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Public Act 102-0929


 

Public Act 0929 102ND GENERAL ASSEMBLY

  
  
  

 


 
Public Act 102-0929
 
HB4313 EnrolledLRB102 21390 BMS 30506 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Sections 131.22, 132.5, and 547 as follows:
 
    (215 ILCS 5/131.22)
    (Text of Section before amendment by P.A. 102-578)
    Sec. 131.22. Confidential treatment.
    (a) Documents, materials, or other information in the
possession or control of the Department that are obtained by
or disclosed to the Director or any other person in the course
of an examination or investigation made pursuant to this
Article and all information reported or provided to the
Department pursuant to paragraphs (12) and (13) of Section
131.5 and Sections 131.13 through 131.21 shall be confidential
by law and privileged, shall not be subject to the Illinois
Freedom of Information Act, shall not be subject to subpoena,
and shall not be subject to discovery or admissible in
evidence in any private civil action. However, the Director is
authorized to use the documents, materials, or other
information in the furtherance of any regulatory or legal
action brought as a part of the Director's official duties.
The Director shall not otherwise make the documents,
materials, or other information public without the prior
written consent of the company to which it pertains unless the
Director, after giving the company and its affiliates who
would be affected thereby prior written notice and an
opportunity to be heard, determines that the interest of
policyholders, shareholders, or the public shall be served by
the publication thereof, in which event the Director may
publish all or any part in such manner as may be deemed
appropriate.
    (b) Neither the Director nor any person who received
documents, materials, or other information while acting under
the authority of the Director or with whom such documents,
materials, or other information are shared pursuant to this
Article shall be permitted or required to testify in any
private civil action concerning any confidential documents,
materials, or information subject to subsection (a) of this
Section.
    (c) In order to assist in the performance of the
Director's duties, the Director:
        (1) may share documents, materials, or other
    information, including the confidential and privileged
    documents, materials, or information subject to subsection
    (a) of this Section, with other state, federal, and
    international regulatory agencies, with the NAIC and its
    affiliates and subsidiaries, and with third-party
    consultants, and with state, federal, and international
    law enforcement authorities and regulatory agencies,
    including members of any supervisory college allowed by
    this Article, provided that the recipient agrees in
    writing to maintain the confidentiality and privileged
    status of the document, material, or other information,
    and has verified in writing the legal authority to
    maintain confidentiality;
        (1.5) notwithstanding paragraph (1) of this subsection
    (c), may only share confidential and privileged documents,
    material, or information reported pursuant to Section
    131.14b with commissioners of states having statutes or
    regulations substantially similar to subsection (a) of
    this Section and who have agreed in writing not to
    disclose such information; and
        (1.7) notwithstanding paragraph (1) of this subsection
    (c), may only share confidential and privileged documents,
    material, or information reported pursuant to Section
    131.14b with the Illinois Insurance Guaranty Fund
    regarding any member company defined in Section 534.5 if
    the member company has an authorized control level event
    as defined in Section 35A-25; the Director may disclose
    the information described in this subsection so long as
    the Fund agrees in writing to hold that information
    confidential, in a manner consistent with this Code, and
    uses that information to prepare for the possible
    liquidation of the member company; access to the
    information disclosed by the Director to the Fund shall be
    limited to the Fund's staff and its counsel; the board of
    directors of the Fund may have access to the information
    disclosed by the Director to the Fund once the member
    company is subject to a delinquency proceeding under
    Article XIII subject to any terms and conditions
    established by the Director; and
        (2) may receive documents, materials, or information,
    including otherwise confidential and privileged documents,
    materials, or information from the NAIC and its affiliates
    and subsidiaries and from regulatory and law enforcement
    officials of other foreign or domestic jurisdictions, and
    shall maintain as confidential or privileged any document,
    material, or information received with notice or the
    understanding that it is confidential or privileged under
    the laws of the jurisdiction that is the source of the
    document, material, or information; any such documents,
    materials, or information, while in the Director's
    possession, shall not be subject to the Illinois Freedom
    of Information Act and shall not be subject to subpoena.
    (c-5) Written agreements with the NAIC or third-party
consultants governing sharing and use of information provided
pursuant to this Article consistent with this subsection (c)
shall:
        (1) specify procedures and protocols regarding the
    confidentiality and security of information shared with
    the NAIC and its affiliates and subsidiaries or
    third-party consultants pursuant to this Article,
    including procedures and protocols for sharing by the NAIC
    with other state, federal, or international regulators;
        (2) specify that ownership of information shared with
    the NAIC and its affiliates and subsidiaries or
    third-party consultants pursuant to this Article remains
    with the Director and the NAIC's or third-party
    consultant's use of the information is subject to the
    direction of the Director;
        (3) require prompt notice to be given to a company
    whose confidential information in the possession of the
    NAIC or third-party consultant pursuant to this Article is
    subject to a request or subpoena for disclosure or
    production; and
        (4) require the NAIC and its affiliates and
    subsidiaries or third-party consultants to consent to
    intervention by a company in any judicial or
    administrative action in which the NAIC and its affiliates
    and subsidiaries or third-party consultants may be
    required to disclose confidential information about the
    company shared with the NAIC and its affiliates and
    subsidiaries or third-party consultants pursuant to this
    Article.
    (d) The sharing of documents, materials, or information by
the Director pursuant to this Article shall not constitute a
delegation of regulatory authority or rulemaking, and the
Director is solely responsible for the administration,
execution, and enforcement of the provisions of this Article.
    (e) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials, or information
shall occur as a result of disclosure to the Director under
this Section or as a result of sharing as authorized in
subsection (c) of this Section.
    (f) Documents, materials, or other information in the
possession or control of the NAIC or a third-party consultant
pursuant to this Article shall be confidential by law and
privileged, shall not be subject to the Illinois Freedom of
Information Act, shall not be subject to subpoena, and shall
not be subject to discovery or admissible in evidence in any
private civil action.
(Source: P.A. 102-394, eff. 8-16-21.)
 
