Bill Text: IL HB4126 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Adds provisions concerning market analysis and market conduct actions. Makes changes to provisions concerning market conduct and non-financial examinations, examination reports, insurance compliance self-evaluative privilege, confidentiality, fees and charges, examination, and fiduciary and bonding requirements. Amends the Network Adequacy and Transparency Act. Adds definitions. Establishes minimum ratios of providers to beneficiaries for network plans issued, delivered, amended, or renewed during 2024. Makes changes to provisions concerning network adequacy, notice of nonrenewal or termination, transition of services, network transparency, administration and enforcement, and provider requirements. Amends the Managed Care Reform and Patient Rights Act. Makes changes to provisions concerning notice of nonrenewal or termination and transition of services. Amends the Illinois Administrative Procedure Act to authorize the Department of Insurance to adopt emergency rules implementing federal standards for provider ratios, time and distance, or appointment wait times when such standards apply to health insurance coverage regulated by the Department of Insurance and are more stringent than the State standards extant at the time the final federal standards are published. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB4126 Detail]

Download: Illinois-2023-HB4126-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4126 Introduced , by Rep. Sue Scherer SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Insurance Code. Adds provisions concerning market analysis and market conduct actions. Makes changes to provisions concerning market conduct and non-financial examinations, examination reports, insurance compliance self-evaluative privilege, confidentiality, fees and charges, examination, and fiduciary and bonding requirements. Amends the Network Adequacy and Transparency Act. Adds definitions. Establishes minimum ratios of providers to beneficiaries for network plans issued, delivered, amended, or renewed during 2024. Makes changes to provisions concerning network adequacy, notice of nonrenewal or termination, transition of services, network transparency, administration and enforcement, and provider requirements. Amends the Managed Care Reform and Patient Rights Act. Makes changes to provisions concerning notice of nonrenewal or termination and transition of services. Amends the Illinois Administrative Procedure Act to authorize the Department of Insurance to adopt emergency rules implementing federal standards for provider ratios, time and distance, or appointment wait times when such standards apply to health insurance coverage regulated by the Department of Insurance and are more stringent than the State standards extant at the time the final federal standards are published. Effective immediately.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Administrative Procedure Act is
amended by adding Section 5-45.21 as follows:
(5 ILCS 100/5-45.21 new)
Sec. 5-45.21. Emergency rulemaking; Network Adequacy and
Transparency Act. To provide for the expeditious and timely
implementation of the Network Adequacy and Transparency Act,
emergency rules implementing federal standards for provider
ratios, travel time and distance, and appointment wait times
if such standards apply to health insurance coverage regulated
by the Department of Insurance and are more stringent than the
State standards extant at the time the final federal standards
are published may be adopted in accordance with Section 5-45
by the Department of Insurance. The adoption of emergency
rules authorized by Section 5-45 and this Section is deemed to
be necessary for the public interest, safety, and welfare.
Section 10. The Illinois Insurance Code is amended by
changing Sections 132, 132.5, 155.35, 402, 408, 511.109,
512-3, 512-5, and 513b3 and by adding Section 512-11 as
follows:

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(215 ILCS 5/132) (from Ch. 73, par. 744)
Sec. 132. Market conduct and non-financial examinations.
(a) Definitions.
As used in this Section:
"Desk examination" means an examination conducted by
market conduct surveillance personnel at a location other than
the regulated person's premises. A "desk examination" is
usually performed at the Department's offices with the insurer
providing requested documents by hard copy, microfiche, discs,
or other electronic media for review without an on-site
examination.
"Market analysis" means a process whereby market conduct
surveillance personnel collect and analyze information from
filed schedules, surveys, data calls, required reports, and
other sources in order to develop a baseline understanding of
the marketplace and to identify patterns or practices of
regulated persons that deviate significantly from the norm or
that may pose a potential risk to the insurance consumer.
"Market conduct action" means any of the full range of
activities that the Director may initiate to assess and
address the market practices of regulated persons, including,
but not limited to, market analysis and market conduct
examinations. "Market conduct action" does not include the
Department's consumer complaint process outlined in 50 Ill.
Adm. Code 926; however, the Department may initiate market

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conduct actions based on information gathered during that
process. Examples of "market conduct action" include, but are
not limited to:
(1) correspondence with the company or person;
(2) interviews with the company or person;
(3) information gathering;
(4) reviews of policies and procedures;
(5) interrogatories;
(6) reviews of self-evaluations and voluntary
compliance programs of the person or company;
(7) self-audits; and
(8) market conduct examinations.
"Market conduct examination" or "examination" means any
type of examination described in the NAIC Market Regulation
Handbook that may be used to assess a regulated person's
compliance with the laws, rules, and regulations applicable to
the examinee. "Market conduct examination" includes
comprehensive examinations, targeted examinations, and
follow-up examinations. Market conduct examinations may be
conducted as desk examinations, on-site examinations, or a
combination of those 2 types of examinations.
"Market conduct surveillance" means market analysis or a
market conduct action.
"Market conduct surveillance personnel" means those
individuals employed or retained by the Department and
designated by the Director to collect, analyze, review, or act

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on information in the insurance marketplace that identifies
patterns or practices of insurers. "Market conduct
surveillance personnel" includes all persons identified as an
examiner in the insurance laws or rules of this State if the
Director has designated those persons to assist the Director
in ascertaining the non-financial business practices,
performance, and operations of a company or person subject to
the Director's jurisdiction.
"NAIC" means the National Association of Insurance
Commissioners.
"On-site examination" means an examination conducted at
the insurer's home office or the location where the records
under review are stored.
(b) Examinations. (1)
The Director, for the purposes of ascertaining the
non-financial business practices, performance, and operations
of any company, may make examinations of:
(1) (a) any company transacting or being organized to
transact business in this State;
(2) (b) any person engaged in or proposing to be
engaged in the organization, promotion, or solicitation of
shares or capital contributions to or aiding in the
formation of a company;
(3) (c) any person having a contract, written or oral,
pertaining to the management or control of a company as
general agent, managing agent, or attorney-in-fact;

