SB0670 EngrossedLRB101 04430 SMS 49438 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 Freedom of Information Act is amended by
5changing Section 7.5 as follows:
 
6    (5 ILCS 140/7.5)
7    Sec. 7.5. Statutory exemptions. To the extent provided for
8by the statutes referenced below, the following shall be exempt
9from inspection and copying:
10        (a) All information determined to be confidential
11    under Section 4002 of the Technology Advancement and
12    Development Act.
13        (b) Library circulation and order records identifying
14    library users with specific materials under the Library
15    Records Confidentiality Act.
16        (c) Applications, related documents, and medical
17    records received by the Experimental Organ Transplantation
18    Procedures Board and any and all documents or other records
19    prepared by the Experimental Organ Transplantation
20    Procedures Board or its staff relating to applications it
21    has received.
22        (d) Information and records held by the Department of
23    Public Health and its authorized representatives relating

 

 

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1    to known or suspected cases of sexually transmissible
2    disease or any information the disclosure of which is
3    restricted under the Illinois Sexually Transmissible
4    Disease Control Act.
5        (e) Information the disclosure of which is exempted
6    under Section 30 of the Radon Industry Licensing Act.
7        (f) Firm performance evaluations under Section 55 of
8    the Architectural, Engineering, and Land Surveying
9    Qualifications Based Selection Act.
10        (g) Information the disclosure of which is restricted
11    and exempted under Section 50 of the Illinois Prepaid
12    Tuition Act.
13        (h) Information the disclosure of which is exempted
14    under the State Officials and Employees Ethics Act, and
15    records of any lawfully created State or local inspector
16    general's office that would be exempt if created or
17    obtained by an Executive Inspector General's office under
18    that Act.
19        (i) Information contained in a local emergency energy
20    plan submitted to a municipality in accordance with a local
21    emergency energy plan ordinance that is adopted under
22    Section 11-21.5-5 of the Illinois Municipal Code.
23        (j) Information and data concerning the distribution
24    of surcharge moneys collected and remitted by carriers
25    under the Emergency Telephone System Act.
26        (k) Law enforcement officer identification information

 

 

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1    or driver identification information compiled by a law
2    enforcement agency or the Department of Transportation
3    under Section 11-212 of the Illinois Vehicle Code.
4        (l) Records and information provided to a residential
5    health care facility resident sexual assault and death
6    review team or the Executive Council under the Abuse
7    Prevention Review Team Act.
8        (m) Information provided to the predatory lending
9    database created pursuant to Article 3 of the Residential
10    Real Property Disclosure Act, except to the extent
11    authorized under that Article.
12        (n) Defense budgets and petitions for certification of
13    compensation and expenses for court appointed trial
14    counsel as provided under Sections 10 and 15 of the Capital
15    Crimes Litigation Act. This subsection (n) shall apply
16    until the conclusion of the trial of the case, even if the
17    prosecution chooses not to pursue the death penalty prior
18    to trial or sentencing.
19        (o) Information that is prohibited from being
20    disclosed under Section 4 of the Illinois Health and
21    Hazardous Substances Registry Act.
22        (p) Security portions of system safety program plans,
23    investigation reports, surveys, schedules, lists, data, or
24    information compiled, collected, or prepared by or for the
25    Regional Transportation Authority under Section 2.11 of
26    the Regional Transportation Authority Act or the St. Clair

 

 

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1    County Transit District under the Bi-State Transit Safety
2    Act.
3        (q) Information prohibited from being disclosed by the
4    Personnel Record Review Act.
5        (r) Information prohibited from being disclosed by the
6    Illinois School Student Records Act.
7        (s) Information the disclosure of which is restricted
8    under Section 5-108 of the Public Utilities Act.
9        (t) All identified or deidentified health information
10    in the form of health data or medical records contained in,
11    stored in, submitted to, transferred by, or released from
12    the Illinois Health Information Exchange, and identified
13    or deidentified health information in the form of health
14    data and medical records of the Illinois Health Information
15    Exchange in the possession of the Illinois Health
16    Information Exchange Authority due to its administration
17    of the Illinois Health Information Exchange. The terms
18    "identified" and "deidentified" shall be given the same
19    meaning as in the Health Insurance Portability and
20    Accountability Act of 1996, Public Law 104-191, or any
21    subsequent amendments thereto, and any regulations
22    promulgated thereunder.
23        (u) Records and information provided to an independent
24    team of experts under the Developmental Disability and
25    Mental Health Safety Act (also known as Brian's Law).
26        (v) Names and information of people who have applied

