SB1479 EnrolledLRB103 05817 BMS 50837 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 132, 132.5, 155.35, 402, 408, 511.109,
6512-3, 512-5, and 513b3 and by adding Section 512-11 as
7follows:
 
8    (215 ILCS 5/132)  (from Ch. 73, par. 744)
9    Sec. 132. Market conduct actions and market analysis and
10non-financial examinations.
11    (a) Definitions. As used in this Section:
12    "Data call" means a written solicitation by the Director
13to 2 or more regulated companies or persons seeking existing
14data or other existing information to be provided within a
15reasonable time period for a narrow and targeted regulatory
16oversight purpose for market analysis. "Data call" does not
17include an information request in a market conduct action or
18any data or information that the Director shall or may
19specifically require under any other law, except as provided
20by the other law.
21    "Desk examination" means an examination that is conducted
22by market conduct surveillance personnel at a location other
23than the regulated company's or person's premises. "Desk

 

 

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1examination" includes an examination performed at the
2Department's offices with the company or person providing
3requested documents by hard copy, microfiche, or discs or
4other electronic media for review without an on-site
5examination.
6    "Market analysis" means a process whereby market conduct
7surveillance personnel collect and analyze information from
8filed schedules, surveys, required reports, data calls, and
9other sources to develop a baseline understanding of the
10marketplace and to identify patterns or practices of regulated
11persons that deviate significantly from the norm or that may
12pose a potential risk to insurance consumers.
13    "Market conduct action" means any activity, other than
14market analysis, that the Director may initiate to assess and
15address the market and nonfinancial practices of regulated
16persons, including market conduct examinations. The
17Department's consumer complaint process outlined in 50 Ill.
18Adm. Code 926 is not a market conduct action for purposes of
19this Section; however, the Department may initiate market
20conduct actions based on information gathered during that
21process. "Market conduct action" includes:
22        (1) correspondence with the company or person;
23        (2) interviews with the company or person;
24        (3) information gathering;
25        (4) policy and procedure reviews;
26        (5) interrogatories;

 

 

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1        (6) review of company or person self-evaluations and
2    voluntary compliance programs;
3        (7) self-audits; and
4        (8) market conduct examinations.
5    "Market conduct examination" or "examination" means any
6type of examination, other than a financial examination, that
7assesses a regulated person's compliance with the laws, rules,
8and regulations applicable to the examinee. "Market conduct
9examination" includes comprehensive examinations, targeted
10examinations, and follow-up examinations, which may be
11conducted as desk examinations, on-site examinations, or a
12combination of those 2 methods.
13    "Market conduct surveillance" means market analysis or a
14market conduct action.
15    "Market conduct surveillance personnel" means those
16individuals employed or retained by the Department and
17designated by the Director to collect, analyze, review, or act
18on information in the insurance marketplace that identifies
19patterns or practices of persons subject to the Director's
20jurisdiction. "Market conduct surveillance personnel" includes
21all persons identified as an examiner in the insurance laws or
22rules of this State if the Director has designated them to
23assist her or him in ascertaining the nonfinancial business
24practices, performance, and operations of a company or person
25subject to the Director's jurisdiction.
26    "On-site examination" means an examination conducted at

 

 

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1the company's or person's home office or the location where
2the records under review are stored.
3    "SOFR rate" means the Secured Overnight Financing Rate
4published by the Federal Reserve Bank of New York every
5business day.
6    (b) Companies and persons subject to surveillance. The
7Director, for the purposes of ascertaining the nonfinancial
8business practices, performance, and operations of any person
9subject to the Director's jurisdiction or within the
10marketplace, may engage in market conduct actions or market
11analysis relating to:
12        (1) any company transacting or being organized to
13    transact business in this State;
14        (2) any person engaged in or proposing to be engaged
15    in the organization, promotion, or solicitation of shares
16    or capital contributions to or aiding in the formation of
17    a company;
18        (3) any person having a written or oral contract
19    pertaining to the management or control of a company as
20    general agent, managing agent, or attorney-in-fact;
21        (4) any licensed or registered producer, firm,
22    pharmacy benefit manager, administrator, or any person
23    making application for any license, certificate, or
24    registration;
25        (5) any person engaged in the business of adjusting
26    losses or financing premiums; or

 

 

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1        (6) any person, organization, trust, or corporation
2    having custody or control of information reasonably
3    related to the operation, performance, or conduct of a
4    company or person subject to the Director's jurisdiction,
5    but only as to the operation, performance, or conduct of a
6    company or person subject to the Director's jurisdiction.
7    (c) Market analysis and market conduct actions.
8        (1) The Director may perform market analysis by
9    gathering and analyzing information from data currently
10    available to the Director, information from surveys, data
11    call responses, or reports that are submitted to the
12    Director, information collected by the NAIC, and
13    information from a variety of other sources to develop a
14    baseline understanding of the marketplace and to identify
15    for further review companies or practices that deviate
16    from the norm or that may pose a potential risk to
17    insurance consumers. The Director shall use the most
18    recent NAIC Market Regulation Handbook as a guide in
19    performing market analysis. The Director may also employ
20    other guidelines or procedures as the Director may deem
21    appropriate.
22        (2) The Director may initiate a market conduct action
23    subject to the following:
24            (A) If the Director determines that further
25        inquiry into a particular person or practice is
26        needed, then the Director may consider undertaking a

 

 

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1        market conduct action. The Director shall inform the
2        examinee of the initiation of the market conduct
3        action and shall use the most recent NAIC Market
4        Regulation Handbook as a guide in performing the
5        market conduct action. The Director may also employ
6        other guidelines or procedures as the Director may
7        deem appropriate.
8            (B) For an examination, the Director shall conduct
9        a pre-examination conference with the examinee to
10        clarify expectations before commencement of the
11        examination. At the pre-examination conference, the
12        Director or the market conduct surveillance personnel
13        shall disclose the basis of the examination, including
14        the statutes, regulations, or business practices at
15        issue. The Director shall provide at least 30 days'
16        advance notice of the date of the pre-examination
17        conference unless circumstances warrant that the
18        examination proceed more quickly.
19            (C) The Director may coordinate a market conduct
20        action and findings of this State with market conduct
21        actions and findings of other states.
22        (3) Nothing in this Section requires the Director to
23    undertake market analysis before initiating any market
24    conduct action.
25        (4) Nothing in this Section restricts the Director to
26    the type of market conduct action he or she initially

 

 

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1    selected.
2        (5) A regulated person is required to respond to a
3    market analysis data call or to an information request in
4    a market conduct action on the terms and conditions
5    established by the Director. The Department shall
6    establish reasonable timelines that are commensurate with
7    the volume and nature of the data required to be collected
8    in the information request.
9        (6) Without limiting the contents of any examination
10    report, market conduct actions taken as a result of a
11    market analysis shall focus primarily on the general
12    business practices and compliance activities of companies
13    or persons rather than identifying infrequent or
14    unintentional random errors that do not cause significant
15    consumer harm. The Director may give a company or person
16    an opportunity to resolve matters that are identified as a
17    result of a market analysis to the Director's satisfaction
18    before undertaking a market conduct action against the
19    company or person.
20    (d) Access to books and records. Every examinee and its
21officers, directors, and agents must provide to the Director
22convenient and free access at all reasonable hours at its
23office or location to all books, records, and documents and
24any or all papers relating to the business, performance,
25operations, and affairs of the examinee. The officers,
26directors, and agents of the examinee must facilitate the

 

 

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1market conduct action and aid in the action so far as it is in
2their power to do so. The Director and any authorized market
3conduct surveillance personnel have the power to administer
4oaths and examine under oath any person relevant to the
5business of the examinee. A failure to produce requested
6books, records, or documents by the deadline shall not be a
7violation until after the later of:
8        (1) 5 business days after the initial response
9    deadline set by the Director or authorized personnel; or
10        (2) an extended deadline granted by the Director or
11    authorized personnel.
12    (e) Examination report. The market conduct surveillance
13personnel designated by the Director under Section 402 must
14make a full and true report of every examination made by them
15that contains only facts ascertained from the books, papers,
16records, documents, and other evidence obtained by
17investigation and examined by them or ascertained from the
18testimony of officers, agents, or other persons examined under
19oath concerning the business, affairs, conduct, and
20performance of the examinee. The report of examination must be
21verified by the oath of the examiner in charge thereof, and
22when so verified is prima facie evidence in any action or
23proceeding in the name of the State against the examinee, its
24officers, directors, or agents upon the facts stated therein.
25    (f) Examinee response to examination report. The
26Department and the examinee shall comply with the following

 

 

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1timeline, unless a mutual agreement is reached to modify the
2timeline:
3        (1) The Department shall deliver a draft report to the
4    examinee as soon as reasonably practicable. Nothing in
5    this Section prevents the Department from sharing an
6    earlier draft of the report with the examinee before
7    confirming that the examination is completed.
8        (2) If the examinee chooses to respond with written
9    submissions or rebuttals, then the examinee must do so
10    within 30 days after receipt of any draft report delivered
11    after the completion of the examination.
12        (3) As soon as reasonably practicable after receipt of
13    any written submissions or rebuttals, the Department shall
14    issue a final report. Whenever the Department has made
15    substantive changes to a previously shared draft report,
16    unless those changes remove part or all of an alleged
17    violation or were proposed by the examinee, the Department
18    shall deliver the revised version to the examinee as a new
19    draft and shall allow the examinee 30 days to respond
20    before the Department issues a final report.
21        (4) The examinee shall, within 10 days after the
22    issuance of the final report, accept the final report or
23    request a hearing in writing, unless granted an extension
24    by mutual agreement. Failure to take either action within
25    10 days or the mutually agreed extension shall be deemed
26    an acceptance of the final report. If the examinee accepts

 

 

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1    the examination report, the Director shall continue to
2    hold the content of the examination report as private and
3    confidential for a period of 30 days. Thereafter, the
4    Director shall open the final report for public
5    inspection.
6    (g) Hearing; final examination report. Notwithstanding
7anything to the contrary in this Code or Department rules, if
8the examinee requests a hearing, then the following procedures
9apply:
10        (1) The examinee must request the hearing in writing
11    and must specify the issues in the final report that the
12    examinee is challenging. The examinee is limited to
13    challenging the issues that were previously challenged in
14    the examinee's written submission and rebuttal or
15    supplemental submission and rebuttal pursuant to
16    paragraphs (2) and (3) of subsection (f).
17        (2) Except as permitted in paragraphs (3) and (8) of
18    this subsection, the hearing shall be limited to the
19    written arguments submitted by the parties to the
20    designated hearing officer. The designated hearing officer
21    may, however, grant a live hearing upon the request of
22    either party.
23        (3) Discovery is limited to the market conduct
24    surveillance personnel's work papers that are relevant to
25    the issues the examinee is challenging. The relevant
26    market conduct surveillance personnel's work papers shall

 

 

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1    be admitted into the record. No other forms of discovery,
2    including depositions and interrogatories, are allowed,
3    except upon written agreement of the examinee and the
4    Department when necessary to conduct a fair hearing or as
5    otherwise provided in this subsection.
6        (4) Only the examinee and the Department may submit
7    written arguments.
8        (5) The examinee must submit its written argument and
9    any supporting evidence within 30 days after the
10    Department serves a formal notice of hearing.
11        (6) The Department must submit its written response
12    and any supporting evidence within 30 days after the
13    examinee submits its written argument.
14        (7) The designated hearing officer may allow
15    additional written submissions if necessary or useful to
16    the fair resolution of the hearing.
17        (8) If either the examinee or the Department submit
18    written testimony or affidavits, then the opposing party
19    shall be given the opportunity to cross-examine the
20    witness and to submit the cross-examination to the hearing
21    officer before a decision.
22        (9) The Director shall issue a decision accompanied by
23    findings and conclusions. The Director's order is a final
24    administrative decision and shall be served upon the
25    examinee together with a copy of the final report within
26    90 days after the conclusion of the hearing. The hearing

 

 

