97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3443

 

Introduced 2/24/2011, by Rep. Frank J. Mautino

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/4  from Ch. 73, par. 616

    Amends the Illinois Insurance Code in the provision concerning classes of insurance to provides that the insurance laws of this State, including the Illinois Insurance Code, do not apply to a religious organization or members of the organization when the organization meets certain criteria.


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A BILL FOR

 

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1    AN ACT concerning insurance.
 
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 Section 4 as follows:
 
6    (215 ILCS 5/4)  (from Ch. 73, par. 616)
7    Sec. 4. Classes of insurance. Insurance and insurance
8business shall be classified as follows:
9    Class 1. Life, Accident and Health.
10    (a) Life. Insurance on the lives of persons and every
11insurance appertaining thereto or connected therewith and
12granting, purchasing or disposing of annuities. Policies of
13life or endowment insurance or annuity contracts or contracts
14supplemental thereto which contain provisions for additional
15benefits in case of death by accidental means and provisions
16operating to safeguard such policies or contracts against
17lapse, to give a special surrender value, or special benefit,
18or an annuity, in the event, that the insured or annuitant
19shall become totally and permanently disabled as defined by the
20policy or contract, or which contain benefits providing
21acceleration of life or endowment or annuity benefits in
22advance of the time they would otherwise be payable, as an
23indemnity for long term care which is certified or ordered by a

 

 

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1physician, including but not limited to, professional nursing
2care, medical care expenses, custodial nursing care,
3non-nursing custodial care provided in a nursing home or at a
4residence of the insured, or which contain benefits providing
5acceleration of life or endowment or annuity benefits in
6advance of the time they would otherwise be payable, at any
7time during the insured's lifetime, as an indemnity for a
8terminal illness shall be deemed to be policies of life or
9endowment insurance or annuity contracts within the intent of
10this clause.
11    Also to be deemed as policies of life or endowment
12insurance or annuity contracts within the intent of this clause
13shall be those policies or riders that provide for the payment
14of up to 75% of the face amount of benefits in advance of the
15time they would otherwise be payable upon a diagnosis by a
16physician licensed to practice medicine in all of its branches
17that the insured has incurred a covered condition listed in the
18policy or rider.
19    "Covered condition", as used in this clause, means: heart
20attack, stroke, coronary artery surgery, life threatening
21cancer, renal failure, alzheimer's disease, paraplegia, major
22organ transplantation, total and permanent disability, and any
23other medical condition that the Department may approve for any
24particular filing.
25    The Director may issue rules that specify prohibited policy
26provisions, not otherwise specifically prohibited by law,

 

 

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1which in the opinion of the Director are unjust, unfair, or
2unfairly discriminatory to the policyholder, any person
3insured under the policy, or beneficiary.
4    (b) Accident and health. Insurance against bodily injury,
5disablement or death by accident and against disablement
6resulting from sickness or old age and every insurance
7appertaining thereto, including stop-loss insurance. Stop-loss
8insurance is insurance against the risk of economic loss issued
9to a single employer self-funded employee disability benefit
10plan or an employee welfare benefit plan as described in 29
11U.S.C. 100 et seq. The insurance laws of this State, including
12this Code, do not apply to a religious organization or members
13of the organization when the organization meets all of the
14following criteria:
15        (i) the organization is described in section 501(c)(3)
16    of the Internal Revenue Code and is exempt from taxation
17    under Section 501(a) of the Internal Revenue Code;
18        (ii) members of the organization share a common set of
19    ethical or religious beliefs and share medical expenses
20    among members in accordance with those beliefs and without
21    regard to the state in which a member resides or is
22    employed;
23        (iii) members of the organization retain membership
24    even after they develop a medical condition;
25        (iv) the organization or a predecessor organization
26    has been in existence at all times since December 31, 1999,

 

 

