Bill Text: IL HB1129 | 2011-2012 | 97th General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Repeals provisions in the Dental Service Plan Act, Health Maintenance Organization Act, Limited Health Service Organization Act, and Voluntary Health Services Plans Act concerning annual statements and amends each Act to comply with the provisions of the Illinois Insurance Code concerning annual statements and penalties for late or false annual statements.

Spectrum: Bipartisan Bill

Status: (Passed) 2011-08-22 - Public Act . . . . . . . . . 97-0486 [HB1129 Detail]

Download: Illinois-2011-HB1129-Enrolled.html

---

HB1129 Enrolled LRB097 06759 RPM 46847 b
AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 3. The Illinois Insurance Code is amended by
changing Sections 136, 143, and 408 as follows:
(215 ILCS 5/136) (from Ch. 73, par. 748)
Sec. 136. Annual statement.
(1) Every company authorized to do business in this State
or accredited by this State shall submit to file with the
Director by March 1st in each year 2 copies of its financial
statement for the year ending December 31st immediately
preceding in such manner and in such form as on forms
prescribed by the Director, which shall conform substantially
to the form of statement adopted by the National Association of
Insurance Commissioners. Unless the Director provides
otherwise, the annual statement is to be prepared in accordance
with the annual statement instructions and the Accounting
Practices and Procedures Manual adopted by the National
Association of Insurance Commissioners. The Director shall
have power to make such modifications and additions in this
form as he may deem desirable or necessary to ascertain the
condition and affairs of the company. The Director shall have
authority to extend the time for filing any statement by any

HB1129 Enrolled - 2 - LRB097 06759 RPM 46847 b
company for reasons which he considers good and sufficient. In
every statement the admitted assets shall be shown at the
actual values as of the last day of the preceding year, in
accordance with Section 126.7. The statement shall be verified
by oaths of the president and secretary of the company or, in
their absence, by 2 other principal officers. In addition, any
company may be required by the Director, when he considers that
action to be necessary and appropriate for the protection of
policyholders, creditors, shareholders, or claimants, to file,
within 60 days after mailing to the company a notice that such
is required, a supplemental summary statement as of the last
day of any calendar month occurring during the 100 days next
preceding the mailing of such notice designated by him on forms
prescribed and furnished by the Director. The Director may
require supplemental summary statements to be certified by an
independent actuary deemed competent by the Director or by an
independent certified public accountant.
(2) The statement of an alien company shall embrace only
its condition and transactions in the United States and shall
be verified by the oaths of its resident manager or principal
representative in the United States, except that in the case of
any life company organized under the laws of Canada or any
province thereof, the statement may be verified by the oaths of
any of its principal officers designated for that purpose by
its board of directors.
(3) For the information of the public generally the

HB1129 Enrolled - 3 - LRB097 06759 RPM 46847 b
Director shall cause an abstract of the information contained
in the annual statement to be made available to the public as
soon as practicable after filing with the Department, by
printing those abstracts in pamphlet tabular form for free
general distribution by the Department, or by such other
publication in the city of Springfield or in the city of
Chicago as may be reasonably necessary more fully to inform the
public of the financial condition of companies transacting
business in this State.
(4) Each domestic, foreign, and alien insurer authorized to
do business in this State or accredited by this State shall
participate in the National Association of Insurance
Commissioners' Insurance Regulatory Information System,
including the payment of all fees and charges of the system.
Each company shall, on or before March 1 of each year, file
with the National Association of Insurance Commissioners a copy
of its annual financial statement along with any additional
filings prescribed by the Director for the preceding year. The
statement filed with the National Association of Insurance
Commissioners shall be in the same format and scope as that
required by this Code and shall include a signed jurat page and
actuarial certification. Any amendments and addendums to the
annual statement shall also be filed with the National
Association of Insurance Commissioners. Each company shall
also file with the National Association of Insurance
Commissioners annual and quarterly financial statement

HB1129 Enrolled - 4 - LRB097 06759 RPM 46847 b
information in computer readable format as required by the
Insurance Regulatory Information System. Failure of a company
to file financial statement information in computer readable
format shall subject the company to the provisions of Section
139.
(5) All financial analysis ratios and examination synopsis
concerning insurance companies that are submitted to the
Director by the National Association of Insurance
Commissioners' Insurance Regulatory Information System are
confidential and may not be disclosed by the Director.
(6) Every property and casualty insurance company doing
business in this State, unless otherwise exempted by the
Director, shall annually submit the opinion of an appointed
actuary entitled "Statement of Actuarial Opinion". This
opinion shall be filed in accordance with the appropriate
National Association of Insurance Commissioners Property and
Casualty Annual Statement Instructions.
(a) Every property and casualty insurance company
domiciled in this State that is required to submit a
Statement of Actuarial Opinion shall annually submit an
Actuarial Opinion Summary, written by the company's
appointed actuary. This Actuarial Opinion Summary shall be
filed in accordance with the appropriate National
Association of Insurance Commissioners Property and
Casualty Annual Statement Instructions and shall be
considered as a document supporting the Actuarial Opinion