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(4) (d) any licensed or registered producer, firm, or
administrator, or any person, organization, or corporation
making application for any licenses or registration;
(5) (e) any person engaged in the business of
adjusting losses or financing premiums; or
(6) (f) any person, organization, trust, or
corporation having custody or control of information
reasonably related to the operation, performance, or
conduct of a company or person subject to the jurisdiction
of the Director.
(c) Market analysis and market conduct actions.
(1) The Director may perform market analysis by
gathering and analyzing information from data currently
available to the Director, information from surveys or
reports that are submitted regularly to the Director or
required in a data call, information collected by the
NAIC, and information from a variety of other sources in
both the public and private domain in order to develop a
baseline understanding of the marketplace and to identify
for further review practices that deviate from the norm or
that may pose a potential risk to the insurance consumer.
The Director shall use the NAIC Market Regulation Handbook
as a guide in performing market analysis.
(2) If the Director determines that further inquiry
into a particular person or practice is needed, the
Director may consider one or more market conduct actions.

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The Director shall inform the examinee in writing of the
type of market conduct action selected and shall use the
NAIC Market Regulation Handbook as a guide in performing
the market conduct action. The Director may coordinate a
market conduct action and findings of this State with
market conduct actions and findings of other states.
(3) Nothing in this Section requires the Director to
conduct market analysis prior to initiating any market
conduct action.
(4) Nothing in this Section restricts the Director to
the type of market conduct action initially selected. The
Director shall inform the examinee in writing of any
change in the type of market conduct action being
conducted.
(d) Access to books and records; oaths and examinations.
(2) Every examinee company or person being examined and
its officers, directors, and agents must provide to the
Director convenient and free access at all reasonable hours at
its office or location to all books, records, documents,
including consumer communications, and any or all papers
relating to the business, performance, operations, and affairs
of the examinee company. The officers, directors, and agents
of the examinee company or person must facilitate the market
conduct action examination and aid in the action examination
so far as it is in their power to do so.
The Director and any authorized market conduct

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surveillance personnel examiner have the power to administer
oaths and examine under oath any person relative to the
business of the examinee company being examined. Any delay of
more than 5 business days in the transmission of requested
documents without an extension approved by the Director or
designated market conduct surveillance personnel is a
violation of this Section.
(e) Examination report.
(3) The market conduct surveillance personnel examiners
designated by the Director under Section 402 must make a full
and true report of every examination made by them, which
contains only facts ascertained from the books, papers,
records, or documents, and other evidence obtained by
investigation and examined by them or ascertained from the
testimony of officers or agents or other persons examined
under oath concerning the business, affairs, conduct, and
performance of the examinee company or person. The report of
examination must be verified by the oath of the examiner in
charge thereof, and when so verified is prima facie evidence
in any action or proceeding in the name of the State against
the company, its officers, or agents upon the facts stated
therein.
(f) Examinee acceptance of examination report.
The Department and the examinee shall adhere to the
following timeline, unless a mutual agreement is reached to
modify the timeline:

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(1) The Department shall deliver the draft report to
the examinee within 60 days after completion of the
examination. "Completion of the examination" means the
date the Department confirms in writing that the
examination is completed. Nothing in this Section prevents
the Department from sharing an earlier draft of the report
with the examinee before confirming that the examination
is completed.
(2) If the examinee chooses to respond with written
submissions or rebuttals, the examinee must do so within
30 days after receipt of any draft report delivered after
the completion of the examination.
(3) After receipt of any written submissions or
rebuttals, the Department shall issue a final report. At
any time, the Department may share draft corrections or
changes to the report with the examinee before issuing a
final report, and the examinee shall have 30 days to
respond to the draft.
(4) The examinee shall, within 10 days after the
issuance of the final report, accept the final report or
request a hearing in writing. Failure to take either
action within 10 days shall be deemed an acceptance of the
final report. If the examinee accepts the examination
report, the Director shall continue to hold the content of
the examination report as private and confidential for a
period of 30 days, except to the extent provided for in

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subsection (h) and in paragraph (10) of subsection (g).
Thereafter, the Director shall open the report for public
inspection if no court of competent jurisdiction has
stayed its publication.
(g) Written hearing.
Notwithstanding anything to the contrary in this Code or
Department rules, if the examinee requests a hearing, the
following procedures apply:
(1) The examinee shall request the hearing in writing
and shall specify the issues in the final report that the
examinee is challenging. The examinee is limited to
challenging the issues that were previously challenged in
the examinee's written submission and rebuttal or
supplemental submission and rebuttal as provided pursuant
to paragraphs (2) and (3) of subsection (f).
(2) The hearing shall be conducted by written
arguments submitted to the Director.
(3) Discovery is limited to the market conduct
surveillance personnel's work papers that are relevant to
the issues the examinee is challenging. The relevant
market conduct surveillance personnel's work papers shall
be deemed admitted into and included in the record. No
other forms of discovery, including depositions and
interrogatories, are allowed, except upon written
agreement of the examinee and the Department's counsel.
(4) Only the examinee and the Department's counsel may

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submit written arguments.
(5) The examinee shall submit its written argument
within 30 days after the Department's counsel serves a
formal notice of hearing.
(6) The Department's counsel shall submit its written
response within 30 days after the examinee submits its
written argument.
(7) The Director shall issue a decision accompanied by
findings and conclusions resulting from the Director's
consideration and review of the written arguments, the
final report, relevant market conduct surveillance
personnel work papers, and any written submissions or
rebuttals. The Director's order is a final agency action
and shall be served upon the examinee by electronic mail
together with a copy of the final report pursuant to
Section 10-75 of the Illinois Administrative Procedure
Act.
(8) Any portion of the final examination report that
was not challenged by the examinee is incorporated into
the decision of the Director.
(9) Findings of fact and conclusions of law in the
Director's final agency action are prima facie evidence in
any legal or regulatory action.
(10) If an examinee has requested a hearing, the
Director shall continue to hold the content of any
examination report or other final agency action of a

