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| [ Introduced ] | [ House Amendment 001 ] |
91_HB2774eng HB2774 Engrossed LRB9102646JSpc 1 AN ACT relating to insurance companies. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Insurance Code is amended by 5 changing Sections 245, 356h, 356v, 364, 367, and 367i as 6 follows: 7 (215 ILCS 5/245) (from Ch. 73, par. 857) 8 Sec. 245. Salaries; pensions. 9 (1) No domestic life company shall directly or 10 indirectly pay any salary, compensation or emolument to any 11 officer, trustee or director thereof, or any salary, 12 compensation or emolument amounting in any year to more than 13 $200,000$100,000to any person, firm or corporation, unless 14 such payment be first authorized by a vote of the board of 15 directors of such company, which vote shall be duly recorded 16 in the records of the company. No such domestic life company 17 shall make any agreement with any of its officers, trustees 18 or salaried employees whereby it agrees that for any services 19 rendered or to be rendered he shall receive any salary, 20 compensation or emolument, directly or indirectly, that will 21 extend beyond a period of three years from the date of such 22 agreement except that payment of an amount not in excess of 23 20% of the salary of any of its officers, trustees, or 24 salaried employees may by written agreement be deferred 25 beyond such period of three years, which agreement may 26 include conditions to be met by such officer, trustee, or 27 salaried employee before payment will be made. The limitation 28 as to time contained herein shall not apply to a contract for 29 renewal commissions with any such officer, trustee or 30 salaried employee who is also an agent of the company nor 31 shall such limitation be construed as preventing a domestic HB2774 Engrossed -2- LRB9102646JSpc 1 company from entering into contracts with its agents for the 2 payment of renewal commissions. 3 (2) No such life company shall grant any pension to any 4 officer, director or trustee thereof or to any member of his 5 family after his death except that it may provide a pension 6 pursuant to the terms of the uniform retirement plan adopted 7 by the board of directors and for any person who is or has 8 been a salaried officer or employee of such company and who 9 may retire by reason of age or disability. 10 (3) No such company shall hereafter create or establish 11 any account or fund for the purpose of promoting the health 12 or welfare of its employees except from annual accretions to 13 earned surplus computed in the manner provided by this Code. 14 Contributions to such fund by any company in any calendar 15 year shall not exceed 15% of the accretion to earned surplus 16 in such calendar year. Before such account or fund shall be 17 established, maintained or operated, the plan for such 18 account or fund and its method of operation shall be approved 19 by the board of directors of the company, and submitted to 20 the shareholders in the case of a stock company, or members 21 in the case of a mutual company, at a special meeting called 22 for the purpose of considering such plan. Contributions to 23 the fund from sources other than the company may be provided 24 for in the operation of the plan. No amount held in such fund 25 or account whether contributed by the company or from any 26 other source shall be considered an admitted asset as defined 27 in this Code, nor considered in determining the solvency of 28 such company, nor be subject to the provisions of this Code. 29 (Source: P.A. 86-384.) 30 (215 ILCS 5/356h) (from Ch. 73, par. 968h) 31 Sec. 356h. No individual or group policy of accident and 32 health insurance which covers the insured's immediate family 33 or children, as well as covering the insured, shall exclude a HB2774 Engrossed -3- LRB9102646JSpc 1 child from coverage or limit coverage for a child solely 2 because the child is an adopted child, or solely because the 3 child does not reside with the insured. For purposes of this 4 Section, a child who is in the custody of the insured, 5 pursuant to an interim court order of adoption or, in the 6 case of group insurance, placement of adoption, whichever 7 comes first, vesting temporary care of the child in the 8 insured, is an adopted child, regardless of whether a final 9 order granting adoption is ultimately issued. 10 (Source: P.A. 86-649.) 11 (215 ILCS 5/356v) 12 Sec. 356v. Use of information derived from genetic 13 testing. After the effective date of this amendatory Act of 14 1997, an insurer must comply with the provisions of the 15 Genetic Information Privacy Act in connection with the 16 amendment, delivery, issuance, or renewal of, or claims for 17 or denial of coverage under, an individual or group policy of 18 accident and health insurance. Additionally, genetic 19 information shall not be treated as a condition described in 20 item (1) of subsection (A) of Section 20 of the Illinois 21 Health Insurance Portability and Accountability Act in the 22 absence of a diagnosis of the condition related to that 23 genetic information. 24 (Source: P.A. 90-25, eff. 1-1-98; 90-655, eff. 7-30-98.) 25 (215 ILCS 5/364) (from Ch. 73, par. 976) 26 Sec. 364. Discrimination prohibited. Discrimination 27 between individuals of the same class of risk in the issuance 28 of its policies or in the amount of premiums or rates charged 29 for any insurance covered by this article, or in the benefits 30 payable thereon, or in any of the terms or conditions of such 31 policy, or in any other manner whatsoever is prohibited. 