100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5582

 

Introduced , by Rep. Norine K. Hammond

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/131.22  from Ch. 73, par. 743.22
215 ILCS 5/353a  from Ch. 73, par. 965a
215 ILCS 5/404  from Ch. 73, par. 1016
215 ILCS 5/141.2 rep.
215 ILCS 5/155.25 rep.
215 ILCS 5/233 rep.
215 ILCS 5/Art. XIX rep.
215 ILCS 125/1-2  from Ch. 111 1/2, par. 1402

    Amends the Illinois Insurance Code. In provisions concerning confidential treatment, provides that specified information shall remain confidential and privileged with the exception of information submitted pursuant to provisions concerning acquisition of control or merger with domestic companies that is not personal financial information. In provisions concerning accident and health reserves, removes language requiring the Director of Insurance from time to time to adopt rules requiring the use of appropriate tables of morbidity, mortality, interest rates, and valuation methods for such reserves. Provides that the Director may to enter into written agreements to share confidential insurer records or information with the International Association of Insurance Supervisors. Repeals provisions concerning grounds for disapproval of a management contract or service agreement, reports by certain property and casualty insurers, participating and non-participating policies, and burial societies. Amends the Health Maintenance Organization Act. Changes the definition of "organization" to mean any domestic insurance company (rather than any insurance company). Effective immediately.


LRB100 18102 SMS 33295 b

 

 

A BILL FOR

 

HB5582LRB100 18102 SMS 33295 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 131.22, 125.1a, 125.2a, 353a, and 404 as
6follows:
 
7    (215 ILCS 5/131.22)  (from Ch. 73, par. 743.22)
8    Sec. 131.22. Confidential treatment.
9    (a) Documents, materials, or other information in the
10possession or control of the Department that are obtained by or
11disclosed to the Director or any other person in the course of
12an examination or investigation made pursuant to this Article
13and all information reported pursuant to this Article, with the
14exception of information submitted pursuant to Sections 131.5
15through 131.10 that is not personal financial information,
16shall be confidential by law and privileged, shall not be
17subject to the Illinois Freedom of Information Act, shall not
18be subject to subpoena, and shall not be subject to discovery
19or admissible in evidence in any private civil action. However,
20the Director is authorized to use the documents, materials, or
21other information in the furtherance of any regulatory or legal
22action brought as a part of the Director's official duties. The
23Director shall not otherwise make the documents, materials, or

 

 

HB5582- 2 -LRB100 18102 SMS 33295 b

1other information public without the prior written consent of
2the company to which it pertains unless the Director, after
3giving the company and its affiliates who would be affected
4thereby prior written notice and an opportunity to be heard,
5determines that the interest of policyholders, shareholders,
6or the public shall be served by the publication thereof, in
7which event the Director may publish all or any part in such
8manner as may be deemed appropriate.
9    (b) Neither the Director nor any person who received
10documents, materials, or other information while acting under
11the authority of the Director or with whom such documents,
12materials, or other information are shared pursuant to this
13Article shall be permitted or required to testify in any
14private civil action concerning any confidential documents,
15materials, or information subject to subsection (a) of this
16Section.
17    (c) In order to assist in the performance of the Director's
18duties, the Director:
19        (1) may share documents, materials, or other
20    information, including the confidential and privileged
21    documents, materials, or information subject to subsection
22    (a) of this Section, with other state, federal, and
23    international regulatory agencies, with the NAIC and its
24    affiliates and subsidiaries, and with state, federal, and
25    international law enforcement authorities, including
26    members of any supervisory college allowed by this Article,

 

 

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1    provided that the recipient agrees in writing to maintain
2    the confidentiality and privileged status of the document,
3    material, or other information, and has verified in writing
4    the legal authority to maintain confidentiality;
5        (1.5) notwithstanding paragraph (1) of this subsection
6    (c), may only share confidential and privileged documents,
7    material, or information reported pursuant to Section
8    131.14b with commissioners of states having statutes or
9    regulations substantially similar to subsection (a) of
10    this Section and who have agreed in writing not to disclose
11    such information;
12        (2) may receive documents, materials, or information,
13    including otherwise confidential and privileged documents,
14    materials, or information from the NAIC and its affiliates
15    and subsidiaries and from regulatory and law enforcement
16    officials of other foreign or domestic jurisdictions, and
17    shall maintain as confidential or privileged any document,
18    material, or information received with notice or the
19    understanding that it is confidential or privileged under
20    the laws of the jurisdiction that is the source of the
21    document, material, or information; any such documents,
22    materials, or information, while in the Director's
23    possession, shall not be subject to the Illinois Freedom of
24    Information Act and shall not be subject to subpoena; and
25        (3) shall enter into written agreements with the NAIC
26    governing sharing and use of information provided pursuant

