Illinois General Assembly - Full Text of HB1955
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Full Text of HB1955  102nd General Assembly




HB1955 EnrolledLRB102 13242 BMS 18586 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 35B-25, 131.1, 131.8, and 131.22 and by
6adding Section 131.20d as follows:
7    (215 ILCS 5/35B-25)
8    Sec. 35B-25. Plan of division approval.
9    (a) A division shall not become effective until it is
10approved by the Director after reasonable notice and a public
11hearing, if the notice and hearing are deemed by the Director
12to be in the public interest. The Director shall hold a public
13hearing if one is requested by the dividing company. A hearing
14conducted under this Section shall be conducted in accordance
15with Article 10 of the Illinois Administrative Procedure Act.
16    (b) The Director shall approve a plan of division unless
17the Director finds that:
18        (1) the interest of any class of policyholder or
19    shareholder of the dividing company will not be properly
20    protected;
21        (2) each new company created by the proposed division,
22    except a new company that is a nonsurviving party to a
23    merger pursuant to subsection (b) of Section 156, would be



HB1955 Enrolled- 2 -LRB102 13242 BMS 18586 b

1    ineligible to receive a license to do insurance business
2    in this State pursuant to Section 5;
3        (2.5) each new company created by the proposed
4    division, except a new company that is a nonsurviving
5    party to a merger pursuant to subsection (b) of Section
6    156, that will be a member insurer of the Illinois Life and
7    Health Insurance Guaranty Association and that will have
8    policy liabilities allocated to it will not be licensed to
9    do insurance business in each state where such policies
10    were written by the dividing company;
11        (3) the proposed division violates a provision of the
12    Uniform Fraudulent Transfer Act;
13        (4) the division is being made for purposes of
14    hindering, delaying, or defrauding any policyholders or
15    other creditors of the dividing company;
16        (5) one or more resulting companies will not be
17    solvent upon the consummation of the division; or
18        (6) the remaining assets of one or more resulting
19    companies will be, upon consummation of a division,
20    unreasonably small in relation to the business and
21    transactions in which the resulting company was engaged or
22    is about to engage.
23    (c) In determining whether the standards set forth in
24paragraph (3) of subsection (b) have been satisfied, the
25Director shall only apply the Uniform Fraudulent Transfer Act
26to a dividing company in its capacity as a resulting company



HB1955 Enrolled- 3 -LRB102 13242 BMS 18586 b

1and shall not apply the Uniform Fraudulent Transfer Act to any
2dividing company that is not proposed to survive the division.
3    (d) In determining whether the standards set forth in
4paragraphs (3), (4), (5), and (6) of subsection (b) have been
5satisfied, the Director may consider all proposed assets of
6the resulting company, including, without limitation,
7reinsurance agreements, parental guarantees, support or keep
8well agreements, or capital maintenance or contingent capital
9agreements, in each case, regardless of whether the same would
10qualify as an admitted asset as defined in Section 3.1.
11    (e) In determining whether the standards set forth in
12paragraph (3) of subsection (b) have been satisfied, with
13respect to each resulting company, the Director shall, in
14applying the Uniform Fraudulent Transfer Act, treat:
15        (1) the resulting company as a debtor;
16        (2) liabilities allocated to the resulting company as
17    obligations incurred by a debtor;
18        (3) the resulting company as not having received
19    reasonably equivalent value in exchange for incurring the
20    obligations; and
21        (4) assets allocated to the resulting company as
22    remaining property.
23    (f) All information, documents, materials, and copies
24thereof submitted to, obtained by, or disclosed to the
25Director in connection with a plan of division or in
26contemplation thereof, including any information, documents,



