect to each individual  participating
32        in  a  governmental  retirement  plan  established  under
33        Section  401,  403(b) or 457 of the U.S. Internal Revenue
34        Code covered by an unallocated annuity  contract  or  the
SB193 Enrolled              -21-               LRB9000079DPcd
 1        beneficiaries of each such individual if deceased, in the
 2        aggregate,  $100,000  in  present value annuity benefits,
 3        including net cash  surrender  and  net  cash  withdrawal
 4        values;  provided,  however,  that  in no event shall the
 5        Association be liable to expend more than $300,000 in the
 6        aggregate  with  respect  to  any  one  individual  under
 7        subparagraph (1) and this subparagraph:
 8             (iii)  with  respect  to  any  one  contract  holder
 9        covered by any unallocated annuity contract not  included
10        in   subparagraph   (3)(b)(ii)  of  this  Section  above,
11        $5,000,000 in benefits, irrespective  of  the  number  of
12        such contracts held by that contract holder.
13    (Source: P.A. 88-364.)
14        (215 ILCS 5/1003) (from Ch. 73, par. 1065.703)
15        Sec. 1003.  Definitions.  As used in this Article:
16        (A) "Adverse underwriting decision" means:
17             (1)  any  of  the  following actions with respect to
18        insurance transactions involving insurance coverage which
19        is individually underwritten:
20                  (a)  a declination of insurance coverage,
21                  (b)  a termination of insurance coverage,
22                  (c)  failure of an agent to apply for insurance
23             coverage with a specific insurance institution which
24             the agent represents and which is  requested  by  an
25             applicant,
26                  (d)  in  the  case  of  a  property or casualty
27             insurance coverage:
28                       (i) placement by an insurance  institution
29                  or  agent  of  a  risk  with  a residual market
30                  mechanism,  an  unauthorized  insurer   or   an
31                  insurance   institution  which  specializes  in
32                  substandard risks, or
33                       (ii) the charging of a higher rate on  the
SB193 Enrolled              -22-               LRB9000079DPcd
 1                  basis  of  information  which differs from that
 2                  which the applicant or policyholder  furnished,
 3                  or
 4                  (e)  in  the case of life, health or disability
 5             insurance coverage, an offer  to  insure  at  higher
 6             than standard rates.
 7             (2)  Notwithstanding   paragraph   (1)   above,  the
 8        following  actions  shall  not  be   considered   adverse
 9        underwriting  decisions  but the insurance institution or
10        agent responsible for their occurrence shall nevertheless
11        provide the applicant or policyholder with  the  specific
12        reason or reasons for their occurrence:
13                  (a)  the  termination  of  an individual policy
14             form on a class or statewide basis,
15                  (b)  a declination of insurance coverage solely
16             because such coverage is not available on a class or
17             statewide basis, or
18                  (c)  the rescission of a policy.
19        (B)  "Affiliate" or  "affiliated"  means  a  person  that
20    directly,  or  indirectly through one or more intermediaries,
21    controls, is controlled by or is under  common  control  with
22    another person.
23        (C)  "Agent"  means  an  individual,  firm,  partnership,
24    association   or   corporation   who   is   involved  in  the
25    solicitation, negotiation or binding of coverages for  or  on
26    applications  or  policies of insurance, covering property or
27    risks located in  this  State.   For  the  purposes  of  this
28    Article,  both  "Insurance  Agent" and "Insurance Broker", as
29    defined in Section 490, shall be considered an agent.
30        (D)  "Applicant" means any person who seeks  to  contract
31    for  insurance  coverage  other  than  a person seeking group
32    insurance that is not individually underwritten.
33        (E)  "Director" means the Director of Insurance.
34        (F)  "Consumer report" means any written, oral  or  other
SB193 Enrolled              -23-               LRB9000079DPcd
 1    communication  of  information  bearing on a natural person's
 2    credit  worthiness,   credit   standing,   credit   capacity,
 3    character,  general  reputation,  personal characteristics or
 4    mode of living which is  used  or  expected  to  be  used  in
 5    connection with an insurance transaction.
 6        (G) "Consumer reporting agency" means any person who:
 7             (1) regularly  engages,  in whole or in part, in the
 8        practice of assembling or preparing consumer reports  for
 9        a monetary fee,
10             (2) obtains information primarily from sources other
11        than insurance institutions, and
12             (3) furnishes consumer reports to other persons.
