97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2876

 

Introduced 2/1/2012, by Sen. William R. Haine

 

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

    Amends the Illinois Insurance Code in the provision concerning classes of insurance. Provides that the insurance laws of the State, including the Illinois Insurance Code, do not apply to medical fee sharing arrangements between a religious organization and the organization's members or participants if (1) the organization limits its operations to those activities permitted by the provision concerning medical fee sharing arrangements between a religious organization and the organization's members or participants and (2) the medical fee sharing arrangement and organization meet certain criteria. Effective immediately.


LRB097 16449 RPM 61613 b

 

 

A BILL FOR

 

SB2876LRB097 16449 RPM 61613 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.
12    (b-5) The insurance laws of this State, including this
13Code, do not apply to medical fee sharing arrangements between
14a religious organization and the organization's members or
15participants if (1) the organization limits its operations to
16those activities permitted by this subsection (b-5) and (2) the
17medical fee sharing arrangement and organization meet all of
18the following criteria:
19        (i) the organization is described in Section 501(c)(3)
20    of the Internal Revenue Code and is exempt from taxation
21    under Section 501(a) of the Internal Revenue Code;
22        (ii) members of the organization share a common set of
23    religious beliefs, hold a bona fide conviction that the
24    acquisition of insurance is contrary to such ethical or
25    religious beliefs, and share medical expenses among
26    members in accordance with those beliefs;

 

 

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1        (iii) members of the organization retain membership
2    even after they develop a medical condition;
3        (iv) the arrangement between the organization and its
4    members is limited to the sharing of medical fees directly
5    between members;
6        (v) the organization facilitates the payment of the
7    medical expenses of its members through contributions made
8    directly from one member to another without accepting such
9    funds or depositing with or transferring such funds to a
10    third party, or comingling contributions submitted by
11    members for the medical expenses of other members;
12        (vi) the organization and its members do not assume any
13    risk or make any promise of payment by the organization or
14    its members;
15        (vii) the organization provides to its members, within
16    30 days after enrollment, a complete set of its rules for
17    the sharing of medical expenses, the process for the filing
18    of complaints and appeals of decisions made by the
19    organization, and a complete list of all potential
20    out-of-pocket expenses associated with the submission of a
21    medical expense that may be the member's responsibility;
22        (viii) the organization clearly identifies and
23    separately collects contributions from members for the
24    operations or expenses of the organization and informs its
25    members that any contributions made for the operations or
26    expenses of the organization shall not be used for the

 

 

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1    payment of the medical expenses of its members;
2        (ix) within 60 days after the effective date of this
3    amendatory Act of the 97th General Assembly, and by March 1
4    of each year, the organization files with the Department a
5    copy of its medical fee sharing arrangement and a letter
6    from the organization certifying compliance with each of
7    the requirements of this subsection (b-5);
8        (x) the organization or a predecessor organization has
9    been in existence in this State at all times since December
10    31, 1999, and medical expenses of its members have been
11    shared continuously and without interruption in this State
12    since at least December 31, 1999;
13        (xi) the organization conducts an annual audit that is
14    performed by an independent certified public accounting
15    firm in accordance with generally accepted accounting
16    principles and is made available to the public upon
17    request;
18        (xii) the organization includes the following
19    statement, in writing, on or accompanying all applications
20    and guideline materials: "Notice: The organization
21    facilitating the sharing of medical expenses is not an
22    insurance company, and neither its guidelines nor plan of
23    operation constitute or create an insurance policy. Any
24    assistance you receive with your medical bills will be
25    totally voluntary. As such, participation in the
26    organization or a subscription to any of its documents

 

 

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1    should never be considered to be insurance. Whether or not
2    you receive any payments for medical expenses and whether
3    or not this organization continues to operate, you are
4    always personally responsible for the payment of your own
5    medical bills."; and
6        (xiii) any membership card or similar document issued
7    by the organization and any written communication sent by
8    the organization to a hospital, physician, or other health
9    care provider shall include a statement that the
10    organization does not issue health insurance and that the
11    member or participant is personally liable for payment of
12    his or her medical bills.
13    (c) Legal Expense Insurance. Insurance which involves the
14assumption of a contractual obligation to reimburse the
15beneficiary against or pay on behalf of the beneficiary, all or
16a portion of his fees, costs, or expenses related to or arising
17out of services performed by or under the supervision of an
18attorney licensed to practice in the jurisdiction wherein the
19services are performed, regardless of whether the payment is
20made by the beneficiaries individually or by a third person for
21them, but does not include the provision of or reimbursement
22for legal services incidental to other insurance coverages. The
23insurance laws of this State, including this Act do not apply
24to:
25        (i) Retainer contracts made by attorneys at law with
26    individual clients with fees based on estimates of the