HB1129 Enrolled - 5 - LRB097 06759 RPM 46847 b
required in this subsection (6). Each foreign and alien
property and casualty company authorized to do business in
this State shall provide the Actuarial Opinion Summary upon
request.
(b) An Actuarial Report and underlying workpapers as
required by the appropriate National Association of
Insurance Commissioners Property and Casualty Annual
Statement Instructions shall be prepared to support each
Actuarial Opinion. If the insurance company fails to
provide a supporting Actuarial Report or workpapers at the
request of the Director or the Director determines that the
supporting Actuarial Report or workpapers provided by the
insurance company is otherwise unacceptable to the
Director, the Director may engage a qualified actuary at
the expense of the company to review the opinion and the
basis for the opinion and prepare the supporting Actuarial
Report or workpapers.
(c) The appointed actuary shall not be liable for
damages to any person (other than the insurance company and
the Director) for any act, error, omission, decision, or
conduct with respect to the actuary's opinion, except in
cases of fraud or willful misconduct on the part of the
appointed actuary.
(d) The Statement of Actuarial Opinion shall be
provided with the Annual Statement in accordance with the
appropriate National Association of Insurance

HB1129 Enrolled - 6 - LRB097 06759 RPM 46847 b
Commissioners Property and Casualty Annual Statement
Instructions and shall be treated as a public document.
Documents, materials, or other information in the
possession or control of the Director that are considered
an Actuarial Report, workpapers, or Actuarial Opinion
Summary provided in support of the opinion, and any other
material provided by the company to the Director in
connection with the Actuarial Report, workpapers or
Actuarial Opinion Summary, must be given confidential
treatment, are not subject to subpoena, and may not be made
public by the Director or any other persons. This paragraph
(d) shall not be construed to limit the Director's
authority to release the documents to the Actuarial Board
for Counseling and Discipline (ABCD), so long as the
material is required for the purpose of professional
disciplinary proceedings and that the ABCD establishes
procedures satisfactory to the Director for preserving the
confidentiality of the documents, nor shall this paragraph
(d) be construed to limit the Director's authority to use
the documents, materials or other information in
furtherance of any regulatory or legal action brought as
part of the Director's official duties. Neither the
Director nor any person who received documents, materials,
or other information while acting under the authority of
the Director shall be permitted or required to testify in
any private civil action concerning any confidential

HB1129 Enrolled - 7 - LRB097 06759 RPM 46847 b
documents, materials, or information subject to this
subsection (6). Except where another provision of this Code
expressly prohibits a disclosure of confidential
information to the specific officials or organizations
described in this subsection, the Director may:
(i) share documents, materials, or other
information, including the confidential and privileged
documents, materials or information subject to this
paragraph (d) with the insurance department of any
other state or country or with law enforcement
officials of this or any other state or agency of the
federal government at any time, as long as the agency
or office receiving the document, material, or other
information agrees in writing to hold it confidential
and in a manner consistent with this Code;
(ii) receive documents, materials, or information,
including otherwise confidential and privileged
documents, materials, or information, from the
National Association of Insurance Commissioners and
its affiliates and subsidiaries, and from regulatory
and law enforcement officials of other foreign or
domestic jurisdictions, and shall maintain as
confidential or privileged any document, material, or
information received with notice or the understanding
that it is confidential or privileged under the laws of
the jurisdiction that is the source of the document,

HB1129 Enrolled - 8 - LRB097 06759 RPM 46847 b
material, or information; and
(iii) enter into agreements governing sharing and
use of information consistent with paragraph (d).
(e) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials or information
shall occur as a result of disclosure to the Director under
this Section or as a result of sharing as authorized in
subparagraphs (i), (ii), and (iii) of paragraph (d) of
subsection (6) of this Section. All 2008 Annual Statements,
which are filed in 2009, and all subsequent Annual
Statement filings shall be done in accordance with
subsection (6) of this Section.
(Source: P.A. 96-145, eff. 8-7-09.)
(215 ILCS 5/143) (from Ch. 73, par. 755)
Sec. 143. Policy forms.
(1) Life, accident and health. No company transacting the
kind or kinds of business enumerated in Classes 1 (a), 1 (b)
and 2 (a) of Section 4 shall issue or deliver in this State a
policy or certificate of insurance or evidence of coverage,
attach an endorsement or rider thereto, incorporate by
reference bylaws or other matter therein or use an application
blank in this State until the form and content of such policy,
certificate, evidence of coverage, endorsement, rider, bylaw
or other matter incorporated by reference or application blank
has been filed electronically with the Director, either through

