093_HB3162

 
                                     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
 
                            -2-      LRB093 08537 LRD 11985 b
 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)  Selling  insurance  coverage  within  an  individual
 8    market  after  notice of withdrawal from that market has been
 9    given if that coverage was among the types  of  coverage  for
10    which notice of withdrawal was given.
11        (7)  Withdrawing  from  an  individual  market within 240
12    days of selling insurance coverage in that market.
13    (Source: P.A. 92-399, eff.  8-16-01;  92-651,  eff.  7-11-02;
14    92-669, eff. 1-1-03.)

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

18        (215 ILCS 97/50)
19        Sec.  50.  Guaranteed  renewability  of individual health
20    insurance coverage.
21        (A)  In general.  Except as provided in this  Section,  a
22    health  insurance  issuer  that  provides  individual  health
23    insurance  coverage  to an individual shall renew or continue
24    in force such coverage at the option of the individual.
25        (B)  General exceptions.  A health insurance  issuer  may
26    nonrenew  or  discontinue  health  insurance  coverage  of an
27    individual in the individual market based only on one or more
28    of the following:
29             (1)  Nonpayment of  premiums.   The  individual  has
30        failed  to  pay  premiums  or contributions in accordance
31        with the terms of the health insurance  coverage  or  the
32        issuer has not received timely premium payments.
 
                            -3-      LRB093 08537 LRD 11985 b
 1             (2)  Fraud.  The  individual has performed an act or
 2        practice that constitutes fraud or  made  an  intentional
 3        misrepresentation of material fact under the terms of the
 4        coverage.
 5             (3)  Termination  of plan.  The issuer is ceasing to
 6        offer coverage in the  individual  market  in  accordance
 7        with  subsection  (C)  of  this  Section  and  applicable
 8        Illinois law.
 9             (4)  Movement outside the service area.  In the case
10        of a health insurance issuer that offers health insurance
11        coverage  in  the  market  through  a  network  plan, the
12        individual no longer resides,  lives,  or  works  in  the
13        service  area  (or  in  an  area  for which the issuer is
14        authorized to do business), but only if such coverage  is
15        terminated  under this paragraph uniformly without regard
16        to  any   health   status-related   factor   of   covered
17        individuals.
18             (5)  Association  membership ceases.  In the case of
19        health insurance coverage that is made available  in  the
20        individual  market  only  through  one  or more bona fide
21        associations, the membership of  the  individual  in  the
22        association  (on  the  basis  of  which  the  coverage is
23        provided) ceases, but only if such coverage is terminated
24        under this paragraph  uniformly  without  regard  to  any
25        health status-related factor of covered individuals.
26        (C)  Requirements for uniform termination of coverage.
27             (1)  Particular  type  of  coverage not offered.  In
28        any case  in  which  an  issuer  decides  to  discontinue
29        offering  a  particular type of health insurance coverage
30        offered in the individual market, coverage of  such  type
31        may be discontinued by the issuer only if:
32                  (a)  the issuer provides notice to each covered
33             individual  provided  coverage  of this type in such
34             market of such  discontinuation  at  least  90  days
 
                            -4-      LRB093 08537 LRD 11985 b
 1             prior  to  the  date  of the discontinuation of such
 2             coverage;
 3                  (b)  the issuer offers, to each  individual  in
 4             the  individual  market  provided  coverage  of this
 5             type, the option to purchase  any  other  individual
 6             health insurance coverage currently being offered by
 7             the issuer for individuals in such market; and
 8                  (c)  in  exercising  the  option to discontinue
 9             coverage of that type and in offering the option  of
10             coverage  under  subparagraph  (b),  the issuer acts
11             uniformly   without    regard    to    any    health
12             status-related  factor  of  enrolled  individuals or
13             individuals  who  may  become  eligible   for   such
14             coverage.
15             (2)  Discontinuance of all coverage.
16                  (a)  In  general.  Subject to subparagraph (c),
17             in any case  in  which  a  health  insurance  issuer
18             elects  to discontinue offering all health insurance
19             coverage  in  the  individual  market  in  Illinois,
20             health insurance coverage may be discontinued by the
21             issuer only if:
22                       (i)  the issuer  provides  notice  to  the
23                  Director   and   to   each  individual  of  the
24                  discontinuation at least 180 days prior to  the
25                  date of the expiration of such coverage; and
26                       (ii)  all   health   insurance  issued  or
27                  delivered for  issuance  in  Illinois  in  such
28                  market  is discontinued and coverage under such
29                  health insurance coverage in such market is not
30                  renewed.
31                  (a-5)  A  health  insurance  issuer   may   not
32             discontinue offering health insurance coverage in an
33             individual  market  in  Illinois  if  another health
34             insurance issuer in the  same  family  of  companies
 