    (Text of Section after amendment by P.A. 102-578)
    Sec. 131.22. Confidential treatment.
    (a) Documents, materials, or other information in the
possession or control of the Department that are obtained by
or disclosed to the Director or any other person in the course
of an examination or investigation made pursuant to this
Article and all information reported or provided to the
Department pursuant to paragraphs (12) and (13) of Section
131.5 and Sections 131.13 through 131.21 are recognized by
this State as being proprietary and to contain trade secrets,
and shall be confidential by law and privileged, shall not be
subject to the Illinois Freedom of Information Act, shall not
be subject to subpoena, and shall not be subject to discovery
or admissible in evidence in any private civil action.
However, the Director is authorized to use the documents,
materials, or other information in the furtherance of any
regulatory or legal action brought as a part of the Director's
official duties. The Director shall not otherwise make the
documents, materials, or other information public without the
prior written consent of the company to which it pertains
unless the Director, after giving the company and its
affiliates who would be affected thereby prior written notice
and an opportunity to be heard, determines that the interest
of policyholders, shareholders, or the public shall be served
by the publication thereof, in which event the Director may
publish all or any part in such manner as may be deemed
appropriate.
    (b) Neither the Director nor any person who received
documents, materials, or other information while acting under
the authority of the Director or with whom such documents,
materials, or other information are shared pursuant to this
Article shall be permitted or required to testify in any
private civil action concerning any confidential documents,
materials, or information subject to subsection (a) of this
Section.
    (c) In order to assist in the performance of the
Director's duties, the Director:
        (1) may share documents, materials, or other
    information, including the confidential and privileged
    documents, materials, or information subject to subsection
    (a) of this Section, including proprietary and trade
    secret documents and materials, with other state, federal,
    and international regulatory agencies, with the NAIC and
    its affiliates and subsidiaries, and with third-party
    consultants, and with state, federal, and international
    law enforcement authorities and regulatory agencies,
    including members of any supervisory college allowed by
    this Article, provided that the recipient agrees in
    writing to maintain the confidentiality and privileged
    status of the document, material, or other information,
    and has verified in writing the legal authority to
    maintain confidentiality;
        (1.5) notwithstanding paragraph (1) of this subsection
    (c), may only share confidential and privileged documents,
    material, or information reported pursuant to subsection
    (a) of Section 131.14b with commissioners of states having
    statutes or regulations substantially similar to
    subsection (a) of this Section and who have agreed in
    writing not to disclose such information; and
        (1.7) notwithstanding paragraph (1) of this subsection
    (c), may only share confidential and privileged documents,
    material, or information reported pursuant to Section
    131.14b with the Illinois Insurance Guaranty Fund
    regarding any member company defined in Section 534.5 if
    the member company has an authorized control level event
    as defined in Section 35A-25; the Director may disclose
    the information described in this subsection so long as
    the Fund agrees in writing to hold that information
    confidential, in a manner consistent with this Code, and
    uses that information to prepare for the possible
    liquidation of the member company; access to the
    information disclosed by the Director to the Fund shall be
    limited to the Fund's staff and its counsel; the board of
    directors of the Fund may have access to the information
    disclosed by the Director to the Fund once the member
    company is subject to a delinquency proceeding under
    Article XIII subject to any terms and conditions
    established by the Director; and
        (2) may receive documents, materials, or information,
    including otherwise confidential and privileged documents,
    materials, or information, including proprietary and trade
    secret information, from the NAIC and its affiliates and
    subsidiaries and from regulatory and law enforcement
    officials of other foreign or domestic jurisdictions, and
    shall maintain as confidential or privileged any document,
    material, or information received with notice or the
    understanding that it is confidential or privileged under
    the laws of the jurisdiction that is the source of the
    document, material, or information; any such documents,
    materials, or information, while in the Director's
    possession, shall not be subject to the Illinois Freedom
    of Information Act and shall not be subject to subpoena.
        (blank).
    (c-5) Written agreements with the NAIC or third-party
consultants governing sharing and use of information provided
pursuant to this Article consistent with subsection (c) shall:
        (1) specify procedures and protocols regarding the
    confidentiality and security of information shared with
    the NAIC and its affiliates and subsidiaries or
    third-party consultants pursuant to this Article,
    including procedures and protocols for sharing by the NAIC
    with other state, federal, or international regulators;
    the agreement shall provide that the recipient agrees in
    writing to maintain the confidentiality and privileged
    status of the documents, materials, or other information
    and has verified in writing the legal authority to
    maintain such confidentiality;
        (2) specify that ownership of information shared with
    the NAIC and its affiliates and subsidiaries or
    third-party consultants pursuant to this Article remains
    with the Director and the NAIC's or third-party
    consultant's use of the information is subject to the
    direction of the Director;
        (3) require prompt notice to be given to a company
    whose confidential information in the possession of the
    NAIC or third-party consultant pursuant to this Article is
    subject to a request or subpoena for disclosure or
    production;
        (4) require the NAIC and its affiliates and
    subsidiaries or third-party consultants to consent to
    intervention by a company in any judicial or
    administrative action in which the NAIC and its affiliates
    and subsidiaries or third-party consultants may be
    required to disclose confidential information about the
    company shared with the NAIC and its affiliates and
    subsidiaries or third-party consultants pursuant to this
    Article; and
        (5) excluding documents, material, or information
    reported pursuant to subsection (c) of Section 131.14b,
    prohibit the NAIC or third-party consultant from storing
    the information shared pursuant to this Code in a
    permanent database after the underlying analysis is
    completed.
    (d) The sharing of documents, materials, or information by
the Director pursuant to this Article shall not constitute a
delegation of regulatory authority or rulemaking, and the
Director is solely responsible for the administration,
execution, and enforcement of the provisions of this Article.
    (e) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials, or information
shall occur as a result of disclosure to the Director under
this Section or as a result of sharing as authorized in
subsection (c) of this Section.
    (f) Documents, materials, or other information in the
possession or control of the NAIC or third-party consultant
pursuant to this Article shall be confidential by law and
privileged, shall not be subject to the Illinois Freedom of
Information Act, shall not be subject to subpoena, and shall
not be subject to discovery or admissible in evidence in any
private civil action.
(Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 12-31-22;
revised 9-22-21.)
 