HB1129 Enrolled - 9 - LRB097 06759 RPM 46847 b
the System for Electronic Rate and Form Filing (SERFF) or as
otherwise prescribed by the Director, and approved by the
Director. The Department shall mail a quarterly invoice to the
company for the appropriate filing fees required under Section
408. Any such endorsement or rider that unilaterally reduces
benefits and is to be attached to a policy subsequent to the
date the policy is issued must be filed with, reviewed, and
formally approved by the Director prior to the date it is
attached to a policy issued or delivered in this State. It
shall be the duty of the Director to withhold approval of any
such policy, certificate, endorsement, rider, bylaw or other
matter incorporated by reference or application blank filed
with him if it contains provisions which encourage
misrepresentation or are unjust, unfair, inequitable,
ambiguous, misleading, inconsistent, deceptive, contrary to
law or to the public policy of this State, or contains
exceptions and conditions that unreasonably or deceptively
affect the risk purported to be assumed in the general coverage
of the policy. In all cases the Director shall approve or
disapprove any such form within 60 days after submission unless
the Director extends by not more than an additional 30 days the
period within which he shall approve or disapprove any such
form by giving written notice to the insurer of such extension
before expiration of the initial 60 days period. The Director
shall withdraw his approval of a policy, certificate, evidence
of coverage, endorsement, rider, bylaw, or other matter

HB1129 Enrolled - 10 - LRB097 06759 RPM 46847 b
incorporated by reference or application blank if he
subsequently determines that such policy, certificate,
evidence of coverage, endorsement, rider, bylaw, other matter,
or application blank is misrepresentative, unjust, unfair,
inequitable, ambiguous, misleading, inconsistent, deceptive,
contrary to law or public policy of this State, or contains
exceptions or conditions which unreasonably or deceptively
affect the risk purported to be assumed in the general coverage
of the policy or evidence of coverage.
If a previously approved policy, certificate, evidence of
coverage, endorsement, rider, bylaw or other matter
incorporated by reference or application blank is withdrawn for
use, the Director shall serve upon the company an order of
withdrawal of use, either personally or by mail, and if by
mail, such service shall be completed if such notice be
deposited in the post office, postage prepaid, addressed to the
company's last known address specified in the records of the
Department of Insurance. The order of withdrawal of use shall
take effect 30 days from the date of mailing but shall be
stayed if within the 30-day period a written request for
hearing is filed with the Director. Such hearing shall be held
at such time and place as designated in the order given by the
Director. The hearing may be held either in the City of
Springfield, the City of Chicago or in the county where the
principal business address of the company is located. The
action of the Director in disapproving or withdrawing such form

HB1129 Enrolled - 11 - LRB097 06759 RPM 46847 b
shall be subject to judicial review under the Administrative
Review Law.
This subsection shall not apply to riders or endorsements
issued or made at the request of the individual policyholder
relating to the manner of distribution of benefits or to the
reservation of rights and benefits under his life insurance
policy.
(2) Casualty, fire, and marine. The Director shall require
the filing of all policy forms issued or delivered by any
company transacting the kind or kinds of business enumerated in
Classes 2 (except Class 2 (a)) and 3 of Section 4 in an
electronic format either through the System for Electronic Rate
and Form Filing (SERFF) or as otherwise prescribed and approved
by the Director. In addition, he may require the filing of any
generally used riders, endorsements, certificates, application
blanks, and other matter incorporated by reference in any such
policy or contract of insurance. The Department shall mail a
quarterly invoice to the company for the appropriate filing
fees required under Section 408. Companies that are members of
an organization, bureau, or association may have the same filed
for them by the organization, bureau, or association. If the
Director shall find from an examination of any such policy
form, rider, endorsement, certificate, application blank, or
other matter incorporated by reference in any such policy so
filed that it (i) violates any provision of this Code, (ii)
contains inconsistent, ambiguous, or misleading clauses, or

HB1129 Enrolled - 12 - LRB097 06759 RPM 46847 b
(iii) contains exceptions and conditions that will
unreasonably or deceptively affect the risks that are purported
to be assumed by the policy, he shall order the company or
companies issuing these forms to discontinue their use. Nothing
in this subsection shall require a company transacting the kind
or kinds of business enumerated in Classes 2 (except Class 2
(a)) and 3 of Section 4 to obtain approval of these forms
before they are issued nor in any way affect the legality of
any policy that has been issued and found to be in conflict
with this subsection, but such policies shall be subject to the
provisions of Section 442.
(3) This Section shall not apply (i) to surety contracts or
fidelity bonds, (ii) to policies issued to an industrial
insured as defined in Section 121-2.08 except for workers'
compensation policies, nor (iii) to riders or endorsements
prepared to meet special, unusual, peculiar, or extraordinary
conditions applying to an individual risk.
(Source: P.A. 93-1083, eff. 2-7-05.)
(215 ILCS 5/408) (from Ch. 73, par. 1020)
Sec. 408. Fees and charges.
(1) The Director shall charge, collect and give proper
acquittances for the payment of the following fees and charges:
(a) For filing all documents submitted for the
incorporation or organization or certification of a
domestic company, except for a fraternal benefit society,