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market conduct examination as private and confidential for
a period of 49 days after the final agency action. After
the 49-day period expires, the Director shall open the
final agency action for public inspection if a court of
competent jurisdiction has not stayed its publication.
(h) Nothing in this Section prevents the Director from
disclosing at any time the content of an examination report,
preliminary examination report, or results, or any matter
relating to a report or results, to the division or to the
insurance division of any other state or agency or office of
the federal government at any time if the division, agency, or
office receiving the report or related matters agrees and has
the legal authority to hold it confidential in a manner
consistent with this Section.
(i) Confidentiality.
(1) The Director and any other person in the course of
market conduct surveillance shall keep confidential all
documents pertaining to the market conduct surveillance,
including working papers, third-party models, or products,
complaint logs, and copies of any documents created by,
produced by, obtained by, or disclosed to the Director,
market conduct surveillance personnel, or any other person
in the course of market conduct surveillance conducted
pursuant to this Section, and all documents obtained by
the NAIC as a result of this Section. The documents shall
remain confidential after termination of the market

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conduct surveillance, are not subject to subpoena, are not
subject to discovery or admissible as evidence in private
civil litigation, are not subject to disclosure under the
Freedom of Information Act, and shall not be made public
at any time or used by the Director or any other person,
except as provided in paragraphs (3), (4), and (6) of this
subsection and in subsection (l).
(2) The Director, the Department, and any other person
in the course of market conduct surveillance shall keep
confidential any self-evaluation or voluntary compliance
program documents disclosed to the Director or other
person by an examinee and the data collected via the NAIC
market conduct annual statement. The documents are not
subject to subpoena, are not subject to discovery or
admissible as evidence in private civil litigation, are
not subject to disclosure under the Freedom of Information
Act, and shall not be made public or used by the Director
or any other person, except as provided in paragraphs (3),
(4), and (6) of this subsection, in subsection (l), or in
Section 155.35 of this Code.
(3) Notwithstanding paragraphs (1) and (2), and
consistent with paragraph (5), in order to assist in the
performance of the Director's duties, the Director may:
(A) share documents, materials, communications, or
other information, including the confidential and
privileged documents, materials, or information

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described in this subsection, with other State,
federal, alien, and international regulatory agencies
and law enforcement authorities and the NAIC, its
affiliates, and subsidiaries, if the recipient agrees
to and has the legal authority to maintain the
confidentiality and privileged status of the document,
material, communication, or other information;
(B) receive documents, materials, communications,
or information, including otherwise confidential and
privileged documents, materials, or information, from
the NAIC and its affiliates or subsidiaries, and from
regulatory and law enforcement officials of other
domestic, alien, or international jurisdictions,
authorities, and agencies, and shall maintain as
confidential or privileged any document, material,
communication, 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, material, communication,
or information;
(C) enter into agreements governing the sharing
and use of information consistent with this Section;
and
(D) when the Director performs any type of market
conduct surveillance that does not rise to the level
of a market conduct examination, make the final

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results of the market conduct surveillance, in an
aggregated format, available for public inspection in
a manner deemed appropriate by the Director.
(4) Nothing in this Section limits:
(A) the Director's authority to use, if consistent
with subsection (5) of Section 188.1, any final or
preliminary examination report, any market conduct
surveillance or examinee work papers or other
documents, or any other information discovered or
developed during the course of any market conduct
surveillance, in the furtherance of any legal or
regulatory action initiated by the Director that the
Director may, in the Director's sole discretion, deem
appropriate; or
(B) the ability of an examinee to conduct
discovery in accordance with paragraph (3) of
subsection (g).
(5) Disclosure to the Director of documents,
materials, communications, or information required as part
of any type of market conduct surveillance does not waive
any applicable privilege or claim of confidentiality in
the documents, materials, communications, or information.
(6) If the Director deems fit, the Director may
publicly acknowledge the existence of an ongoing
examination before filing the examination report but shall
not disclose any other information protected under this

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subsection.
(j) Corrective actions; sanctions.
(1) As a result of any market conduct action other
than market analysis, the Director may order the examinee
to take any action the Director considers necessary or
appropriate in accordance with the report of examination
or any hearing thereon, including, but not limited to,
requiring the regulated person to undertake corrective
actions to cease and desist an identified violation or
institute processes and practices to comply with
applicable standards, requiring reimbursement or
restitution to persons harmed by the regulated person's
violation, or imposing civil penalties, for acts in
violation of any law, rule, or prior lawful order of the
Director. Civil penalties imposed as a result of a market
conduct action shall be consistent, reasonable, and
justifiable.
(2) If any other provision of this Code or any other
law or rule under the Director's jurisdiction prescribes
an amount or range of penalties for a violation of a
particular statute, that provision shall apply. If no
penalty is already provided by law or rule for a violation
and the violation is quantifiable, then the Director may
order a penalty of up to $3,000 for every act in violation
of any law, rule, or prior lawful order of the Director. If
the examination report finds a violation by the examinee

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that the report is unable to quantify, such as, an
operational policy or procedure that conflicts with
applicable law, then the Director may order a penalty of
up to $10,000 for that violation. A violation of
subsection (d) is punishable by a fine of $2,000 per day up
to a maximum of $500,000.
(k) Participation in national market conduct databases.
The Director shall collect and report market data to the
NAIC's market information systems, including, but not limited
to, the Complaint Database System, the Examination Tracking
System, and the Regulatory Information Retrieval System, or
other successor NAIC products as determined by the Director.
Information collected and maintained by the Department for
inclusion in these NAIC market information systems shall be
compiled in a manner that meets the requirements of the NAIC.
(4) The Director must notify the company or person made
the subject of any examination hereunder of the contents of
the verified examination report before filing it and making
the report public of any matters relating thereto, and must
afford the company or person an opportunity to demand a
hearing with reference to the facts and other evidence therein
contained.
The company or person may request a hearing within 10 days
after receipt of the examination report by giving the Director
written notice of that request, together with a statement of
its objections. The Director must then conduct a hearing in

