Illinois General Assembly - Full Text of SB0092
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Full Text of SB0092  103rd General Assembly




State of Illinois
2023 and 2024


Introduced 1/20/2023, by Sen. Laura Fine


215 ILCS 5/355a  from Ch. 73, par. 967a

    Amends the Illinois Insurance Code. Provides that the Director of Insurance shall issue rules to establish specific standards which may cover, but shall not be limited to, alignment of an accident and health insurance policy's coverage year and deductible year for the purpose of determining patient out-of-pocket cost-sharing limits. Defines "coverage year" and "deductible year".

LRB103 05011 BMS 50024 b





SB0092LRB103 05011 BMS 50024 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 Section 355a as follows:
6    (215 ILCS 5/355a)  (from Ch. 73, par. 967a)
7    Sec. 355a. Standardization of terms and coverage.
8    (1) The purposes of this Section shall be (a) to provide
9reasonable standardization and simplification of terms and
10coverages of individual accident and health insurance policies
11to facilitate public understanding and comparisons; (b) to
12eliminate provisions contained in individual accident and
13health insurance policies which may be misleading or
14unreasonably confusing in connection either with the purchase
15of such coverages or with the settlement of claims; and (c) to
16provide for reasonable disclosure in the sale of accident and
17health coverages.
18    (2) Definitions applicable to this Section are as follows:
19        (a) "Policy" means all or any part of the forms
20    constituting the contract between the insurer and the
21    insured, including the policy, certificate, subscriber
22    contract, riders, endorsements, and the application if
23    attached, which are subject to filing with and approval by



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1    the Director.
2        (b) "Service corporations" means voluntary health and
3    dental corporations organized and operating respectively
4    under the Voluntary Health Services Plans Act and the
5    Dental Service Plan Act.
6        (c) "Accident and health insurance" means insurance
7    written under Article XX of this Code, other than credit
8    accident and health insurance, and coverages provided in
9    subscriber contracts issued by service corporations. For
10    purposes of this Section such service corporations shall
11    be deemed to be insurers engaged in the business of
12    insurance.
13        (d) "Coverage year" means the 12-month period during
14    which coverage is provided by an accident and health
15    insurance policy.
16        (e) "Deductible year" means the 12-month period used
17    for the purpose of determining the accrual of deductibles
18    and out-of-pocket cost-sharing limits under an accident
19    and health insurance policy.
20    (3) The Director shall issue such rules as he shall deem
21necessary or desirable to establish specific standards,
22including standards of full and fair disclosure that set forth
23the form and content and required disclosure for sale, of
24individual policies of accident and health insurance, which
25rules and regulations shall be in addition to and in
26accordance with the applicable laws of this State, and which



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1may cover but shall not be limited to: (a) terms of
2renewability; (b) initial and subsequent conditions of
3eligibility; (c) non-duplication of coverage provisions; (d)
4coverage of dependents; (e) pre-existing conditions; (f)
5termination of insurance; (g) probationary periods; (h)
6limitation, exceptions, and reductions; (i) elimination
7periods; (j) requirements regarding replacements; (k)
8recurrent conditions; and (l) the definition of terms,
9including, but not limited to, the following: hospital,
10accident, sickness, injury, physician, accidental means, total
11disability, partial disability, nervous disorder, guaranteed
12renewable, and non-cancellable; and (m) alignment of an
13accident and health insurance policy's coverage year and
14deductible year for the purpose of determining patient
15out-of-pocket cost-sharing limits.
16    The Director may issue rules that specify prohibited
17policy provisions not otherwise specifically authorized by
18statute which in the opinion of the Director are unjust,
19unfair or unfairly discriminatory to the policyholder, any
20person insured under the policy, or beneficiary.
21    (4) The Director shall issue such rules as he shall deem
22necessary or desirable to establish minimum standards for
23benefits under each category of coverage in individual
24accident and health policies, other than conversion policies
25issued pursuant to a contractual conversion privilege under a
26group policy, including but not limited to the following