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1materials, or copies provided by or on behalf of a domestic
2stock company in advance of its adoption or submission of a
3plan of division, shall be confidential and shall be subject
4to the same protection and treatment in accordance with
5Section 131.22 131.14d as documents and reports disclosed to
6or filed with the Director pursuant to Section 131.14b until
7such time, if any, as a notice of the hearing contemplated by
8subsection (a) is issued.
9    (g) From and after the issuance of a notice of the hearing
10contemplated by subsection (a), all business, financial, and
11actuarial information that the domestic stock company requests
12confidential treatment, other than the plan of division, shall
13continue to be confidential and shall not be available for
14public inspection and shall be subject to the same protection
15and treatment in accordance with Section 131.22 131.14d as
16documents and reports disclosed to or filed with the Director
17pursuant to Section 131.14b.
18    (h) All expenses incurred by the Director in connection
19with proceedings under this Section, including expenses for
20the services of any attorneys, actuaries, accountants, and
21other experts as may be reasonably necessary to assist the
22Director in reviewing the proposed division, shall be paid by
23the dividing company filing the plan of division. A dividing
24company may allocate expenses described in this subsection in
25a plan of division in the same manner as any other liability.
26    (i) If the Director approves a plan of division, the



HB1955 Enrolled- 5 -LRB102 13242 BMS 18586 b

1Director shall issue an order that shall be accompanied by
2findings of fact and conclusions of law.
3    (j) The conditions in this Section for freeing one or more
4of the resulting companies from the liabilities of the
5dividing company and for allocating some or all of the
6liabilities of the dividing company shall be conclusively
7deemed to have been satisfied if the plan of division has been
8approved by the Director in a final order that is not subject
9to further appeal.
10(Source: P.A. 100-1118, eff. 11-27-18; 101-549, eff. 1-1-20.)
11    (215 ILCS 5/131.1)  (from Ch. 73, par. 743.1)
12    Sec. 131.1. Definitions. As used in this Article, the
13following terms have the respective meanings set forth in this
14Section unless the context requires otherwise:
15    (a) An "affiliate" of, or person "affiliated" with, a
16specific person, is a person that directly, or indirectly
17through one or more intermediaries, controls, or is controlled
18by, or is under common control with, the person specified.
19    (a-5) "Acquiring party" means such person by whom or on
20whose behalf the merger or other acquisition of control
21referred to in Section 131.4 is to be affected and any person
22that controls such person or persons.
23    (a-10) "Associated person" means, with respect to an
24acquiring party, (1) any beneficial owner of shares of the
25company to be acquired, owned, directly or indirectly, of



HB1955 Enrolled- 6 -LRB102 13242 BMS 18586 b

1record or beneficially by the acquiring party, (2) any
2affiliate of the acquiring party or beneficial owner, and (3)
3any other person acting in concert, directly or indirectly,
4pursuant to any agreement, arrangement, or understanding,
5whether written or oral, with the acquiring party or
6beneficial owner, or any of their respective affiliates, in
7connection with the merger, consolidation, or other
8acquisition of control referred to in Section 131.4 of this
10    (a-15) "Company" has the same meaning as "company" as
11defined in Section 2 of this Code, except that it does not
12include agencies, authorities, or instrumentalities of the
13United States, its possessions and territories, the
14Commonwealth of Puerto Rico, the District of Columbia, or a
15state or political subdivision of a state.
16    (b) "Control" (including the terms "controlling",
17"controlled by" and "under common control with") means the
18possession, direct or indirect, of the power to direct or
19cause the direction of the management and policies of a
20person, whether through the ownership of voting securities,
21the holding of shareholders' or policyholders' proxies by
22contract other than a commercial contract for goods or
23non-management services, or otherwise, unless the power is
24solely the result of an official position with or corporate
25office held by the person. Control is presumed to exist if any
26person, directly or indirectly, owns, controls, holds with the



HB1955 Enrolled- 7 -LRB102 13242 BMS 18586 b

1power to vote, or holds shareholders' proxies representing 10%
2or more of the voting securities of any other person, or holds
3or controls sufficient policyholders' proxies to elect the
4majority of the board of directors of the domestic company.
5This presumption may be rebutted by a showing made in the
6manner as the Director may provide by rule. The Director may
7determine, after furnishing all persons in interest notice and
8opportunity to be heard and making specific findings of fact
9to support such determination, that control exists in fact,
10notwithstanding the absence of a presumption to that effect.
11    (b-5) "Enterprise risk" means any activity, circumstance,
12event, or series of events involving one or more affiliates of
13a company that, if not remedied promptly, is likely to have a
14material adverse effect upon the financial condition or
15liquidity of the company or its insurance holding company
16system as a whole, including, but not limited to, anything
17that would cause the company's risk-based capital to fall into
18company action level as set forth in Article IIA of this Code
19or would cause the company to be in hazardous financial
20condition as set forth in Article XII 1/2 of this Code.
21    (b-10) "Exchange Act" means the Securities Exchange Act of
221934, as amended, together with the rules and regulations
23promulgated thereunder.
24    (b-15) "Group-wide supervisor" means the regulatory
25official authorized to engage in conducting and coordinating
26group-wide supervision activities who is determined or