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1    is deemed concluded on the later of the last date of any
2    live hearing or the final deadline date for written
3    submissions to the hearing officer, including any
4    continuances or supplemental briefings permitted by the
5    hearing officer.
6        (10) Any portion of the final examination report that
7    was not challenged by the examinee is incorporated into
8    the decision of the Director.
9        (11) Findings of fact and conclusions of law in the
10    Director's final administrative decision are prima facie
11    evidence in any legal or regulatory action.
12        (12) If an examinee has requested a hearing, then the
13    Director shall continue to hold the final report and any
14    related decision as private and confidential for a period
15    of 49 days after the final administrative decision. After
16    the 49-day period expires, the Director shall open the
17    final report and any related decision for public
18    inspection if a court of competent jurisdiction has not
19    stayed its publication.
20    (h) Disclosure. So long as the recipient agrees to and
21verifies in writing its legal authority to hold the
22information confidential in a manner consistent with this
23Section, nothing in this Section prevents the Director from
24disclosing at any time the content of an examination report,
25preliminary examination report, or results, or any matter
26relating to a report or results, to:

 

 

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1        (1) the insurance regulatory authorities of any other
2    state; or
3        (2) any agency or office of the federal government.
4    (i) Confidentiality.
5        (1) The Director and any other person in the course of
6    market conduct surveillance shall keep confidential all
7    documents, including working papers, third-party models,
8    or products; complaint logs; copies of any documents
9    created, produced, obtained by, or disclosed to the
10    Director, market conduct surveillance personnel, or any
11    other person in the course of market conduct surveillance
12    conducted pursuant to this Section; and all documents
13    obtained by the NAIC pursuant to this Section. The
14    documents shall remain confidential after the termination
15    of the market conduct surveillance, are not subject to
16    subpoena, are not subject to discovery or admissible as
17    evidence in private civil litigation, are not subject to
18    disclosure under the Freedom of Information Act, and must
19    not be made public at any time or used by the Director or
20    any other person, except as provided in paragraphs (3),
21    (4), and (6) of this subsection (i) and in subsection (k).
22        (2) The Director and any other person in the course of
23    market conduct surveillance shall keep confidential any
24    self-evaluation or voluntary compliance program documents
25    disclosed to the Director or other person by an examinee
26    and the data collected via the NAIC market conduct annual

 

 

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1    statement. The documents are not subject to subpoena, are
2    not subject to discovery or admissible as evidence in
3    private civil litigation, are not subject to disclosure
4    under the Freedom of Information Act, and they shall not
5    be made public or used by the Director or any other person,
6    except as provided in paragraphs (3) and (4) of this
7    subsection (i), in subsection (k), or in Section 155.35.
8    Nothing in this Section shall supersede the restrictions
9    on disclosure under Section 155.35.
10        (3) Notwithstanding paragraphs (1) and (2) of this
11    subsection (i), and consistent with paragraph (5) of this
12    subsection (i), in order to assist in the performance of
13    the Director's duties, the Director may:
14            (A) share documents, materials, communications, or
15        other information, including the confidential and
16        privileged documents, materials, or information
17        described in this subsection (i), with other State,
18        federal, alien, and international regulatory agencies
19        and law enforcement authorities and the NAIC, its
20        affiliates, and subsidiaries, if the recipient agrees
21        to and verifies in writing its legal authority to
22        maintain the confidentiality and privileged status of
23        the document, material, communication, or other
24        information;
25            (B) receive documents, materials, communications,
26        or information, including otherwise confidential and

 

 

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1        privileged documents, materials, or information, from
2        the NAIC and its affiliates or subsidiaries, and from
3        regulatory and law enforcement officials of other
4        State, federal, alien, or international jurisdictions,
5        authorities, and agencies, and shall maintain as
6        confidential or privileged any document, material,
7        communication, or information received with notice or
8        the understanding that it is confidential or
9        privileged under the laws of the jurisdiction that is
10        the source of the document, material, communication,
11        or information; and
12            (C) enter into agreements governing the sharing
13        and use of information consistent with this Section.
14        (4) Nothing in this Section limits:
15            (A) the Director's authority to use, if consistent
16        with subsection (5) of Section 188.1, as applicable,
17        any final or preliminary examination report, any
18        market conduct surveillance or examinee work papers or
19        other documents, or any other information discovered
20        or developed during the course of any market conduct
21        surveillance in the furtherance of any legal or
22        regulatory action initiated by the Director that the
23        Director may, in the Director's sole discretion, deem
24        appropriate; however, confidential or privileged
25        information about a company or person that is used in
26        the legal or regulatory action shall not be made

 

 

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1        public except by order of a court of competent
2        jurisdiction or with the written consent of the
3        company or person; or
4            (B) the ability of an examinee to conduct
5        discovery in accordance with paragraph (3) of
6        subsection (g).
7        (5) Disclosure to or by the Director of documents,
8    materials, communications, or information required as part
9    of any type of market conduct surveillance does not waive
10    any applicable privilege or claim of confidentiality in
11    the documents, materials, communications, or information.
12        (6) Notwithstanding the confidentiality requirements
13    of this Section or otherwise imposed by State law, if the
14    Director performs a data call, other than the collection
15    of data for the NAIC market conduct annual statement, the
16    Director may make the results of the data call available
17    for public inspection in an aggregated format that does
18    not disclose information or data attributed to any
19    specific company or person, including the name of any
20    company or person who responded to the data call, so long
21    as the Director provides all companies or persons that
22    responded to the data call 15 days' notice identifying the
23    information to be publicly released. Nothing in this
24    Section requires the Director to publish results from any
25    data call.
26    (j) Corrective actions.

 

 

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1        (1) As a result of any market conduct action, the
2    Director may take any action the Director considers
3    necessary or appropriate in accordance with the report of
4    examination or any hearing thereon for acts in violation
5    of any law, rule, or prior lawful order of the Director. No
6    corrective action, including a penalty, shall be ordered
7    with respect to violations in transactions with consumers
8    or other entities that are isolated occurrences or that
9    occur with such low frequency as to fall below a
10    reasonable margin of error. Such actions include, but are
11    not limited to:
12            (A) requiring the regulated person to undertake
13        corrective actions to cease and desist an identified
14        violation or institute processes and practices to
15        comply with applicable standards;
16            (B) requiring reimbursement or restitution of any
17        actual losses or damages to persons harmed by the
18        regulated person's violation with interest from the
19        date that the actual loss or damage was incurred,
20        which shall be calculated at the SOFR rate applicable
21        on the date that the actual loss or damage was incurred
22        plus 2%; and
23            (C) imposing civil penalties as provided in this
24        subsection (j).
25        (2) The Director may order a penalty of up to $2,000
26    for each violation of any law, rule, or prior lawful order

 

 

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1    of the Director. Any failure to respond to an information
2    request in a market conduct action or violation of
3    subsection (d) may carry a fine of up to $1,000 per day up
4    to a maximum of $50,000. Fines and penalties shall be
5    consistent, reasonable, and justifiable, and the Director
6    may consider reasonable criteria in ordering the fines and
7    penalties, including, but not limited to, consumer harm,
8    the intentionality of any violations, or remedial actions
9    already undertaken by the examinee. The Director shall
10    communicate to the examinee the basis for any assessed
11    fine or penalty.
12        (3) If any other provision of this Code or any other
13    law or rule under the Director's jurisdiction prescribes
14    an amount or range of monetary penalty for a violation of a
15    particular statute or rule or a maximum penalty in the
16    aggregate for repeated violations, the Director shall
17    assess penalties pursuant to the terms of the statute or
18    rule allowing the largest penalty.
19        (4) If any other provision of this Code or any other
20    law or rule under the Director's jurisdiction prescribes
21    or specifies a method by which the Director is to
22    determine a violation, then compliance with the process
23    set forth herein shall be deemed to comply with the method
24    prescribed or specified in the other provision.
25        (5) If the Director imposes any sanctions or
26    corrective actions described in subparagraphs (A) through

 

 

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1    (C) of paragraph (1) of this subsection (j) based on the
2    final report, the Director shall include those actions in
3    a proposed stipulation and consent order enclosed with the
4    final report issued to the examinee under subsection (f).
5    The examinee shall have 10 days to sign the order or
6    request a hearing in writing on the actions proposed in
7    the order regardless of whether the examinee requests a
8    hearing on the contents of the report under subsection
9    (f). If the examinee does not sign the order or request a
10    hearing on the proposed actions or the final report within
11    10 days, the Director may issue a final order imposing the
12    sanctions or corrective actions. Nothing in this Section
13    prevents the Department from sharing an earlier draft of
14    the proposed order with the examinee before issuing the
15    final report.
16        (6) If the examinee accepts the order and the final
17    report, the Director shall hold the content of the order
18    and report as private and confidential for a period of 30
19    days. Thereafter, the Director shall open the order and
20    report for public inspection.
21        (7) If the examinee makes a timely request for a
22    hearing on the order, the request must specify the
23    sanctions or corrective actions in the order that the
24    examinee is challenging. Any hearing shall follow the
25    procedures set forth in paragraphs (2) through (7) of
26    subsection (g).

 

 

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1        (8) If the examinee has also requested a hearing on
2    the contents of the report, then that hearing shall be
3    consolidated with the hearing on the order. The Director
4    shall not impose sanctions or corrective actions under
5    this Section until the conclusion of the hearing.
6        (9) The Director shall issue a decision accompanied by
7    findings and conclusions along with any corrective actions
8    or sanctions. Any sanctions or corrective actions shall be
9    based on the final report accepted by the examinee or
10    adopted by the Director under paragraph (9) of subsection
11    (g). The Director's order is a final administrative
12    decision and shall be served upon the examinee together
13    with a copy of the final report within 90 days after the
14    conclusion of the hearing or within 10 days after the
15    examinee's acceptance of the proposed order and final
16    report, as applicable. The hearing is deemed concluded on
17    the later of the last date of any live hearing or the final
18    deadline date for written submissions to the hearing
19    officer, including any continuances or supplemental
20    briefings permitted by the hearing officer.
21        (10) If an examinee has requested a hearing under this
22    subsection (i), the Director shall continue to hold the
23    final order and examination report as private and
24    confidential for a period of 49 days after the final
25    administrative decision. After the 49-day period expires,
26    the Director shall open the final order and examination

 

 

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1    report if a court of competent jurisdiction has not stayed
2    their publication.
3    (k) National market conduct databases. The Director shall
4collect and report market data to the NAIC's market
5information systems, including, but not limited to, the
6Complaint Database System, the Examination Tracking System,
7and the Regulatory Information Retrieval System, or other
8successor NAIC products as determined by the Director.
9Information collected and maintained by the Department for
10inclusion in these NAIC market information systems shall be
11compiled in a manner that meets the requirements of the NAIC.
12Confidential or privileged information collected, reported, or
13maintained under this subsection (k) shall be subject to the
14protections and restrictions on disclosure in subsection (i).
15    (l) Immunity of market conduct surveillance personnel.
16        (1) No cause of action shall arise nor shall any
17    liability be imposed against the Director, the Director's
18    authorized representatives, market conduct surveillance
19    personnel, or an examiner appointed by the Director for
20    any statements made or conduct performed in good faith
21    while carrying out the provisions of this Section.
22        (2) No cause of action shall arise nor shall any
23    liability be imposed against any person for the act of
24    communicating or delivering information or data to the
25    Director, the Director's authorized representative, market
26    conduct surveillance personnel, or examiner pursuant to an

 

 

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1    examination made under this Section, if the act of
2    communication or delivery was performed in good faith and
3    without fraudulent intent or the intent to deceive.
4        (3) A person identified in paragraph (1) of this
5    subsection (l) shall be entitled to an award of attorney's
6    fees and costs if he or she is the prevailing party in a
7    civil cause of action for libel, slander, or any other
8    relevant tort arising out of activities in carrying out
9    the provisions of this Section and the party bringing the
10    action was not substantially justified in doing so. As
11    used in this paragraph, a proceeding is substantially
12    justified if it had a reasonable basis in law or fact at
13    the time it was initiated.
14        (4) This subsection (l) does not abrogate or modify in
15    any way any common law or statutory privilege or immunity
16    heretofore enjoyed by any person identified in paragraph
17    (1) of this subsection (l).
18    (1) The Director, for the purposes of ascertaining the
19non-financial business practices, performance, and operations
20of any company, may make examinations of:
21        (a) any company transacting or being organized to
22    transact business in this State;
23        (b) any person engaged in or proposing to be engaged
24    in the organization, promotion, or solicitation of shares
25    or capital contributions to or aiding in the formation of
26    a company;