 

 

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1    nature and amount of services to be provided to the
2    specific client, and similar contracts made with a group of
3    clients involved in the same or closely related legal
4    matters;
5        (ii) Plans owned or operated by attorneys who are the
6    providers of legal services to the plan;
7        (iii) Plans providing legal service benefits to groups
8    where such plans are owned or operated by authority of a
9    state, county, local or other bar association;
10        (iv) Any lawyer referral service authorized or
11    operated by a state, county, local or other bar
12    association;
13        (v) The furnishing of legal assistance by labor unions
14    and other employee organizations to their members in
15    matters relating to employment or occupation;
16        (vi) The furnishing of legal assistance to members or
17    dependents, by churches, consumer organizations,
18    cooperatives, educational institutions, credit unions, or
19    organizations of employees, where such organizations
20    contract directly with lawyers or law firms for the
21    provision of legal services, and the administration and
22    marketing of such legal services is wholly conducted by the
23    organization or its subsidiary;
24        (vii) Legal services provided by an employee welfare
25    benefit plan defined by the Employee Retirement Income
26    Security Act of 1974;

 

 

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1        (viii) Any collectively bargained plan for legal
2    services between a labor union and an employer negotiated
3    pursuant to Section 302 of the Labor Management Relations
4    Act as now or hereafter amended, under which plan legal
5    services will be provided for employees of the employer
6    whether or not payments for such services are funded to or
7    through an insurance company.
8    Class 2. Casualty, Fidelity and Surety.
9    (a) Accident and health. Insurance against bodily injury,
10disablement or death by accident and against disablement
11resulting from sickness or old age and every insurance
12appertaining thereto, including stop-loss insurance. Stop-loss
13insurance is insurance against the risk of economic loss issued
14to a single employer self-funded employee disability benefit
15plan or an employee welfare benefit plan as described in 29
16U.S.C. 1001 et seq.
17    (b) Vehicle. Insurance against any loss or liability
18resulting from or incident to the ownership, maintenance or use
19of any vehicle (motor or otherwise), draft animal or aircraft.
20Any policy insuring against any loss or liability on account of
21the bodily injury or death of any person may contain a
22provision for payment of disability benefits to injured persons
23and death benefits to dependents, beneficiaries or personal
24representatives of persons who are killed, including the named
25insured, irrespective of legal liability of the insured, if the
26injury or death for which benefits are provided is caused by

 

 

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1accident and sustained while in or upon or while entering into
2or alighting from or through being struck by a vehicle (motor
3or otherwise), draft animal or aircraft, and such provision
4shall not be deemed to be accident insurance.
5    (c) Liability. Insurance against the liability of the
6insured for the death, injury or disability of an employee or
7other person, and insurance against the liability of the
8insured for damage to or destruction of another person's
9property.
10    (d) Workers' compensation. Insurance of the obligations
11accepted by or imposed upon employers under laws for workers'
12compensation.
13    (e) Burglary and forgery. Insurance against loss or damage
14by burglary, theft, larceny, robbery, forgery, fraud or
15otherwise; including all householders' personal property
16floater risks.
17    (f) Glass. Insurance against loss or damage to glass
18including lettering, ornamentation and fittings from any
19cause.
20    (g) Fidelity and surety. Become surety or guarantor for any
21person, copartnership or corporation in any position or place
22of trust or as custodian of money or property, public or
23private; or, becoming a surety or guarantor for the performance
24of any person, copartnership or corporation of any lawful
25obligation, undertaking, agreement or contract of any kind,
26except contracts or policies of insurance; and underwriting

 

 

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1blanket bonds. Such obligations shall be known and treated as
2suretyship obligations and such business shall be known as
3surety business.
4    (h) Miscellaneous. Insurance against loss or damage to
5property and any liability of the insured caused by accidents
6to boilers, pipes, pressure containers, machinery and
7apparatus of any kind and any apparatus connected thereto, or
8used for creating, transmitting or applying power, light, heat,
9steam or refrigeration, making inspection of and issuing
10certificates of inspection upon elevators, boilers, machinery
11and apparatus of any kind and all mechanical apparatus and
12appliances appertaining thereto; insurance against loss or
13damage by water entering through leaks or openings in
14buildings, or from the breakage or leakage of a sprinkler,
15pumps, water pipes, plumbing and all tanks, apparatus, conduits
16and containers designed to bring water into buildings or for
17its storage or utilization therein, or caused by the falling of
18a tank, tank platform or supports, or against loss or damage
19from any cause (other than causes specifically enumerated under
20Class 3 of this Section) to such sprinkler, pumps, water pipes,
21plumbing, tanks, apparatus, conduits or containers; insurance
22against loss or damage which may result from the failure of
23debtors to pay their obligations to the insured; and insurance
24of the payment of money for personal services under contracts
25of hiring.
26    (i) Other casualty risks. Insurance against any other