13        (H)  "Control",  including  the  terms "controlled by" or
14    "under common control with", means the possession, direct  or
15    indirect,  of  the  power to direct or cause the direction of
16    the management and policies of a person, whether through  the
17    ownership  of  voting  securities,  by  contract other than a
18    commercial contract for goods or nonmanagement  services,  or
19    otherwise,  unless  the  power  is  the result of an official
20    position with or corporate office held by the person.
21        (I)  "Declination of insurance coverage" means a  denial,
22    in  whole or in part, by an insurance institution or agent of
23    requested insurance coverage.
24        (J)  "Individual" means any natural person who:
25             (1)  in the case of property or casualty  insurance,
26        is   a   past,  present  or  proposed  named  insured  or
27        certificateholder;
28             (2)  in the  case  of  life,  health  or  disability
29        insurance,  is  a  past,  present  or  proposed principal
30        insured or certificateholder;
31             (3)  is a past, present or proposed policyowner;
32             (4)  is a past or present applicant;
33             (5)  is a past or present claimant; or
34             (6)  derived,  derives  or  is  proposed  to  derive
SB193 Enrolled              -24-               LRB9000079DPcd
 1        insurance  coverage  under   an   insurance   policy   or
 2        certificate subject to this Article.
 3        (K)  "Institutional   source"   means   any   person   or
 4    governmental   entity  that  provides  information  about  an
 5    individual   to   an   agent,   insurance   institution    or
 6    insurance-support organization, other than:
 7             (1)  an agent,
 8             (2)  the  individual  who  is  the  subject  of  the
 9        information, or
10             (3)  a  natural person acting in a personal capacity
11        rather than in a business or professional capacity.
12        (L)  "Insurance  institution"  means   any   corporation,
13    association, partnership, reciprocal exchange, inter-insurer,
14    Lloyd's  insurer,  fraternal  benefit society or other person
15    engaged in the  business  of  insurance,  health  maintenance
16    organizations   as  defined  in  Section  2  of  the  "Health
17    Maintenance  Organization  Act",  medical  service  plans  as
18    defined in Section 2  of  "the  Medical  Service  Plan  Act",
19    hospital service corporation under "the Nonprofit Health Care
20    Service Plan Act", voluntary health services plans as defined
21    in  Section  2  of "the Voluntary Health Services Plans Act",
22    vision service plans as defined in Section 2  of-"The  Vision
23    Service Plan Act", dental service plans as defined in Section
24    4  of  "the  Dental  Service  Plan  Act",  and pharmaceutical
25    service plans as defined in Section 4 of "the  Pharmaceutical
26    Service Plan Act".  "Insurance institution" shall not include
27    agents or insurance-support organizations.
28        (M)  "Insurance-support organization" means:
29             (1) any person who regularly engages, in whole or in
30        part,   in  the  practice  of  assembling  or  collecting
31        information about natural persons for the primary purpose
32        of providing the information to an insurance  institution
33        or agent for insurance transactions, including:
34                  (a)  the  furnishing  of  consumer  reports  or
SB193 Enrolled              -25-               LRB9000079DPcd
 1             investigative   consumer  reports  to  an  insurance
 2             institution or agent for use in connection  with  an
 3             insurance transaction, or
 4                  (b)  the  collection  of  personal  information
 5             from   insurance   institutions,   agents  or  other
 6             insurance-support organizations for the  purpose  of
 7             detecting     or    preventing    fraud,    material
 8             misrepresentation  or  material   nondisclosure   in
 9             connection  with insurance underwriting or insurance
10             claim activity.
11             (2) Notwithstanding   paragraph   (1)   above,   the
12        following    persons    shall    not    be     considered
13        "insurance-support  organizations"  for  purposes of this
14        Article:  agents,  government   institutions,   insurance
15        institutions,   medical  care  institutions  and  medical
16        professionals.
17        (N)  "Insurance  transaction"   means   any   transaction
18    involving   insurance   primarily  for  personal,  family  or
19    household needs rather than business  or  professional  needs
20    which entails:
21             (1)  the    determination    of    an   individual's
22        eligibility  for  an  insurance  coverage,   benefit   or
23        payment, or
24             (2)  the  servicing  of  an  insurance  application,
25        policy, contract or certificate.