 

 

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1    for or received Firearm Owner's Identification Cards under
2    the Firearm Owners Identification Card Act or applied for
3    or received a concealed carry license under the Firearm
4    Concealed Carry Act, unless otherwise authorized by the
5    Firearm Concealed Carry Act; and databases under the
6    Firearm Concealed Carry Act, records of the Concealed Carry
7    Licensing Review Board under the Firearm Concealed Carry
8    Act, and law enforcement agency objections under the
9    Firearm Concealed Carry Act.
10        (w) Personally identifiable information which is
11    exempted from disclosure under subsection (g) of Section
12    19.1 of the Toll Highway Act.
13        (x) Information which is exempted from disclosure
14    under Section 5-1014.3 of the Counties Code or Section
15    8-11-21 of the Illinois Municipal Code.
16        (y) Confidential information under the Adult
17    Protective Services Act and its predecessor enabling
18    statute, the Elder Abuse and Neglect Act, including
19    information about the identity and administrative finding
20    against any caregiver of a verified and substantiated
21    decision of abuse, neglect, or financial exploitation of an
22    eligible adult maintained in the Registry established
23    under Section 7.5 of the Adult Protective Services Act.
24        (z) Records and information provided to a fatality
25    review team or the Illinois Fatality Review Team Advisory
26    Council under Section 15 of the Adult Protective Services

 

 

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1    Act.
2        (aa) Information which is exempted from disclosure
3    under Section 2.37 of the Wildlife Code.
4        (bb) Information which is or was prohibited from
5    disclosure by the Juvenile Court Act of 1987.
6        (cc) Recordings made under the Law Enforcement
7    Officer-Worn Body Camera Act, except to the extent
8    authorized under that Act.
9        (dd) Information that is prohibited from being
10    disclosed under Section 45 of the Condominium and Common
11    Interest Community Ombudsperson Act.
12        (ee) Information that is exempted from disclosure
13    under Section 30.1 of the Pharmacy Practice Act.
14        (ff) Information that is exempted from disclosure
15    under the Revised Uniform Unclaimed Property Act.
16        (gg) Information that is prohibited from being
17    disclosed under Section 7-603.5 of the Illinois Vehicle
18    Code.
19        (hh) Records that are exempt from disclosure under
20    Section 1A-16.7 of the Election Code.
21        (ii) Information which is exempted from disclosure
22    under Section 2505-800 of the Department of Revenue Law of
23    the Civil Administrative Code of Illinois.
24        (jj) Information and reports that are required to be
25    submitted to the Department of Labor by registering day and
26    temporary labor service agencies but are exempt from

 

 

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1    disclosure under subsection (a-1) of Section 45 of the Day
2    and Temporary Labor Services Act.
3        (kk) Information prohibited from disclosure under the
4    Seizure and Forfeiture Reporting Act.
5        (ll) Information the disclosure of which is restricted
6    and exempted under Section 5-30.8 of the Illinois Public
7    Aid Code.
8        (mm) Records that are exempt from disclosure under
9    Section 4.2 of the Crime Victims Compensation Act.
10        (nn) Information that is exempt from disclosure under
11    Section 70 of the Higher Education Student Assistance Act.
12        (oo) Communications, notes, records, and reports
13    arising out of a peer support counseling session prohibited
14    from disclosure under the First Responders Suicide
15    Prevention Act.
16        (pp) Names and all identifying information relating to
17    an employee of an emergency services provider or law
18    enforcement agency under the First Responders Suicide
19    Prevention Act.
20        (qq) (oo) Information and records held by the
21    Department of Public Health and its authorized
22    representatives collected under the Reproductive Health
23    Act.
24        (rr) (oo) Information that is exempt from disclosure
25    under the Cannabis Regulation and Tax Act.
26        (ss) (oo) Data reported by an employer to the

 

 