HB1955 Enrolled- 8 -LRB102 13242 BMS 18586 b

1acknowledged by the Director under Section 131.20d of this
2Code to have sufficient contacts with an internationally
3active insurance group.
4    (c) "Insurance holding company system" means two or more
5affiliated persons, one or more of which is an insurance
6company as defined in paragraph (e) of Section 2 of this Code.
7    (c-5) "Internationally active insurance group" means an
8insurance holding company system that:
9        (1) includes an insurer registered under Section 4 of
10    this Code; and
11        (2) meets the following criteria:
12            (A) premiums written in at least 3 countries;
13            (B) the percentage of gross premiums written
14        outside the United States is at least 10% of the
15        insurance holding company system's total gross written
16        premiums; and
17            (C) based on a 3-year rolling average, the total
18        assets of the insurance holding company system are at
19        least $50,000,000,000 or the total gross written
20        premiums of the insurance holding company system are
21        at least $10,000,000,000.
22    (d) (Blank).
23    (d-1) "NAIC" means the National Association of Insurance
25    (d-5) "Non-operating holding company" is a general
26business corporation functioning solely for the purpose of



HB1955 Enrolled- 9 -LRB102 13242 BMS 18586 b

1forming, owning, acquiring, and managing subsidiary business
2entities and having no other business operations not related
4    (d-10) "Own", "owned," or "owning" means shares (1) with
5respect to which a person has title or to which a person's
6nominee, custodian, or other agent has title and which such
7nominee, custodian, or other agent is holding on behalf of the
8person or (2) with respect to which a person (A) has purchased
9or has entered into an unconditional contract, binding on both
10parties, to purchase the shares, but has not yet received the
11shares, (B) owns a security convertible into or exchangeable
12for the shares and has tendered the security for conversion or
13exchange, (C) has an option to purchase or acquire, or rights
14or warrants to subscribe to, the shares and has exercised such
15option, rights, or warrants, or (D) holds a securities futures
16contract to purchase the shares and has received notice that
17the position will be physically settled and is irrevocably
18bound to receive the underlying shares. To the extent that any
19affiliates of the stockholder or beneficial owner are acting
20in concert with the stockholder or beneficial owner, the
21determination of shares owned may include the effect of
22aggregating the shares owned by the affiliate or affiliates.
23Whether shares constitute shares owned shall be decided by the
24Director in his or her reasonable determination.
25    (e) "Person" means an individual, a corporation, a limited
26liability company, a partnership, an association, a joint



HB1955 Enrolled- 10 -LRB102 13242 BMS 18586 b

1stock company, a trust, an unincorporated organization, any
2similar entity or any combination of the foregoing acting in
3concert, but does not include any securities broker performing
4no more than the usual and customary broker's function or
5joint venture partnership exclusively engaged in owning,
6managing, leasing or developing real or tangible personal
7property other than capital stock.
8    (e-5) "Policyholders' proxies" are proxies that give the
9holder the right to vote for the election of the directors and
10other corporate actions not in the day to day operations of the
12    (f) (Blank).
13    (f-5) "Securityholder" of a specified person is one who
14owns any security of such person, including common stock,
15preferred stock, debt obligations, and any other security
16convertible into or evidencing the right to acquire any of the
18    (g) "Subsidiary" of a specified person is an affiliate
19controlled by such person directly, or indirectly through one
20or more intermediaries.
21    (h) "Voting Security" is a security which gives to the
22holder thereof the right to vote for the election of directors
23and includes any security convertible into or evidencing a
24right to acquire a voting security.
25    (i) (Blank).
26    (j) (Blank).