26        (O)  "Investigative  consumer  report"  means  a consumer
27    report or  portion  thereof  in  which  information  about  a
28    natural  person's  character,  general  reputation,  personal
29    characteristics   or  mode  of  living  is  obtained  through
30    personal interviews with  the  person's  neighbors,  friends,
31    associates,  acquaintances  or  others who may have knowledge
32    concerning such items of information.
33        (P)  "Medical-care institution"  means  any  facility  or
34    institution  that is licensed to provide health care services
SB193 Enrolled              -26-               LRB9000079DPcd
 1    to natural persons, including but not limited to:  hospitals,
 2    skilled  nursing  facilities,  home-health  agencies, medical
 3    clinics, rehabilitation agencies and  public-health  agencies
 4    and health-maintenance organizations.
 5        (Q)  "Medical  professional" means any person licensed or
 6    certified    to  provide  health  care  services  to  natural
 7    persons, including but not limited to, a physician,  dentist,
 8    nurse,  optometrist,  chiropractor,  pharmacist,  physical or
 9    occupational therapist,  psychiatric  social  worker,  speech
10    therapist, clinical dietitian or clinical psychologist.
11        (R)  "Medical-record    information"    means    personal
12    information which:
13             (1)  relates  to  an individual's physical or mental
14        condition, medical history or medical treatment, and
15             (2)  is obtained  from  a  medical  professional  or
16        medical-care  institution,  from  the individual, or from
17        the individual's spouse, parent or legal guardian.
18        (S)  "Person"  means  any  natural  person,  corporation,
19    association, partnership or other legal entity.
20        (T)  "Personal  information"   means   any   individually
21    identifiable  information  gathered  in  connection  with  an
22    insurance  transaction from which judgments can be made about
23    an  individual's  character,  habits,  avocations,  finances,
24    occupation, general reputation, credit, health or  any  other
25    personal characteristics.  "Personal information" includes an
26    individual's    name    and   address   and   "medical-record
27    information" but does not include "privileged information".
28        (U)  "Policyholder" means any person who:
29             (1)  in the case of individual property or  casualty
30        insurance, is a present named insured;
31             (2)  in  the  case  of  individual  life,  health or
32        disability insurance, is a present policyowner; or
33             (3)  in  the  case  of  group  insurance  which   is
34        individually    underwritten,    is   a   present   group
SB193 Enrolled              -27-               LRB9000079DPcd
 1        certificateholder.
 2        (V)  "Pretext interview" means  an  interview  whereby  a
 3    person,  in  an attempt to obtain information about a natural
 4    person, performs one or more of the following acts:
 5             (1)  pretends to be someone he or she is not,
 6             (2)  pretends to represent a person he or she is not
 7        in fact representing,
 8             (3)  misrepresents   the   true   purpose   of   the
 9        interview, or
10             (4)  refuses to identify  himself  or  herself  upon
11        request.
12        (W)  "Privileged   information"  means  any  individually
13    identifiable information that: (1) relates  to  a  claim  for
14    insurance   benefits   or  a  civil  or  criminal  proceeding
15    involving an individual, and (2) is collected  in  connection
16    with  or  in reasonable anticipation of a claim for insurance
17    benefits  or  civil  or  criminal  proceeding  involving   an
18    individual;  provided, however, information otherwise meeting
19    the requirements of this  subsection  shall  nevertheless  be
20    considered "personal information" under this Article if it is
21    disclosed in violation of Section 1014 of this Article.
22        (X)  "Residual  market  mechanism"  means an association,
23    organization or other entity described in Article  XXXIII  of
24    this Act, or Section 7-501 of "The Illinois Vehicle Code".
25        (Y)  "Termination  of insurance coverage" or "termination
26    of an  insurance  policy"  means  either  a  cancellation  or
27    nonrenewal  of  an insurance policy, in whole or in part, for
28    any reason other  than  the  failure  to  pay  a  premium  as
29    required by the policy.
30        (Z) "Unauthorized insurer" means an insurance institution
31    that  has  not been granted a certificate of authority by the
32    Director to transact the business of insurance in this State.
33    (Source: P.A. 82-108.)