32 Nothing in this provision shall prohibit an insurer from HB2774 Engrossed -4- LRB9102646JSpc 1 providing incentives for insureds to utilize the services of 2 a particular hospital or person. It is hereby expressly 3 provided that whenever the terms "physician" or "doctor" 4 appear or are used in any way in any policy of accident or 5 health insurance issued in this state, said terms shall 6 include within their meaning persons licensed to practice 7 dentistry under the Illinois Dental Practice Act with regard 8 to benefits payable for services performed by a person so 9 licensed, which such services are within the coverage 10 provided by the particular policy or contract of insurance 11 and are within the professional services authorized to be 12 performed by such person under and in accordance with the 13 said Act. 14 No company, in any policy of accident or health insurance 15 issued in this State, shall make or permit any distinction or 16 discrimination against individuals solely because of 17 handicaps or disabilities in the amount of payment of 18 premiums or rates charged for policies of insurance, in the 19 amount of any dividends or other benefits payable thereon, or 20 in any other terms and conditions of the contract it makes, 21 except where the distinction or discrimination is based on 22 sound actuarial principles or is related to actual or 23 reasonably anticipated experience. 24 No company shall refuse to insure, or refuse to continue 25 to insure, or limit the amount or extent or kind of coverage 26 available to an individual, or charge an individual a 27 different rate for the same coverage solely because of 28 blindness or partial blindness. With respect to all other 29 conditions, including the underlying cause of the blindness 30 or partial blindness, persons who are blind or partially 31 blind shall be subject to the same standards of sound 32 actuarial principles or actual or reasonably anticipated 33 experience as are sighted persons. Refusal to insure includes 34 denial by an insurer of disability insurance coverage on the HB2774 Engrossed -5- LRB9102646JSpc 1 grounds that the policy defines "disability" as being 2 presumed in the event that the insured loses his or her 3 eyesight.However, an insurer may exclude from coverage4disabilities consisting solely of blindness or partial5blindness when such condition existed at the time the policy6was issued.7 (Source: P.A. 85-1209.) 8 (215 ILCS 5/367) (from Ch. 73, par. 979) 9 Sec. 367. Group accident and health insurance. 10 (1) Group accident and health insurance is hereby 11 declared to be that form of accident and health insurance 12 covering not less than 210employees, members, or employees 13 of members,(except in case of volunteer fire departments the14number shall not be less than 5 members)written under a 15 master policy issued to any governmental corporation, unit, 16 agency or department thereof, or to any corporation, 17 copartnership, individual employer, or to any association 18 upon application of an executive officer or trustee of such 19 association having a constitution or bylaws and formed in 20 good faith for purposes other than that of obtaining 21 insurance, where officers, members, employees, employees of 22 members or classes or department thereof, may be insured for 23 their individual benefit. In addition a group accident and 24 health policy may be written to insure any group which may be 25 insured under a group life insurance policy. The term 26 "employees" shall include the officers, managers and 27 employees of subsidiary or affiliated corporations, and the 28 individual proprietors, partners and employees of affiliated 29 individuals and firms, when the business of such subsidiary 30 or affiliated corporations, firms or individuals, is 31 controlled by a common employer through stock ownership, 32 contract or otherwise. 33 (2) Any insurance company authorized to write accident HB2774 Engrossed -6- LRB9102646JSpc 1 and health insurance in this State shall have power to issue 2 group accident and health policies. No policy of group 3 accident and health insurance may be issued or delivered in 4 this State unless a copy of the form thereof shall have been 5 filed with the department and approved by it in accordance 6 with Section 355, and it contains in substance those 7 provisions contained in Sections 357.1 through 357.30 as may 8 be applicable to group accident and health insurance and the 9 following provisions: 10 (a) A provision that the policy, the application of 11 the employer, or executive officer or trustee of any 12 association, and the individual applications, if any, of 13 the employees, members or employees of members insured 14 shall constitute the entire contract between the parties, 15 and that all statements made by the employer, or the 16 executive officer or trustee, or by the individual 17 employees, members or employees of members shall (in the 18 absence of fraud) be deemed representations and not 19 warranties, and that no such statement shall be used in 20 defense to a claim under the policy, unless it is 21 contained in a written application. 22 (b) A provision that the insurer will issue to the 23 employer, or to the executive officer or trustee of the 24 association, for delivery to the employee, member or 25 employee of a member, who is insured under such policy, 26 an individual certificate setting forth a statement as to 27 the insurance protection to which he is entitled and to 28 whom payable. 