HB1955 Enrolled- 11 -LRB102 13242 BMS 18586 b

1    (k) (Blank).
2(Source: P.A. 98-609, eff. 1-1-14.)
3    (215 ILCS 5/131.8)  (from Ch. 73, par. 743.8)
4    Sec. 131.8. (1) After the statement required by Section
5131.5 has been filed, the Director shall approve any merger,
6consolidation or other acquisition of control referred to in
7Section 131.4 unless the Director finds that:
8        (a) after the change of control, the domestic company
9    referred to in Section 131.4 would not be able to satisfy
10    the requirements for the issuance of a license to write
11    the line or lines of insurance for which it is presently
12    licensed;
13        (b) the effect of the merger, consolidation or other
14    acquisition of control would be substantially to lessen
15    competition in insurance in this State or tend to create a
16    monopoly therein. In applying the competitive standard in
17    this paragraph:
18            (i) the informational requirements of subsection
19        (3)(a) and the standards of subsection (4)(b) of
20        Section 131.12a shall apply,
21            (ii) the merger or other acquisition shall not be
22        found substantially to lessen competition in insurance
23        in this State or tend to create a monopoly therein if
24        the Director finds that any of the situations meeting
25        the criteria provided by subsection (4)(c) of Section



HB1955 Enrolled- 12 -LRB102 13242 BMS 18586 b

1        131.12a exist, and
2            (iii) the Director may condition the approval of
3        the merger or other acquisition on the removal of the
4        basis of disapproval within a specified period of
5        time;
6        (c) the financial condition of any acquiring party is
7    such as might jeopardize the financial stability of the
8    domestic company or jeopardize the interests of its
9    policyholders;
10        (d) the plans or proposals which the acquiring party
11    has to liquidate the domestic company, sell its assets or
12    consolidate or merge it with any person, or to make any
13    other material change in its business or corporate
14    structure or management, are unfair and unreasonable to
15    policyholders of such company and not in the public
16    interest; or
17        (e) the competence, experience and integrity of those
18    persons who would control the operation of the domestic
19    company are such that it would not be in the best interests
20    of policyholders of such company and of the insurance
21    buying public to permit the merger, consolidation or other
22    acquisition of control.
23    (2) The Director may hold a public hearing on any merger,
24consolidation or other acquisition of control referred to in
25Section 131.4 if the Director determines that the statement
26filed as required by Section 131.5 does not demonstrate



HB1955 Enrolled- 13 -LRB102 13242 BMS 18586 b

1compliance with the standards referred to in subsection (1),
2of this Section, or if he determines that such acquisition of
3control is likely to be hazardous or prejudicial to the
4insurance buying public.
5    (3) The public hearing referred to in subsection (2) must
6be held within 60 days after the statement required by Section
7131.5 is filed, and at least 20 days' notice thereof must be
8given by the Director to the person filing the statement and to
9the domestic company. Not less than 7 days' notice of such
10hearing must be given by the person filing the statement to
11such other persons as may be designated by the Director and by
12the company to its shareholders. The Director must make a
13determination within 60 days after the conclusion of the
14hearing. At the hearing, the person filing the statement, the
15domestic company, any person to whom notice of the hearing was
16sent, and any other person whose interests may be affected
17thereby has the right to present evidence, examine and
18cross-examine witnesses, and offer oral and written arguments
19and in connection therewith is entitled to conduct discovery
20proceedings in the same manner as is presently allowed in the
21Circuit Courts of this State. All discovery proceedings must
22be concluded not later than 3 days prior to the commencement of
23the public hearing.
24    (4) If the proposed acquisition of control will require
25the approval of more than one state insurance commissioner,
26the public hearing referred to in subsection (2) of this