HB1129 Enrolled - 13 - LRB097 06759 RPM 46847 b
$2,000.
(b) For filing all documents submitted for the
incorporation or organization of a fraternal benefit
society, $500.
(c) For filing amendments to articles of incorporation
and amendments to declaration of organization, except for a
fraternal benefit society, a mutual benefit association, a
burial society or a farm mutual, $200.
(d) For filing amendments to articles of incorporation
of a fraternal benefit society, a mutual benefit
association or a burial society, $100.
(e) For filing amendments to articles of incorporation
of a farm mutual, $50.
(f) For filing bylaws or amendments thereto, $50.
(g) For filing agreement of merger or consolidation:
(i) for a domestic company, except for a fraternal
benefit society, a mutual benefit association, a
burial society, or a farm mutual, $2,000.
(ii) for a foreign or alien company, except for a
fraternal benefit society, $600.
(iii) for a fraternal benefit society, a mutual
benefit association, a burial society, or a farm
mutual, $200.
(h) For filing agreements of reinsurance by a domestic
company, $200.
(i) For filing all documents submitted by a foreign or

HB1129 Enrolled - 14 - LRB097 06759 RPM 46847 b
alien company to be admitted to transact business or
accredited as a reinsurer in this State, except for a
fraternal benefit society, $5,000.
(j) For filing all documents submitted by a foreign or
alien fraternal benefit society to be admitted to transact
business in this State, $500.
(k) For filing declaration of withdrawal of a foreign
or alien company, $50.
(l) For filing annual statement by a domestic company,
except a fraternal benefit society, a mutual benefit
association, a burial society, or a farm mutual, $200.
(m) For filing annual statement by a domestic fraternal
benefit society, $100.
(n) For filing annual statement by a farm mutual, a
mutual benefit association, or a burial society, $50.
(o) For issuing a certificate of authority or renewal
thereof except to a foreign fraternal benefit society, $400
$200.
(p) For issuing a certificate of authority or renewal
thereof to a foreign fraternal benefit society, $200 $100.
(q) For issuing an amended certificate of authority,
$50.
(r) For each certified copy of certificate of
authority, $20.
(s) For each certificate of deposit, or valuation, or
compliance or surety certificate, $20.

HB1129 Enrolled - 15 - LRB097 06759 RPM 46847 b
(t) For copies of papers or records per page, $1.
(u) For each certification to copies of papers or
records, $10.
(v) For multiple copies of documents or certificates
listed in subparagraphs (r), (s), and (u) of paragraph (1)
of this Section, $10 for the first copy of a certificate of
any type and $5 for each additional copy of the same
certificate requested at the same time, unless, pursuant to
paragraph (2) of this Section, the Director finds these
additional fees excessive.
(w) For issuing a permit to sell shares or increase
paid-up capital:
(i) in connection with a public stock offering,
$300;
(ii) in any other case, $100.
(x) For issuing any other certificate required or
permissible under the law, $50.
(y) For filing a plan of exchange of the stock of a
domestic stock insurance company, a plan of
demutualization of a domestic mutual company, or a plan of
reorganization under Article XII, $2,000.
(z) For filing a statement of acquisition of a domestic
company as defined in Section 131.4 of this Code, $2,000.
(aa) For filing an agreement to purchase the business
of an organization authorized under the Dental Service Plan
Act or the Voluntary Health Services Plans Act or of a

HB1129 Enrolled - 16 - LRB097 06759 RPM 46847 b
health maintenance organization or a limited health
service organization, $2,000.
(bb) For filing a statement of acquisition of a foreign
or alien insurance company as defined in Section 131.12a of
this Code, $1,000.
(cc) For filing a registration statement as required in
Sections 131.13 and 131.14, the notification as required by
Sections 131.16, 131.20a, or 141.4, or an agreement or
transaction required by Sections 124.2(2), 141, 141a, or
141.1, $200.
(dd) For filing an application for licensing of:
(i) a religious or charitable risk pooling trust or
a workers' compensation pool, $1,000;
(ii) a workers' compensation service company,
$500;
(iii) a self-insured automobile fleet, $200; or
(iv) a renewal of or amendment of any license
issued pursuant to (i), (ii), or (iii) above, $100.
(ee) For filing articles of incorporation for a
syndicate to engage in the business of insurance through
the Illinois Insurance Exchange, $2,000.
(ff) For filing amended articles of incorporation for a
syndicate engaged in the business of insurance through the
Illinois Insurance Exchange, $100.
(gg) For filing articles of incorporation for a limited
syndicate to join with other subscribers or limited