29 (c) A provision that to the group or class thereof 30 originally insured shall be added from time to time all 31 new employees of the employer, members of the association 32 or employees of members eligible to and applying for 33 insurance in such group or class. 34 (3) Anything in this code to the contrary HB2774 Engrossed -7- LRB9102646JSpc 1 notwithstanding, any group accident and health policy may 2 provide that all or any portion of any indemnities provided 3 by any such policy on account of hospital, nursing, medical 4 or surgical services, may, at the insurer's option, be paid 5 directly to the hospital or person rendering such services; 6 but the policy may not require that the service be rendered 7 by a particular hospital or person. Payment so made shall 8 discharge the insurer's obligation with respect to the amount 9 of insurance so paid. Nothing in this subsection (3) shall 10 prohibit an insurer from providing incentives for insureds to 11 utilize the services of a particular hospital or person. 12 (4) Special group policies may be issued to school 13 districts providing medical or hospital service, or both, for 14 pupils of the district injured while participating in any 15 athletic activity under the jurisdiction of or sponsored or 16 controlled by the district or the authorities of any school 17 thereof. The provisions of this Section governing the 18 issuance of group accident and health insurance shall, 19 insofar as applicable, control the issuance of such policies 20 issued to schools. 21 (5) No policy of group accident and health insurance may 22 be issued or delivered in this State unless it provides that 23 upon the death of the insured employee or group member the 24 dependents' coverage, if any, continues for a period of at 25 least 90 days subject to any other policy provisions relating 26 to termination of dependents' coverage. 27 (6) No group hospital policy covering miscellaneous 28 hospital expenses issued or delivered in this State shall 29 contain any exception or exclusion from coverage which would 30 preclude the payment of expenses incurred for the processing 31 and administration of blood and its components. 32 (7) No policy of group accident and health insurance, 33 delivered in this State more than 120 days after the 34 effective day of the Section, which provides inpatient HB2774 Engrossed -8- LRB9102646JSpc 1 hospital coverage for sicknesses shall exclude from such 2 coverage the treatment of alcoholism. This subsection shall 3 not apply to a policy which covers only specified sicknesses. 4 (8) No policy of group accident and health insurance, 5 which provides benefits for hospital or medical expenses 6 based upon the actual expenses incurred, issued or delivered 7 in this State shall contain any specific exception to 8 coverage which would preclude the payment of actual expenses 9 incurred in the examination and testing of a victim of an 10 offense defined in Sections 12-13 through 12-16 of the 11 Criminal Code of 1961, or an attempt to commit such offense, 12 to establish that sexual contact did occur or did not occur, 13 and to establish the presence or absence of sexually 14 transmitted disease or infection, and examination and 15 treatment of injuries and trauma sustained by the victim of 16 such offense, arising out of the offense. Every group policy 17 of accident and health insurance which specifically provides 18 benefits for routine physical examinations shall provide full 19 coverage for expenses incurred in the examination and testing 20 of a victim of an offense defined in Sections 12-13 through 21 12-16 of the Criminal Code of 1961, or an attempt to commit 22 such offense, as set forth in this Section. This subsection 23 shall not apply to a policy which covers hospital and medical 24 expenses for specified illnesses and injuries only. 25 (9) For purposes of enabling the recovery of State 26 funds, any insurance carrier subject to this Section shall 27 upon reasonable demand by the Department of Public Health 28 disclose the names and identities of its insureds entitled to 29 benefits under this provision to the Department of Public 30 Health whenever the Department of Public Health has 31 determined that it has paid, or is about to pay, hospital or 32 medical expenses for which an insurance carrier is liable 33 under this Section. All information received by the 34 Department of Public Health under this provision shall be HB2774 Engrossed -9- LRB9102646JSpc 1 held on a confidential basis and shall not be subject to 2 subpoena and shall not be made public by the Department of 3 Public Health or used for any purpose other than that 4 authorized by this Section. 5 (10) Whenever the Department of Public Health finds that 6 it has paid all or part of any hospital or medical expenses 7 which an insurance carrier is obligated to pay under this 8 Section, the Department of Public Health shall be entitled to 9 receive reimbursement for its payments from such insurance 10 carrier provided that the Department of Public Health has 11 notified the insurance carrier of its claim before the 12 carrier has paid the benefits to its insureds or the 13 insureds' assignees. 14 (11) (a) No group hospital, medical or surgical expense 15 policy shall contain any provision whereby benefits 16 otherwise payable thereunder are subject to reduction 17 solely on account of the existence of similar benefits 18 provided under other group or group-type accident and 19 sickness insurance policies where such reduction would 20 operate to reduce total benefits payable under these 21 policies below an amount equal to 100% of total allowable 22 expenses provided under these policies. 