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1Section may be held on a consolidated basis upon request of the
2person filing the statement referred to in Section 131.5 of
3this Code. Such person shall file the statement referred to in
4Section 131.5 of this Code with the National Association of
5Insurance Commissioners (NAIC) within 5 days after making the
6request for a public hearing. A commissioner may opt out of a
7consolidated hearing and shall provide notice to the applicant
8of the opt out within 10 days after the receipt of the
9statement referred to in Section 131.5 of this Code. A hearing
10conducted on a consolidated basis shall be public and shall be
11held within the United States before the commissioners of the
12states in which the companies are domiciled. Such
13commissioners shall hear and receive evidence. A commissioner
14may attend such hearing in person or by telecommunication.
15    (5) In connection with a change of control of a domestic
16company, any determination by the Director that the person
17acquiring control of the company shall be required to maintain
18or restore the capital of the company to the level required by
19the laws and regulations of this State shall be made not later
20than 60 days after the filing of the statement required by
21Section 131.5 of this Code.
22(Source: P.A. 98-609, eff. 1-1-14.)
23    (215 ILCS 5/131.20d new)
24    Sec. 131.20d. Group-wide supervision of internationally
25active insurance groups.



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1    (a) The Director is authorized to act as the group-wide
2supervisor for any internationally active insurance group in
3accordance with the provisions of this Section.
4    (b) The Director may otherwise acknowledge another
5regulatory official as the group-wide supervisor where the
6internationally active insurance group:
7        (1) does not have substantial insurance operations in
8    the United States;
9        (2) has substantial insurance operations in the United
10    States, but not in this State; or
11        (3) has substantial insurance operations in the United
12    States and this State, but the Director has determined
13    pursuant to the factors set forth in subsections (d) and
14    (h) that the other regulatory official is the appropriate
15    group-wide supervisor.
16    (c) An insurance holding company system that does not
17otherwise qualify as an internationally active insurance group
18may request that the Director make a determination or
19acknowledgment as to a group-wide supervisor pursuant to this
21    (d) In cooperation with other state, federal, and
22international regulatory agencies, the Director will identify
23a single group-wide supervisor for an internationally active
24insurance group. The Director may determine that the Director
25is the appropriate group-wide supervisor for an
26internationally active insurance group that conducts



HB1955 Enrolled- 16 -LRB102 13242 BMS 18586 b

1substantial insurance operations concentrated in this State.
2However, the Director may acknowledge that a regulatory
3official from another jurisdiction is the appropriate
4group-wide supervisor for the internationally active insurance
5group. A regulatory official identified under this Section as
6the group-wide supervisor may determine that it is appropriate
7to acknowledge another supervisor to serve as the group-wide
8supervisor. The acknowledgment of the group-wide supervisor
9shall be made after consideration of the factors listed in
10paragraphs (1) through (5) of this subsection, and shall be
11made in cooperation with and subject to the acknowledgment of
12other regulatory officials involved with supervision of
13members of the internationally active insurance group, and in
14consultation with the internationally active insurance group.
15The Director shall consider the following factors when making
16a determination or acknowledgment under this subsection:
17        (1) the place of domicile of the insurance companies
18    within the internationally active insurance group that
19    hold the largest share of the group's written premiums,
20    assets, or liabilities;
21        (2) the place of domicile of the top-tiered insurance
22    company or companies in the insurance holding company
23    system of the internationally active insurance group;
24        (3) the location of the executive offices or largest
25    operational offices of the internationally active
26    insurance group;



HB1955 Enrolled- 17 -LRB102 13242 BMS 18586 b

1        (4) whether another regulatory official is acting or
2    is seeking to act as the group-wide supervisor under a
3    regulatory system that the Director determines to be:
4            (A) substantially similar to the system of
5        regulation provided under the laws of this State; or
6            (B) otherwise sufficient in terms of providing for
7        group-wide supervision, enterprise risk analysis, and
8        cooperation with other regulatory officials; and
9        (5) whether another regulatory official acting or
10    seeking to act as the group-wide supervisor provides the
11    Director with reasonably reciprocal recognition and
12    cooperation.
13    (e) Notwithstanding any other provision of law, when
14another regulatory official is acting as the group-wide
15supervisor of an internationally active insurance group, the
16Director shall acknowledge that regulatory official as the
17group-wide supervisor. However, in the event of a material
18change in the internationally active insurance group that
19results in:
20        (1) the internationally active insurance group's
21    insurance companies domiciled in this State holding the
22    largest share of the group's premiums, assets, or
23    liabilities; or
24        (2) this State being the place of domicile of the
25    top-tiered insurance company or companies in the insurance
26    holding company system of the internationally active