 

 

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1        (c) any person having a contract, written or oral,
2    pertaining to the management or control of a company as
3    general agent, managing agent, or attorney-in-fact;
4        (d) any licensed or registered producer, firm, or
5    administrator, or any person, organization, or corporation
6    making application for any licenses or registration;
7        (e) any person engaged in the business of adjusting
8    losses or financing premiums; or
9        (f) any person, organization, trust, or corporation
10    having custody or control of information reasonably
11    related to the operation, performance, or conduct of a
12    company or person subject to the jurisdiction of the
13    Director.
14    (2) Every company or person being examined and its
15officers, directors, and agents must provide to the Director
16convenient and free access at all reasonable hours at its
17office or location to all books, records, documents, and any
18or all papers relating to the business, performance,
19operations, and affairs of the company. The officers,
20directors, and agents of the company or person must facilitate
21the examination and aid in the examination so far as it is in
22their power to do so.
23    The Director and any authorized examiner have the power to
24administer oaths and examine under oath any person relative to
25the business of the company being examined.
26    (3) The examiners designated by the Director under Section

 

 

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1402 must make a full and true report of every examination made
2by them, which contains only facts ascertained from the books,
3papers, records, or documents, and other evidence obtained by
4investigation and examined by them or ascertained from the
5testimony of officers or agents or other persons examined
6under oath concerning the business, affairs, conduct, and
7performance of the company or person. The report of
8examination must be verified by the oath of the examiner in
9charge thereof, and when so verified is prima facie evidence
10in any action or proceeding in the name of the State against
11the company, its officers, or agents upon the facts stated
12therein.
13    (4) The Director must notify the company or person made
14the subject of any examination hereunder of the contents of
15the verified examination report before filing it and making
16the report public of any matters relating thereto, and must
17afford the company or person an opportunity to demand a
18hearing with reference to the facts and other evidence therein
19contained.
20    The company or person may request a hearing within 10 days
21after receipt of the examination report by giving the Director
22written notice of that request, together with a statement of
23its objections. The Director must then conduct a hearing in
24accordance with Sections 402 and 403. He must issue a written
25order based upon the examination report and upon the hearing
26within 90 days after the report is filed or within 90 days

 

 

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1after the hearing.
2    If the examination reveals that the company is operating
3in violation of any law, regulation, or prior order, the
4Director in the written order may require the company or
5person to take any action he considers necessary or
6appropriate in accordance with the report of examination or
7any hearing thereon. The order is subject to judicial review
8under the Administrative Review Law. The Director may withhold
9any report from public inspection for such time as he may deem
10proper and may, after filing the same, publish any part or all
11of the report as he considers to be in the interest of the
12public, in one or more newspapers in this State, without
13expense to the company.
14    (5) Any company which or person who violates or aids and
15abets any violation of a written order issued under this
16Section shall be guilty of a business offense and may be fined
17not more than $5,000. The penalty shall be paid into the
18General Revenue fund of the State of Illinois.
19(Source: P.A. 87-108.)
 
20    (215 ILCS 5/132.5)  (from Ch. 73, par. 744.5)
21    Sec. 132.5. Examination reports.
22    (a) General description. All examination reports shall be
23comprised of only facts appearing upon the books, records, or
24other documents of the company, its agents, or other persons
25examined or as ascertained from the testimony of its officers,

 

 

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1agents, or other persons examined concerning its affairs and
2the conclusions and recommendations as the examiners find
3reasonably warranted from those facts.
4    (b) Filing of examination report. No later than 60 days
5following completion of the examination, the examiner in
6charge shall file with the Department a verified written
7report of examination under oath. Upon receipt of the verified
8report, the Department shall transmit the report to the
9company examined, together with a notice that affords the
10company examined a reasonable opportunity of not more than 30
11days to make a written submission or rebuttal with respect to
12any matters contained in the examination report.
13    (c) Adoption of the report on examination. Within 30 days
14of the end of the period allowed for the receipt of written
15submissions or rebuttals, the Director shall fully consider
16and review the report, together with any written submissions
17or rebuttals and any relevant portions of the examiners work
18papers and enter an order:
19        (1) Adopting the examination report as filed or with
20    modification or corrections. If the examination report
21    reveals that the company is operating in violation of any
22    law, regulation, or prior order of the Director, the
23    Director may order the company to take any action the
24    Director considers necessary and appropriate to cure the
25    violation.
26        (2) Rejecting the examination report with directions

 

 

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1    to the examiners to reopen the examination for purposes of
2    obtaining additional data, documentation, or information
3    and refiling under subsection (b).
4        (3) Calling for an investigatory hearing with no less
5    than 20 days notice to the company for purposes of
6    obtaining additional documentation, data, information, and
7    testimony.
8    (d) Order and procedures. All orders entered under
9paragraph (1) of subsection (c) shall be accompanied by
10findings and conclusions resulting from the Director's
11consideration and review of the examination report, relevant
12examiner work papers, and any written submissions or
13rebuttals. The order shall be considered a final
14administrative decision and may be appealed in accordance with
15the Administrative Review Law. The order shall be served upon
16the company by certified mail, together with a copy of the
17adopted examination report. Within 30 days of the issuance of
18the adopted report, the company shall file affidavits executed
19by each of its directors stating under oath that they have
20received a copy of the adopted report and related orders.
21    Any hearing conducted under paragraph (3) of subsection
22(c) by the Director or an authorized representative shall be
23conducted as a nonadversarial confidential investigatory
24proceeding as necessary for the resolution of any
25inconsistencies, discrepancies, or disputed issues apparent
26upon the face of the filed examination report or raised by or

 

 

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1as a result of the Director's review of relevant work papers or
2by the written submission or rebuttal of the company. Within
320 days of the conclusion of any hearing, the Director shall
4enter an order under paragraph (1) of subsection (c).
5    The Director shall not appoint an examiner as an
6authorized representative to conduct the hearing. The hearing
7shall proceed expeditiously with discovery by the company
8limited to the examiner's work papers that tend to
9substantiate any assertions set forth in any written
10submission or rebuttal. The Director or his representative may
11issue subpoenas for the attendance of any witnesses or the
12production of any documents deemed relevant to the
13investigation, whether under the control of the Department,
14the company, or other persons. The documents produced shall be
15included in the record, and testimony taken by the Director or
16his representative shall be under oath and preserved for the
17record. Nothing contained in this Section shall require the
18Department to disclose any information or records that would
19indicate or show the existence or content of any investigation
20or activity of a criminal justice agency.
21    The hearing shall proceed with the Director or his
22representative posing questions to the persons subpoenaed.
23Thereafter, the company and the Department may present
24testimony relevant to the investigation. Cross-examination
25shall be conducted only by the Director or his representative.
26The company and the Department shall be permitted to make

 

 

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1closing statements and may be represented by counsel of their
2choice.
3    (e) Publication and use. Upon the adoption of the
4examination report under paragraph (1) of subsection (c), the
5Director shall continue to hold the content of the examination
6report as private and confidential information for a period of
735 days, except to the extent provided in subsection (b).
8Thereafter, the Director may open the report for public
9inspection so long as no court of competent jurisdiction has
10stayed its publication.
11    Nothing contained in this Code shall prevent or be
12construed as prohibiting the Director from disclosing the
13content of an examination report, preliminary examination
14report or results, or any matter relating thereto, to the
15insurance department of any other state or country or to law
16enforcement officials of this or any other state or agency of
17the federal government at any time, so long as the agency or
18office receiving the report or matters relating thereto agrees
19in writing to hold it confidential and in a manner consistent
20with this Code.
21    In the event the Director determines that regulatory
22action is appropriate as a result of any examination, he may
23initiate any proceedings or actions as provided by law.
24    (f) Confidentiality of ancillary information. All working
25papers, recorded information, documents, and copies thereof
26produced by, obtained by, or disclosed to the Director or any

 

 

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1other person in the course of any examination must be given
2confidential treatment, are not subject to subpoena, and may
3not be made public by the Director or any other persons, except
4to the extent provided in subsection (e). Access may also be
5granted to the National Association of Insurance
6Commissioners. Those parties must agree in writing before
7receiving the information to provide to it the same
8confidential treatment as required by this Section, unless the
9prior written consent of the company to which it pertains has
10been obtained.
11    This subsection (f) applies to market conduct examinations
12described in Section 132 of this Code.
13    (g) Disclosure. Nothing contained in this Code shall
14prevent or be construed as prohibiting the Director from
15disclosing the information described in subsections (e) and
16(f) to the Illinois Insurance Guaranty Fund regarding any
17member company defined in Section 534.5 if the member company
18has an authorized control level event as defined in Section
1935A-25. The Director may disclose the information described in
20this subsection so long as the Fund agrees in writing to hold
21that information confidential, in a manner consistent with
22this Code, and uses that information to prepare for the
23possible liquidation of the member company. Access to the
24information disclosed by the Director to the Fund shall be
25limited to the Fund's staff and its counsel. The Board of
26Directors of the Fund may have access to the information

 

 

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1disclosed by the Director to the Fund once the member company
2is subject to a delinquency proceeding under Article XIII
3subject to any terms and conditions established by the
4Director.
5(Source: P.A. 102-929, eff. 5-27-22.)
 
6    (215 ILCS 5/155.35)
7    Sec. 155.35. Insurance compliance self-evaluative
8privilege.
9    (a) To encourage insurance companies and persons
10conducting activities regulated under this Code, both to
11conduct voluntary internal audits of their compliance programs
12and management systems and to assess and improve compliance
13with State and federal statutes, rules, and orders, an
14insurance compliance self-evaluative privilege is recognized
15to protect the confidentiality of communications relating to
16voluntary internal compliance audits. The General Assembly
17hereby finds and declares that protection of insurance
18consumers is enhanced by companies' voluntary compliance with
19this State's insurance and other laws and that the public will
20benefit from incentives to identify and remedy insurance and
21other compliance issues. It is further declared that limited
22expansion of the protection against disclosure will encourage
23voluntary compliance and improve insurance market conduct
24quality and that the voluntary provisions of this Section will
25not inhibit the exercise of the regulatory authority by those

 

 

SB1479 Enrolled- 32 -LRB103 05817 BMS 50837 b

1entrusted with protecting insurance consumers.
2    (b)(1) An insurance compliance self-evaluative audit
3document is privileged information and is not admissible as
4evidence in any legal action in any civil, criminal, or
5administrative proceeding, except as provided in subsections
6(c) and (d) of this Section. Documents, communications, data,
7reports, or other information created as a result of a claim
8involving personal injury or workers' compensation made
9against an insurance policy are not insurance compliance
10self-evaluative audit documents and are admissible as evidence
11in civil proceedings as otherwise provided by applicable rules
12of evidence or civil procedure, subject to any applicable
13statutory or common law privilege, including, but not limited
14to, the work product doctrine, the attorney-client privilege,
15or the subsequent remedial measures exclusion.
16    (2) If any company, person, or entity performs or directs
17the performance of an insurance compliance audit, an officer
18or employee involved with the insurance compliance audit, or
19any consultant who is hired for the purpose of performing the
20insurance compliance audit, may not be examined in any civil,
21criminal, or administrative proceeding as to the insurance
22compliance audit or any insurance compliance self-evaluative
23audit document, as defined in this Section. This subsection
24(b)(2) does not apply if the privilege set forth in subsection
25(b)(1) of this Section is determined under subsection (c) or
26(d) not to apply.