    (215 ILCS 5/132.5)  (from Ch. 73, par. 744.5)
    Sec. 132.5. Examination reports.
    (a) General description. All examination reports shall be
comprised of only facts appearing upon the books, records, or
other documents of the company, its agents, or other persons
examined or as ascertained from the testimony of its officers,
agents, or other persons examined concerning its affairs and
the conclusions and recommendations as the examiners find
reasonably warranted from those facts.
    (b) Filing of examination report. No later than 60 days
following completion of the examination, the examiner in
charge shall file with the Department a verified written
report of examination under oath. Upon receipt of the verified
report, the Department shall transmit the report to the
company examined, together with a notice that affords the
company examined a reasonable opportunity of not more than 30
days to make a written submission or rebuttal with respect to
any matters contained in the examination report.
    (c) Adoption of the report on examination. Within 30 days
of the end of the period allowed for the receipt of written
submissions or rebuttals, the Director shall fully consider
and review the report, together with any written submissions
or rebuttals and any relevant portions of the examiners work
papers and enter an order:
        (1) Adopting the examination report as filed or with
    modification or corrections. If the examination report
    reveals that the company is operating in violation of any
    law, regulation, or prior order of the Director, the
    Director may order the company to take any action the
    Director considers necessary and appropriate to cure the
    violation.
        (2) Rejecting the examination report with directions
    to the examiners to reopen the examination for purposes of
    obtaining additional data, documentation, or information
    and refiling under subsection (b).
        (3) Calling for an investigatory hearing with no less
    than 20 days notice to the company for purposes of
    obtaining additional documentation, data, information, and
    testimony.
    (d) Order and procedures. All orders entered under
paragraph (1) of subsection (c) shall be accompanied by
findings and conclusions resulting from the Director's
consideration and review of the examination report, relevant
examiner work papers, and any written submissions or
rebuttals. The order shall be considered a final
administrative decision and may be appealed in accordance with
the Administrative Review Law. The order shall be served upon
the company by certified mail, together with a copy of the
adopted examination report. Within 30 days of the issuance of
the adopted report, the company shall file affidavits executed
by each of its directors stating under oath that they have
received a copy of the adopted report and related orders.
    Any hearing conducted under paragraph (3) of subsection
(c) by the Director or an authorized representative shall be
conducted as a nonadversarial confidential investigatory
proceeding as necessary for the resolution of any
inconsistencies, discrepancies, or disputed issues apparent
upon the face of the filed examination report or raised by or
as a result of the Director's review of relevant work papers or
by the written submission or rebuttal of the company. Within
20 days of the conclusion of any hearing, the Director shall
enter an order under paragraph (1) of subsection (c).
    The Director shall not appoint an examiner as an
authorized representative to conduct the hearing. The hearing
shall proceed expeditiously with discovery by the company
limited to the examiner's work papers that tend to
substantiate any assertions set forth in any written
submission or rebuttal. The Director or his representative may
issue subpoenas for the attendance of any witnesses or the
production of any documents deemed relevant to the
investigation, whether under the control of the Department,
the company, or other persons. The documents produced shall be
included in the record, and testimony taken by the Director or
his representative shall be under oath and preserved for the
record. Nothing contained in this Section shall require the
Department to disclose any information or records that would
indicate or show the existence or content of any investigation
or activity of a criminal justice agency.