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accordance with Sections 402 and 403. He must issue a written
order based upon the examination report and upon the hearing
within 90 days after the report is filed or within 90 days
after the hearing.
If the examination reveals that the company is operating
in violation of any law, regulation, or prior order, the
Director in the written order may require the company or
person to take any action he considers necessary or
appropriate in accordance with the report of examination or
any hearing thereon. The order is subject to judicial review
under the Administrative Review Law. The Director may withhold
any report from public inspection for such time as he may deem
proper and may, after filing the same, publish any part or all
of the report as he considers to be in the interest of the
public, in one or more newspapers in this State, without
expense to the company.
(5) Any company which or person who violates or aids and
abets any violation of a written order issued under this
Section shall be guilty of a business offense and may be fined
not more than $5,000. The penalty shall be paid into the
General Revenue fund of the State of Illinois.
(Source: P.A. 87-108.)
(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)
Sec. 132.5. Examination reports.
(a) General description. All examination reports shall be

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comprised of only facts appearing upon the books, records, or
other documents of the company, its agents, or other persons
examined or as ascertained from the testimony of its officers,
agents, or other persons examined concerning its affairs and
the conclusions and recommendations as the examiners find
reasonably warranted from those facts.
(b) Filing of examination report. No later than 60 days
following completion of the examination, the examiner in
charge shall file with the Department a verified written
report of examination under oath. Upon receipt of the verified
report, the Department shall transmit the report to the
company examined, together with a notice that affords the
company examined a reasonable opportunity of not more than 30
days to make a written submission or rebuttal with respect to
any matters contained in the examination report.
(c) Adoption of the report on examination. Within 30 days
of the end of the period allowed for the receipt of written
submissions or rebuttals, the Director shall fully consider
and review the report, together with any written submissions
or rebuttals and any relevant portions of the examiners work
papers and enter an order:
(1) Adopting the examination report as filed or with
modification or corrections. If the examination report
reveals that the company is operating in violation of any
law, regulation, or prior order of the Director, the
Director may order the company to take any action the

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Director considers necessary and appropriate to cure the
violation.
(2) Rejecting the examination report with directions
to the examiners to reopen the examination for purposes of
obtaining additional data, documentation, or information
and refiling under subsection (b).
(3) Calling for an investigatory hearing with no less
than 20 days notice to the company for purposes of
obtaining additional documentation, data, information, and
testimony.
(d) Order and procedures. All orders entered under
paragraph (1) of subsection (c) shall be accompanied by
findings and conclusions resulting from the Director's
consideration and review of the examination report, relevant
examiner work papers, and any written submissions or
rebuttals. The order shall be considered a final
administrative decision and may be appealed in accordance with
the Administrative Review Law. The order shall be served upon
the company by certified mail, together with a copy of the
adopted examination report. Within 30 days of the issuance of
the adopted report, the company shall file affidavits executed
by each of its directors stating under oath that they have
received a copy of the adopted report and related orders.
Any hearing conducted under paragraph (3) of subsection
(c) by the Director or an authorized representative shall be
conducted as a nonadversarial confidential investigatory

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proceeding as necessary for the resolution of any
inconsistencies, discrepancies, or disputed issues apparent
upon the face of the filed examination report or raised by or
as a result of the Director's review of relevant work papers or
by the written submission or rebuttal of the company. Within
20 days of the conclusion of any hearing, the Director shall
enter an order under paragraph (1) of subsection (c).
The Director shall not appoint an examiner as an
authorized representative to conduct the hearing. The hearing
shall proceed expeditiously with discovery by the company
limited to the examiner's work papers that tend to
substantiate any assertions set forth in any written
submission or rebuttal. The Director or his representative may
issue subpoenas for the attendance of any witnesses or the
production of any documents deemed relevant to the
investigation, whether under the control of the Department,
the company, or other persons. The documents produced shall be
included in the record, and testimony taken by the Director or
his representative shall be under oath and preserved for the
record. Nothing contained in this Section shall require the
Department to disclose any information or records that would
indicate or show the existence or content of any investigation
or activity of a criminal justice agency.
The hearing shall proceed with the Director or his
representative posing questions to the persons subpoenaed.
Thereafter the company and the Department may present

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testimony relevant to the investigation. Cross-examination
shall be conducted only by the Director or his representative.
The company and the Department shall be permitted to make
closing statements and may be represented by counsel of their
choice.
(e) Publication and use. Upon the adoption of the
examination report under paragraph (1) of subsection (c), the
Director shall continue to hold the content of the examination
report as private and confidential information for a period of
35 days, except to the extent provided in subsection (b).
Thereafter, the Director may open the report for public
inspection so long as no court of competent jurisdiction has
stayed its publication.
Nothing contained in this Code shall prevent or be
construed as prohibiting the Director from disclosing the
content of an examination report, preliminary examination
report or results, or any matter relating thereto, to the
insurance department of any other state or country or to law
enforcement officials of this or any other state or agency of
the federal government at any time, so long as the agency or
office receiving the report or matters relating thereto agrees
in writing to hold it confidential and in a manner consistent
with this Code.
In the event the Director determines that regulatory
action is appropriate as a result of any examination, he may
initiate any proceedings or actions as provided by law.