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1    Department of Human Rights pursuant to Section 2-108 of the
2    Illinois Human Rights Act.
3        (tt) (oo) Recordings made under the Children's
4    Advocacy Center Act, except to the extent authorized under
5    that Act.
6        (uu) (oo) Information that is exempt from disclosure
7    under Section 50 of the Sexual Assault Evidence Submission
8    Act.
9        (vv) (oo) Information that is exempt from disclosure
10    under subsections (f) and (j) of Section 5-36 of the
11    Illinois Public Aid Code.
12        (ww) (oo) Information that is exempt from disclosure
13    under Section 16.8 of the State Treasurer Act.
14        (xx) Information that is exempt from disclosure or
15    information that shall not be made public under the
16    Illinois Insurance Code.
17(Source: P.A. 100-20, eff. 7-1-17; 100-22, eff. 1-1-18;
18100-201, eff. 8-18-17; 100-373, eff. 1-1-18; 100-464, eff.
198-28-17; 100-465, eff. 8-31-17; 100-512, eff. 7-1-18; 100-517,
20eff. 6-1-18; 100-646, eff. 7-27-18; 100-690, eff. 1-1-19;
21100-863, eff. 8-14-18; 100-887, eff. 8-14-18; 101-13, eff.
226-12-19; 101-27, eff. 6-25-19; 101-81, eff. 7-12-19; 101-221,
23eff. 1-1-20; 101-236, eff. 1-1-20; 101-375, eff. 8-16-19;
24101-377, eff. 8-16-19; 101-452, eff. 1-1-20; 101-466, eff.
251-1-20; revised 9-25-19.)
 

 

 

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1    Section 10. The Illinois Insurance Code is amended by
2adding Article VIII.33 as follows:
 
3    (215 ILCS 5/Art. VIII.33 heading new)
4
ARTICLE VIII 1/3. Corporate Governance Annual Disclosure Law

 
5    (215 ILCS 5/130.1 new)
6    Sec. 130.1. Short title. This Article may be cited as the
7Corporate Governance Annual Disclosure Law.
 
8    (215 ILCS 5/130.2 new)
9    Sec. 130.2. Purpose and scope. The purpose of this Article
10is to:
11        (1) provide the Director a summary of an insurer's or
12    insurance group's corporate governance structure,
13    policies, and practices to permit the Director to gain and
14    maintain an understanding of the insurer's corporate
15    governance framework;
16        (2) outline the requirements for completing a
17    corporate governance annual disclosure with the Director;
18        (3) provide for the confidential treatment of the
19    corporate governance annual disclosure and related
20    information that will contain confidential and sensitive
21    information related to an insurer's or insurance group's
22    internal operations and proprietary and trade-secret
23    information that, if made public, could potentially cause

 

 

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1    the insurer or insurance group competitive harm or
2    disadvantage.
3    Nothing in this Article shall be construed to prescribe or
4impose corporate governance standards and internal procedures
5beyond that which is required under applicable State corporate
6law. Notwithstanding the foregoing, nothing in this Article
7shall be construed to limit the Director's authority or the
8rights or obligations of third parties under Sections 131.21,
9132 through 132.7, and 401 through 403. The requirements of
10this Article apply to all insurers domiciled in this State.
 
11    (215 ILCS 5/130.3 new)
12    Sec. 130.3. Definitions. As used in this Article:
13    "Director" means the Director of Insurance.
14    "Corporate governance annual disclosure" means a
15confidential report filed by the insurer or insurance group
16made in accordance with the requirements of this Article.
17    "Insurance group" means those insurers and affiliates
18included within an insurance holding company system as defined
19in Section 131.1.
20    "Insurer" has the same meaning given to that term in
21Section 2, except that it does not include agencies,
22authorities, or instrumentalities of the United States, its
23possessions and territories, the Commonwealth of Puerto Rico,
24the District of Columbia, or a state or political subdivision
25of a state.

 

 

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1    "ORSA summary report" means the own risk and solvency
2assessment report filed in accordance with Article VIII 1/4.
 
3    (215 ILCS 5/130.4 new)
4    Sec. 130.4. Disclosure requirement.
5    (a) An insurer, or the insurance group of which the insurer
6is a member, shall, no later than June 1 of each calendar year,
7submit to the Director a corporate governance annual disclosure
8that contains the information described in subsection (b) of
9Section 130.5. Notwithstanding any request from the Director
10made pursuant to subsection (c), if the insurer is a member of
11an insurance group, the insurer shall submit the report
12required by this Section to the Director of the lead state for
13the insurance group, in accordance with the laws of the lead
14state, as determined by the procedures outlined in the most
15recent Financial Analysis Handbook adopted by the National
16Association of Insurance Commissioners.
17    (b) The corporate governance annual disclosure must
18include a signature of the insurer's or insurance group's chief
19executive officer or corporate secretary attesting to the best
20of that individual's belief and knowledge that the insurer has
21implemented the corporate governance practices required by
22this Section and that a copy of the disclosure has been
23provided to the insurer's board of directors or the appropriate
24committee thereof.
25    (c) An insurer not required to submit a corporate