HB1129 Enrolled - 17 - LRB097 06759 RPM 46847 b
syndicates to do business through the Illinois Insurance
Exchange, $1,000.
(hh) For filing amended articles of incorporation for a
limited syndicate to do business through the Illinois
Insurance Exchange, $100.
(ii) For a permit to solicit subscriptions to a
syndicate or limited syndicate, $100.
(jj) For the filing of each form as required in Section
143 of this Code, $50 per form. The fee for advisory and
rating organizations shall be $200 per form.
(i) For the purposes of the form filing fee,
filings made on insert page basis will be considered
one form at the time of its original submission.
Changes made to a form subsequent to its approval shall
be considered a new filing.
(ii) Only one fee shall be charged for a form,
regardless of the number of other forms or policies
with which it will be used.
(iii) (Blank).
(iv) The Director may by rule exempt forms from
such fees.
(kk) For filing an application for licensing of a
reinsurance intermediary, $500.
(ll) For filing an application for renewal of a license
of a reinsurance intermediary, $200.
(2) When printed copies or numerous copies of the same

HB1129 Enrolled - 18 - LRB097 06759 RPM 46847 b
paper or records are furnished or certified, the Director may
reduce such fees for copies if he finds them excessive. He may,
when he considers it in the public interest, furnish without
charge to state insurance departments and persons other than
companies, copies or certified copies of reports of
examinations and of other papers and records.
(3) The expenses incurred in any performance examination
authorized by law shall be paid by the company or person being
examined. The charge shall be reasonably related to the cost of
the examination including but not limited to compensation of
examiners, electronic data processing costs, supervision and
preparation of an examination report and lodging and travel
expenses. All lodging and travel expenses shall be in accord
with the applicable travel regulations as published by the
Department of Central Management Services and approved by the
Governor's Travel Control Board, except that out-of-state
lodging and travel expenses related to examinations authorized
under Section 132 shall be in accordance with travel rates
prescribed under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
authorization of the Director. With the exception of the direct
reimbursements authorized by the Director, all performance
examination charges collected by the Department shall be paid
to the Insurance Producers Administration Fund, however, the

HB1129 Enrolled - 19 - LRB097 06759 RPM 46847 b
electronic data processing costs incurred by the Department in
the performance of any examination shall be billed directly to
the company being examined for payment to the Statistical
Services Revolving Fund.
(4) At the time of any service of process on the Director
as attorney for such service, the Director shall charge and
collect the sum of $20, which may be recovered as taxable costs
by the party to the suit or action causing such service to be
made if he prevails in such suit or action.
(5) (a) The costs incurred by the Department of Insurance
in conducting any hearing authorized by law shall be assessed
against the parties to the hearing in such proportion as the
Director of Insurance may determine upon consideration of all
relevant circumstances including: (1) the nature of the
hearing; (2) whether the hearing was instigated by, or for the
benefit of a particular party or parties; (3) whether there is
a successful party on the merits of the proceeding; and (4) the
relative levels of participation by the parties.
(b) For purposes of this subsection (5) costs incurred
shall mean the hearing officer fees, court reporter fees, and
travel expenses of Department of Insurance officers and
employees; provided however, that costs incurred shall not
include hearing officer fees or court reporter fees unless the
Department has retained the services of independent
contractors or outside experts to perform such functions.
(c) The Director shall make the assessment of costs

HB1129 Enrolled - 20 - LRB097 06759 RPM 46847 b
incurred as part of the final order or decision arising out of
the proceeding; provided, however, that such order or decision
shall include findings and conclusions in support of the
assessment of costs. This subsection (5) shall not be construed
as permitting the payment of travel expenses unless calculated
in accordance with the applicable travel regulations of the
Department of Central Management Services, as approved by the
Governor's Travel Control Board. The Director as part of such
order or decision shall require all assessments for hearing
officer fees and court reporter fees, if any, to be paid
directly to the hearing officer or court reporter by the
party(s) assessed for such costs. The assessments for travel
expenses of Department officers and employees shall be
reimbursable to the Director of Insurance for deposit to the
fund out of which those expenses had been paid.
(d) The provisions of this subsection (5) shall apply in
the case of any hearing conducted by the Director of Insurance
not otherwise specifically provided for by law.
(6) The Director shall charge and collect an annual
financial regulation fee from every domestic company for
examination and analysis of its financial condition and to fund
the internal costs and expenses of the Interstate Insurance
Receivership Commission as may be allocated to the State of
Illinois and companies doing an insurance business in this
State pursuant to Article X of the Interstate Insurance
Receivership Compact. The fee shall be the greater fixed amount

