093_HB3162eng

 
HB3162 Engrossed                     LRB093 08537 LRD 11985 b

 1        AN ACT in relation to insurance.

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

 4        Section  5.   The  Illinois  Insurance Code is amended by
 5    changing Section 424 as follows:

 6        (215 ILCS 5/424) (from Ch. 73, par. 1031)
 7        Sec. 424. Unfair methods of  competition  and  unfair  or
 8    deceptive  acts  or  practices  defined.   The  following are
 9    hereby defined as unfair methods of  competition  and  unfair
10    and deceptive acts or practices in the business of insurance:
11        (1)  The  commission  by any person of any one or more of
12    the acts defined or prohibited by Sections 134, 143.24c, 147,
13    148, 149, 151, 155.22, 155.22a, 236, 237,  364,  and  469  of
14    this Code.
15        (2)  Entering  into  any  agreement  to commit, or by any
16    concerted action committing, any act of boycott, coercion  or
17    intimidation   resulting   in   or   tending   to  result  in
18    unreasonable restraint of, or monopoly in,  the  business  of
19    insurance.
20        (3)  Making  or  permitting,  in the case of insurance of
21    the types enumerated in Classes 1, 2, and 3 of Section 4, any
22    unfair discrimination between individuals  or  risks  of  the
23    same  class  or  of  essentially  the same hazard and expense
24    element because of the race,  color,  religion,  or  national
25    origin   of   such   insurance   risks  or  applicants.   The
26    application  of  this  Article  to  the  types  of  insurance
27    enumerated in Class 1 of Section 4 shall  in  no  way  limit,
28    reduce,  or  impair  the  protections  and  remedies  already
29    provided  for  by  Sections  236  and 364 of this Code or any
30    other provision of this Code.
31        (4)  Engaging in any of the acts or practices defined  in
 
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 1    or prohibited by Sections 154.5 through 154.8 of this Code.
 2        (5)  Making  or  charging  any rate for insurance against
 3    losses arising from the use or ownership of a  motor  vehicle
 4    which  requires  a  higher premium of any person by reason of
 5    his physical handicap, race,  color,  religion,  or  national
 6    origin.
 7        (6)  Issuing  a  new  policy  within an individual health
 8    insurance market after notice of withdrawal from that  market
 9    has  been  given according to item (i) of subparagraph (a) of
10    paragraph (2) of subsection (C) of Section 50 of the Illinois
11    Health Insurance Portability and Accountability Act  if  that
12    coverage  was among the types of coverage for which notice of
13    withdrawal has been given.
14    (Source: P.A. 92-399, eff.  8-16-01;  92-651,  eff.  7-11-02;
15    92-669, eff. 1-1-03.)

16        Section  10.   The  Illinois Health Insurance Portability
17    and Accountability Act is amended by changing Section 50  and
18    adding Section 60 as follows:

19        (215 ILCS 97/50)
20        Sec.  50.  Guaranteed  renewability  of individual health
21    insurance coverage.
22        (A)  In general.  Except as provided in this  Section,  a
23    health  insurance  issuer  that  provides  individual  health
24    insurance  coverage  to an individual shall renew or continue
25    in force such coverage at the option of the individual.
26        (B)  General exceptions.  A health insurance  issuer  may
27    nonrenew  or  discontinue  health  insurance  coverage  of an
28    individual in the individual market based only on one or more
29    of the following:
30             (1)  Nonpayment of  premiums.   The  individual  has
31        failed  to  pay  premiums  or contributions in accordance
32        with the terms of the health insurance  coverage  or  the
 
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 1        issuer has not received timely premium payments.
 2             (2)  Fraud.  The  individual has performed an act or
 3        practice that constitutes fraud or  made  an  intentional
 4        misrepresentation of material fact under the terms of the
 5        coverage.
 6             (3)  Termination  of plan.  The issuer is ceasing to
 7        offer coverage in the  individual  market  in  accordance
 8        with  subsection  (C)  of  this  Section  and  applicable
 9        Illinois law.
10             (4)  Movement outside the service area.  In the case
11        of a health insurance issuer that offers health insurance
12        coverage  in  the  market  through  a  network  plan, the
13        individual no longer resides,  lives,  or  works  in  the
14        service  area  (or  in  an  area  for which the issuer is
15        authorized to do business), but only if such coverage  is
16        terminated  under this paragraph uniformly without regard
17        to  any   health   status-related   factor   of   covered
18        individuals.
19             (5)  Association  membership ceases.  In the case of
20        health insurance coverage that is made available  in  the
21        individual  market  only  through  one  or more bona fide
22        associations, the membership of  the  individual  in  the
23        association  (on  the  basis  of  which  the  coverage is
24        provided) ceases, but only if such coverage is terminated
25        under this paragraph  uniformly  without  regard  to  any
26        health status-related factor of covered individuals.
27        (C)  Requirements for uniform termination of coverage.
28             (1)  Particular  type  of  coverage not offered.  In
29        any case  in  which  an  issuer  decides  to  discontinue
30        offering  a  particular type of health insurance coverage
31        offered in the individual market, coverage of  such  type
32        may be discontinued by the issuer only if:
33                  (a)  the issuer provides notice to each covered
34             individual  provided  coverage  of this type in such
 