SB193 Enrolled              -28-               LRB9000079DPcd
 1        Section  10.  The Health Maintenance Organization Act  is
 2    amended by changing Sections 1-2, 5-3, and 5-6 as follows:
 3        (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
 4        Sec.  1-2.   Definitions. As used in this Act, unless the
 5    context otherwise requires, the following  terms  shall  have
 6    the meanings ascribed to them:
 7        (1)  "Advertisement"   means  any  printed  or  published
 8    material, audiovisual material and descriptive literature  of
 9    the  health  care  plan  used  in  direct  mail,  newspapers,
10    magazines,  radio scripts, television scripts, billboards and
11    similar displays; and any  descriptive  literature  or  sales
12    aids  of  all  kinds  disseminated by a representative of the
13    health care plan for presentation to  the  public  including,
14    but   not   limited   to,   circulars,   leaflets,  booklets,
15    depictions, illustrations, form letters  and  prepared  sales
16    presentations.
17        (2)  "Director" means the Director of Insurance.
18        (3)  "Basic  health  care services" means emergency care,
19    and inpatient hospital and physician care, outpatient medical
20    services, mental health services and  care  for  alcohol  and
21    drug   abuse,   including   any  reasonable  deductibles  and
22    co-payments, all of which are subject to such limitations  as
23    are determined by the Director pursuant to rule.
24        (4)  "Enrollee" means an individual who has been enrolled
25    in a health care plan.
26        (5)  "Evidence   of   coverage"  means  any  certificate,
27    agreement, or contract issued to an enrollee setting out  the
28    coverage to which he is entitled in exchange for a per capita
29    prepaid sum.
30        (6)  "Group  contract"  means  a contract for health care
31    services which by its terms limits eligibility to members  of
32    a specified group.
33        (7)  "Health care plan" means any arrangement whereby any
SB193 Enrolled              -29-               LRB9000079DPcd
 1    organization undertakes to provide or arrange for and pay for
 2    or  reimburse  the  cost  of  basic health care services from
 3    providers selected by the Health Maintenance Organization and
 4    such arrangement consists of arranging for or  the  provision
 5    of  such  health  care  services,  as distinguished from mere
 6    indemnification against the cost of such services, except  as
 7    otherwise  authorized  by  Section  2-3 of this Act, on a per
 8    capita prepaid basis,  through  insurance  or  otherwise.   A
 9    "health  care  plan" also includes any arrangement whereby an
10    organization undertakes to provide or arrange for or pay  for
11    or  reimburse the cost of any health care service for persons
12    who are  enrolled  in  the  integrated  health  care  program
13    established  under  Section 5-16.3 of the Illinois Public Aid
14    Code through providers selected by the organization  and  the
15    arrangement  consists of making provision for the delivery of
16    health   care   services,   as   distinguished   from    mere
17    indemnification.    Nothing   in  this  definition,  however,
18    affects the  total  medical  services  available  to  persons
19    eligible for medical assistance under the Illinois Public Aid
20    Code.
21        (8)  "Health  care  services" means any services included
22    in the furnishing to any  individual  of  medical  or  dental
23    care, or the hospitalization or incident to the furnishing of
24    such care or hospitalization as well as the furnishing to any
25    person  of  any  and  all  other  services for the purpose of
26    preventing, alleviating, curing or healing human  illness  or
27    injury.
28        (9)  "Health    Maintenance   Organization"   means   any
29    organization formed under the laws of this or  another  state
30    to provide or arrange for one or more health care plans under
31    a  system  which  causes  any part of the risk of health care
32    delivery to be borne by the organization or its providers.
33        (10)  "Net worth" means admitted assets,  as  defined  in
34    Section 1-3 of this Act, minus liabilities.
SB193 Enrolled              -30-               LRB9000079DPcd
 1        (11)  "Organization"  means  any  insurance company, or a
 2    nonprofit corporation authorized under  the  Medical  Service
 3    Plan  Act,  the  Dental  Service Plan Act, the Vision Service
 4    Plan Act, the Pharmaceutical Service Plan Act, the  Voluntary
 5    Health  Services  Plans  Act  or  the  Non-profit Health Care
 6    Service Plan Act, or a corporation organized under  the  laws
 7    of  this or another state for the purpose of operating one or
 8    more health care plans and doing no business other than  that
 9    of a Health Maintenance Organization or an insurance company.