 

 

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1    (3) A company may voluntarily submit, in connection with
2examinations conducted under this Article, an insurance
3compliance self-evaluative audit document to the Director, or
4his or her designee, as a confidential document under
5subsection (i) of Section 132 or subsection (f) of Section
6132.5 of this Code without waiving the privilege set forth in
7this Section to which the company would otherwise be entitled;
8provided, however, that the provisions in Sections 132 and
9subsection (f) of Section 132.5 permitting the Director to
10make confidential documents public pursuant to subsection (e)
11of Section 132.5 and grant access to the National Association
12of Insurance Commissioners shall not apply to the insurance
13compliance self-evaluative audit document so voluntarily
14submitted. Nothing contained in this subsection shall give the
15Director any authority to compel a company to disclose
16involuntarily or otherwise provide an insurance compliance
17self-evaluative audit document.
18    (c)(1) The privilege set forth in subsection (b) of this
19Section does not apply to the extent that it is expressly
20waived by the company that prepared or caused to be prepared
21the insurance compliance self-evaluative audit document.
22    (2) In a civil or administrative proceeding, a court of
23record may, after an in camera review, require disclosure of
24material for which the privilege set forth in subsection (b)
25of this Section is asserted, if the court determines one of the
26following:

 

 

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1        (A) the privilege is asserted for a fraudulent
2    purpose;
3        (B) the material is not subject to the privilege; or
4        (C) even if subject to the privilege, the material
5    shows evidence of noncompliance with State and federal
6    statutes, rules and orders and the company failed to
7    undertake reasonable corrective action or eliminate the
8    noncompliance within a reasonable time.
9    (3) In a criminal proceeding, a court of record may, after
10an in camera review, require disclosure of material for which
11the privilege described in subsection (b) of this Section is
12asserted, if the court determines one of the following:
13        (A) the privilege is asserted for a fraudulent
14    purpose;
15        (B) the material is not subject to the privilege;
16        (C) even if subject to the privilege, the material
17    shows evidence of noncompliance with State and federal
18    statutes, rules and orders and the company failed to
19    undertake reasonable corrective action or eliminate such
20    noncompliance within a reasonable time; or
21        (D) the material contains evidence relevant to
22    commission of a criminal offense under this Code, and all
23    of the following factors are present:
24            (i) the Director, State's Attorney, or Attorney
25        General has a compelling need for the information;
26            (ii) the information is not otherwise available;

 

 

SB1479 Enrolled- 35 -LRB103 05817 BMS 50837 b

1        and
2            (iii) the Director, State's Attorney, or Attorney
3        General is unable to obtain the substantial equivalent
4        of the information by any means without incurring
5        unreasonable cost and delay.
6    (d)(1) Within 30 days after the Director, State's
7Attorney, or Attorney General makes a written request by
8certified mail for disclosure of an insurance compliance
9self-evaluative audit document under this subsection, the
10company that prepared or caused the document to be prepared
11may file with the appropriate court a petition requesting an
12in camera hearing on whether the insurance compliance
13self-evaluative audit document or portions of the document are
14privileged under this Section or subject to disclosure. The
15court has jurisdiction over a petition filed by a company
16under this subsection requesting an in camera hearing on
17whether the insurance compliance self-evaluative audit
18document or portions of the document are privileged or subject
19to disclosure. Failure by the company to file a petition
20waives the privilege.
21    (2) A company asserting the insurance compliance
22self-evaluative privilege in response to a request for
23disclosure under this subsection shall include in its request
24for an in camera hearing all of the information set forth in
25subsection (d)(5) of this Section.
26    (3) Upon the filing of a petition under this subsection,

 

 

SB1479 Enrolled- 36 -LRB103 05817 BMS 50837 b

1the court shall issue an order scheduling, within 45 days
2after the filing of the petition, an in camera hearing to
3determine whether the insurance compliance self-evaluative
4audit document or portions of the document are privileged
5under this Section or subject to disclosure.
6    (4) The court, after an in camera review, may require
7disclosure of material for which the privilege in subsection
8(b) of this Section is asserted if the court determines, based
9upon its in camera review, that any one of the conditions set
10forth in subsection (c)(2)(A) through (C) is applicable as to
11a civil or administrative proceeding or that any one of the
12conditions set forth in subsection (c)(3)(A) through (D) is
13applicable as to a criminal proceeding. Upon making such a
14determination, the court may only compel the disclosure of
15those portions of an insurance compliance self-evaluative
16audit document relevant to issues in dispute in the underlying
17proceeding. Any compelled disclosure will not be considered to
18be a public document or be deemed to be a waiver of the
19privilege for any other civil, criminal, or administrative
20proceeding. A party unsuccessfully opposing disclosure may
21apply to the court for an appropriate order protecting the
22document from further disclosure.
23    (5) A company asserting the insurance compliance
24self-evaluative privilege in response to a request for
25disclosure under this subsection (d) shall provide to the
26Director, State's Attorney, or Attorney General, as the case

 

 

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1may be, at the time of filing any objection to the disclosure,
2all of the following information:
3        (A) The date of the insurance compliance
4    self-evaluative audit document.
5        (B) The identity of the entity conducting the audit.
6        (C) The general nature of the activities covered by
7    the insurance compliance audit.
8        (D) An identification of the portions of the insurance
9    compliance self-evaluative audit document for which the
10    privilege is being asserted.
11    (e) (1) A company asserting the insurance compliance
12self-evaluative privilege set forth in subsection (b) of this
13Section has the burden of demonstrating the applicability of
14the privilege. Once a company has established the
15applicability of the privilege, a party seeking disclosure
16under subsections (c)(2)(A) or (C) of this Section has the
17burden of proving that the privilege is asserted for a
18fraudulent purpose or that the company failed to undertake
19reasonable corrective action or eliminate the noncompliance
20with a reasonable time. The Director, State's Attorney, or
21Attorney General seeking disclosure under subsection (c)(3) of
22this Section has the burden of proving the elements set forth
23in subsection (c)(3) of this Section.
24    (2) The parties may at any time stipulate in proceedings
25under subsections (c) or (d) of this Section to entry of an
26order directing that specific information contained in an

 

 

SB1479 Enrolled- 38 -LRB103 05817 BMS 50837 b

1insurance compliance self-evaluative audit document is or is
2not subject to the privilege provided under subsection (b) of
3this Section.
4    (f) The privilege set forth in subsection (b) of this
5Section shall not extend to any of the following:
6        (1) documents, communications, data, reports, or other
7    information required to be collected, developed,
8    maintained, reported, or otherwise made available to a
9    regulatory agency pursuant to this Code, or other federal
10    or State law, rule, or order;
11        (2) information obtained by observation or monitoring
12    by any regulatory agency; or
13        (3) information obtained from a source independent of
14    the insurance compliance audit.
15    (g) As used in this Section:
16        (1) "Insurance compliance audit" means a voluntary,
17    internal evaluation, review, assessment, or audit not
18    otherwise expressly required by law of a company or an
19    activity regulated under this Code, or other State or
20    federal law applicable to a company, or of management
21    systems related to the company or activity, that is
22    designed to identify and prevent noncompliance and to
23    improve compliance with those statutes, rules, or orders.
24    An insurance compliance audit may be conducted by the
25    company, its employees, or by independent contractors.
26        (2) "Insurance compliance self-evaluative audit

 

 

SB1479 Enrolled- 39 -LRB103 05817 BMS 50837 b

1    document" means documents prepared as a result of or in
2    connection with and not prior to an insurance compliance
3    audit. An insurance compliance self-evaluation audit
4    document may include a written response to the findings of
5    an insurance compliance audit. An insurance compliance
6    self-evaluative audit document may include, but is not
7    limited to, as applicable, field notes and records of
8    observations, findings, opinions, suggestions,
9    conclusions, drafts, memoranda, drawings, photographs,
10    computer-generated or electronically recorded
11    information, phone records, maps, charts, graphs, and
12    surveys, provided this supporting information is collected
13    or developed for the primary purpose and in the course of
14    an insurance compliance audit. An insurance compliance
15    self-evaluative audit document may also include any of the
16    following:
17            (A) an insurance compliance audit report prepared
18        by an auditor, who may be an employee of the company or
19        an independent contractor, which may include the scope
20        of the audit, the information gained in the audit, and
21        conclusions and recommendations, with exhibits and
22        appendices;
23            (B) memoranda and documents analyzing portions or
24        all of the insurance compliance audit report and
25        discussing potential implementation issues;
26            (C) an implementation plan that addresses

 

 

SB1479 Enrolled- 40 -LRB103 05817 BMS 50837 b

1        correcting past noncompliance, improving current
2        compliance, and preventing future noncompliance; or
3            (D) analytic data generated in the course of
4        conducting the insurance compliance audit.
5        (3) "Company" has the same meaning as provided in
6    Section 2 of this Code.
7    (h) Nothing in this Section shall limit, waive, or
8abrogate the scope or nature of any statutory or common law
9privilege including, but not limited to, the work product
10doctrine, the attorney-client privilege, or the subsequent
11remedial measures exclusion.
12(Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)
 
13    (215 ILCS 5/402)  (from Ch. 73, par. 1014)
14    Sec. 402. Examinations, investigations and hearings. (1)
15All examinations, investigations and hearings provided for by
16this Code may be conducted either by the Director personally,
17or by one or more of the actuaries, technical advisors,
18deputies, supervisors or examiners employed or retained by the
19Department and designated by the Director for such purpose.
20When necessary to supplement its examination procedures, the
21Department may retain independent actuaries deemed competent
22by the Director, independent certified public accountants, or
23qualified examiners of insurance companies, or other qualified
24outside professional assistance deemed competent by the
25Director, or any combination of the foregoing, the cost of

 

 

SB1479 Enrolled- 41 -LRB103 05817 BMS 50837 b

1which shall be borne by the company or person being examined.
2The Director may compensate independent actuaries, certified
3public accountants, and qualified examiners, and other
4qualified outside professional assistance retained for
5supplementing examination procedures in amounts not to exceed
6the reasonable and customary charges for such services. The
7Director may also accept as a part of the Department's
8examination of any company or person (a) a report by an
9independent actuary deemed competent by the Director or (b) a
10report of an audit made by an independent certified public
11accountant. Neither those persons so designated nor any
12members of their immediate families shall be officers of,
13connected with, or financially interested in any company other
14than as policyholders, nor shall they be financially
15interested in any other corporation or person affected by the
16examination, investigation or hearing.
17    (2) All hearings provided for in this Code shall, unless
18otherwise specially provided, be held at such time and place
19as shall be designated in a notice which shall be given by the
20Director in writing to the person or company whose interests
21are affected, at least 10 days before the date designated
22therein. The notice shall state the subject of inquiry and the
23specific charges, if any. The hearings shall be held in the
24City of Springfield, the City of Chicago, or in the county
25where the principal business address of the person or company
26affected is located.

 

 

SB1479 Enrolled- 42 -LRB103 05817 BMS 50837 b

1(Source: P.A. 87-757.)
 
2    (215 ILCS 5/408)  (from Ch. 73, par. 1020)
3    (Text of Section before amendment by P.A. 103-75)
4    Sec. 408. Fees and charges.
5    (1) The Director shall charge, collect and give proper
6acquittances for the payment of the following fees and
7charges:
8        (a) For filing all documents submitted for the
9    incorporation or organization or certification of a
10    domestic company, except for a fraternal benefit society,
11    $2,000.
12        (b) For filing all documents submitted for the
13    incorporation or organization of a fraternal benefit
14    society, $500.
15        (c) For filing amendments to articles of incorporation
16    and amendments to declaration of organization, except for
17    a fraternal benefit society, a mutual benefit association,
18    a burial society or a farm mutual, $200.
19        (d) For filing amendments to articles of incorporation
20    of a fraternal benefit society, a mutual benefit
21    association or a burial society, $100.
22        (e) For filing amendments to articles of incorporation
23    of a farm mutual, $50.
24        (f) For filing bylaws or amendments thereto, $50.
25        (g) For filing agreement of merger or consolidation:

 

 

SB1479 Enrolled- 43 -LRB103 05817 BMS 50837 b

1            (i) for a domestic company, except for a fraternal
2        benefit society, a mutual benefit association, a
3        burial society, or a farm mutual, $2,000.
4            (ii) for a foreign or alien company, except for a
5        fraternal benefit society, $600.
6            (iii) for a fraternal benefit society, a mutual
7        benefit association, a burial society, or a farm
8        mutual, $200.
9        (h) For filing agreements of reinsurance by a domestic
10    company, $200.
11        (i) For filing all documents submitted by a foreign or
12    alien company to be admitted to transact business or
13    accredited as a reinsurer in this State, except for a
14    fraternal benefit society, $5,000.
15        (j) For filing all documents submitted by a foreign or
16    alien fraternal benefit society to be admitted to transact
17    business in this State, $500.
18        (k) For filing declaration of withdrawal of a foreign
19    or alien company, $50.
20        (l) For filing annual statement by a domestic company,
21    except a fraternal benefit society, a mutual benefit
22    association, a burial society, or a farm mutual, $200.
23        (m) For filing annual statement by a domestic
24    fraternal benefit society, $100.
25        (n) For filing annual statement by a farm mutual, a
26    mutual benefit association, or a burial society, $50.