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(f) Confidentiality of ancillary information. All working
papers, recorded information, documents, and copies thereof
produced by, obtained by, or disclosed to the Director or any
other person in the course of any examination must be given
confidential treatment, are not subject to subpoena, and may
not be made public by the Director or any other persons, except
to the extent provided in subsection (e). Access may also be
granted to the National Association of Insurance
Commissioners. Those parties must agree in writing before
receiving the information to provide to it the same
confidential treatment as required by this Section, unless the
prior written consent of the company to which it pertains has
been obtained.
This subsection (f) applies to market conduct examinations
described in Section 132 of this Code.
(g) Disclosure. Nothing contained in this Code shall
prevent or be construed as prohibiting the Director from
disclosing the information described in subsections (e) and
(f) to the Illinois Insurance Guaranty Fund regarding any
member company defined in Section 534.5 if the member company
has an authorized control level event as defined in Section
35A-25. The Director may disclose the information described in
this subsection so long as the Fund agrees in writing to hold
that information confidential, in a manner consistent with
this Code, and uses that information to prepare for the
possible liquidation of the member company. Access to the

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information disclosed by the Director to the Fund shall be
limited to the Fund's staff and its counsel. The Board of
Directors of the Fund may have access to the information
disclosed by the Director to the Fund once the member company
is subject to a delinquency proceeding under Article XIII
subject to any terms and conditions established by the
Director.
(Source: P.A. 102-929, eff. 5-27-22.)
(215 ILCS 5/155.35)
Sec. 155.35. Insurance compliance self-evaluative
privilege.
(a) To encourage insurance companies and persons
conducting activities regulated under this Code, both to
conduct voluntary internal audits of their compliance programs
and management systems and to assess and improve compliance
with State and federal statutes, rules, and orders, an
insurance compliance self-evaluative privilege is recognized
to protect the confidentiality of communications relating to
voluntary internal compliance audits. The General Assembly
hereby finds and declares that protection of insurance
consumers is enhanced by companies' voluntary compliance with
this State's insurance and other laws and that the public will
benefit from incentives to identify and remedy insurance and
other compliance issues. It is further declared that limited
expansion of the protection against disclosure will encourage

HB4126 - 24 - LRB103 33572 RJT 63384 b
voluntary compliance and improve insurance market conduct
quality and that the voluntary provisions of this Section will
not inhibit the exercise of the regulatory authority by those
entrusted with protecting insurance consumers.
(b)(1) An insurance compliance self-evaluative audit
document is privileged information and is not admissible as
evidence in any legal action in any civil, criminal, or
administrative proceeding, except as provided in subsections
(c) and (d) of this Section. Documents, communications, data,
reports, or other information created as a result of a claim
involving personal injury or workers' compensation made
against an insurance policy are not insurance compliance
self-evaluative audit documents and are admissible as evidence
in civil proceedings as otherwise provided by applicable rules
of evidence or civil procedure, subject to any applicable
statutory or common law privilege, including but not limited
to the work product doctrine, the attorney-client privilege,
or the subsequent remedial measures exclusion.
(2) If any company, person, or entity performs or directs
the performance of an insurance compliance audit, an officer
or employee involved with the insurance compliance audit, or
any consultant who is hired for the purpose of performing the
insurance compliance audit, may not be examined in any civil,
criminal, or administrative proceeding as to the insurance
compliance audit or any insurance compliance self-evaluative
audit document, as defined in this Section. This subsection

HB4126 - 25 - LRB103 33572 RJT 63384 b
(b)(2) does not apply if the privilege set forth in subsection
(b)(1) of this Section is determined under subsection (c) or
(d) not to apply.
(3) A company may voluntarily submit, in connection with
examinations conducted under this Article, an insurance
compliance self-evaluative audit document to the Director, or
his or her designee, as a confidential document under
subsection (i) of Section 132 or subsection (f) of Section
132.5 of this Code, as applicable, without waiving the
privilege set forth in this Section to which the company would
otherwise be entitled; provided, however, that the provisions
in Sections 132 and subsection (f) of Section 132.5 permitting
the Director to make confidential documents public pursuant to
subsection (e) of Section 132.5 and grant access to the
National Association of Insurance Commissioners shall not
apply to the insurance compliance self-evaluative audit
document so voluntarily submitted. Nothing contained in this
subsection shall give the Director any authority to compel a
company to disclose involuntarily or otherwise provide an
insurance compliance self-evaluative audit document.
(c)(1) The privilege set forth in subsection (b) of this
Section does not apply to the extent that it is expressly
waived by the company that prepared or caused to be prepared
the insurance compliance self-evaluative audit document.
(2) In a civil or administrative proceeding, a court of
record may, after an in camera review, require disclosure of

HB4126 - 26 - LRB103 33572 RJT 63384 b
material for which the privilege set forth in subsection (b)
of this Section is asserted, if the court determines one of the
following:
(A) the privilege is asserted for a fraudulent
purpose;
(B) the material is not subject to the privilege; or
(C) even if subject to the privilege, the material
shows evidence of noncompliance with State and federal
statutes, rules and orders and the company failed to
undertake reasonable corrective action or eliminate the
noncompliance within a reasonable time.
(3) In a criminal proceeding, a court of record may, after
an in camera review, require disclosure of material for which
the privilege described in subsection (b) of this Section is
asserted, if the court determines one of the following:
(A) the privilege is asserted for a fraudulent
purpose;
(B) the material is not subject to the privilege;
(C) even if subject to the privilege, the material
shows evidence of noncompliance with State and federal
statutes, rules and orders and the company failed to
undertake reasonable corrective action or eliminate such
noncompliance within a reasonable time; or
(D) the material contains evidence relevant to
commission of a criminal offense under this Code, and all
of the following factors are present:

HB4126 - 27 - LRB103 33572 RJT 63384 b
(i) the Director, State's Attorney, or Attorney
General has a compelling need for the information;
(ii) the information is not otherwise available;
and
(iii) the Director, State's Attorney, or Attorney
General is unable to obtain the substantial equivalent
of the information by any means without incurring
unreasonable cost and delay.
(d)(1) Within 30 days after the Director, State's
Attorney, or Attorney General makes a written request by
certified mail for disclosure of an insurance compliance
self-evaluative audit document under this subsection, the
company that prepared or caused the document to be prepared
may file with the appropriate court a petition requesting an
in camera hearing on whether the insurance compliance
self-evaluative audit document or portions of the document are
privileged under this Section or subject to disclosure. The
court has jurisdiction over a petition filed by a company
under this subsection requesting an in camera hearing on
whether the insurance compliance self-evaluative audit
document or portions of the document are privileged or subject
to disclosure. Failure by the company to file a petition
waives the privilege.
(2) A company asserting the insurance compliance
self-evaluative privilege in response to a request for
disclosure under this subsection shall include in its request

HB4126 - 28 - LRB103 33572 RJT 63384 b
for an in camera hearing all of the information set forth in
subsection (d)(5) of this Section.
(3) Upon the filing of a petition under this subsection,
the court shall issue an order scheduling, within 45 days
after the filing of the petition, an in camera hearing to
determine whether the insurance compliance self-evaluative
audit document or portions of the document are privileged
under this Section or subject to disclosure.
(4) The court, after an in camera review, may require
disclosure of material for which the privilege in subsection
(b) of this Section is asserted if the court determines, based
upon its in camera review, that any one of the conditions set
forth in subsection (c)(2)(A) through (C) is applicable as to
a civil or administrative proceeding or that any one of the
conditions set forth in subsection (c)(3)(A) through (D) is
applicable as to a criminal proceeding. Upon making such a
determination, the court may only compel the disclosure of
those portions of an insurance compliance self-evaluative
audit document relevant to issues in dispute in the underlying
proceeding. Any compelled disclosure will not be considered to
be a public document or be deemed to be a waiver of the
privilege for any other civil, criminal, or administrative
proceeding. A party unsuccessfully opposing disclosure may
apply to the court for an appropriate order protecting the
document from further disclosure.
(5) A company asserting the insurance compliance

HB4126 - 29 - LRB103 33572 RJT 63384 b
self-evaluative privilege in response to a request for
disclosure under this subsection (d) shall provide to the
Director, State's Attorney, or Attorney General, as the case
may be, at the time of filing any objection to the disclosure,
all of the following information:
(A) The date of the insurance compliance
self-evaluative audit document.
(B) The identity of the entity conducting the audit.
(C) The general nature of the activities covered by
the insurance compliance audit.
(D) An identification of the portions of the insurance
compliance self-evaluative audit document for which the
privilege is being asserted.
(e) (1) A company asserting the insurance compliance
self-evaluative privilege set forth in subsection (b) of this
Section has the burden of demonstrating the applicability of
the privilege. Once a company has established the
applicability of the privilege, a party seeking disclosure
under subsections (c)(2)(A) or (C) of this Section has the
burden of proving that the privilege is asserted for a
fraudulent purpose or that the company failed to undertake
reasonable corrective action or eliminate the noncompliance
with a reasonable time. The Director, State's Attorney, or
Attorney General seeking disclosure under subsection (c)(3) of
this Section has the burden of proving the elements set forth
in subsection (c)(3) of this Section.

HB4126 - 30 - LRB103 33572 RJT 63384 b
(2) The parties may at any time stipulate in proceedings
under subsections (c) or (d) of this Section to entry of an
order directing that specific information contained in an
insurance compliance self-evaluative audit document is or is
not subject to the privilege provided under subsection (b) of
this Section.
(f) The privilege set forth in subsection (b) of this
Section shall not extend to any of the following:
(1) documents, communications, data, reports, or other
information required to be collected, developed,
maintained, reported, or otherwise made available to a
regulatory agency pursuant to this Code, or other federal
or State law, rule, or order;
(2) information obtained by observation or monitoring
by any regulatory agency; or
(3) information obtained from a source independent of
the insurance compliance audit.
(g) As used in this Section:
(1) "Insurance compliance audit" means a voluntary,
internal evaluation, review, assessment, or audit not
otherwise expressly required by law of a company or an
activity regulated under this Code, or other State or
federal law applicable to a company, or of management
systems related to the company or activity, that is
designed to identify and prevent noncompliance and to
improve compliance with those statutes, rules, or orders.

HB4126 - 31 - LRB103 33572 RJT 63384 b
An insurance compliance audit may be conducted by the
company, its employees, or by independent contractors.
(2) "Insurance compliance self-evaluative audit
document" means documents prepared as a result of or in
connection with and not prior to an insurance compliance
audit. An insurance compliance self-evaluation audit
document may include a written response to the findings of
an insurance compliance audit. An insurance compliance
self-evaluative audit document may include, but is not
limited to, as applicable, field notes and records of
observations, findings, opinions, suggestions,
conclusions, drafts, memoranda, drawings, photographs,
computer-generated or electronically recorded
information, phone records, maps, charts, graphs, and
surveys, provided this supporting information is collected
or developed for the primary purpose and in the course of
an insurance compliance audit. An insurance compliance
self-evaluative audit document may also include any of the
following:
(A) an insurance compliance audit report prepared
by an auditor, who may be an employee of the company or
an independent contractor, which may include the scope
of the audit, the information gained in the audit, and
conclusions and recommendations, with exhibits and
appendices;
(B) memoranda and documents analyzing portions or

HB4126 - 32 - LRB103 33572 RJT 63384 b
all of the insurance compliance audit report and
discussing potential implementation issues;
(C) an implementation plan that addresses
correcting past noncompliance, improving current
compliance, and preventing future noncompliance; or
(D) analytic data generated in the course of
conducting the insurance compliance audit.
(3) "Company" has the same meaning as provided in
Section 2 of this Code.
(h) Nothing in this Section shall limit, waive, or
abrogate the scope or nature of any statutory or common law
privilege including, but not limited to, the work product
doctrine, the attorney-client privilege, or the subsequent
remedial measures exclusion.
(Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)
(215 ILCS 5/402) (from Ch. 73, par. 1014)
Sec. 402. Examinations, investigations and hearings. (1)
All examinations, investigations and hearings provided for by
this Code may be conducted either by the Director personally,
or by one or more of the actuaries, technical advisors,
deputies, supervisors or examiners employed or retained by the
Department and designated by the Director for such purpose.
When necessary to supplement its examination procedures, the
Department may retain independent actuaries deemed competent
by the Director, independent certified public accountants,