10    Organization  shall  also  mean  the  University  of Illinois
11    Hospital as defined in the University  of  Illinois  Hospital
12    Act.
13        (12)  "Provider"  means any physician, hospital facility,
14    or other person which is licensed or otherwise authorized  to
15    furnish  health  care  services  and  also includes any other
16    entity that arranges for the delivery or furnishing of health
17    care service.
18        (13)  "Producer" means a person  directly  or  indirectly
19    associated   with   a   health   care  plan  who  engages  in
20    solicitation or enrollment.
21        (14)  "Per capita prepaid" means a basis of prepayment by
22    which a fixed amount of money is prepaid  per  individual  or
23    any   other   enrollment   unit  to  the  Health  Maintenance
24    Organization or for health care services which  are  provided
25    during  a definite time period regardless of the frequency or
26    extent of the services rendered  by  the  Health  Maintenance
27    Organization,  except  for  copayments  and  deductibles  and
28    except  as  provided in subsection (f) of Section 5-3 of this
29    Act.
30        (15)  "Subscriber" means a person who has entered into  a
31    contractual   relationship   with   the   Health  Maintenance
32    Organization for the provision of or arrangement of at  least
33    basic  health  care  services  to  the  beneficiaries of such
34    contract.
SB193 Enrolled              -31-               LRB9000079DPcd
 1    (Source: P.A. 88-554, eff. 7-26-94; 89-90, eff. 6-30-95.)
 2        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 3        Sec. 5-3.  Insurance Code provisions.
 4        (a)  Health Maintenance Organizations shall be subject to
 5    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
 6    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
 7    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 367i,  401,  401.1,
 8    402,  403,  403A,  408,  408.2,  and  412,  paragraph  (c) of
 9    subsection (2) of Section 367, and Articles  VIII  1/2,  XII,
10    XII  1/2,  XIII, XIII 1/2, and XXVI of the Illinois Insurance
11    Code.
12        (b)  For purposes of the Illinois Insurance Code,  except
13    for   Articles   XIII   and   XIII  1/2,  Health  Maintenance
14    Organizations in the following categories are  deemed  to  be
15    "domestic companies":
16             (1)  a  corporation  authorized  under  the  Medical
17        Service Plan Act, the Dental Service Plan Act, the Vision
18        Service  Plan  Act,  the Pharmaceutical Service Plan Act,
19        the Voluntary Health Services Plan Act, or the  Nonprofit
20        Health Care Service Plan Act;
21             (2)  a  corporation organized under the laws of this
22        State; or
23             (3)  a  corporation  organized  under  the  laws  of
24        another state, 30% or more of the enrollees of which  are
25        residents  of this State, except a corporation subject to
26        substantially the  same  requirements  in  its  state  of
27        organization  as  is  a  "domestic company" under Article
28        VIII 1/2 of the Illinois Insurance Code.
29        (c)  In considering the merger, consolidation,  or  other
30    acquisition  of  control of a Health Maintenance Organization
31    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
32             (1)  the Director shall give  primary  consideration
33        to  the  continuation  of  benefits  to enrollees and the
SB193 Enrolled              -32-               LRB9000079DPcd
 1        financial conditions of the acquired  Health  Maintenance
 2        Organization  after  the  merger, consolidation, or other
 3        acquisition of control takes effect;
 4             (2)(i)  the criteria specified in subsection  (1)(b)
 5        of Section 131.8 of the Illinois Insurance Code shall not
 6        apply  and (ii) the Director, in making his determination
 7        with respect  to  the  merger,  consolidation,  or  other
 8        acquisition  of  control,  need not take into account the
 9        effect on competition of the  merger,  consolidation,  or
10        other acquisition of control;
11             (3)  the  Director  shall  have the power to require
12        the following information:
13                  (A)  certification by an independent actuary of
14             the  adequacy  of  the  reserves   of   the   Health
15             Maintenance Organization sought to be acquired;
16                  (B)  pro  forma financial statements reflecting
17             the combined balance sheets of the acquiring company
18             and the Health Maintenance Organization sought to be
19             acquired as of the end of the preceding year and  as
20             of  a date 90 days prior to the acquisition, as well
21             as  pro  forma   financial   statements   reflecting
22             projected  combined  operation  for  a  period  of 2
23             years;
24                  (C)  a pro forma  business  plan  detailing  an
25             acquiring   party's   plans   with  respect  to  the
26             operation of  the  Health  Maintenance  Organization
27             sought  to be acquired for a period of not less than
28             3 years; and
29                  (D)  such other  information  as  the  Director
30             shall require.