 

 

SB1479 Enrolled- 44 -LRB103 05817 BMS 50837 b

1        (o) For issuing a certificate of authority or renewal
2    thereof except to a foreign fraternal benefit society,
3    $400.
4        (p) For issuing a certificate of authority or renewal
5    thereof to a foreign fraternal benefit society, $200.
6        (q) For issuing an amended certificate of authority,
7    $50.
8        (r) For each certified copy of certificate of
9    authority, $20.
10        (s) For each certificate of deposit, or valuation, or
11    compliance or surety certificate, $20.
12        (t) For copies of papers or records per page, $1.
13        (u) For each certification to copies of papers or
14    records, $10.
15        (v) For multiple copies of documents or certificates
16    listed in subparagraphs (r), (s), and (u) of paragraph (1)
17    of this Section, $10 for the first copy of a certificate of
18    any type and $5 for each additional copy of the same
19    certificate requested at the same time, unless, pursuant
20    to paragraph (2) of this Section, the Director finds these
21    additional fees excessive.
22        (w) For issuing a permit to sell shares or increase
23    paid-up capital:
24            (i) in connection with a public stock offering,
25        $300;
26            (ii) in any other case, $100.

 

 

SB1479 Enrolled- 45 -LRB103 05817 BMS 50837 b

1        (x) For issuing any other certificate required or
2    permissible under the law, $50.
3        (y) For filing a plan of exchange of the stock of a
4    domestic stock insurance company, a plan of
5    demutualization of a domestic mutual company, or a plan of
6    reorganization under Article XII, $2,000.
7        (z) For filing a statement of acquisition of a
8    domestic company as defined in Section 131.4 of this Code,
9    $2,000.
10        (aa) For filing an agreement to purchase the business
11    of an organization authorized under the Dental Service
12    Plan Act or the Voluntary Health Services Plans Act or of a
13    health maintenance organization or a limited health
14    service organization, $2,000.
15        (bb) For filing a statement of acquisition of a
16    foreign or alien insurance company as defined in Section
17    131.12a of this Code, $1,000.
18        (cc) For filing a registration statement as required
19    in Sections 131.13 and 131.14, the notification as
20    required by Sections 131.16, 131.20a, or 141.4, or an
21    agreement or transaction required by Sections 124.2(2),
22    141, 141a, or 141.1, $200.
23        (dd) For filing an application for licensing of:
24            (i) a religious or charitable risk pooling trust
25        or a workers' compensation pool, $1,000;
26            (ii) a workers' compensation service company,

 

 

SB1479 Enrolled- 46 -LRB103 05817 BMS 50837 b

1        $500;
2            (iii) a self-insured automobile fleet, $200; or
3            (iv) a renewal of or amendment of any license
4        issued pursuant to (i), (ii), or (iii) above, $100.
5        (ee) For filing articles of incorporation for a
6    syndicate to engage in the business of insurance through
7    the Illinois Insurance Exchange, $2,000.
8        (ff) For filing amended articles of incorporation for
9    a syndicate engaged in the business of insurance through
10    the Illinois Insurance Exchange, $100.
11        (gg) For filing articles of incorporation for a
12    limited syndicate to join with other subscribers or
13    limited syndicates to do business through the Illinois
14    Insurance Exchange, $1,000.
15        (hh) For filing amended articles of incorporation for
16    a limited syndicate to do business through the Illinois
17    Insurance Exchange, $100.
18        (ii) For a permit to solicit subscriptions to a
19    syndicate or limited syndicate, $100.
20        (jj) For the filing of each form as required in
21    Section 143 of this Code, $50 per form. Informational and
22    advertising filings shall be $25 per filing. The fee for
23    advisory and rating organizations shall be $200 per form.
24            (i) For the purposes of the form filing fee,
25        filings made on insert page basis will be considered
26        one form at the time of its original submission.

 

 

SB1479 Enrolled- 47 -LRB103 05817 BMS 50837 b

1        Changes made to a form subsequent to its approval
2        shall be considered a new filing.
3            (ii) Only one fee shall be charged for a form,
4        regardless of the number of other forms or policies
5        with which it will be used.
6            (iii) Fees charged for a policy filed as it will be
7        issued regardless of the number of forms comprising
8        that policy shall not exceed $1,500. For advisory or
9        rating organizations, fees charged for a policy filed
10        as it will be issued regardless of the number of forms
11        comprising that policy shall not exceed $2,500.
12            (iv) The Director may by rule exempt forms from
13        such fees.
14        (kk) For filing an application for licensing of a
15    reinsurance intermediary, $500.
16        (ll) For filing an application for renewal of a
17    license of a reinsurance intermediary, $200.
18        (mm) For filing a plan of division of a domestic stock
19    company under Article IIB, $10,000.
20        (nn) For filing all documents submitted by a foreign
21    or alien company to be a certified reinsurer in this
22    State, except for a fraternal benefit society, $1,000.
23        (oo) For filing a renewal by a foreign or alien
24    company to be a certified reinsurer in this State, except
25    for a fraternal benefit society, $400.
26        (pp) For filing all documents submitted by a reinsurer

 

 

SB1479 Enrolled- 48 -LRB103 05817 BMS 50837 b

1    domiciled in a reciprocal jurisdiction, $1,000.
2        (qq) For filing a renewal by a reinsurer domiciled in
3    a reciprocal jurisdiction, $400.
4        (rr) For registering a captive management company or
5    renewal thereof, $50.
6    (2) When printed copies or numerous copies of the same
7paper or records are furnished or certified, the Director may
8reduce such fees for copies if he finds them excessive. He may,
9when he considers it in the public interest, furnish without
10charge to state insurance departments and persons other than
11companies, copies or certified copies of reports of
12examinations and of other papers and records.
13    (3)(a) The expenses incurred in any performance
14examination authorized by law shall be paid by the company or
15person being examined. The charge shall be consistent with
16that otherwise authorized by law and shall be reasonably
17related to the cost of the examination including but not
18limited to compensation of examiners, electronic data
19processing costs, supervision and preparation of an
20examination report and lodging and travel expenses. All
21lodging and travel expenses shall be in accord with the
22applicable travel regulations as published by the Department
23of Central Management Services and approved by the Governor's
24Travel Control Board, except that out-of-state lodging and
25travel expenses related to examinations authorized under
26Section 132 shall be in accordance with travel rates

 

 

SB1479 Enrolled- 49 -LRB103 05817 BMS 50837 b

1prescribed under paragraph 301-7.2 of the Federal Travel
2Regulations, 41 C.F.R. 301-7.2, for reimbursement of
3subsistence expenses incurred during official travel. All
4lodging and travel expenses may be reimbursed directly upon
5authorization of the Director. With the exception of the
6direct reimbursements authorized by the Director, all
7performance examination charges collected by the Department
8shall be paid to the Insurance Producer Administration Fund,
9however, the electronic data processing costs incurred by the
10Department in the performance of any examination shall be
11billed directly to the company being examined for payment to
12the Technology Management Revolving Fund.
13    (b) The costs and fees incurred in a market conduct
14examination shall be itemized and bills shall be provided to
15the examinee on a monthly basis for review prior to submission
16for payment. The Director shall review and affirmatively
17endorse detailed billings from any contracted, qualified
18outside professional assistance retained under Section 402 for
19market conduct examinations before the detailed billings are
20sent to the examinee. Before any qualified outside
21professional assistance conducts billable work on an
22examination, the Department shall disclose to the examinee the
23terms of the contracts with the qualified outside professional
24assistance that will be used, including the fees and hourly
25rates that can be charged.
26    (4) At the time of any service of process on the Director

 

 

SB1479 Enrolled- 50 -LRB103 05817 BMS 50837 b

1as attorney for such service, the Director shall charge and
2collect the sum of $40, which may be recovered as taxable costs
3by the party to the suit or action causing such service to be
4made if he prevails in such suit or action.
5    (5) (a) The costs incurred by the Department of Insurance
6in conducting any hearing authorized by law shall be assessed
7against the parties to the hearing in such proportion as the
8Director of Insurance may determine upon consideration of all
9relevant circumstances including: (1) the nature of the
10hearing; (2) whether the hearing was instigated by, or for the
11benefit of a particular party or parties; (3) whether there is
12a successful party on the merits of the proceeding; and (4) the
13relative levels of participation by the parties.
14    (b) For purposes of this subsection (5) costs incurred
15shall mean the hearing officer fees, court reporter fees, and
16travel expenses of Department of Insurance officers and
17employees; provided however, that costs incurred shall not
18include hearing officer fees or court reporter fees unless the
19Department has retained the services of independent
20contractors or outside experts to perform such functions.
21    (c) The Director shall make the assessment of costs
22incurred as part of the final order or decision arising out of
23the proceeding; provided, however, that such order or decision
24shall include findings and conclusions in support of the
25assessment of costs. This subsection (5) shall not be
26construed as permitting the payment of travel expenses unless

 

 

SB1479 Enrolled- 51 -LRB103 05817 BMS 50837 b

1calculated in accordance with the applicable travel
2regulations of the Department of Central Management Services,
3as approved by the Governor's Travel Control Board. The
4Director as part of such order or decision shall require all
5assessments for hearing officer fees and court reporter fees,
6if any, to be paid directly to the hearing officer or court
7reporter by the party(s) assessed for such costs. The
8assessments for travel expenses of Department officers and
9employees shall be reimbursable to the Director of Insurance
10for deposit to the fund out of which those expenses had been
11paid.
12    (d) The provisions of this subsection (5) shall apply in
13the case of any hearing conducted by the Director of Insurance
14not otherwise specifically provided for by law.
15    (6) The Director shall charge and collect an annual
16financial regulation fee from every domestic company for
17examination and analysis of its financial condition and to
18fund the internal costs and expenses of the Interstate
19Insurance Receivership Commission as may be allocated to the
20State of Illinois and companies doing an insurance business in
21this State pursuant to Article X of the Interstate Insurance
22Receivership Compact. The fee shall be the greater fixed
23amount based upon the combination of nationwide direct premium
24income and nationwide reinsurance assumed premium income or
25upon admitted assets calculated under this subsection as
26follows:

 

 

SB1479 Enrolled- 52 -LRB103 05817 BMS 50837 b

1        (a) Combination of nationwide direct premium income
2    and nationwide reinsurance assumed premium.
3            (i) $150, if the premium is less than $500,000 and
4        there is no reinsurance assumed premium;
5            (ii) $750, if the premium is $500,000 or more, but
6        less than $5,000,000 and there is no reinsurance
7        assumed premium; or if the premium is less than
8        $5,000,000 and the reinsurance assumed premium is less
9        than $10,000,000;
10            (iii) $3,750, if the premium is less than
11        $5,000,000 and the reinsurance assumed premium is
12        $10,000,000 or more;
13            (iv) $7,500, if the premium is $5,000,000 or more,
14        but less than $10,000,000;
15            (v) $18,000, if the premium is $10,000,000 or
16        more, but less than $25,000,000;
17            (vi) $22,500, if the premium is $25,000,000 or
18        more, but less than $50,000,000;
19            (vii) $30,000, if the premium is $50,000,000 or
20        more, but less than $100,000,000;
21            (viii) $37,500, if the premium is $100,000,000 or
22        more.
23        (b) Admitted assets.
24            (i) $150, if admitted assets are less than
25        $1,000,000;
26            (ii) $750, if admitted assets are $1,000,000 or

 

 

SB1479 Enrolled- 53 -LRB103 05817 BMS 50837 b

1        more, but less than $5,000,000;
2            (iii) $3,750, if admitted assets are $5,000,000 or
3        more, but less than $25,000,000;
4            (iv) $7,500, if admitted assets are $25,000,000 or
5        more, but less than $50,000,000;
6            (v) $18,000, if admitted assets are $50,000,000 or
7        more, but less than $100,000,000;
8            (vi) $22,500, if admitted assets are $100,000,000
9        or more, but less than $500,000,000;
10            (vii) $30,000, if admitted assets are $500,000,000
11        or more, but less than $1,000,000,000;
12            (viii) $37,500, if admitted assets are
13        $1,000,000,000 or more.
14        (c) The sum of financial regulation fees charged to
15    the domestic companies of the same affiliated group shall
16    not exceed $250,000 in the aggregate in any single year
17    and shall be billed by the Director to the member company
18    designated by the group.
19    (7) The Director shall charge and collect an annual
20financial regulation fee from every foreign or alien company,
21except fraternal benefit societies, for the examination and
22analysis of its financial condition and to fund the internal
23costs and expenses of the Interstate Insurance Receivership
24Commission as may be allocated to the State of Illinois and
25companies doing an insurance business in this State pursuant
26to Article X of the Interstate Insurance Receivership Compact.