 

 

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1    to this Article consistent with this subsection (c) that
2    shall (i) specify procedures and protocols regarding the
3    confidentiality and security of information shared with
4    the NAIC and its affiliates and subsidiaries pursuant to
5    this Article, including procedures and protocols for
6    sharing by the NAIC with other state, federal, or
7    international regulators; (ii) specify that ownership of
8    information shared with the NAIC and its affiliates and
9    subsidiaries pursuant to this Article remains with the
10    Director and the NAIC's use of the information is subject
11    to the direction of the Director; (iii) require prompt
12    notice to be given to a company whose confidential
13    information in the possession of the NAIC pursuant to this
14    Article is subject to a request or subpoena to the NAIC for
15    disclosure or production; and (iv) require the NAIC and its
16    affiliates and subsidiaries to consent to intervention by a
17    company in any judicial or administrative action in which
18    the NAIC and its affiliates and subsidiaries may be
19    required to disclose confidential information about the
20    company shared with the NAIC and its affiliates and
21    subsidiaries pursuant to this Article.
22    (d) The sharing of documents, materials, or information by
23the Director pursuant to this Article shall not constitute a
24delegation of regulatory authority or rulemaking, and the
25Director is solely responsible for the administration,
26execution, and enforcement of the provisions of this Article.

 

 

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1    (e) No waiver of any applicable privilege or claim of
2confidentiality in the documents, materials, or information
3shall occur as a result of disclosure to the Director under
4this Section or as a result of sharing as authorized in
5subsection (c) of this Section.
6    (f) Documents, materials, or other information in the
7possession or control of the NAIC pursuant to this Article
8shall be confidential by law and privileged, shall not be
9subject to the Illinois Freedom of Information Act, shall not
10be subject to subpoena, and shall not be subject to discovery
11or admissible in evidence in any private civil action.
12(Source: P.A. 98-609, eff. 1-1-14.)
 
13    (215 ILCS 5/353a)  (from Ch. 73, par. 965a)
14    Sec. 353a. Accident and health reserves. The reserves for
15all accident and health policies issued after the operative
16date of this section shall be computed and maintained on a
17basis which shall place an actuarially sound value on the
18liabilities under such policies. To provide a basis for the
19determination of such actuarially sound value, the Director
20from time to time shall adopt rules requiring the use of
21appropriate tables of morbidity, mortality, interest rates and
22valuation methods for such reserves. In no event shall such
23reserves be less than the pro rata gross unearned premium
24reserve for such policies.
25    The company shall give the notice required in section 234

 

 

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1on all non-cancellable accident and health policies.
2    After this section becomes effective, any company may file
3with the Director written notice of its election to comply with
4the provisions of this section after a specified date before
5January 1, 1967. After the filing of such notice, then upon
6such specified date (which shall be the operative date of this
7section for such company), this section shall become operative
8with respect to the accident and health policies thereafter
9issued by such company. If a company makes no such election,
10the operative date of this section for such company shall be
11January 1, 1967.
12    After this section becomes effective, any company may file
13with the Director written notice of its election to establish
14and maintain reserves upon its accident and health policies
15issued prior to the operative date of this section in
16accordance with the standards for reserves established by this
17section, and thereafter the reserve standards prescribed
18pursuant to this section shall be effective with respect to
19said accident and health policies issued prior to the operative
20date of this section.
21(Source: Laws 1965, p. 740.)
 