31        (d)  The  provisions  of Article VIII 1/2 of the Illinois
32    Insurance Code and this Section 5-3 shall apply to  the  sale
33    by any health maintenance organization of greater than 10% of
34    its  enrollee  population  (including  without limitation the
SB193 Enrolled              -33-               LRB9000079DPcd
 1    health maintenance organization's right, title, and  interest
 2    in and to its health care certificates).
 3        (e)  In  considering  any  management contract or service
 4    agreement subject to Section 141.1 of the Illinois  Insurance
 5    Code,  the  Director  (i)  shall, in addition to the criteria
 6    specified in Section 141.2 of the  Illinois  Insurance  Code,
 7    take  into  account  the effect of the management contract or
 8    service  agreement  on  the  continuation  of   benefits   to
 9    enrollees   and   the   financial  condition  of  the  health
10    maintenance organization to be managed or serviced, and  (ii)
11    need  not  take  into  account  the  effect of the management
12    contract or service agreement on competition.
13        (f)  Except for small employer groups as defined  in  the
14    Small  Employer  Rating,  Renewability and Portability Health
15    Insurance Act and except for medicare supplement policies  as
16    defined  in  Section  363  of  the Illinois Insurance Code, a
17    Health Maintenance Organization may by contract agree with  a
18    group  or  other  enrollment unit to effect refunds or charge
19    additional premiums under the following terms and conditions:
20             (i)  the amount of, and other terms  and  conditions
21        with respect to, the refund or additional premium are set
22        forth  in the group or enrollment unit contract agreed in
23        advance of the period for which a refund is to be paid or
24        additional premium is to be charged (which  period  shall
25        not be less than one year); and
26             (ii)  the amount of the refund or additional premium
27        shall   not   exceed   20%   of  the  Health  Maintenance
28        Organization's profitable or unprofitable experience with
29        respect to the group or other  enrollment  unit  for  the
30        period  (and,  for  purposes  of  a  refund or additional
31        premium, the profitable or unprofitable experience  shall
32        be calculated taking into account a pro rata share of the
33        Health   Maintenance  Organization's  administrative  and
34        marketing expenses, but shall not include any  refund  to
SB193 Enrolled              -34-               LRB9000079DPcd
 1        be made or additional premium to be paid pursuant to this
 2        subsection (f)).  The Health Maintenance Organization and
 3        the   group   or  enrollment  unit  may  agree  that  the
 4        profitable or unprofitable experience may  be  calculated
 5        taking into account the refund period and the immediately
 6        preceding 2 plan years.
 7        The  Health  Maintenance  Organization  shall  include  a
 8    statement in the evidence of coverage issued to each enrollee
 9    describing the possibility of a refund or additional premium,
10    and  upon request of any group or enrollment unit, provide to
11    the group or enrollment unit a description of the method used
12    to  calculate  (1)  the  Health  Maintenance   Organization's
13    profitable experience with respect to the group or enrollment
14    unit and the resulting refund to the group or enrollment unit
15    or  (2)  the  Health  Maintenance Organization's unprofitable
16    experience with respect to the group or enrollment  unit  and
17    the  resulting  additional premium to be paid by the group or
18    enrollment unit.
19        In  no  event  shall  the  Illinois  Health   Maintenance
20    Organization  Guaranty  Association  be  liable  to  pay  any
21    contractual  obligation  of  an insolvent organization to pay
22    any refund authorized under this Section.
23    (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
24        (215 ILCS 125/5-6) (from Ch. 111 1/2, par. 1414)
25        Sec. 5-6.  Supervision of rehabilitation, liquidation  or
26    conservation by the Director.