HB4126 - 33 - LRB103 33572 RJT 63384 b
attorneys, or qualified examiners of insurance companies
deemed competent by the Director, or any combination of the
foregoing, the cost of which shall be borne by the company or
person being examined. The Director may compensate independent
actuaries, certified public accountants and qualified
examiners retained for supplementing examination procedures in
amounts not to exceed the reasonable and customary charges for
such services. The Director may also accept as a part of the
Department's examination of any company or person (a) a report
by an independent actuary deemed competent by the Director or
(b) a report of an audit made by an independent certified
public accountant. Neither those persons so designated nor any
members of their immediate families shall be officers of,
connected with, or financially interested in any company other
than as policyholders, nor shall they be financially
interested in any other corporation or person affected by the
examination, investigation or hearing.
(2) All hearings provided for in this Code shall, unless
otherwise specially provided, be held at such time and place
as shall be designated in a notice which shall be given by the
Director in writing to the person or company whose interests
are affected, at least 10 days before the date designated
therein. The notice shall state the subject of inquiry and the
specific charges, if any. The hearings shall be held in the
City of Springfield, the City of Chicago, or in the county
where the principal business address of the person or company

HB4126 - 34 - LRB103 33572 RJT 63384 b
affected is located.
(Source: P.A. 87-757.)
(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,
$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:

HB4126 - 35 - LRB103 33572 RJT 63384 b
(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
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.

HB4126 - 36 - LRB103 33572 RJT 63384 b
(o) For issuing a certificate of authority or renewal
thereof except to a foreign fraternal benefit society,
$400.
(p) For issuing a certificate of authority or renewal
thereof to a foreign fraternal benefit society, $200.
(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.
(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.

HB4126 - 37 - LRB103 33572 RJT 63384 b
(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
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,

HB4126 - 38 - LRB103 33572 RJT 63384 b
$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 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

HB4126 - 39 - LRB103 33572 RJT 63384 b
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) Fees charged for a policy filed as it will be
issued regardless of the number of forms comprising
that policy shall not exceed $1,500. For advisory or
rating organizations, fees charged for a policy filed
as it will be issued regardless of the number of forms
comprising that policy shall not exceed $2,500.
(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.
(mm) For a network adequacy filing required under the
Network Adequacy and Transparency Act, $500, except that
the fee for a filing required based on a material change is
$100.
(2) When printed copies or numerous copies of the same
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

HB4126 - 40 - LRB103 33572 RJT 63384 b
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 Producer Administration Fund,
however, the 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 Technology Management Revolving Fund.
(4) At the time of any service of process on the Director

HB4126 - 41 - LRB103 33572 RJT 63384 b
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
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

HB4126 - 42 - LRB103 33572 RJT 63384 b
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 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:

HB4126 - 43 - LRB103 33572 RJT 63384 b
(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.
(i) $150, if admitted assets are less than
$1,000,000;
(ii) $750, if admitted assets are $1,000,000 or

HB4126 - 44 - LRB103 33572 RJT 63384 b
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
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.

HB4126 - 45 - LRB103 33572 RJT 63384 b
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
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

HB4126 - 46 - LRB103 33572 RJT 63384 b
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 Technology Management Revolving Fund. Except
for direct reimbursements authorized by the Director or direct
payments made under Section 131.21 or subsection (d) of
Section 132.4 of this Code, all financial regulation fees and

HB4126 - 47 - LRB103 33572 RJT 63384 b
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.
(11) Unless otherwise specified, all of the fees collected
under this Section shall be paid into the Insurance Financial

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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 business in this State under the provisions of Article

HB4126 - 49 - LRB103 33572 RJT 63384 b
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. 100-23, eff. 7-6-17.)
(215 ILCS 5/511.109) (from Ch. 73, par. 1065.58-109)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.109. Examination.
(a) The Director or the Director's his designee may
examine any applicant for or holder of an administrator's
license in accordance with Sections 132 through 132.7 of this
Code. If the Director or the examiners find that the
administrator has violated this Article or any other
insurance-related laws or rules under the Director's
jurisdiction because of the manner in which the administrator
has conducted business on behalf of an insurer or plan
sponsor, then, unless the insurer or plan sponsor is included
in the examination and has been afforded the same opportunity
to request or participate in a hearing on the examination
report, the examination report shall not allege a violation by

HB4126 - 50 - LRB103 33572 RJT 63384 b
the insurer or plan sponsor and the Director's order based on
the report shall not impose any requirements, prohibitions, or
penalties on the insurer or plan sponsor. Nothing in this
Section shall prevent the Director from using any information
obtained during the examination of an administrator to
examine, investigate, or take other appropriate regulatory or
legal action with respect to an insurer or plan sponsor.
(b) (Blank). Any administrator being examined shall
provide to the Director or his designee convenient and free
access, at all reasonable hours at their offices, to all
books, records, documents and other papers relating to such
administrator's business affairs.
(c) (Blank). The Director or his designee may administer
oaths and thereafter examine any individual about the business
of the administrator.
(d) (Blank). The examiners designated by the Director
pursuant to this Section may make reports to the Director. Any
report alleging substantive violations of this Article, any
applicable provisions of the Illinois Insurance Code, or any
applicable Part of Title 50 of the Illinois Administrative
Code shall be in writing and be based upon facts obtained by
the examiners. The report shall be verified by the examiners.
(e) (Blank). If a report is made, the Director shall
either deliver a duplicate thereof to the administrator being
examined or send such duplicate by certified or registered
mail to the administrator's address specified in the records