    The hearing shall proceed with the Director or his
representative posing questions to the persons subpoenaed.
Thereafter the company and the Department may present
testimony relevant to the investigation. Cross-examination
shall be conducted only by the Director or his representative.
The company and the Department shall be permitted to make
closing statements and may be represented by counsel of their
choice.
    (e) Publication and use. Upon the adoption of the
examination report under paragraph (1) of subsection (c), the
Director shall continue to hold the content of the examination
report as private and confidential information for a period of
35 days, except to the extent provided in subsection (b).
Thereafter, the Director may open the report for public
inspection so long as no court of competent jurisdiction has
stayed its publication.
    Nothing contained in this Code shall prevent or be
construed as prohibiting the Director from disclosing the
content of an examination report, preliminary examination
report or results, or any matter relating thereto, to the
insurance department of any other state or country or to law
enforcement officials of this or any other state or agency of
the federal government at any time, so long as the agency or
office receiving the report or matters relating thereto agrees
in writing to hold it confidential and in a manner consistent
with this Code.
    In the event the Director determines that regulatory
action is appropriate as a result of any examination, he may
initiate any proceedings or actions as provided by law.
    (f) Confidentiality of ancillary information. All working
papers, recorded information, documents, and copies thereof
produced by, obtained by, or disclosed to the Director or any
other person in the course of any examination must be given
confidential treatment, are not subject to subpoena, and may
not be made public by the Director or any other persons, except
to the extent provided in subsection (e). Access may also be
granted to the National Association of Insurance
Commissioners. Those parties must agree in writing before
receiving the information to provide to it the same
confidential treatment as required by this Section, unless the
prior written consent of the company to which it pertains has
been obtained.
    This subsection (f) applies to market conduct examinations
described in Section 132 of this Code.
    (g) Disclosure. Nothing contained in this Code shall
prevent or be construed as prohibiting the Director from
disclosing the information described in subsections (e) and
(f) to the Illinois Insurance Guaranty Fund regarding any
member company defined in Section 534.5 if the member company
has an authorized control level event as defined in Section
35A-25. The Director may disclose the information described in
this subsection so long as the Fund agrees in writing to hold
that information confidential, in a manner consistent with
this Code, and uses that information to prepare for the
possible liquidation of the member company. Access to the
information disclosed by the Director to the Fund shall be
limited to the Fund's staff and its counsel. The Board of
Directors of the Fund may have access to the information
disclosed by the Director to the Fund once the member company
is subject to a delinquency proceeding under Article XIII
subject to any terms and conditions established by the
Director.
(Source: P.A. 100-475, eff. 1-1-18.)
 
    (215 ILCS 5/547)  (from Ch. 73, par. 1065.97)
    Sec. 547. Prevention of insolvencies. To aid in the
detection and prevention of company insolvencies:
    (a) The board of directors may, upon majority vote, make
recommendations to the Director on matters pertaining to
regulation for solvency.
    (b) The board of directors may prepare a report on the
history and causes of any company insolvency in which the Fund
was obligated to pay covered claims, based on the information
available to the Fund, and submit such report to the Director.
    (c) The Director may disclose to the Fund the information
described in subsection (g) of Section 132.5 as well as the
information described in subsection (c) of Section 131.22, and
the Fund may use that information to prepare for the possible
liquidation of a member company subject to the requirements
and restrictions set forth in Section 132.5.
(Source: P.A. 85-576.)
 
    Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 5/27/2022