 

 

SB1479 Enrolled- 54 -LRB103 05817 BMS 50837 b

1The fee shall be a fixed amount based upon Illinois direct
2premium income and nationwide reinsurance assumed premium
3income in accordance with the following schedule:
4        (a) $150, if the premium is less than $500,000 and
5    there is no reinsurance assumed premium;
6        (b) $750, if the premium is $500,000 or more, but less
7    than $5,000,000 and there is no reinsurance assumed
8    premium; or if the premium is less than $5,000,000 and the
9    reinsurance assumed premium is less than $10,000,000;
10        (c) $3,750, if the premium is less than $5,000,000 and
11    the reinsurance assumed premium is $10,000,000 or more;
12        (d) $7,500, if the premium is $5,000,000 or more, but
13    less than $10,000,000;
14        (e) $18,000, if the premium is $10,000,000 or more,
15    but less than $25,000,000;
16        (f) $22,500, if the premium is $25,000,000 or more,
17    but less than $50,000,000;
18        (g) $30,000, if the premium is $50,000,000 or more,
19    but less than $100,000,000;
20        (h) $37,500, if the premium is $100,000,000 or more.
21    The sum of financial regulation fees under this subsection
22(7) charged to the foreign or alien companies within the same
23affiliated group shall not exceed $250,000 in the aggregate in
24any single year and shall be billed by the Director to the
25member company designated by the group.
26    (8) Beginning January 1, 1992, the financial regulation

 

 

SB1479 Enrolled- 55 -LRB103 05817 BMS 50837 b

1fees imposed under subsections (6) and (7) of this Section
2shall be paid by each company or domestic affiliated group
3annually. After January 1, 1994, the fee shall be billed by
4Department invoice based upon the company's premium income or
5admitted assets as shown in its annual statement for the
6preceding calendar year. The invoice is due upon receipt and
7must be paid no later than June 30 of each calendar year. All
8financial regulation fees collected by the Department shall be
9paid to the Insurance Financial Regulation Fund. The
10Department may not collect financial examiner per diem charges
11from companies subject to subsections (6) and (7) of this
12Section undergoing financial examination after June 30, 1992.
13    (9) In addition to the financial regulation fee required
14by this Section, a company undergoing any financial
15examination authorized by law shall pay the following costs
16and expenses incurred by the Department: electronic data
17processing costs, the expenses authorized under Section 131.21
18and subsection (d) of Section 132.4 of this Code, and lodging
19and travel expenses.
20    Electronic data processing costs incurred by the
21Department in the performance of any examination shall be
22billed directly to the company undergoing examination for
23payment to the Technology Management Revolving Fund. Except
24for direct reimbursements authorized by the Director or direct
25payments made under Section 131.21 or subsection (d) of
26Section 132.4 of this Code, all financial regulation fees and

 

 

SB1479 Enrolled- 56 -LRB103 05817 BMS 50837 b

1all financial examination charges collected by the Department
2shall be paid to the Insurance Financial Regulation Fund.
3    All lodging and travel expenses shall be in accordance
4with applicable travel regulations published by the Department
5of Central Management Services and approved by the Governor's
6Travel Control Board, except that out-of-state lodging and
7travel expenses related to examinations authorized under
8Sections 132.1 through 132.7 shall be in accordance with
9travel rates prescribed under paragraph 301-7.2 of the Federal
10Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
11subsistence expenses incurred during official travel. All
12lodging and travel expenses may be reimbursed directly upon
13the authorization of the Director.
14    In the case of an organization or person not subject to the
15financial regulation fee, the expenses incurred in any
16financial examination authorized by law shall be paid by the
17organization or person being examined. The charge shall be
18reasonably related to the cost of the examination including,
19but not limited to, compensation of examiners and other costs
20described in this subsection.
21    (10) Any company, person, or entity failing to make any
22payment of $150 or more as required under this Section shall be
23subject to the penalty and interest provisions provided for in
24subsections (4) and (7) of Section 412.
25    (11) Unless otherwise specified, all of the fees collected
26under this Section shall be paid into the Insurance Financial

 

 

SB1479 Enrolled- 57 -LRB103 05817 BMS 50837 b

1Regulation Fund.
2    (12) For purposes of this Section:
3        (a) "Domestic company" means a company as defined in
4    Section 2 of this Code which is incorporated or organized
5    under the laws of this State, and in addition includes a
6    not-for-profit corporation authorized under the Dental
7    Service Plan Act or the Voluntary Health Services Plans
8    Act, a health maintenance organization, and a limited
9    health service organization.
10        (b) "Foreign company" means a company as defined in
11    Section 2 of this Code which is incorporated or organized
12    under the laws of any state of the United States other than
13    this State and in addition includes a health maintenance
14    organization and a limited health service organization
15    which is incorporated or organized under the laws of any
16    state of the United States other than this State.
17        (c) "Alien company" means a company as defined in
18    Section 2 of this Code which is incorporated or organized
19    under the laws of any country other than the United
20    States.
21        (d) "Fraternal benefit society" means a corporation,
22    society, order, lodge or voluntary association as defined
23    in Section 282.1 of this Code.
24        (e) "Mutual benefit association" means a company,
25    association or corporation authorized by the Director to
26    do business in this State under the provisions of Article

 

 

SB1479 Enrolled- 58 -LRB103 05817 BMS 50837 b

1    XVIII of this Code.
2        (f) "Burial society" means a person, firm,
3    corporation, society or association of individuals
4    authorized by the Director to do business in this State
5    under the provisions of Article XIX of this Code.
6        (g) "Farm mutual" means a district, county and
7    township mutual insurance company authorized by the
8    Director to do business in this State under the provisions
9    of the Farm Mutual Insurance Company Act of 1986.
10(Source: P.A. 102-775, eff. 5-13-22.)
 
11    (Text of Section after amendment by P.A. 103-75)
12    Sec. 408. Fees and charges.
13    (1) The Director shall charge, collect and give proper
14acquittances for the payment of the following fees and
15charges:
16        (a) For filing all documents submitted for the
17    incorporation or organization or certification of a
18    domestic company, except for a fraternal benefit society,
19    $2,000.
20        (b) For filing all documents submitted for the
21    incorporation or organization of a fraternal benefit
22    society, $500.
23        (c) For filing amendments to articles of incorporation
24    and amendments to declaration of organization, except for
25    a fraternal benefit society, a mutual benefit association,

 

 

SB1479 Enrolled- 59 -LRB103 05817 BMS 50837 b

1    a burial society or a farm mutual, $200.
2        (d) For filing amendments to articles of incorporation
3    of a fraternal benefit society, a mutual benefit
4    association or a burial society, $100.
5        (e) For filing amendments to articles of incorporation
6    of a farm mutual, $50.
7        (f) For filing bylaws or amendments thereto, $50.
8        (g) For filing agreement of merger or consolidation:
9            (i) for a domestic company, except for a fraternal
10        benefit society, a mutual benefit association, a
11        burial society, or a farm mutual, $2,000.
12            (ii) for a foreign or alien company, except for a
13        fraternal benefit society, $600.
14            (iii) for a fraternal benefit society, a mutual
15        benefit association, a burial society, or a farm
16        mutual, $200.
17        (h) For filing agreements of reinsurance by a domestic
18    company, $200.
19        (i) For filing all documents submitted by a foreign or
20    alien company to be admitted to transact business or
21    accredited as a reinsurer in this State, except for a
22    fraternal benefit society, $5,000.
23        (j) For filing all documents submitted by a foreign or
24    alien fraternal benefit society to be admitted to transact
25    business in this State, $500.
26        (k) For filing declaration of withdrawal of a foreign

 

 

SB1479 Enrolled- 60 -LRB103 05817 BMS 50837 b

1    or alien company, $50.
2        (l) For filing annual statement by a domestic company,
3    except a fraternal benefit society, a mutual benefit
4    association, a burial society, or a farm mutual, $200.
5        (m) For filing annual statement by a domestic
6    fraternal benefit society, $100.
7        (n) For filing annual statement by a farm mutual, a
8    mutual benefit association, or a burial society, $50.
9        (o) For issuing a certificate of authority or renewal
10    thereof except to a foreign fraternal benefit society,
11    $400.
12        (p) For issuing a certificate of authority or renewal
13    thereof to a foreign fraternal benefit society, $200.
14        (q) For issuing an amended certificate of authority,
15    $50.
16        (r) For each certified copy of certificate of
17    authority, $20.
18        (s) For each certificate of deposit, or valuation, or
19    compliance or surety certificate, $20.
20        (t) For copies of papers or records per page, $1.
21        (u) For each certification to copies of papers or
22    records, $10.
23        (v) For multiple copies of documents or certificates
24    listed in subparagraphs (r), (s), and (u) of paragraph (1)
25    of this Section, $10 for the first copy of a certificate of
26    any type and $5 for each additional copy of the same

 

 

SB1479 Enrolled- 61 -LRB103 05817 BMS 50837 b

1    certificate requested at the same time, unless, pursuant
2    to paragraph (2) of this Section, the Director finds these
3    additional fees excessive.
4        (w) For issuing a permit to sell shares or increase
5    paid-up capital:
6            (i) in connection with a public stock offering,
7        $300;
8            (ii) in any other case, $100.
9        (x) For issuing any other certificate required or
10    permissible under the law, $50.
11        (y) For filing a plan of exchange of the stock of a
12    domestic stock insurance company, a plan of
13    demutualization of a domestic mutual company, or a plan of
14    reorganization under Article XII, $2,000.
15        (z) For filing a statement of acquisition of a
16    domestic company as defined in Section 131.4 of this Code,
17    $2,000.
18        (aa) For filing an agreement to purchase the business
19    of an organization authorized under the Dental Service
20    Plan Act or the Voluntary Health Services Plans Act or of a
21    health maintenance organization or a limited health
22    service organization, $2,000.
23        (bb) For filing a statement of acquisition of a
24    foreign or alien insurance company as defined in Section
25    131.12a of this Code, $1,000.
26        (cc) For filing a registration statement as required

 

 

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1    in Sections 131.13 and 131.14, the notification as
2    required by Sections 131.16, 131.20a, or 141.4, or an
3    agreement or transaction required by Sections 124.2(2),
4    141, 141a, or 141.1, $200.
5        (dd) For filing an application for licensing of:
6            (i) a religious or charitable risk pooling trust
7        or a workers' compensation pool, $1,000;
8            (ii) a workers' compensation service company,
9        $500;
10            (iii) a self-insured automobile fleet, $200; or
11            (iv) a renewal of or amendment of any license
12        issued pursuant to (i), (ii), or (iii) above, $100.
13        (ee) For filing articles of incorporation for a
14    syndicate to engage in the business of insurance through
15    the Illinois Insurance Exchange, $2,000.
16        (ff) For filing amended articles of incorporation for
17    a syndicate engaged in the business of insurance through
18    the Illinois Insurance Exchange, $100.
19        (gg) For filing articles of incorporation for a
20    limited syndicate to join with other subscribers or
21    limited syndicates to do business through the Illinois
22    Insurance Exchange, $1,000.
23        (hh) For filing amended articles of incorporation for
24    a limited syndicate to do business through the Illinois
25    Insurance Exchange, $100.
26        (ii) For a permit to solicit subscriptions to a

 

 