HB1129 Enrolled - 21 - LRB097 06759 RPM 46847 b
based upon the combination of nationwide direct premium income
and nationwide reinsurance assumed premium income or upon
admitted assets calculated under this subsection as follows:
(a) Combination of nationwide direct premium income
and nationwide reinsurance assumed premium.
(i) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(ii) $750, if the premium is $500,000 or more, but
less than $5,000,000 and there is no reinsurance
assumed premium; or if the premium is less than
$5,000,000 and the reinsurance assumed premium is less
than $10,000,000;
(iii) $3,750, if the premium is less than
$5,000,000 and the reinsurance assumed premium is
$10,000,000 or more;
(iv) $7,500, if the premium is $5,000,000 or more,
but less than $10,000,000;
(v) $18,000, if the premium is $10,000,000 or more,
but less than $25,000,000;
(vi) $22,500, if the premium is $25,000,000 or
more, but less than $50,000,000;
(vii) $30,000, if the premium is $50,000,000 or
more, but less than $100,000,000;
(viii) $37,500, if the premium is $100,000,000 or
more.
(b) Admitted assets.

HB1129 Enrolled - 22 - LRB097 06759 RPM 46847 b
(i) $150, if admitted assets are less than
$1,000,000;
(ii) $750, if admitted assets are $1,000,000 or
more, but less than $5,000,000;
(iii) $3,750, if admitted assets are $5,000,000 or
more, but less than $25,000,000;
(iv) $7,500, if admitted assets are $25,000,000 or
more, but less than $50,000,000;
(v) $18,000, if admitted assets are $50,000,000 or
more, but less than $100,000,000;
(vi) $22,500, if admitted assets are $100,000,000
or more, but less than $500,000,000;
(vii) $30,000, if admitted assets are $500,000,000
or more, but less than $1,000,000,000;
(viii) $37,500, if admitted assets are
$1,000,000,000 or more.
(c) The sum of financial regulation fees charged to the
domestic companies of the same affiliated group shall not
exceed $250,000 in the aggregate in any single year and
shall be billed by the Director to the member company
designated by the group.
(7) The Director shall charge and collect an annual
financial regulation fee from every foreign or alien company,
except fraternal benefit societies, for the examination and
analysis of its financial condition and to fund the internal
costs and expenses of the Interstate Insurance Receivership

HB1129 Enrolled - 23 - LRB097 06759 RPM 46847 b
Commission as may be allocated to the State of Illinois and
companies doing an insurance business in this State pursuant to
Article X of the Interstate Insurance Receivership Compact. The
fee shall be a fixed amount based upon Illinois direct premium
income and nationwide reinsurance assumed premium income in
accordance with the following schedule:
(a) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(b) $750, if the premium is $500,000 or more, but less
than $5,000,000 and there is no reinsurance assumed
premium; or if the premium is less than $5,000,000 and the
reinsurance assumed premium is less than $10,000,000;
(c) $3,750, if the premium is less than $5,000,000 and
the reinsurance assumed premium is $10,000,000 or more;
(d) $7,500, if the premium is $5,000,000 or more, but
less than $10,000,000;
(e) $18,000, if the premium is $10,000,000 or more, but
less than $25,000,000;
(f) $22,500, if the premium is $25,000,000 or more, but
less than $50,000,000;
(g) $30,000, if the premium is $50,000,000 or more, but
less than $100,000,000;
(h) $37,500, if the premium is $100,000,000 or more.
The sum of financial regulation fees under this subsection
(7) charged to the foreign or alien companies within the same
affiliated group shall not exceed $250,000 in the aggregate in

HB1129 Enrolled - 24 - LRB097 06759 RPM 46847 b
any single year and shall be billed by the Director to the
member company designated by the group.
(8) Beginning January 1, 1992, the financial regulation
fees imposed under subsections (6) and (7) of this Section
shall be paid by each company or domestic affiliated group
annually. After January 1, 1994, the fee shall be billed by
Department invoice based upon the company's premium income or
admitted assets as shown in its annual statement for the
preceding calendar year. The invoice is due upon receipt and
must be paid no later than June 30 of each calendar year. All
financial regulation fees collected by the Department shall be
paid to the Insurance Financial Regulation Fund. The Department
may not collect financial examiner per diem charges from
companies subject to subsections (6) and (7) of this Section
undergoing financial examination after June 30, 1992.
(9) In addition to the financial regulation fee required by
this Section, a company undergoing any financial examination
authorized by law shall pay the following costs and expenses
incurred by the Department: electronic data processing costs,
the expenses authorized under Section 131.21 and subsection (d)
of Section 132.4 of this Code, and lodging and travel expenses.
Electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company undergoing examination for
payment to the Statistical Services Revolving Fund. Except for
direct reimbursements authorized by the Director or direct

