HB3443 EngrossedLRB097 05656 RPM 45718 b

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 arrangements between a religious
13organization and the organization's members or participants
14when the arrangement and organization meet all of the following
15criteria:
16        (i) the organization is described in Section 501(c)(3)
17    of the Internal Revenue Code and is exempt from taxation
18    under Section 501(a) of the Internal Revenue Code;
19        (ii) members of the organization share a common set of
20    ethical or religious beliefs and share medical expenses
21    among members in accordance with those beliefs and without
22    regard to the state in which a member resides or is
23    employed;
24        (iii) members of the organization retain membership
25    even after they develop a medical condition;
26        (iv) the organization or a predecessor organization

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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