                            -5-      LRB093 08537 LRD 11985 b
 1             continues  selling  health insurance in that market.
 2             Any  health  insurance  issuer   that   discontinued
 3             coverage  after January 1, 2001, in such a way as to
 4             not  comply  with  this  subparagraph  (a-5)   shall
 5             reunderwrite  all  policyholders  affected  by  that
 6             discontinuation under terms and conditions identical
 7             to  those  enjoyed  by  the  affected  policyholders
 8             immediately     prior     to     their     policies'
 9             discontinuation.  The  terms and conditions include,
10             but are not limited  to,  any  fees  and  deductible
11             amounts.  To be reunderwritten under these terms and
12             conditions,  affected  policyholders must notify the
13             relevant insurance issuer in writing by  January  1,
14             2005, of their desire to be reunderwritten.
15                  (b)  Prohibition  on  market  reentry.   In the
16             case of a discontinuation under subparagraph (a)  in
17             the  individual  market,  the issuer may not provide
18             for the issuance of any health insurance coverage in
19             Illinois involved during the 5-year period beginning
20             on the date  of  the  discontinuation  of  the  last
21             health insurance coverage not so renewed.
22        (D)  Exception  for uniform modification of coverage.  At
23    the time of coverage renewal, a health insurance  issuer  may
24    modify  the  health  insurance  coverage  for  a  policy form
25    offered to individuals in the individual market  so  long  as
26    the   modification   is  consistent  with  Illinois  law  and
27    effective on a uniform basis among all individuals with  that
28    policy   form.   A  modification  of  coverage  by  a  health
29    insurance issuer is not uniform if another  health  insurance
30    issuer in the same family of companies does not make the same
31    modification  of  coverage.  Any health insurance issuer that
32    modified coverage after January 1, 2001, in such a way as  to
33    not  comply  with  this  paragraph (D) shall reunderwrite all
34    policyholders affected by that  discontinuation  under  terms
 
                            -6-      LRB093 08537 LRD 11985 b
 1    and  conditions  identical  to  those enjoyed by the affected
 2    policyholders   immediately   prior   to    their    policies
 3    modification.  The  terms and conditions include, but are not
 4    limited  to,  any  fees  and  deductible   amounts.   To   be
 5    reunderwritten  under  these  terms  and conditions, affected
 6    policyholders must notify the relevant  insurance  issuer  in
 7    writing by January 1, 2005.
 8        (E)  Application   to   coverage   offered  only  through
 9    associations.  In applying this Section in the case of health
10    insurance  coverage  that  is  made  available  by  a  health
11    insurance issuer in the individual market to individuals only
12    through  one  or  more  associations,  a  reference   to   an
13    "individual"  is  deemed  to  include  a reference to such an
14    association (of which the individual is a member).
15        (F)  For the purpose of this Section:
16        "Family of companies" means a business entity  consisting
17    of  a  parent company and any subidiaries in which the parent
18    company holds a 50% or greater ownership stake.
19        "Parent  company"  means  a  company  identified  by   an
20    employer  identification  number  that holds a 50% or greater
21    ownership stake in one or more other companies.
22        Subsidiary" means an  insurance  issuer  licensed  to  do
23    business  in  the  State  of  Illinois  and  in which another
24    company holds a 50% or greater ownership stake.
25    (Source: P.A. 90-567, eff. 1-23-98.)