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1categories: (a) basic hospital expense coverage; (b) basic
2medical-surgical expense coverage; (c) hospital confinement
3indemnity coverage; (d) major medical expense coverage; (e)
4disability income protection coverage; (f) accident only
5coverage; and (g) specified disease or specified accident
7    Nothing in this subsection (4) shall preclude the issuance
8of any policy which combines two or more of the categories of
9coverage enumerated in subparagraphs (a) through (f) of this
11    No policy shall be delivered or issued for delivery in
12this State which does not meet the prescribed minimum
13standards for the categories of coverage listed in this
14subsection unless the Director finds that such policy is
15necessary to meet specific needs of individuals or groups and
16such individuals or groups will be adequately informed that
17such policy does not meet the prescribed minimum standards,
18and such policy meets the requirement that the benefits
19provided therein are reasonable in relation to the premium
20charged. The standards and criteria to be used by the Director
21in approving such policies shall be included in the rules
22required under this Section with as much specificity as
24    The Director shall prescribe by rule the method of
25identification of policies based upon coverages provided.
26    (5) (a) In order to provide for full and fair disclosure in



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1the sale of individual accident and health insurance policies,
2no such policy shall be delivered or issued for delivery in
3this State unless the outline of coverage described in
4paragraph (b) of this subsection either accompanies the
5policy, or is delivered to the applicant at the time the
6application is made, and an acknowledgment signed by the
7insured, of receipt of delivery of such outline, is provided
8to the insurer. In the event the policy is issued on a basis
9other than that applied for, the outline of coverage properly
10describing the policy must accompany the policy when it is
11delivered and such outline shall clearly state that the policy
12differs, and to what extent, from that for which application
13was originally made. All policies, except single premium
14nonrenewal policies, shall have a notice prominently printed
15on the first page of the policy or attached thereto stating in
16substance, that the policyholder shall have the right to
17return the policy within 10 days of its delivery and to have
18the premium refunded if after examination of the policy the
19policyholder is not satisfied for any reason.
20    (b) The Director shall issue such rules as he shall deem
21necessary or desirable to prescribe the format and content of
22the outline of coverage required by paragraph (a) of this
23subsection. "Format" means style, arrangement, and overall
24appearance, including such items as the size, color, and
25prominence of type and the arrangement of text and captions.
26"Content" shall include without limitation thereto, statements



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1relating to the particular policy as to the applicable
2category of coverage prescribed under subsection (4);
3principal benefits; exceptions, reductions and limitations;
4and renewal provisions, including any reservation by the
5insurer of a right to change premiums. Such outline of
6coverage shall clearly state that it constitutes a summary of
7the policy issued or applied for and that the policy should be
8consulted to determine governing contractual provisions.
9    (c) (Blank).
10    (d) (Blank).
11    (e) (Blank).
12    (f) (Blank).
13    (6) Prior to the issuance of rules pursuant to this
14Section, the Director shall afford the public, including the
15companies affected thereby, reasonable opportunity for
16comment. Such rulemaking is subject to the provisions of the
17Illinois Administrative Procedure Act.
18    (7) When a rule has been adopted, pursuant to this
19Section, all policies of insurance or subscriber contracts
20which are not in compliance with such rule shall, when so
21provided in such rule, be deemed to be disapproved as of a date
22specified in such rule not less than 120 days following its
23effective date, without any further or additional notice other
24than the adoption of the rule.
25    (8) When a rule adopted pursuant to this Section so
26provides, a policy of insurance or subscriber contract which



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1does not comply with the rule shall, not less than 120 days
2from the effective date of such rule, be construed, and the
3insurer or service corporation shall be liable, as if the
4policy or contract did comply with the rule.
5    (9) Violation of any rule adopted pursuant to this Section
6shall be a violation of the insurance law for purposes of
7Sections 370 and 446 of this Code.
8(Source: P.A. 102-775, eff. 5-13-22.)