 

 

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1governance annual disclosure under this Section shall do so
2upon the Director's request.
3    (d) For purposes of completing the corporate governance
4annual disclosure, the insurer or insurance group may provide
5information regarding corporate governance at the ultimate
6controlling parent level, an intermediate holding company
7level, or the individual legal entity level, depending upon how
8the insurer or insurance group has structured its system of
9corporate governance. The insurer or insurance group is
10encouraged to make the corporate governance annual disclosure
11at the level at which the insurer's or insurance group's risk
12appetite is determined, the level at which the earnings,
13capital, liquidity, operations, and reputation of the insurer
14are overseen collectively and at which the supervision of those
15factors is coordinated and exercised, or the level at which
16legal liability for failure of general corporate governance
17duties would be placed. If the insurer or insurance group
18determines the level of reporting based on these criteria, it
19shall indicate which of the 3 criteria was used to determine
20the level of reporting and explain any subsequent changes in
21the level of reporting.
22    (e) The review of the corporate governance annual
23disclosure and any additional requests for information shall be
24made through the lead state as determined by the procedures
25within the most recent Financial Analysis Handbook adopted by
26the National Association of Insurance Commissioners.

 

 

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1    (f) Insurers providing information substantially similar
2to the information required by this Article in other documents
3provided to the Director, including proxy statements filed in
4conjunction with the requirements of Section 131.13 or other
5State or federal filings provided to the Department, are not
6required to duplicate that information in the corporate
7governance annual disclosure but are only required to
8cross-reference the document in which the information is
9included.
 
10    (215 ILCS 5/130.5 new)
11    Sec. 130.5. Contents of corporate governance annual
12disclosure.
13    (a) The insurer or insurance group has discretion over the
14responses to the corporate governance annual disclosure
15inquiries if the corporate governance annual disclosure
16contains the material information necessary to permit the
17Director to gain an understanding of the insurer's or insurance
18group's corporate governance structure, policies, and
19practices. The Director may request additional information
20that he or she deems material and necessary to provide the
21Director with a clear understanding of the corporate governance
22policies, the reporting or information system, or controls
23implementing those policies.
24    (b) Notwithstanding subsection (a), the corporate
25governance annual disclosure shall be prepared in a manner

 

 

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1consistent with rules adopted by the Director. Documentation
2and supporting information shall be maintained and made
3available upon examination or upon the request of the Director.
4    (c) The Director may retain, at the insurer's expense,
5third-party consultants, including attorneys, actuaries,
6accountants, and other experts not otherwise a part of the
7Director's staff, as may be reasonably necessary to assist the
8Director in reviewing the corporate governance annual
9disclosure and related information or the insurer's compliance
10with this Article. Any persons retained shall be under the
11direction and control of the Director and shall act only in an
12advisory capacity.
 
13    (215 ILCS 5/130.6 new)
14    Sec. 130.6. Confidentiality.
15    (a) Documents, materials, or other information, including
16the corporate governance annual disclosure, in the possession
17or control of the Department that are obtained by, created by,
18or disclosed to the Director or any other person under this
19Article are recognized by this State as being proprietary and
20to contain trade secrets. All such documents, materials, or
21other information shall be confidential by law and privileged,
22shall not be subject to the Freedom of Information Act, shall
23not be subject to subpoena, and shall not be subject to
24discovery or admissible in evidence in any private civil
25action. However, the Director is authorized to use the

 

 

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1documents, materials, or other information in furtherance of
2any regulatory or legal action brought as a part of the
3Director's official duties. The Director shall not otherwise
4make the documents, materials, or other information public
5without the prior written consent of the insurer.
6    (b) Neither the Director nor any person who received
7documents, materials, or other corporate governance annual
8disclosure-related information through examination or
9otherwise, while acting under the authority of the Director or
10with whom such documents, materials, or other information are
11shared pursuant to this Article, shall be permitted or required
12to testify in any private civil action concerning any
13confidential documents, materials, or information subject to
14subsection (a).
15    (c) In order to assist in the performance of the Director's
16regulatory duties, the Director may:
17        (1) upon request, share documents, materials, or other
18    corporate governance annual disclosure-related
19    information, including the confidential and privileged
20    documents, materials, and information subject to
21    subsection (a), including proprietary and trade-secret
22    documents and materials with other state, federal, and
23    international financial regulatory agencies, including
24    members of any supervisory college as defined in subsection
25    (c) of Section 131.20, with the National Association of
26    Insurance Commissioners, and with third-party consultants,