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 1             market of such  discontinuation  at  least  90  days
 2             prior  to  the  date  of the discontinuation of such
 3             coverage;
 4                  (b)  the issuer offers, to each  individual  in
 5             the  individual  market  provided  coverage  of this
 6             type, the option to purchase  any  other  individual
 7             health insurance coverage currently being offered by
 8             the issuer for individuals in such market; and
 9                  (c)  in  exercising  the  option to discontinue
10             coverage of that type and in offering the option  of
11             coverage  under  subparagraph  (b),  the issuer acts
12             uniformly   without    regard    to    any    health
13             status-related  factor  of  enrolled  individuals or
14             individuals  who  may  become  eligible   for   such
15             coverage.
16             (2)  Discontinuance of all coverage.
17                  (a)  In  general.  Subject to subparagraph (c),
18             in any case  in  which  a  health  insurance  issuer
19             elects  to discontinue offering all health insurance
20             coverage  in  the  individual  market  in  Illinois,
21             health insurance coverage may be discontinued by the
22             issuer only if:
23                       (i)  the issuer  provides  notice  to  the
24                  Director   and   to   each  individual  of  the
25                  discontinuation at least 180 days prior to  the
26                  date of the expiration of such coverage; and
27                       (ii)  all   health   insurance  issued  or
28                  delivered for  issuance  in  Illinois  in  such
29                  market  is discontinued and coverage under such
30                  health insurance coverage in such market is not
31                  renewed.
32                  (a-5)  A  health  insurance  issuer   may   not
33             discontinue offering health insurance coverage in an
34             individual  market  in  Illinois  if  another health
 
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 1             insurance issuer in the  same  family  of  companies
 2             continues  selling  health insurance in that market.
 3             Any  health  insurance  issuer   that   discontinued
 4             coverage  after January 1, 2001, in such a way as to
 5             not  comply  with  this  subparagraph  (a-5)   shall
 6             reunderwrite  all  policyholders  affected  by  that
 7             discontinuation under terms and conditions identical
 8             to  those  enjoyed  by  the  affected  policyholders
 9             immediately     prior     to     their     policies'
10             discontinuation.  The  terms and conditions include,
11             but are not limited  to,  any  fees  and  deductible
12             amounts.  To be reunderwritten under these terms and
13             conditions,  affected  policyholders must notify the
14             relevant insurance issuer in writing by  January  1,
15             2005, of their desire to be reunderwritten.
16                  (b)  Prohibition  on  market  reentry.   In the
17             case of a discontinuation under subparagraph (a)  in
18             the  individual  market,  the issuer may not provide
19             for the issuance of any health insurance coverage in
20             Illinois involved during the 5-year period beginning
21             on the date  of  the  discontinuation  of  the  last
22             health insurance coverage not so renewed.
23        (D)  Exception  for uniform modification of coverage.  At
24    the time of coverage renewal, a health insurance  issuer  may
25    modify  the  health  insurance  coverage  for  a  policy form
26    offered to individuals in the individual market  so  long  as
27    the   modification   is  consistent  with  Illinois  law  and
28    effective on a uniform basis among all individuals with  that
29    policy   form.   A  modification  of  coverage  by  a  health
30    insurance issuer is not uniform if another  health  insurance
31    issuer in the same family of companies does not make the same
32    modification  of  coverage.  Any health insurance issuer that
33    modified coverage after January 1, 2001, in such a way as  to
34    not  comply  with  this  paragraph (D) shall reunderwrite all
 
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 1    policyholders affected by that  discontinuation  under  terms
 2    and  conditions  identical  to  those enjoyed by the affected
 3    policyholders   immediately   prior   to   their    policies'
 4    modification.  The  terms and conditions include, but are not
 5    limited  to,  any  fees  and  deductible   amounts.   To   be
 6    reunderwritten  under  these  terms  and conditions, affected
 7    policyholders must notify the relevant  insurance  issuer  in
 8    writing by January 1, 2005.
 9        (E)  Application   to   coverage   offered  only  through
10    associations.  In applying this Section in the case of health
11    insurance  coverage  that  is  made  available  by  a  health
12    insurance issuer in the individual market to individuals only
13    through  one  or  more  associations,  a  reference   to   an
14    "individual"  is  deemed  to  include  a reference to such an
15    association (of which the individual is a member).
16        (F)  For the purpose of this Section:
17        "Family of companies" means a business entity  consisting
18    of  a  parent company and any subidiaries in which the parent
19    company holds a 50% or greater ownership stake.
20        "Parent  company"  means  a  company  identified  by   an
21    employer  identification  number  that holds a 50% or greater
22    ownership stake in one or more other companies.
23        "Subsidiary" means an insurance  issuer  licensed  to  do
24    business  in  the  State  of  Illinois  and  in which another
25    company holds a 50% or greater ownership stake.
26    (Source: P.A. 90-567, eff. 1-23-98.)

27        (215 ILCS 97/60 new)
28        Sec. 60.  Notice requirement to the  Department.  In  any
29    case  where  a  health  insurance  issuer elects to uniformly
30    modify coverage, uniformly terminate coverage, or discontinue
31    coverage in a marketplace in accordance with Sections 30  and
32    50  of  this  Act,  the  issuer  shall  provide notice to the
33    Department   prior   to   notifying   the   plan    sponsors,
 
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 1    participants,  beneficiaries,  and  covered individuals.  The
 2    notice shall be sent by certified mail to the  Department  90
 3    days in advance of any notification of the company's actions.
 4    The  notice  shall include: (i) a complete description of the
 5    action to be taken, (ii) a specific description of  the  type
 6    of coverage affected, (iii) the total number of covered lives
 7    affected,  (iv)  a  sample draft of all letters being sent to
 8    the plan sponsors and participants, beneficiaries, or covered
 9    individuals, (v) time frames for  the  actions  being  taken,
10    (vi) options the plans sponsors, participants, beneficiaries,
11    or  covered  individuals may have available to them under the
12    federal Health Insurance Portability and Accountability  Act,
13    and   (vii)   any   other  information  as  required  by  the
14    Department.

15        Section 95. Severability.  The provisions of this Act are
16    severable under Section 1.31 of the Statute on Statutes.