(215 ILCS 5/Art. VIIA heading) ARTICLE VIIA. ADVISORY ORGANIZATIONS (Article scheduled to be repealed on January 1, 2027)

(215 ILCS 5/123A-1) (from Ch. 73, par. 735A-1)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-1. Purpose of Article. The purpose of this Article is to authorize the existence, operation, and regulation of qualified advisory organizations generally available to all admitted companies and to permit under certain conditions joint underwriting and joint reinsurance.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-2) (from Ch. 73, par. 735A-2)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-2. Definitions. As used in this Article, unless the context requires otherwise:

(a) "Advisory Organization" means every person, other than an insurance company who as its primary functions (i) compiles insurance statistics, or (ii) prepares insurance policies, bond forms, and underwriting rules, and (iii) furnishes that which it compiles and prepares to insurance companies who are its only members and subscribers.

(b) "Member" means an insurance company who participates in or is entitled to participate in the management of an advisory organization.

(c) "Subscriber" means an insurance company which is furnished at its request with those services provided for in par. (a) of this Section by an advisory organization of which it is not a member.

(Source: P.A. 82-626.)

(215 ILCS 5/123A-3) (from Ch. 73, par. 735A-3)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-3. Scope of Article. The provisions of this Article apply to all classes of insurance in Section 4 of the "Illinois Insurance Code" except Clause (d) of Class 2.

This Article applies to all companies, Lloyds associations, reciprocal and interinsurance exchanges, and Fraternal Benefits Societies which, under the laws of this State, write any of the kinds of insurance to which this Article applies.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-4) (from Ch. 73, par. 735A-4)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-4. Licenses - Application - Fees.

(1) An advisory organization must be licensed by the Director before it is authorized to conduct activities in this State.

(2) Any advisory organization shall make application for a license as an advisory organization by providing with the application satisfactory evidence to the Director that it has complied with Sections 123A-6 and 123A-7 of this Article.

(3) The fee for filing an application as an advisory organization is $50 payable to the Director.

(Source: P.A. 93-32, eff. 7-1-03.)

(215 ILCS 5/123A-5) (from Ch. 73, par. 735A-5)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-5. Issuance of License.

(1) The Director shall examine each application for license as an advisory organization and the supporting documents and data filed with it and may make a further investigation of the applicant and its officers, its affairs, and its proposed plan of operation.

(2) The Director shall issue the license applied for within 45 days from the date the application is properly submitted to him if he is satisfied

(a) that the applicant, its officers, its affairs and its proposed plan of operation conform to this Article;

(b) that the business reputation of the applicant is good and that the business reputation and character of its officers is good; and

(c) that the rules required under Section 123A-7 are reasonable and conform with this Article.

(3) The Director shall notify in writing the applicant of his decision to deny the application and submit the reasons for the denial. The applicant has 10 days from the date he receives the Director's denial to request a hearing which shall be held within 20 days of the date of the request.

(4) Any advisory organization conducting activities in this State for a period of at least 90 days prior to the effective date of this Article is authorized to continue to conduct its activities in this State without the required license for 90 days from the effective date of this Article if the activities comply with this Article.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-6) (from Ch. 73, par. 735A-6)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-6. Documents prerequisite to engaging in activities. No advisory organization and no group, association or other organization authorized in 123A-10 of this Code may engage in activities in this State unless it has filed with the Director

(a) a copy of its constitution, of its articles of incorporation, agreement or association, and of its by-laws, rules and regulations governing its activities, all duly certified by the custodian of the originals thereof;

(b) a list of its members and subscribers; and

(c) the name and address of a resident of this State upon whom notices or orders of the Director or process may be served.

Every such organization shall notify the Director promptly of every change in its constitution, in its article of incorporation, agreement or association, and in its by-laws, rules and regulations governing the conduct of its business; in its list of members and subscribers; and in the name and address of the resident of this State designated by it upon whom notices or orders of the Director or process affecting such organization may be served.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-7) (from Ch. 73, par. 735A-7)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-7. Eligibility for membership-activities of Advisory Organization. Subject to the approval of the Director, every advisory organization must make reasonable rules governing eligibility for membership and must make rules governing their activities. These rules must provide that the advisory organization will

(a) permit any admitted company to become a member of or a subscriber to such organization at a reasonable cost and without discrimination, or to withdraw therefrom;

(b) refrain from adopting any policy, the effect of which would be to require any member or subscriber as a condition to membership or subscribership, to adhere to its insurance statistics, insurance policies, bond forms, or underwriting rules;

(c) neither practice nor sanction any plan or act of boycott or intimidation tending to result in the unreasonable restraint of or monopoly in the business of insurance; and

(d) allow admitted companies who are not members or subscribers to the organization to purchase the same services of such organization as are made available to members and subscribers without discrimination as respects costs to members and subscribers.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-8) (from Ch. 73, par. 735A-8)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-8. Common ownership or management organization. If 2 or more companies have common ownership or are operating in this State under common management, the advisory organization may require as a condition to membership or subscribership of one or more then all such companies must become members or subscribers.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-9) (from Ch. 73, par. 735A-9)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-9. Authorization to act.

(1) Any advisory organization is authorized to compile statistics and to formulate insurance policies, bond forms and underwriting rules and to furnish that which it prepares to its members and subscribers.

(2) Subject to the provisions of this Article, two or more companies are authorized to act in concert with each other and with others with respect to any activities of an advisory organization as authorized under this Article.