SB1479 Enrolled- 63 -LRB103 05817 BMS 50837 b

1    syndicate or limited syndicate, $100.
2        (jj) For the filing of each form as required in
3    Section 143 of this Code, $50 per form. Informational and
4    advertising filings shall be $25 per filing. The fee for
5    advisory and rating organizations shall be $200 per form.
6            (i) For the purposes of the form filing fee,
7        filings made on insert page basis will be considered
8        one form at the time of its original submission.
9        Changes made to a form subsequent to its approval
10        shall be considered a new filing.
11            (ii) Only one fee shall be charged for a form,
12        regardless of the number of other forms or policies
13        with which it will be used.
14            (iii) Fees charged for a policy filed as it will be
15        issued regardless of the number of forms comprising
16        that policy shall not exceed $1,500. For advisory or
17        rating organizations, fees charged for a policy filed
18        as it will be issued regardless of the number of forms
19        comprising that policy shall not exceed $2,500.
20            (iv) The Director may by rule exempt forms from
21        such fees.
22        (kk) For filing an application for licensing of a
23    reinsurance intermediary, $500.
24        (ll) For filing an application for renewal of a
25    license of a reinsurance intermediary, $200.
26        (mm) For filing a plan of division of a domestic stock

 

 

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1    company under Article IIB, $10,000.
2        (nn) For filing all documents submitted by a foreign
3    or alien company to be a certified reinsurer in this
4    State, except for a fraternal benefit society, $1,000.
5        (oo) For filing a renewal by a foreign or alien
6    company to be a certified reinsurer in this State, except
7    for a fraternal benefit society, $400.
8        (pp) For filing all documents submitted by a reinsurer
9    domiciled in a reciprocal jurisdiction, $1,000.
10        (qq) For filing a renewal by a reinsurer domiciled in
11    a reciprocal jurisdiction, $400.
12        (rr) For registering a captive management company or
13    renewal thereof, $50.
14        (ss) For filing an insurance business transfer plan
15    under Article XLVII, $25,000.
16    (2) When printed copies or numerous copies of the same
17paper or records are furnished or certified, the Director may
18reduce such fees for copies if he finds them excessive. He may,
19when he considers it in the public interest, furnish without
20charge to state insurance departments and persons other than
21companies, copies or certified copies of reports of
22examinations and of other papers and records.
23    (3)(a) The expenses incurred in any performance
24examination authorized by law shall be paid by the company or
25person being examined. The charge shall be consistent with
26that otherwise authorized by law and shall be reasonably

 

 

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1related to the cost of the examination including but not
2limited to compensation of examiners, electronic data
3processing costs, supervision and preparation of an
4examination report and lodging and travel expenses. All
5lodging and travel expenses shall be in accord with the
6applicable travel regulations as published by the Department
7of Central Management Services and approved by the Governor's
8Travel Control Board, except that out-of-state lodging and
9travel expenses related to examinations authorized under
10Section 132 shall be in accordance with travel rates
11prescribed under paragraph 301-7.2 of the Federal Travel
12Regulations, 41 C.F.R. 301-7.2, for reimbursement of
13subsistence expenses incurred during official travel. All
14lodging and travel expenses may be reimbursed directly upon
15authorization of the Director. With the exception of the
16direct reimbursements authorized by the Director, all
17performance examination charges collected by the Department
18shall be paid to the Insurance Producer Administration Fund,
19however, the electronic data processing costs incurred by the
20Department in the performance of any examination shall be
21billed directly to the company being examined for payment to
22the Technology Management Revolving Fund.
23    (b) The costs and fees incurred in a market conduct
24examination shall be itemized and bills shall be provided to
25the examinee on a monthly basis for review prior to submission
26for payment. The Director shall review and affirmatively

 

 

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1endorse detailed billings from any contracted, qualified
2outside professional assistance retained under Section 402 for
3market conduct examinations before the detailed billings are
4sent to the examinee. Before any qualified outside
5professional assistance conducts billable work on an
6examination, the Department shall disclose to the examinee the
7terms of the contracts with the qualified outside professional
8assistance that will be used, including the fees and hourly
9rates that can be charged.
10    (4) At the time of any service of process on the Director
11as attorney for such service, the Director shall charge and
12collect the sum of $40, which may be recovered as taxable costs
13by the party to the suit or action causing such service to be
14made if he prevails in such suit or action.
15    (5) (a) The costs incurred by the Department of Insurance
16in conducting any hearing authorized by law shall be assessed
17against the parties to the hearing in such proportion as the
18Director of Insurance may determine upon consideration of all
19relevant circumstances including: (1) the nature of the
20hearing; (2) whether the hearing was instigated by, or for the
21benefit of a particular party or parties; (3) whether there is
22a successful party on the merits of the proceeding; and (4) the
23relative levels of participation by the parties.
24    (b) For purposes of this subsection (5) costs incurred
25shall mean the hearing officer fees, court reporter fees, and
26travel expenses of Department of Insurance officers and

 

 

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1employees; provided however, that costs incurred shall not
2include hearing officer fees or court reporter fees unless the
3Department has retained the services of independent
4contractors or outside experts to perform such functions.
5    (c) The Director shall make the assessment of costs
6incurred as part of the final order or decision arising out of
7the proceeding; provided, however, that such order or decision
8shall include findings and conclusions in support of the
9assessment of costs. This subsection (5) shall not be
10construed as permitting the payment of travel expenses unless
11calculated in accordance with the applicable travel
12regulations of the Department of Central Management Services,
13as approved by the Governor's Travel Control Board. The
14Director as part of such order or decision shall require all
15assessments for hearing officer fees and court reporter fees,
16if any, to be paid directly to the hearing officer or court
17reporter by the party(s) assessed for such costs. The
18assessments for travel expenses of Department officers and
19employees shall be reimbursable to the Director of Insurance
20for deposit to the fund out of which those expenses had been
21paid.
22    (d) The provisions of this subsection (5) shall apply in
23the case of any hearing conducted by the Director of Insurance
24not otherwise specifically provided for by law.
25    (6) The Director shall charge and collect an annual
26financial regulation fee from every domestic company for

 

 

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1examination and analysis of its financial condition and to
2fund the internal costs and expenses of the Interstate
3Insurance Receivership Commission as may be allocated to the
4State of Illinois and companies doing an insurance business in
5this State pursuant to Article X of the Interstate Insurance
6Receivership Compact. The fee shall be the greater fixed
7amount based upon the combination of nationwide direct premium
8income and nationwide reinsurance assumed premium income or
9upon admitted assets calculated under this subsection as
10follows:
11        (a) Combination of nationwide direct premium income
12    and nationwide reinsurance assumed premium.
13            (i) $150, if the premium is less than $500,000 and
14        there is no reinsurance assumed premium;
15            (ii) $750, if the premium is $500,000 or more, but
16        less than $5,000,000 and there is no reinsurance
17        assumed premium; or if the premium is less than
18        $5,000,000 and the reinsurance assumed premium is less
19        than $10,000,000;
20            (iii) $3,750, if the premium is less than
21        $5,000,000 and the reinsurance assumed premium is
22        $10,000,000 or more;
23            (iv) $7,500, if the premium is $5,000,000 or more,
24        but less than $10,000,000;
25            (v) $18,000, if the premium is $10,000,000 or
26        more, but less than $25,000,000;

 

 

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1            (vi) $22,500, if the premium is $25,000,000 or
2        more, but less than $50,000,000;
3            (vii) $30,000, if the premium is $50,000,000 or
4        more, but less than $100,000,000;
5            (viii) $37,500, if the premium is $100,000,000 or
6        more.
7        (b) Admitted assets.
8            (i) $150, if admitted assets are less than
9        $1,000,000;
10            (ii) $750, if admitted assets are $1,000,000 or
11        more, but less than $5,000,000;
12            (iii) $3,750, if admitted assets are $5,000,000 or
13        more, but less than $25,000,000;
14            (iv) $7,500, if admitted assets are $25,000,000 or
15        more, but less than $50,000,000;
16            (v) $18,000, if admitted assets are $50,000,000 or
17        more, but less than $100,000,000;
18            (vi) $22,500, if admitted assets are $100,000,000
19        or more, but less than $500,000,000;
20            (vii) $30,000, if admitted assets are $500,000,000
21        or more, but less than $1,000,000,000;
22            (viii) $37,500, if admitted assets are
23        $1,000,000,000 or more.
24        (c) The sum of financial regulation fees charged to
25    the domestic companies of the same affiliated group shall
26    not exceed $250,000 in the aggregate in any single year

 

 

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1    and shall be billed by the Director to the member company
2    designated by the group.
3    (7) The Director shall charge and collect an annual
4financial regulation fee from every foreign or alien company,
5except fraternal benefit societies, for the examination and
6analysis of its financial condition and to fund the internal
7costs and expenses of the Interstate Insurance Receivership
8Commission as may be allocated to the State of Illinois and
9companies doing an insurance business in this State pursuant
10to Article X of the Interstate Insurance Receivership Compact.
11The fee shall be a fixed amount based upon Illinois direct
12premium income and nationwide reinsurance assumed premium
13income in accordance with the following schedule:
14        (a) $150, if the premium is less than $500,000 and
15    there is no reinsurance assumed premium;
16        (b) $750, if the premium is $500,000 or more, but less
17    than $5,000,000 and there is no reinsurance assumed
18    premium; or if the premium is less than $5,000,000 and the
19    reinsurance assumed premium is less than $10,000,000;
20        (c) $3,750, if the premium is less than $5,000,000 and
21    the reinsurance assumed premium is $10,000,000 or more;
22        (d) $7,500, if the premium is $5,000,000 or more, but
23    less than $10,000,000;
24        (e) $18,000, if the premium is $10,000,000 or more,
25    but less than $25,000,000;
26        (f) $22,500, if the premium is $25,000,000 or more,

 

 

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1    but less than $50,000,000;
2        (g) $30,000, if the premium is $50,000,000 or more,
3    but less than $100,000,000;
4        (h) $37,500, if the premium is $100,000,000 or more.
5    The sum of financial regulation fees under this subsection
6(7) charged to the foreign or alien companies within the same
7affiliated group shall not exceed $250,000 in the aggregate in
8any single year and shall be billed by the Director to the
9member company designated by the group.
10    (8) Beginning January 1, 1992, the financial regulation
11fees imposed under subsections (6) and (7) of this Section
12shall be paid by each company or domestic affiliated group
13annually. After January 1, 1994, the fee shall be billed by
14Department invoice based upon the company's premium income or
15admitted assets as shown in its annual statement for the
16preceding calendar year. The invoice is due upon receipt and
17must be paid no later than June 30 of each calendar year. All
18financial regulation fees collected by the Department shall be
19paid to the Insurance Financial Regulation Fund. The
20Department may not collect financial examiner per diem charges
21from companies subject to subsections (6) and (7) of this
22Section undergoing financial examination after June 30, 1992.
23    (9) In addition to the financial regulation fee required
24by this Section, a company undergoing any financial
25examination authorized by law shall pay the following costs
26and expenses incurred by the Department: electronic data

 

 

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1processing costs, the expenses authorized under Section 131.21
2and subsection (d) of Section 132.4 of this Code, and lodging
3and travel expenses.
4    Electronic data processing costs incurred by the
5Department in the performance of any examination shall be
6billed directly to the company undergoing examination for
7payment to the Technology Management Revolving Fund. Except
8for direct reimbursements authorized by the Director or direct
9payments made under Section 131.21 or subsection (d) of
10Section 132.4 of this Code, all financial regulation fees and
11all financial examination charges collected by the Department
12shall be paid to the Insurance Financial Regulation Fund.
13    All lodging and travel expenses shall be in accordance
14with applicable travel regulations published by the Department
15of Central Management Services and approved by the Governor's
16Travel Control Board, except that out-of-state lodging and
17travel expenses related to examinations authorized under
18Sections 132.1 through 132.7 shall be in accordance with
19travel rates prescribed under paragraph 301-7.2 of the Federal
20Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
21subsistence expenses incurred during official travel. All
22lodging and travel expenses may be reimbursed directly upon
23the authorization of the Director.
24    In the case of an organization or person not subject to the
25financial regulation fee, the expenses incurred in any
26financial examination authorized by law shall be paid by the

 

 

SB1479 Enrolled- 73 -LRB103 05817 BMS 50837 b

1organization or person being examined. The charge shall be
2reasonably related to the cost of the examination including,
3but not limited to, compensation of examiners and other costs
4described in this subsection.
5    (10) Any company, person, or entity failing to make any
6payment of $150 or more as required under this Section shall be
7subject to the penalty and interest provisions provided for in
8subsections (4) and (7) of Section 412.
9    (11) Unless otherwise specified, all of the fees collected
10under this Section shall be paid into the Insurance Financial
11Regulation Fund.
12    (12) For purposes of this Section:
13        (a) "Domestic company" means a company as defined in
14    Section 2 of this Code which is incorporated or organized
15    under the laws of this State, and in addition includes a
16    not-for-profit corporation authorized under the Dental
17    Service Plan Act or the Voluntary Health Services Plans
18    Act, a health maintenance organization, and a limited
19    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 than
23    this State and in addition includes a health maintenance
24    organization and a limited health service organization
25    which is incorporated or organized under the laws of any
26    state of the United States other than this State.