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1    and medical expenses of its members have been shared
2    continuously and without interruption since at least
3    December 31, 1999;
4        (v) the organization conducts an annual audit that is
5    performed by an independent certified public accounting
6    firm in accordance with generally accepted accounting
7    principles and is made available to the public upon
8    request;
9        (vi) the organization includes the following
10    statement, in writing, on or accompanying all applications
11    and guideline materials:
12        "Notice: The organization facilitating the sharing of
13        medical expenses is not an insurance company, and
14        neither its guidelines nor plan of operation
15        constitute or create an insurance policy. Any
16        assistance you receive with your medical bills will be
17        totally voluntary. Neither the organization nor any
18        other participant can be compelled by law to contribute
19        toward your medical bills. As such, participation in
20        the organization or a subscription to any of its
21        documents should never be considered to be insurance.
22        Whether or not you receive any payments for medical
23        expenses and whether or not this organization
24        continues to operate, you are always personally
25        responsible for the payment of your own medical
26        bills."; and

 

 

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1        (vii) any membership card or similar document issued by
2    the organization and any written communication sent by the
3    organization to a hospital, physician, or other health care
4    provider shall include a statement that the organization
5    does not issue health insurance and that the member or
6    participant is personally liable for payment of his or her
7    medical bills.
8    (c) Legal Expense Insurance. Insurance which involves the
9assumption of a contractual obligation to reimburse the
10beneficiary against or pay on behalf of the beneficiary, all or
11a portion of his fees, costs, or expenses related to or arising
12out of services performed by or under the supervision of an
13attorney licensed to practice in the jurisdiction wherein the
14services are performed, regardless of whether the payment is
15made by the beneficiaries individually or by a third person for
16them, but does not include the provision of or reimbursement
17for legal services incidental to other insurance coverages. The
18insurance laws of this State, including this Act do not apply
19to:
20        (i) Retainer contracts made by attorneys at law with
21    individual clients with fees based on estimates of the
22    nature and amount of services to be provided to the
23    specific client, and similar contracts made with a group of
24    clients involved in the same or closely related legal
25    matters;
26        (ii) Plans owned or operated by attorneys who are the

 

 

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1    providers of legal services to the plan;
2        (iii) Plans providing legal service benefits to groups
3    where such plans are owned or operated by authority of a
4    state, county, local or other bar association;
5        (iv) Any lawyer referral service authorized or
6    operated by a state, county, local or other bar
7    association;
8        (v) The furnishing of legal assistance by labor unions
9    and other employee organizations to their members in
10    matters relating to employment or occupation;
11        (vi) The furnishing of legal assistance to members or
12    dependents, by churches, consumer organizations,
13    cooperatives, educational institutions, credit unions, or
14    organizations of employees, where such organizations
15    contract directly with lawyers or law firms for the
16    provision of legal services, and the administration and
17    marketing of such legal services is wholly conducted by the
18    organization or its subsidiary;
19        (vii) Legal services provided by an employee welfare
20    benefit plan defined by the Employee Retirement Income
21    Security Act of 1974;
22        (viii) Any collectively bargained plan for legal
23    services between a labor union and an employer negotiated
24    pursuant to Section 302 of the Labor Management Relations
25    Act as now or hereafter amended, under which plan legal
26    services will be provided for employees of the employer

 

 

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1    whether or not payments for such services are funded to or
2    through an insurance company.
3    Class 2. Casualty, Fidelity and Surety.
4    (a) Accident and health. Insurance against bodily injury,
5disablement or death by accident and against disablement
6resulting from sickness or old age and every insurance
7appertaining thereto, including stop-loss insurance. Stop-loss
8insurance is insurance against the risk of economic loss issued
9to a single employer self-funded employee disability benefit
10plan or an employee welfare benefit plan as described in 29
11U.S.C. 1001 et seq.
12    (b) Vehicle. Insurance against any loss or liability
13resulting from or incident to the ownership, maintenance or use
14of any vehicle (motor or otherwise), draft animal or aircraft.
15Any policy insuring against any loss or liability on account of
16the bodily injury or death of any person may contain a
17provision for payment of disability benefits to injured persons
18and death benefits to dependents, beneficiaries or personal
19representatives of persons who are killed, including the named
20insured, irrespective of legal liability of the insured, if the
21injury or death for which benefits are provided is caused by
22accident and sustained while in or upon or while entering into
23or alighting from or through being struck by a vehicle (motor
24or otherwise), draft animal or aircraft, and such provision
25shall not be deemed to be accident insurance.
26    (c) Liability. Insurance against the liability of the