22    (215 ILCS 5/404)  (from Ch. 73, par. 1016)
23    Sec. 404. Office of Director; a public office; destruction
24or disposal of records, papers, documents, and memoranda.
25    (1)(a) The office of the Director shall be a public office

 

 

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1and the records, books, and papers thereof on file therein,
2except those records or documents containing or disclosing any
3analysis, opinion, calculation, ratio, recommendation, advice,
4viewpoint, or estimation by any Department staff regarding the
5financial or market condition of an insurer not otherwise made
6part of the public record by the Director, shall be accessible
7to the inspection of the public, except as the Director, for
8good reason, may decide otherwise, or except as may be
9otherwise provided in this Code or as otherwise provided in
10Section 7 of the Freedom of Information Act.
11    (b) Except where another provision of this Code expressly
12prohibits a disclosure of confidential information to the
13specific officials or organizations described in this
14subsection, the Director may disclose or share any confidential
15records or information in his custody and control with any
16insurance regulatory officials of any state or country, with
17the law enforcement officials of this State, any other state,
18or the federal government, or with the National Association of
19Insurance Commissioners, upon the written agreement of the
20official or organization receiving the information to hold the
21information or records confidential and in a manner consistent
22with this Code.
23    (c) The Director shall maintain as confidential any records
24or information received from the National Association of
25Insurance Commissioners or insurance regulatory officials of
26other states which is confidential in that other jurisdiction.

 

 

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1    (2) Upon the filing of the examination to which they
2relate, the Director is authorized to destroy or otherwise
3dispose of all working papers relative to any company which has
4been examined at any time prior to that last examination by the
5Department, so that in such circumstances only current working
6papers of that last examination may be retained by the
7Department.
8    (3) Five years after the conclusion of the transactions to
9which they relate, the Director is authorized to destroy or
10otherwise dispose of all books, records, papers, memoranda and
11correspondence directly related to consumer complaints or
12inquiries.
13    (4) Two years after the conclusion of the transactions to
14which they relate, the Director is authorized to destroy or
15otherwise dispose of all books, records, papers, memoranda, and
16correspondence directly related to all void, obsolete, or
17superseded rate filings and schedules required to be filed by
18statute; and all individual company rating experience data and
19all records, papers, documents and memoranda in the possession
20of the Director relating thereto.
21    (5) Five years after the conclusion of the transactions to
22which they relate, the Director is authorized to destroy or
23otherwise dispose of all examination reports of companies made
24by the insurance supervisory officials of states other than
25Illinois; applications, requisitions, and requests for
26licenses; all records of hearings; and all similar records,

 

 

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1papers, documents, and memoranda in the possession of the
2Director.
3    (6) Ten years after the conclusion of the transactions to
4which they relate, the Director is authorized to destroy or
5otherwise dispose of all official correspondence of foreign and
6alien companies, all foreign companies' and alien companies'
7annual statements, valuation reports, tax reports, and all
8similar records, papers, documents and memoranda in the
9possession of the Director.
10    (7) Whenever any records, papers, documents or memoranda
11are destroyed or otherwise disposed of pursuant to the
12provisions of this section, the Director shall execute and file
13in a separate, permanent office file a certificate listing and
14setting forth by summary description the records, papers,
15documents or memoranda so destroyed or otherwise disposed of,
16and the Director may, in his discretion, preserve copies of any
17such records, papers, documents or memoranda by means of
18microfilming or photographing the same.
19    (8) This Section shall apply to records, papers, documents,
20and memoranda presently in the possession of the Director as
21well as to records, papers, documents, and memoranda hereafter
22coming into his possession.
23    (9) The Director may enter into written agreements to share
24confidential insurer records or information with the
25International Association of Insurance Supervisors.
26(Source: P.A. 97-1004, eff. 8-17-12.)
 

 

 

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1    (215 ILCS 5/141.2 rep.)
2    (215 ILCS 5/155.25 rep.)
3    (215 ILCS 5/233 rep.)
4    (215 ILCS 5/Art. XIX rep.)
5    Section 10. The Illinois Insurance Code is amended by
6repealing Sections 141.2, 155.25, and 233 and Article XIX.
 
7    Section 15. The Health Maintenance Organization Act is
8amended by changing Section 1-2 as follows:
 
9    (215 ILCS 125/1-2)  (from Ch. 111 1/2, par. 1402)
10    Sec. 1-2. Definitions. As used in this Act, unless the
11context otherwise requires, the following terms shall have the
12meanings ascribed to them:
13    (1) "Advertisement" means any printed or published
14material, audiovisual material and descriptive literature of
15the health care plan used in direct mail, newspapers,
16magazines, radio scripts, television scripts, billboards and
17similar displays; and any descriptive literature or sales aids
18of all kinds disseminated by a representative of the health
19care plan for presentation to the public including, but not
20limited to, circulars, leaflets, booklets, depictions,
21illustrations, form letters and prepared sales presentations.
22    (2) "Director" means the Director of Insurance.
23    (3) "Basic health care services" means emergency care, and