23 (b) When dependents of insureds are covered under 2 24 policies, both of which contain coordination of benefits 25 provisions, benefits of the policy of the insured whose 26 birthday falls earlier in the year are determined before 27 those of the policy of the insured whose birthday falls 28 later in the year. Birthday, as used herein, refers only 29 to the month and day in a calendar year, not the year in 30 which the person was born. The Department of Insurance 31 shall promulgate rules defining the order of benefit 32 determination pursuant to this paragraph (b). 33 (12) Every group policy under this Section shall be 34 subject to the provisions of Sections 356g and 356n of this HB2774 Engrossed -10- LRB9102646JSpc 1 Code. 2 (13) No accident and health insurer providing coverage 3 for hospital or medical expenses on an expense incurred basis 4 shall deny reimbursement for an otherwise covered expense 5 incurred for any organ transplantation procedure solely on 6 the basis that such procedure is deemed experimental or 7 investigational unless supported by the determination of the 8 Office of Health Care Technology Assessment within the Agency 9 for Health Care Policy and Research within the federal 10 Department of Health and Human Services that such procedure 11 is either experimental or investigational or that there is 12 insufficient data or experience to determine whether an organ 13 transplantation procedure is clinically acceptable. If an 14 accident and health insurer has made written request, or had 15 one made on its behalf by a national organization, for 16 determination by the Office of Health Care Technology 17 Assessment within the Agency for Health Care Policy and 18 Research within the federal Department of Health and Human 19 Services as to whether a specific organ transplantation 20 procedure is clinically acceptable and said organization 21 fails to respond to such a request within a period of 90 22 days, the failure to act may be deemed a determination that 23 the procedure is deemed to be experimental or 24 investigational. 25 (14) Whenever a claim for benefits by an insured under a 26 dental prepayment program is denied or reduced, based on the 27 review of x-ray films, such review must be performed by a 28 dentist. 29 (Source: P.A. 89-187, eff. 7-19-95.) 30 (215 ILCS 5/367i) (from Ch. 73, par. 979i) 31 Sec. 367i. Discontinuance and replacement of coverage. 32 Group health insurance policies issued, amended, delivered or 33 renewed on and after the effective date of this amendatory HB2774 Engrossed -11- LRB9102646JSpc 1 Act of 1989, shall provide a reasonable extension of benefits 2 in the event of total disability on the date the policy is 3 discontinued for any reason. 4 Any applicable extension of benefits or accrued liability 5 shall be described in the policy and group certificate. 6 Benefits payable during any extension of benefits may be 7 subject to the policy's regular benefit limits. 8 Any insurer discontinuing a group health insurance policy 9 shall provide to the policyholder for delivery to covered 10 employees or members a notice as to the date such 11 discontinuation is to be effective and urging them to refer 12 to their group certificates to determine what contract 13 rights, if any, are available to them. 14 In the event a discontinued policy is replaced by another 15 group policy, the prior insurer or plan shall be liable only 16 to the extent of its accrued liabilities and extension of 17 benefits. Persons eligible for coverage under the succeeding 18 insurer's planor policyshall include all employees and 19 dependents covered under the prior insurer's plan, including 20 disabled individuals covered under the prior plan but absent 21 from work on the effective date and thereafter. The prior 22 insurer shall provide extension of benefits for an insured's 23 disabling condition when no coverage is available under the 24 succeeding insurer's plan whether due to the absence of 25 coverage in the contract or lack of required creditable 26 coverage for a preexisting condition.be covered by that27policy. Persons not eligible for coverage under the28succeeding insurer's policy shall, until such time as such29person becomes eligible, be covered by the succeeding30insurer's policy in such a way as to ensure that such persons31shall be treated no less favorably than had the change in32insurers not occurred.33 The Director shall promulgate reasonable rules as 34 necessary to carry out this Section. HB2774 Engrossed -12- LRB9102646JSpc 1 (Source: P.A. 86-537.) 2 Section 10. The Health Maintenance Organization Act is 3 amended by changing Section 4-9 as follows: 4 (215 ILCS 125/4-9) (from Ch. 111 1/2, par. 1409.2) 5 Sec. 4-9. Adopted children. No contract or evidence of 6 coverage issued by a Health Maintenance Organization which 7 provides for coverage of dependents of the principal 8 enrollees shall exclude a child from coverage or eligibility 9 for coverage or limit coverage for a child solely on the 10 basis that he or she is an adopted child. For purposes of 11 this Section, a child who is in the custody of a principal 12 enrollee, pursuant to an interim court order of adoption or, 13 in the case of group insurance, placement of adoption, 14 whichever comes first, vesting temporary care of the child in 15 the enrollee, is an adopted child, regardless of whether a 16 final order granting adoption is ultimately issued. 17 (Source: P.A. 86-620.) 18 Section 99. Effective date. This Act takes effect upon 19 becoming law.