 

 

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1insured for the death, injury or disability of an employee or
2other person, and insurance against the liability of the
3insured for damage to or destruction of another person's
4property.
5    (d) Workers' compensation. Insurance of the obligations
6accepted by or imposed upon employers under laws for workers'
7compensation.
8    (e) Burglary and forgery. Insurance against loss or damage
9by burglary, theft, larceny, robbery, forgery, fraud or
10otherwise; including all householders' personal property
11floater risks.
12    (f) Glass. Insurance against loss or damage to glass
13including lettering, ornamentation and fittings from any
14cause.
15    (g) Fidelity and surety. Become surety or guarantor for any
16person, copartnership or corporation in any position or place
17of trust or as custodian of money or property, public or
18private; or, becoming a surety or guarantor for the performance
19of any person, copartnership or corporation of any lawful
20obligation, undertaking, agreement or contract of any kind,
21except contracts or policies of insurance; and underwriting
22blanket bonds. Such obligations shall be known and treated as
23suretyship obligations and such business shall be known as
24surety business.
25    (h) Miscellaneous. Insurance against loss or damage to
26property and any liability of the insured caused by accidents

 

 

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1to boilers, pipes, pressure containers, machinery and
2apparatus of any kind and any apparatus connected thereto, or
3used for creating, transmitting or applying power, light, heat,
4steam or refrigeration, making inspection of and issuing
5certificates of inspection upon elevators, boilers, machinery
6and apparatus of any kind and all mechanical apparatus and
7appliances appertaining thereto; insurance against loss or
8damage by water entering through leaks or openings in
9buildings, or from the breakage or leakage of a sprinkler,
10pumps, water pipes, plumbing and all tanks, apparatus, conduits
11and containers designed to bring water into buildings or for
12its storage or utilization therein, or caused by the falling of
13a tank, tank platform or supports, or against loss or damage
14from any cause (other than causes specifically enumerated under
15Class 3 of this Section) to such sprinkler, pumps, water pipes,
16plumbing, tanks, apparatus, conduits or containers; insurance
17against loss or damage which may result from the failure of
18debtors to pay their obligations to the insured; and insurance
19of the payment of money for personal services under contracts
20of hiring.
21    (i) Other casualty risks. Insurance against any other
22casualty risk not otherwise specified under Classes 1 or 3,
23which may lawfully be the subject of insurance and may properly
24be classified under Class 2.
25    (j) Contingent losses. Contingent, consequential and
26indirect coverages wherein the proximate cause of the loss is

 

 

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1attributable to any one of the causes enumerated under Class 2.
2Such coverages shall, for the purpose of classification, be
3included in the specific grouping of the kinds of insurance
4wherein such cause is specified.
5    (k) Livestock and domestic animals. Insurance against
6mortality, accident and health of livestock and domestic
7animals.
8    (l) Legal expense insurance. Insurance against risk
9resulting from the cost of legal services as defined under
10Class 1(c).
11    Class 3. Fire and Marine, etc.
12    (a) Fire. Insurance against loss or damage by fire, smoke
13and smudge, lightning or other electrical disturbances.
14    (b) Elements. Insurance against loss or damage by
15earthquake, windstorms, cyclone, tornado, tempests, hail,
16frost, snow, ice, sleet, flood, rain, drought or other weather
17or climatic conditions including excess or deficiency of
18moisture, rising of the waters of the ocean or its tributaries.
19    (c) War, riot and explosion. Insurance against loss or
20damage by bombardment, invasion, insurrection, riot, strikes,
21civil war or commotion, military or usurped power, or explosion
22(other than explosion of steam boilers and the breaking of fly
23wheels on premises owned, controlled, managed, or maintained by
24the insured.)
25    (d) Marine and transportation. Insurance against loss or
26damage to vessels, craft, aircraft, vehicles of every kind,