 

 

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1casualty risk not otherwise specified under Classes 1 or 3,
2which may lawfully be the subject of insurance and may properly
3be classified under Class 2.
4    (j) Contingent losses. Contingent, consequential and
5indirect coverages wherein the proximate cause of the loss is
6attributable to any one of the causes enumerated under Class 2.
7Such coverages shall, for the purpose of classification, be
8included in the specific grouping of the kinds of insurance
9wherein such cause is specified.
10    (k) Livestock and domestic animals. Insurance against
11mortality, accident and health of livestock and domestic
12animals.
13    (l) Legal expense insurance. Insurance against risk
14resulting from the cost of legal services as defined under
15Class 1(c).
16    Class 3. Fire and Marine, etc.
17    (a) Fire. Insurance against loss or damage by fire, smoke
18and smudge, lightning or other electrical disturbances.
19    (b) Elements. Insurance against loss or damage by
20earthquake, windstorms, cyclone, tornado, tempests, hail,
21frost, snow, ice, sleet, flood, rain, drought or other weather
22or climatic conditions including excess or deficiency of
23moisture, rising of the waters of the ocean or its tributaries.
24    (c) War, riot and explosion. Insurance against loss or
25damage by bombardment, invasion, insurrection, riot, strikes,
26civil war or commotion, military or usurped power, or explosion

 

 

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

 

 

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1as herein specified, shall not mean insurances against loss by
2reason of bodily injury to the person; and insurance against
3loss or damage to precious stones, jewels, jewelry, gold,
4silver and other precious metals whether used in business or
5trade or otherwise and whether the same be in course of
6transportation or otherwise, which shall include jewelers'
7block insurance; and insurance against loss or damage to
8bridges, tunnels and other instrumentalities of transportation
9and communication (excluding buildings, their furniture and
10furnishings, fixed contents and supplies held in storage)
11unless fire, tornado, sprinkler leakage, hail, explosion,
12earthquake, riot and civil commotion are the only hazards to be
13covered; and to piers, wharves, docks and slips, excluding the
14risks of fire, tornado, sprinkler leakage, hail, explosion,
15earthquake, riot and civil commotion; and to other aids to
16navigation and transportation, including dry docks and marine
17railways, against all risk.
18    (e) Vehicle. Insurance against loss or liability resulting
19from or incident to the ownership, maintenance or use of any
20vehicle (motor or otherwise), draft animal or aircraft,
21excluding the liability of the insured for the death, injury or
22disability of another person.
23    (f) Property damage, sprinkler leakage and crop. Insurance
24against the liability of the insured for loss or damage to
25another person's property or property interests from any cause
26enumerated in this class; insurance against loss or damage by

 

 

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1water entering through leaks or openings in buildings, or from
2the breakage or leakage of a sprinkler, pumps, water pipes,
3plumbing and all tanks, apparatus, conduits and containers
4designed to bring water into buildings or for its storage or
5utilization therein, or caused by the falling of a tank, tank
6platform or supports or against loss or damage from any cause
7to such sprinklers, pumps, water pipes, plumbing, tanks,
8apparatus, conduits or containers; insurance against loss or
9damage from insects, diseases or other causes to trees, crops
10or other products of the soil.
11    (g) Other fire and marine risks. Insurance against any
12other property risk not otherwise specified under Classes 1 or
132, which may lawfully be the subject of insurance and may
14properly be classified under Class 3.
15    (h) Contingent losses. Contingent, consequential and
16indirect coverages wherein the proximate cause of the loss is
17attributable to any of the causes enumerated under Class 3.
18Such coverages shall, for the purpose of classification, be
19included in the specific grouping of the kinds of insurance
20wherein such cause is specified.
21    (i) Legal expense insurance. Insurance against risk
22resulting from the cost of legal services as defined under
23Class 1(c).
24(Source: P.A. 90-741, eff. 8-13-98; 90-810, eff. 1-6-99.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.