 

 

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1    if the recipient agrees in writing to maintain the
2    confidentiality and privileged status of the corporate
3    governance annual disclosure-related documents, materials,
4    or other information and has verified in writing the legal
5    authority to maintain confidentiality; and
6        (2) receive documents, materials, or other corporate
7    governance annual disclosure-related information,
8    including otherwise confidential and privileged documents,
9    materials, and information, including proprietary and
10    trade-secret information and documents from regulatory
11    officials of other state, federal, and international
12    financial regulatory agencies, including members of any
13    supervisory college as defined in subsection (c) of Section
14    131.20, and from the National Association of Insurance
15    Commissioners, and shall maintain as confidential or
16    privileged any documents, materials, or information
17    received with notice or the understanding that it is
18    confidential or privileged under the laws of the
19    jurisdiction that is the source of the document, material,
20    or information.
21    (d) A written agreement with the National Association of
22Insurance Commissioners or a third-party consultant governing
23sharing and use of information provided pursuant to this
24Article shall:
25        (1) include specific procedures and protocols for
26    maintaining the confidentiality and security of corporate

 

 

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1    governance annual disclosure-related information shared
2    with the National Association of Insurance Commissioners
3    or a third-party consultant pursuant to this Article,
4    including procedures and protocols for sharing by the
5    National Association of Insurance Commissioners only with
6    other state regulators from states in which the insurance
7    group has domiciled insurers; the agreement shall provide
8    that the recipient agrees in writing to maintain the
9    confidentiality and privileged status of the corporate
10    governance annual disclosure-related documents, materials,
11    or other information and has verified in writing the legal
12    authority to maintain confidentiality;
13        (2) specify that ownership of the corporate governance
14    annual disclosure-related information shared with the
15    National Association of Insurance Commissioners or a
16    third-party consultant remains with the Director and that
17    the National Association of Insurance Commissioners' or
18    third-party consultant's use of the information is subject
19    to the direction of the Director;
20        (3) prohibit the National Association of Insurance
21    Commissioners or a third-party consultant from storing the
22    information shared pursuant to this Article in a permanent
23    database after the underlying analysis is completed;
24        (4) require the National Association of Insurance
25    Commissioners or a third-party consultant to provide
26    prompt notice to the Director and to the insurer or

 

 

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1    insurance group regarding any subpoena, request for
2    disclosure, or request for production of the insurer's or
3    insurance group's corporate governance annual
4    disclosure-related information;
5        (5) require the National Association of Insurance
6    Commissioners or a third-party consultant to consent to
7    intervention by an insurer in any judicial or
8    administrative action in which the National Association of
9    Insurance Commissioners or a third-party consultant may be
10    required to disclose confidential information about the
11    insurer shared with the National Association of Insurance
12    Commissioners or a third-party consultant pursuant to this
13    Article; and
14        (6) require the National Association of Insurance
15    Commissioners or a third-party consultant to obtain
16    written consent of the insurer before making any of the
17    insurer's corporate governance annual disclosure-related
18    information public.
19    (e) The sharing of information and documents by the
20Director pursuant to this Article shall not constitute a
21delegation of regulatory authority or rulemaking, and the
22Director is solely responsible for the administration,
23execution, and enforcement of this Article.
24    (f) No waiver of any applicable privilege or claim of
25confidentiality in the documents, proprietary and trade-secret
26materials, or other corporate governance annual

 

 

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1disclosure-related information shall occur as a result of
2disclosure of such information or documents to the Director
3under this Section or as a result of sharing as authorized in
4this Article.
5    (g) Documents, materials, or other information in the
6possession or control of the National Association of Insurance
7Commissioners or any third-party consultants pursuant to this
8Article shall be confidential by law and privileged, shall not
9be subject to the Freedom of Information Act, shall not be
10subject to subpoena, and shall not be subject to discovery or
11admissible in evidence in any private civil action.
 
12    (215 ILCS 5/130.7 new)
13    Sec. 130.7. Sanctions. Any insurer failing, without just
14cause, to timely file the corporate governance annual
15disclosure as required in this Article shall be required, after
16notice and a hearing, to pay a penalty of $200 for each day's
17delay, to be recovered by the Director. Any penalty recovered
18shall be paid into the General Revenue Fund. The Director may
19reduce the penalty if the insurer demonstrates to the Director
20that the imposition of the penalty would constitute a financial
21hardship to the insurer.
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.