27        (a)  For  purposes  of the rehabilitation, liquidation or
28    conservation  of  a  health  maintenance  organization,   the
29    operation  of a health maintenance organization in this State
30    constitutes a form of insurance protection  which  should  be
31    governed by the same provisions governing the rehabilitation,
32    liquidation  or  conservation  of  insurance  companies.  Any
33    rehabilitation,  liquidation  or  conservation  of  a  Health
SB193 Enrolled              -35-               LRB9000079DPcd
 1    Maintenance  Organization shall be based upon the grounds set
 2    forth in and subject to the provisions of the  laws  of  this
 3    State   regarding   the   rehabilitation,   liquidation,   or
 4    conservation  of  an insurance company and shall be conducted
 5    under the supervision  of  the  Director.  Insolvency,  as  a
 6    ground  for rehabilitation, liquidation, or conservation of a
 7    Health Maintenance Organization, shall be recognized  when  a
 8    Health Maintenance Organization cannot be expected to satisfy
 9    its financial obligations when such obligations are to become
10    due or when the Health Maintenance Organization has neglected
11    to  correct  within  the time prescribed by subsection (c) of
12    Section   2-4,   a   deficiency   occurring   due   to   such
13    organization's  prescribed  minimum  net  worth  or   special
14    contingent   reserve   being   impaired.    For   purpose  of
15    determining the priority of distribution of  general  assets,
16    claims  of  enrollees and enrollees' beneficiaries shall have
17    the same priority  as  established  by  Section  205  of  the
18    Illinois  Insurance  Code for policyholders and beneficiaries
19    of insureds of insurance companies.  If an enrollee is liable
20    to any provider for services provided pursuant to and covered
21    by the health care plan, that liability shall have the status
22    of an enrollee claim for distribution of general assets.
23        Any provider who is obligated by statute or agreement  to
24    hold  enrollees harmless from liability for services provided
25    pursuant to and covered by a health care plan  shall  have  a
26    priority  of  distribution  of the general assets immediately
27    following that of enrollees and enrollees'  beneficiaries  as
28    described  herein,  and immediately preceding the priority of
29    distribution described in paragraph (e) of subsection (1)  of
30    Section 205 of the Illinois Insurance Code.
31        (b)  For  purposes  of  Articles XIII and XIII-1/2 of the
32    Illinois  Insurance  Code,  organizations  in  the  following
33    categories shall be deemed to be a "domestic company"  and  a
34    "domiciliary company":
SB193 Enrolled              -36-               LRB9000079DPcd
 1             (i)  a  corporation  authorized  under  the  Medical
 2        Service Plan Act, the Dental Service Plan Act, the Vision
 3        Service  Plan  Act,  the Pharmaceutical Service Plan Act,
 4        the Voluntary Health Services Plans Act or the Non-Profit
 5        Health Care Service Plan Act;
 6             (ii)  a corporation organized under the laws of this
 7        State; or
 8             (iii)  a corporation organized  under  the  laws  of
 9        another  state, 20% or more of the enrollees of which are
10        residents of this State, except where such a  corporation
11        is,   in   its   state   of   incorporation,  subject  to
12        rehabilitation, liquidation and  conservation  under  the
13        laws relating to insurance companies.
14        (c)  In   the   event  of  the  insolvency  of  a  health
15    maintenance organization, no enrollee  of  such  organization
16    shall be liable to any provider for medical services rendered
17    by  such  provider,  except  for  applicable  co-payments  or
18    deductibles  for  covered  services  or fees for services not
19    covered by the health maintenance organization, with  respect
20    to  the  amounts such provider is not paid by the Association
21    pursuant to the provisions of Section  6-8  (8)(b)  and  (c).
22    No  provider,  whether  or  not the provider is obligated  by
23    statute  or  agreement  to  hold  enrollees   harmless   from
24    liability,  shall  seek  to  recover any such amount from any
25    enrollee until the Association has made a final determination
26    of its  liability  (or  the  resolution  of  any  dispute  or
27    litigation  resulting  therefrom) with respect to the matters
28    specified in such provisions.  In the event that the provider
29    seeks to recover such amounts before the Association's  final
30    determination  of  its  liability  (or  the resolution of any
31    dispute or  litigation  resulting  therefrom),  the  provider
32    shall  be  liable  for all reasonable costs and attorney fees
33    incurred by the Director or the Association in enforcing this
34    provision or any court orders related hereto.
SB193 Enrolled              -37-               LRB9000079DPcd
 1    (Source: P.A. 88-297; 89-206, eff. 7-21-95.)
 2        (215 ILCS 160/Act rep.)
 3        Section  15.  The Vision Service Plan Act is repealed.
 4        Section 99.  Effective date.  This Act takes effect  upon
 5    becoming law.

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