HB1955 Enrolled- 18 -LRB102 13242 BMS 18586 b

1    insurance group, the Director shall make a determination
2    or acknowledgment as to the appropriate group-wide
3    supervisor for such an internationally active insurance
4    group pursuant to subsection (d).
5    (f) The Director is authorized to collect from any company
6registered pursuant to Section 131.13 all information
7necessary to determine whether the Director may act as the
8group-wide supervisor of an internationally active insurance
9group or if the Director may acknowledge another regulatory
10official to act as the group-wide supervisor. Before issuing a
11determination that an internationally active insurance group
12is subject to group-wide supervision by the Director, the
13Director shall notify the company registered pursuant to
14Section 131.13 and the ultimate controlling person within the
15internationally active insurance group. The internationally
16active insurance group shall have not less than 30 days to
17provide the Director with additional information pertinent to
18the pending determination. The Department shall publish on its
19Internet website the identity of internationally active
20insurance groups that the Director has determined are subject
21to group-wide supervision by the Director.
22    (g) If the Director is the group-wide supervisor for an
23internationally active insurance group, the Director is
24authorized to engage in any of the following group-wide
25supervision activities:
26        (1) assess the enterprise risks within the



HB1955 Enrolled- 19 -LRB102 13242 BMS 18586 b

1    internationally active insurance group to ensure that:
2            (A) the material financial condition and liquidity
3        risks to the members of the internationally active
4        insurance group that are engaged in the business of
5        insurance are identified by management; and
6            (B) reasonable and effective mitigation measures
7        are in place;
8        (2) request, from any member of an internationally
9    active insurance group subject to the Director's
10    supervision, information necessary and appropriate to
11    assess enterprise risk, including, but not limited to,
12    information about the members of the internationally
13    active insurance group regarding:
14            (A) governance, risk assessment, and management;
15            (B) capital adequacy; and
16            (C) material intercompany transactions;
17        (3) coordinate and, through the authority of the
18    regulatory officials of the jurisdictions where members of
19    the internationally active insurance group are domiciled,
20    compel development and implementation of reasonable
21    measures designed to ensure that the internationally
22    active insurance group is able to timely recognize and
23    mitigate enterprise risks to members of such
24    internationally active insurance group that are engaged in
25    the business of insurance;
26        (4) communicate with other state, federal, and



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1    international regulatory agencies for members within the
2    internationally active insurance group and share relevant
3    information subject to the confidentiality provisions of
4    Section 131.22, through supervisory colleges as set forth
5    in Section 131.20c or otherwise;
6        (5) enter into agreements with or obtain documentation
7    from any company registered under Section 131.13, any
8    member of the internationally active insurance group, and
9    any other state, federal, and international regulatory
10    agencies for members of the internationally active
11    insurance group, providing the basis for or otherwise
12    clarifying the Director's role as group-wide supervisor,
13    including provisions for resolving disputes with other
14    regulatory officials. Such agreements or documentation
15    shall not serve as evidence in any proceeding that any
16    company or person within an insurance holding company
17    system not domiciled or incorporated in this State is
18    doing business in this State or is otherwise subject to
19    jurisdiction in this State; and
20        (6) other group-wide supervision activities,
21    consistent with the authorities and purposes enumerated
22    above, as considered necessary by the Director.
23    (h) If the Director acknowledges that another regulatory
24official from a jurisdiction that is not accredited by the
25NAIC is the group-wide supervisor, the Director is authorized
26to reasonably cooperate, through supervisory colleges or