 

 

SB1479 Enrolled- 74 -LRB103 05817 BMS 50837 b

1        (c) "Alien company" means a company as defined in
2    Section 2 of this Code which is incorporated or organized
3    under the laws of any country other than the United
4    States.
5        (d) "Fraternal benefit society" means a corporation,
6    society, order, lodge or voluntary association as defined
7    in Section 282.1 of this Code.
8        (e) "Mutual benefit association" means a company,
9    association or corporation authorized by the Director to
10    do business in this State under the provisions of Article
11    XVIII of this Code.
12        (f) "Burial society" means a person, firm,
13    corporation, society or association of individuals
14    authorized by the Director to do business in this State
15    under the provisions of Article XIX of this Code.
16        (g) "Farm mutual" means a district, county and
17    township mutual insurance company authorized by the
18    Director to do business in this State under the provisions
19    of the Farm Mutual Insurance Company Act of 1986.
20(Source: P.A. 102-775, eff. 5-13-22; 103-75, eff. 1-1-25.)
 
21    (215 ILCS 5/511.109)  (from Ch. 73, par. 1065.58-109)
22    (Section scheduled to be repealed on January 1, 2027)
23    Sec. 511.109. Examination.
24    (a) The Director or the Director's his designee may
25examine any applicant for or holder of an administrator's

 

 

SB1479 Enrolled- 75 -LRB103 05817 BMS 50837 b

1license in accordance with Sections 132 through 132.7. If the
2Director or the examiners find that the administrator has
3violated this Article or any other insurance-related laws,
4rules, or regulations under the Director's jurisdiction
5because of the manner in which the administrator has conducted
6business on behalf of an insurer or plan sponsor, then, unless
7the insurer or plan sponsor is included in the examination and
8has been afforded the same opportunity to request or
9participate in a hearing on the examination report, the
10examination report shall not allege a violation by the insurer
11or plan sponsor and the Director's order based on the report
12shall not impose any requirements, prohibitions, or penalties
13on the insurer or plan sponsor. Nothing in this Section shall
14prevent the Director from using any information obtained
15during the examination of an administrator to examine,
16investigate, or take other appropriate regulatory or legal
17action with respect to an insurer or plan sponsor.
18    (b) Any administrator being examined shall provide to the
19Director or his designee convenient and free access, at all
20reasonable hours at their offices, to all books, records,
21documents and other papers relating to such administrator's
22business affairs.
23    (c) The Director or his designee may administer oaths and
24thereafter examine any individual about the business of the
25administrator.
26    (d) The examiners designated by the Director pursuant to

 

 

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1this Section may make reports to the Director. Any report
2alleging substantive violations of this Article, any
3applicable provisions of the Illinois Insurance Code, or any
4applicable Part of Title 50 of the Illinois Administrative
5Code shall be in writing and be based upon facts obtained by
6the examiners. The report shall be verified by the examiners.
7    (e) If a report is made, the Director shall either deliver
8a duplicate thereof to the administrator being examined or
9send such duplicate by certified or registered mail to the
10administrator's address specified in the records of the
11Department. The Director shall afford the administrator an
12opportunity to request a hearing to object to the report. The
13administrator may request a hearing within 30 days after
14receipt of the duplicate of the examination report by giving
15the Director written notice of such request together with
16written objections to the report. Any hearing shall be
17conducted in accordance with Sections 402 and 403 of this
18Code. The right to hearing is waived if the delivery of the
19report is refused or the report is otherwise undeliverable or
20the administrator does not timely request a hearing. After the
21hearing or upon expiration of the time period during which an
22administrator may request a hearing, if the examination
23reveals that the administrator is operating in violation of
24any applicable provision of the Illinois Insurance Code, any
25applicable Part of Title 50 of the Illinois Administrative
26Code or prior order, the Director, in the written order, may

 

 

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1require the administrator to take any action the Director
2considers necessary or appropriate in accordance with the
3report or examination hearing. If the Director issues an
4order, it shall be issued within 90 days after the report is
5filed, or if there is a hearing, within 90 days after the
6conclusion of the hearing. The order is subject to review
7under the Administrative Review Law.
8(Source: P.A. 84-887.)
 
9    (215 ILCS 5/512-3)  (from Ch. 73, par. 1065.59-3)
10    Sec. 512-3. Definitions. For the purposes of this Article,
11unless the context otherwise requires, the terms defined in
12this Article have the meanings ascribed to them herein:
13    "Health care payer" means an insurance company, health
14maintenance organization, limited health service organization,
15health services plan corporation, or dental service plan
16corporation authorized to do business in this State.
17    (a) "Third party prescription program" or "program" means
18any system of providing for the reimbursement of
19pharmaceutical services and prescription drug products offered
20or operated in this State under a contractual arrangement or
21agreement between a provider of such services and another
22party who is not the consumer of those services and products.
23Such programs may include, but need not be limited to,
24employee benefit plans whereby a consumer receives
25prescription drugs or other pharmaceutical services and those

 

 

SB1479 Enrolled- 78 -LRB103 05817 BMS 50837 b

1services are paid for by an agent of the employer or others.
2    (b) "Third party program administrator" or "administrator"
3means any person, partnership or corporation who issues or
4causes to be issued any payment or reimbursement to a provider
5for services rendered pursuant to a third party prescription
6program, but does not include the Director of Healthcare and
7Family Services or any agent authorized by the Director to
8reimburse a provider of services rendered pursuant to a
9program of which the Department of Healthcare and Family
10Services is the third party.
11(Source: P.A. 95-331, eff. 8-21-07.)
 
12    (215 ILCS 5/512-5)  (from Ch. 73, par. 1065.59-5)
13    Sec. 512-5. Fiduciary and Bonding Requirements. A third
14party prescription program administrator shall (1) establish
15and maintain a fiduciary account, separate and apart from any
16and all other accounts, for the receipt and disbursement of
17funds for reimbursement of providers of services under the
18program, or (2) post, or cause to be posted, a bond of
19indemnity in an amount equal to not less than 10% of the total
20estimated annual reimbursements under the program.
21    The establishment of such fiduciary accounts and bonds
22shall be consistent with applicable State law. If a bond of
23indemnity is posted, it shall be held by the Director of
24Insurance for the benefit and indemnification of the providers
25of services under the third party prescription program.

 

 

SB1479 Enrolled- 79 -LRB103 05817 BMS 50837 b

1    An administrator who operates more than one third party
2prescription program may establish and maintain a separate
3fiduciary account or bond of indemnity for each such program,
4or may operate and maintain a consolidated fiduciary account
5or bond of indemnity for all such programs.
6    The requirements of this Section do not apply to any third
7party prescription program administered by or on behalf of any
8health care payer insurance company, Health Care Service Plan
9Corporation or Pharmaceutical Service Plan Corporation
10authorized to do business in the State of Illinois.
11(Source: P.A. 82-1005.)
 
12    (215 ILCS 5/512-11 new)
13    Sec. 512-11. Examination. The Director or the Director's
14designee may examine any applicant for or holder of an
15administrator's registration in accordance with Sections 132
16through 132.7 of this Code. If the Director or the examiners
17find that the administrator has violated this Article or any
18other insurance-related laws or regulations under the
19Director's jurisdiction because of the manner in which the
20administrator has conducted business on behalf of a separately
21incorporated health care payer, then, unless the health care
22payer is included in the examination and has been afforded the
23same opportunity to request or participate in a hearing on the
24examination report, the examination report shall not allege a
25violation by the health care payer and the Director's order

 

 

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1based on the report shall not impose any requirements,
2prohibitions, or penalties on the health care payer. Nothing
3in this Section shall prevent the Director from using any
4information obtained during the examination of an
5administrator to examine, investigate, or take other
6appropriate regulatory or legal action with respect to a
7health care payer.
 
8    (215 ILCS 5/513b3)
9    Sec. 513b3. Examination. (a) The Director, or his or her
10designee, may examine a registered pharmacy benefit manager in
11accordance with Sections 132-132.7. If the Director or the
12examiners find that the pharmacy benefit manager has violated
13this Article or any other insurance-related laws, rules, or
14regulations under the Director's jurisdiction because of the
15manner in which the pharmacy benefit manager has conducted
16business on behalf of a health insurer or plan sponsor, then,
17unless the health insurer or plan sponsor is included in the
18examination and has been afforded the same opportunity to
19request or participate in a hearing on the examination report,
20the examination report shall not allege a violation by the
21health insurer or plan sponsor and the Director's order based
22on the report shall not impose any requirements, prohibitions,
23or penalties on the health insurer or plan sponsor. Nothing in
24this Section shall prevent the Director from using any
25information obtained during the examination of an

 

 

SB1479 Enrolled- 81 -LRB103 05817 BMS 50837 b

1administrator to examine, investigate, or take other
2appropriate regulatory or legal action with respect to a
3health insurer or plan sponsor.
4    (b) Any pharmacy benefit manager being examined shall
5provide to the Director, or his or her designee, convenient
6and free access to all books, records, documents, and other
7papers relating to such pharmacy benefit manager's business
8affairs at all reasonable hours at its offices.
9    (c) The Director, or his or her designee, may administer
10oaths and thereafter examine the pharmacy benefit manager's
11designee, representative, or any officer or senior manager as
12listed on the license or registration certificate about the
13business of the pharmacy benefit manager.
14    (d) The examiners designated by the Director under this
15Section may make reports to the Director. Any report alleging
16substantive violations of this Article, any applicable
17provisions of this Code, or any applicable Part of Title 50 of
18the Illinois Administrative Code shall be in writing and be
19based upon facts obtained by the examiners. The report shall
20be verified by the examiners.
21    (e) If a report is made, the Director shall either deliver
22a duplicate report to the pharmacy benefit manager being
23examined or send such duplicate by certified or registered
24mail to the pharmacy benefit manager's address specified in
25the records of the Department. The Director shall afford the
26pharmacy benefit manager an opportunity to request a hearing

 

 

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1to object to the report. The pharmacy benefit manager may
2request a hearing within 30 days after receipt of the
3duplicate report by giving the Director written notice of such
4request together with written objections to the report. Any
5hearing shall be conducted in accordance with Sections 402 and
6403 of this Code. The right to a hearing is waived if the
7delivery of the report is refused or the report is otherwise
8undeliverable or the pharmacy benefit manager does not timely
9request a hearing. After the hearing or upon expiration of the
10time period during which a pharmacy benefit manager may
11request a hearing, if the examination reveals that the
12pharmacy benefit manager is operating in violation of any
13applicable provision of this Code, any applicable Part of
14Title 50 of the Illinois Administrative Code, a provision of
15this Article, or prior order, the Director, in the written
16order, may require the pharmacy benefit manager to take any
17action the Director considers necessary or appropriate in
18accordance with the report or examination hearing. If the
19Director issues an order, it shall be issued within 90 days
20after the report is filed, or if there is a hearing, within 90
21days after the conclusion of the hearing. The order is subject
22to review under the Administrative Review Law.
23(Source: P.A. 101-452, eff. 1-1-20.)
 
24    Section 95. No acceleration or delay. Where this Act makes
25changes in a statute that is represented in this Act by text

 

 

SB1479 Enrolled- 83 -LRB103 05817 BMS 50837 b

1that is not yet or no longer in effect (for example, a Section
2represented by multiple versions), the use of that text does
3not accelerate or delay the taking effect of (i) the changes
4made by this Act or (ii) provisions derived from any other
5Public Act.
 
6    Section 99. Effective date. This Act takes effect January
71, 2025.