(3) Any company is authorized but not required by this Article to furnish to any advisory organization information in its possession relating to that which the advisory organization is authorized in this Article.

(4) Any company is authorized to become a member or subscriber to any advisory organization.

(5) The Director may review such cooperative activities and practices as are authorized in this section and if, after a hearing upon notice to all the cooperating parties, he finds that any activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of the Illinois Insurance Code, he may issue a written order requiring the discontinuance of such activity or practice.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-10) (from Ch. 73, par. 735A-10)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-10. Compliance of membership with Article. Any group, association or organization of admitted companies which engages in joint underwriting or joint reinsurance through any group, association or organizations or by standing agreement among the members of such organizations, which has complied with the applicable provisions of this Article are authorized to conduct joint reinsurance and joint underwriting activities relative to individual risks in this State.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-11) (from Ch. 73, par. 735A-11)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-11. Prohibition against agreements of use or adherence.

(1) Two or more companies, except as authorized in this Article or in Section 478.1 of this Code, must not agree with each other or any advisory organization to adhere to or to use any statistics, policy or bond forms or underwriting rules furnished by any advisory organization or other source, either as a condition to receive such statistics, policy or bond forms or underwriting rules or otherwise.

(2) The fact that two or more companies, whether or not members or subscribers of an advisory organization, use consistently or intermittently, the insurance statistics, insurance policy or bond forms or underwriting rules of an advisory organization, is not sufficient in itself to support a finding that an agreement to adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.

(3) Two or more companies having a common ownership or operating in this State under common management or control may act in concert with respect to any matters pertaining to those activities authorized in this Article or in Section 478.1 of this Code between or among themselves the same as if they constituted a single company, and to the extent that such matters relate to co-surety bonds, two or more admitted companies executing such bonds are authorized to act in concert between or among themselves as if they constituted a single company. Nothing hereunder requires such companies to act in concert.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-12) (from Ch. 73, par. 735A-12)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-12. Exchange of information or statistical data between advisory Organizations and companies. Advisory organizations, or advisory organizations and companies may exchange the type of information or statistical data authorized under this Article. The Director may review such cooperative activities and practices and if, after a hearing, upon notice of all the cooperating parties, he finds that any activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of the Illinois Insurance Code, he may issue a written order requiring the discontinuance of such activity or practice.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-13) (from Ch. 73, par. 735A-13)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-13. Examination of advisory organization, members, subscribers and other companies.

(1) As often as may be reasonable and necessary, the Director must make or cause to be made an examination of any advisory organization. In lieu of any such examination the Director may accept the report of an examination made by the insurance regulatory official of another state. In examining any organization pursuant to this Section, the Director shall ascertain whether such organization complies with the requirements of this Article and all other applicable provisions of the Illinois Insurance Code.

(2) If after examination of a company or advisory organization, or upon the basis of other information, the Director has good cause to believe that the company or organization does not comply with the applicable provisions of the Illinois Insurance Code, he shall, unless he has good cause to believe such noncompliance is knowingly and wilfully, give notice in writing to the company or organization, stating therein to the extent practicable, in what manner such noncompliance is allowed to exist and specifying therein a reasonable time, not less than 10 days thereafter, in which such noncompliance may be corrected. Notices under this Section shall be confidential between the Director and the parties unless a hearing is held thereon.

(3) If the Director has good cause to believe such noncompliance to be wilful, or if within, the period prescribed by the Director in the notice required by paragraph (2) of this Section the company or organization does not make the changes as may be necessary to correct the noncompliance specified by the Director or establish to the satisfaction of the Director that the specified noncompliance does not exist, then the Director may hold a public hearing in connection therewith, provided that within a reasonable period of time, which shall be not less than 10 days before the date of such hearing, he must mail written notice specifying the matters to be considered at such hearing to such company or organization. If no notice has been given as provided in paragraph (2) of this Section, notice of hearing shall state therein, to the extent practicable, in what manner such noncompliance is alleged to exist.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-14) (from Ch. 73, par. 735A-14)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-14. Notice of violation-suspension or revocation of certificate-cease and desist order. If after a hearing pursuant to Sec. 123A-13, the Director finds

(a) that a company or advisory organization is in violation of this Article or other applicable provisions of the Illinois Insurance Code, he may issue an order to such company or organization which has been the subject of the hearing specifying the violation which exists and requiring compliance within a reasonable time thereafter;

(b) that the violation of any of the applicable provisions of the Illinois Insurance Code by any company or advisory organization was wilful, he may suspend or revoke, in whole or in part, the certificate of authority of such company, and revoke the license of the advisory organization and order it to cease all activities within the State of Illinois.

(Source: P.A. 77-1882.)

(215 ILCS 5/123A-15) (from Ch. 73, par. 735A-15)

(Section scheduled to be repealed on January 1, 2027)

Sec. 123A-15. Failure to comply with final order of Director; penalty; collection; to be in addition to other penalties; wilful violation of Act-misdemeanor.

(1) Any person, company or organization who fails to comply with a final order of the Director under this Article shall be liable to the State up to $100 per violation, according to the findings of the Director. If the Director finds the noncompliance wilful, the person, company, or organization shall be liable to the State up to $5,000 per violation. The Director may bring action in the name of the people of the State of Illinois to enforce collection. These penalties may be in addition to any other penalties provided by law.

(2) A wilful violation of the provisions of this Article by any person is a misdemeanor.

(Source: P.A. 77-1882.)