HB1955 Enrolled- 21 -LRB102 13242 BMS 18586 b

1otherwise, with group-wide supervision undertaken by the
2group-wide supervisor, provided that:
3        (1) the Director's cooperation is in compliance with
4    the laws of this State; and
5        (2) the regulatory official acknowledged as the
6    group-wide supervisor also recognizes and cooperates with
7    the Director's activities as a group-wide supervisor for
8    other internationally active insurance groups where
9    applicable. Where such recognition and cooperation is not
10    reasonably reciprocal, the Director is authorized to
11    refuse recognition and cooperation.
12    (i) The Director is authorized to enter into agreements
13with or obtain documentation from any company registered under
14Section 131.13, any affiliate of the company, and other state,
15federal, and international regulatory agencies for members of
16the internationally active insurance group that provide the
17basis for or otherwise clarify a regulatory official's role as
18group-wide supervisor.
19    (j) The Department may adopt regulations necessary for the
20administration of this Section.
21    (k) A registered company subject to this Section shall be
22liable for and shall pay the reasonable expenses of the
23Director's participation in the administration of this
24Section, including the engagement of attorneys, actuaries, and
25any other professionals and all reasonable travel expenses.



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1    (215 ILCS 5/131.22)  (from Ch. 73, par. 743.22)
2    Sec. 131.22. Confidential treatment.
3    (a) Documents, materials, or other information in the
4possession or control of the Department that are obtained by
5or disclosed to the Director or any other person in the course
6of an examination or investigation made pursuant to this
7Article and all information reported or provided to the
8Department pursuant to paragraphs (12) and (13) of Section
9131.5 and Sections 131.13 through 131.21 this Article shall be
10confidential by law and privileged, shall not be subject to
11the Illinois Freedom of Information Act, shall not be subject
12to subpoena, and shall not be subject to discovery or
13admissible in evidence in any private civil action. However,
14the Director is authorized to use the documents, materials, or
15other information in the furtherance of any regulatory or
16legal action brought as a part of the Director's official
17duties. The Director shall not otherwise make the documents,
18materials, or other information public without the prior
19written consent of the company to which it pertains unless the
20Director, after giving the company and its affiliates who
21would be affected thereby prior written notice and an
22opportunity to be heard, determines that the interest of
23policyholders, shareholders, or the public shall be served by
24the publication thereof, in which event the Director may
25publish all or any part in such manner as may be deemed



HB1955 Enrolled- 23 -LRB102 13242 BMS 18586 b

1    (b) Neither the Director nor any person who received
2documents, materials, or other information while acting under
3the authority of the Director or with whom such documents,
4materials, or other information are shared pursuant to this
5Article shall be permitted or required to testify in any
6private civil action concerning any confidential documents,
7materials, or information subject to subsection (a) of this
9    (c) In order to assist in the performance of the
10Director's duties, the Director:
11        (1) may share documents, materials, or other
12    information, including the confidential and privileged
13    documents, materials, or information subject to subsection
14    (a) of this Section, with other state, federal, and
15    international regulatory agencies, with the NAIC and its
16    affiliates and subsidiaries, and with third-party
17    consultants, and with state, federal, and international
18    law enforcement authorities and regulatory agencies,
19    including members of any supervisory college allowed by
20    this Article, provided that the recipient agrees in
21    writing to maintain the confidentiality and privileged
22    status of the document, material, or other information,
23    and has verified in writing the legal authority to
24    maintain confidentiality;
25        (1.5) notwithstanding paragraph (1) of this subsection
26    (c), may only share confidential and privileged documents,



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



HB1955 Enrolled- 25 -LRB102 13242 BMS 18586 b

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



HB1955 Enrolled- 26 -LRB102 13242 BMS 18586 b

1Director is solely responsible for the administration,
2execution, and enforcement of the provisions of this Article.
3    (e) No waiver of any applicable privilege or claim of
4confidentiality in the documents, materials, or information
5shall occur as a result of disclosure to the Director under
6this Section or as a result of sharing as authorized in
7subsection (c) of this Section.
8    (f) Documents, materials, or other information in the
9possession or control of the NAIC or a third-party consultant
10pursuant to this Article shall be confidential by law and
11privileged, shall not be subject to the Illinois Freedom of
12Information Act, shall not be subject to subpoena, and shall
13not be subject to discovery or admissible in evidence in any
14private civil action.
15(Source: P.A. 98-609, eff. 1-1-14.)
16    (215 ILCS 5/131.9a rep.)
17    (215 ILCS 5/131.14d rep.)
18    Section 10. The Illinois Insurance Code is amended by
19repealing Sections 131.9a and 131.14d.
20    Section 99. Effective date. This Act takes effect upon
21becoming law.