HB1129 Enrolled - 25 - LRB097 06759 RPM 46847 b
payments made under Section 131.21 or subsection (d) of Section
132.4 of this Code, all financial regulation fees and all
financial examination charges collected by the Department
shall be paid to the Insurance Financial Regulation Fund.
All lodging and travel expenses shall be in accordance with
applicable travel regulations published by the Department of
Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under
Sections 132.1 through 132.7 shall be in accordance with travel
rates prescribed under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon the
authorization of the Director.
In the case of an organization or person not subject to the
financial regulation fee, the expenses incurred in any
financial examination authorized by law shall be paid by the
organization or person being examined. The charge shall be
reasonably related to the cost of the examination including,
but not limited to, compensation of examiners and other costs
described in this subsection.
(10) Any company, person, or entity failing to make any
payment of $150 or more as required under this Section shall be
subject to the penalty and interest provisions provided for in
subsections (4) and (7) of Section 412.

HB1129 Enrolled - 26 - LRB097 06759 RPM 46847 b
(11) Unless otherwise specified, all of the fees collected
under this Section shall be paid into the Insurance Financial
Regulation Fund.
(12) For purposes of this Section:
(a) "Domestic company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of this State, and in addition includes a
not-for-profit corporation authorized under the Dental
Service Plan Act or the Voluntary Health Services Plans
Act, a health maintenance organization, and a limited
health service organization.
(b) "Foreign company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any state of the United States other than
this State and in addition includes a health maintenance
organization and a limited health service organization
which is incorporated or organized under the laws of any
state of the United States other than this State.
(c) "Alien company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any country other than the United States.
(d) "Fraternal benefit society" means a corporation,
society, order, lodge or voluntary association as defined
in Section 282.1 of this Code.
(e) "Mutual benefit association" means a company,
association or corporation authorized by the Director to do

HB1129 Enrolled - 27 - LRB097 06759 RPM 46847 b
business in this State under the provisions of Article
XVIII of this Code.
(f) "Burial society" means a person, firm,
corporation, society or association of individuals
authorized by the Director to do business in this State
under the provisions of Article XIX of this Code.
(g) "Farm mutual" means a district, county and township
mutual insurance company authorized by the Director to do
business in this State under the provisions of the Farm
Mutual Insurance Company Act of 1986.
(Source: P.A. 93-32, eff. 7-1-03; 93-1083, eff. 2-7-05.)
Section 5. The Dental Service Plan Act is amended by
changing Section 25 as follows:
(215 ILCS 110/25) (from Ch. 32, par. 690.25)
Sec. 25. Application of Insurance Code provisions. Dental
service plan corporations and all persons interested therein or
dealing therewith shall be subject to the provisions of
Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
143, 143c, 149, 355.2, 367.2, 401, 401.1, 402, 403, 403A, 408,
408.2, and 412, and subsection (15) of Section 367 of the
Illinois Insurance Code.
(Source: P.A. 91-549, eff. 8-14-99.)
Section 10. The Health Maintenance Organization Act is

HB1129 Enrolled - 28 - LRB097 06759 RPM 46847 b
amended by changing Section 5-3 as follows:
(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
Sec. 5-3. Insurance Code provisions.
(a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
154.5, 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m,
356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8,
356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15,
356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
(b) For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
Maintenance Organizations in the following categories are
deemed to be "domestic companies":
(1) a corporation authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act;
(2) a corporation organized under the laws of this
State; or
(3) a corporation organized under the laws of another
state, 30% or more of the enrollees of which are residents
of this State, except a corporation subject to

HB1129 Enrolled - 29 - LRB097 06759 RPM 46847 b
substantially the same requirements in its state of
organization as is a "domestic company" under Article VIII
1/2 of the Illinois Insurance Code.
(c) In considering the merger, consolidation, or other
acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
(1) the Director shall give primary consideration to
the continuation of benefits to enrollees and the financial
conditions of the acquired Health Maintenance Organization
after the merger, consolidation, or other acquisition of
control takes effect;
(2)(i) the criteria specified in subsection (1)(b) of
Section 131.8 of the Illinois Insurance Code shall not
apply and (ii) the Director, in making his determination
with respect to the merger, consolidation, or other
acquisition of control, need not take into account the
effect on competition of the merger, consolidation, or
other acquisition of control;
(3) the Director shall have the power to require the
following information:
(A) certification by an independent actuary of the
adequacy of the reserves of the Health Maintenance
Organization sought to be acquired;
(B) pro forma financial statements reflecting the
combined balance sheets of the acquiring company and
the Health Maintenance Organization sought to be