 

 

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1inpatient hospital and physician care, outpatient medical
2services, mental health services and care for alcohol and drug
3abuse, including any reasonable deductibles and co-payments,
4all of which are subject to the limitations described in
5Section 4-20 of this Act and as determined by the Director
6pursuant to rule.
7    (4) "Enrollee" means an individual who has been enrolled in
8a health care plan.
9    (5) "Evidence of coverage" means any certificate,
10agreement, or contract issued to an enrollee setting out the
11coverage to which he is entitled in exchange for a per capita
12prepaid sum.
13    (6) "Group contract" means a contract for health care
14services which by its terms limits eligibility to members of a
15specified group.
16    (7) "Health care plan" means any arrangement whereby any
17organization undertakes to provide or arrange for and pay for
18or reimburse the cost of basic health care services, excluding
19any reasonable deductibles and copayments, from providers
20selected by the Health Maintenance Organization and such
21arrangement consists of arranging for or the provision of such
22health care services, as distinguished from mere
23indemnification against the cost of such services, except as
24otherwise authorized by Section 2-3 of this Act, on a per
25capita prepaid basis, through insurance or otherwise. A "health
26care plan" also includes any arrangement whereby an

 

 

HB5582- 12 -LRB100 18102 SMS 33295 b

1organization undertakes to provide or arrange for or pay for or
2reimburse the cost of any health care service for persons who
3are enrolled under Article V of the Illinois Public Aid Code or
4under the Children's Health Insurance Program Act through
5providers selected by the organization and the arrangement
6consists of making provision for the delivery of health care
7services, as distinguished from mere indemnification. A
8"health care plan" also includes any arrangement pursuant to
9Section 4-17. Nothing in this definition, however, affects the
10total medical services available to persons eligible for
11medical assistance under the Illinois Public Aid Code.
12    (8) "Health care services" means any services included in
13the furnishing to any individual of medical or dental care, or
14the hospitalization or incident to the furnishing of such care
15or hospitalization as well as the furnishing to any person of
16any and all other services for the purpose of preventing,
17alleviating, curing or healing human illness or injury.
18    (9) "Health Maintenance Organization" means any
19organization formed under the laws of this or another state to
20provide or arrange for one or more health care plans under a
21system which causes any part of the risk of health care
22delivery to be borne by the organization or its providers.
23    (10) "Net worth" means admitted assets, as defined in
24Section 1-3 of this Act, minus liabilities.
25    (11) "Organization" means any domestic insurance company,
26a nonprofit corporation authorized under the Dental Service

 

 

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1Plan Act or the Voluntary Health Services Plans Act, or a
2corporation organized under the laws of this or another state
3for the purpose of operating one or more health care plans and
4doing no business other than that of a Health Maintenance
5Organization or an insurance company. "Organization" shall
6also mean the University of Illinois Hospital as defined in the
7University of Illinois Hospital Act or a unit of local
8government health system operating within a county with a
9population of 3,000,000 or more.
10    (12) "Provider" means any physician, hospital facility,
11facility licensed under the Nursing Home Care Act, or facility
12or long-term care facility as those terms are defined in the
13Nursing Home Care Act or other person which is licensed or
14otherwise authorized to furnish health care services and also
15includes any other entity that arranges for the delivery or
16furnishing of health care service.
17    (13) "Producer" means a person directly or indirectly
18associated with a health care plan who engages in solicitation
19or enrollment.
20    (14) "Per capita prepaid" means a basis of prepayment by
21which a fixed amount of money is prepaid per individual or any
22other enrollment unit to the Health Maintenance Organization or
23for health care services which are provided during a definite
24time period regardless of the frequency or extent of the
25services rendered by the Health Maintenance Organization,
26except for copayments and deductibles and except as provided in

 

 

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1subsection (f) of Section 5-3 of this Act.
2    (15) "Subscriber" means a person who has entered into a
3contractual relationship with the Health Maintenance
4Organization for the provision of or arrangement of at least
5basic health care services to the beneficiaries of such
6contract.
7(Source: P.A. 98-651, eff. 6-16-14; 98-841, eff. 8-1-14; 99-78,
8eff. 7-20-15.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.