 

 

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1(excluding vehicles operating under their own power or while in
2storage not incidental to transportation) as well as all goods,
3freights, cargoes, merchandise, effects, disbursements,
4profits, moneys, bullion, precious stones, securities, chooses
5in action, evidences of debt, valuable papers, bottomry and
6respondentia interests and all other kinds of property and
7interests therein, in respect to, appertaining to or in
8connection with any or all risks or perils of navigation,
9transit, or transportation, including war risks, on or under
10any seas or other waters, on land or in the air, or while being
11assembled, packed, crated, baled, compressed or similarly
12prepared for shipment or while awaiting the same or during any
13delays, storage, transshipment, or reshipment incident
14thereto, including marine builder's risks and all personal
15property floater risks; and for loss or damage to persons or
16property in connection with or appertaining to marine, inland
17marine, transit or transportation insurance, including
18liability for loss of or damage to either arising out of or in
19connection with the construction, repair, operation,
20maintenance, or use of the subject matter of such insurance,
21(but not including life insurance or surety bonds); but, except
22as herein specified, shall not mean insurances against loss by
23reason of bodily injury to the person; and insurance against
24loss or damage to precious stones, jewels, jewelry, gold,
25silver and other precious metals whether used in business or
26trade or otherwise and whether the same be in course of

 

 

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1transportation or otherwise, which shall include jewelers'
2block insurance; and insurance against loss or damage to
3bridges, tunnels and other instrumentalities of transportation
4and communication (excluding buildings, their furniture and
5furnishings, fixed contents and supplies held in storage)
6unless fire, tornado, sprinkler leakage, hail, explosion,
7earthquake, riot and civil commotion are the only hazards to be
8covered; and to piers, wharves, docks and slips, excluding the
9risks of fire, tornado, sprinkler leakage, hail, explosion,
10earthquake, riot and civil commotion; and to other aids to
11navigation and transportation, including dry docks and marine
12railways, against all risk.
13    (e) Vehicle. Insurance against loss or liability resulting
14from or incident to the ownership, maintenance or use of any
15vehicle (motor or otherwise), draft animal or aircraft,
16excluding the liability of the insured for the death, injury or
17disability of another person.
18    (f) Property damage, sprinkler leakage and crop. Insurance
19against the liability of the insured for loss or damage to
20another person's property or property interests from any cause
21enumerated in this class; insurance against loss or damage by
22water entering through leaks or openings in buildings, or from
23the breakage or leakage of a sprinkler, pumps, water pipes,
24plumbing and all tanks, apparatus, conduits and containers
25designed to bring water into buildings or for its storage or
26utilization therein, or caused by the falling of a tank, tank

 

 

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1platform or supports or against loss or damage from any cause
2to such sprinklers, pumps, water pipes, plumbing, tanks,
3apparatus, conduits or containers; insurance against loss or
4damage from insects, diseases or other causes to trees, crops
5or other products of the soil.
6    (g) Other fire and marine risks. Insurance against any
7other property risk not otherwise specified under Classes 1 or
82, which may lawfully be the subject of insurance and may
9properly be classified under Class 3.
10    (h) Contingent losses. Contingent, consequential and
11indirect coverages wherein the proximate cause of the loss is
12attributable to any of the causes enumerated under Class 3.
13Such coverages shall, for the purpose of classification, be
14included in the specific grouping of the kinds of insurance
15wherein such cause is specified.
16    (i) Legal expense insurance. Insurance against risk
17resulting from the cost of legal services as defined under
18Class 1(c).
19(Source: P.A. 90-741, eff. 8-13-98; 90-810, eff. 1-6-99.)