HB1129 Enrolled - 30 - LRB097 06759 RPM 46847 b
acquired as of the end of the preceding year and as of
a date 90 days prior to the acquisition, as well as pro
forma financial statements reflecting projected
combined operation for a period of 2 years;
(C) a pro forma business plan detailing an
acquiring party's plans with respect to the operation
of the Health Maintenance Organization sought to be
acquired for a period of not less than 3 years; and
(D) such other information as the Director shall
require.
(d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale by
any health maintenance organization of greater than 10% of its
enrollee population (including without limitation the health
maintenance organization's right, title, and interest in and to
its health care certificates).
(e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code, take
into account the effect of the management contract or service
agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to
be managed or serviced, and (ii) need not take into account the
effect of the management contract or service agreement on
competition.

HB1129 Enrolled - 31 - LRB097 06759 RPM 46847 b
(f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a Health
Maintenance Organization may by contract agree with a group or
other enrollment unit to effect refunds or charge additional
premiums under the following terms and conditions:
(i) the amount of, and other terms and conditions with
respect to, the refund or additional premium are set forth
in the group or enrollment unit contract agreed in advance
of the period for which a refund is to be paid or
additional premium is to be charged (which period shall not
be less than one year); and
(ii) the amount of the refund or additional premium
shall not exceed 20% of the Health Maintenance
Organization's profitable or unprofitable experience with
respect to the group or other enrollment unit for the
period (and, for purposes of a refund or additional
premium, the profitable or unprofitable experience shall
be calculated taking into account a pro rata share of the
Health Maintenance Organization's administrative and
marketing expenses, but shall not include any refund to be
made or additional premium to be paid pursuant to this
subsection (f)). The Health Maintenance Organization and
the group or enrollment unit may agree that the profitable
or unprofitable experience may be calculated taking into

HB1129 Enrolled - 32 - LRB097 06759 RPM 46847 b
account the refund period and the immediately preceding 2
plan years.
The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee
describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the
resulting additional premium to be paid by the group or
enrollment unit.
In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay any
refund authorized under this Section.
(g) Rulemaking authority to implement Public Act 95-1045,
if any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;

HB1129 Enrolled - 33 - LRB097 06759 RPM 46847 b
95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
6-1-10; 96-1000, eff. 7-2-10.)
Section 15. The Limited Health Service Organization Act is
amended by changing Section 4003 as follows:
(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
Sec. 4003. Illinois Insurance Code provisions. Limited
health service organizations shall be subject to the provisions
of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3,
143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6,
154.7, 154.8, 155.04, 155.37, 355.2, 356v, 356z.10, 368a, 401,
401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
XXVI of the Illinois Insurance Code. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and
Articles XIII and XIII 1/2, limited health service
organizations in the following categories are deemed to be
domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another
state, 30% of more of the enrollees of which are residents
of this State, except a corporation subject to
substantially the same requirements in its state of
organization as is a domestic company under Article VIII

HB1129 Enrolled - 34 - LRB097 06759 RPM 46847 b
1/2 of the Illinois Insurance Code.
(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
Section 20. The Voluntary Health Services Plans Act is
amended by changing Section 10 as follows:
(215 ILCS 165/10) (from Ch. 32, par. 604)
Sec. 10. Application of Insurance Code provisions. Health
services plan corporations and all persons interested therein
or dealing therewith shall be subject to the provisions of
Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
143, 143c, 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1,
356r, 356t, 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2,
356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11,
356z.12, 356z.13, 356z.14, 356z.15, 356z.18, 364.01, 367.2,
368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
paragraphs (7) and (15) of Section 367 of the Illinois
Insurance Code.
Rulemaking authority to implement Public Act 95-1045, if
any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.

HB1129 Enrolled - 35 - LRB097 06759 RPM 46847 b
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
96-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
7-2-10.)
(215 ILCS 110/36 rep.)
(215 ILCS 110/37 rep.)
Section 25. The Dental Service Plan Act is amended by
repealing Sections 36 and 37.
(215 ILCS 125/2-7 rep.)
Section 30. The Health Maintenance Organization Act is
amended by repealing Section 2-7.
(215 ILCS 130/2007 rep.)
Section 35. The Limited Health Service Organization Act is
amended by repealing Section 2007.
(215 ILCS 165/21 rep.)
(215 ILCS 165/22 rep.)
Section 40. The Voluntary Health Services Plans Act is
amended by repealing Sections 21 and 22.