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of the Department. The Director shall afford the administrator
an opportunity to request a hearing to object to the report.
The administrator may request a hearing within 30 days after
receipt of the duplicate of the examination report by giving
the Director written notice of such request together with
written objections to the report. Any hearing shall be
conducted in accordance with Sections 402 and 403 of this
Code. The right to hearing is waived if the delivery of the
report is refused or the report is otherwise undeliverable or
the administrator does not timely request a hearing. After the
hearing or upon expiration of the time period during which an
administrator may request a hearing, if the examination
reveals that the administrator is operating in violation of
any applicable provision of the Illinois Insurance Code, any
applicable Part of Title 50 of the Illinois Administrative
Code or prior order, the Director, in the written order, may
require the administrator to take any action the Director
considers necessary or appropriate in accordance with the
report or examination hearing. If the Director issues an
order, it shall be issued within 90 days after the report is
filed, or if there is a hearing, within 90 days after the
conclusion of the hearing. The order is subject to review
under the Administrative Review Law.
(Source: P.A. 84-887.)
(215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)

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Sec. 512-3. Definitions. For the purposes of this Article,
unless the context otherwise requires, the terms defined in
this Article have the meanings ascribed to them herein:
(a) "Third party prescription program" or "program" means
any system of providing for the reimbursement of
pharmaceutical services and prescription drug products offered
or operated in this State under a contractual arrangement or
agreement between a provider of such services and another
party who is not the consumer of those services and products.
Such programs may include, but need not be limited to,
employee benefit plans whereby a consumer receives
prescription drugs or other pharmaceutical services and those
services are paid for by an agent of the employer or others.
(b) "Third party program administrator" or "administrator"
means any person, partnership or corporation who issues or
causes to be issued any payment or reimbursement to a provider
for services rendered pursuant to a third party prescription
program, but does not include the Director of Healthcare and
Family Services or any agent authorized by the Director to
reimburse a provider of services rendered pursuant to a
program of which the Department of Healthcare and Family
Services is the third party.
(c) "Health care payer" means an insurance company, health
maintenance organization, limited health service organization,
health services plan corporation, or dental service plan
corporation authorized to do business in this State.

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(Source: P.A. 95-331, eff. 8-21-07.)
(215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
Sec. 512-5. Fiduciary and Bonding Requirements. A third
party prescription program administrator shall (1) establish
and maintain a fiduciary account, separate and apart from any
and all other accounts, for the receipt and disbursement of
funds for reimbursement of providers of services under the
program, or (2) post, or cause to be posted, a bond of
indemnity in an amount equal to not less than 10% of the total
estimated annual reimbursements under the program.
The establishment of such fiduciary accounts and bonds
shall be consistent with applicable State law. If a bond of
indemnity is posted, it shall be held by the Director of
Insurance for the benefit and indemnification of the providers
of services under the third party prescription program.
An administrator who operates more than one third party
prescription program may establish and maintain a separate
fiduciary account or bond of indemnity for each such program,
or may operate and maintain a consolidated fiduciary account
or bond of indemnity for all such programs.
The requirements of this Section do not apply to any third
party prescription program administered by or on behalf of any
health care payer insurance company, Health Care Service Plan
Corporation or Pharmaceutical Service Plan Corporation
authorized to do business in the State of Illinois.

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(Source: P.A. 82-1005.)
(215 ILCS 5/512-11 new)
Sec. 512-11. Examination. The Director or the Director's
designee may examine any applicant for or holder of an
administrator's registration in accordance with Sections 132
through 132.7 of this Code. If the Director or the examiners
find that the administrator has violated this Article or any
other insurance-related laws or rules under the Director's
jurisdiction because of the manner in which the administrator
has conducted business on behalf of a separately incorporated
health care payer, then, unless the health care payer is
included in the examination and has been afforded the same
opportunity to request or participate in a hearing on the
examination report, the examination report shall not allege a
violation by the health care payer and the Director's order
based on the report shall not impose any requirements,
prohibitions, or penalties on the health care payer. Nothing
in this Section shall prevent the Director from using any
information obtained during the examination of an
administrator to examine, investigate, or take other
appropriate regulatory or legal action with respect to a
health care payer.
(215 ILCS 5/513b3)
Sec. 513b3. Examination.

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(a) The Director, or the Director's his or her designee,
may examine a registered pharmacy benefit manager in
accordance with Sections 132 through 132.7 of this Code. If
the Director or the examiners find that the pharmacy benefit
manager has violated this Article or any other
insurance-related laws or rules under the Director's
jurisdiction because of the manner in which the pharmacy
benefit manager has conducted business on behalf of a health
insurer or plan sponsor, then, unless the health insurer or
plan sponsor is included in the examination and has been
afforded the same opportunity to request or participate in a
hearing on the examination report, the examination report
shall not allege a violation by the health insurer or plan
sponsor and the Director's order based on the report shall not
impose any requirements, prohibitions, or penalties on the
health insurer or plan sponsor. Nothing in this Section shall
prevent the Director from using any information obtained
during the examination of an administrator to examine,
investigate, or take other appropriate regulatory or legal
action with respect to a health insurer or plan sponsor.
(b) (Blank). Any pharmacy benefit manager being examined
shall provide to the Director, or his or her designee,
convenient and free access to all books, records, documents,
and other papers relating to such pharmacy benefit manager's
business affairs at all reasonable hours at its offices.
(c) (Blank). The Director, or his or her designee, may

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administer oaths and thereafter examine the pharmacy benefit
manager's designee, representative, or any officer or senior
manager as listed on the license or registration certificate
about the business of the pharmacy benefit manager.
(d) (Blank). The examiners designated by the Director
under this Section may make reports to the Director. Any
report alleging substantive violations of this Article, any
applicable provisions of this Code, or any applicable Part of
Title 50 of the Illinois Administrative Code shall be in
writing and be based upon facts obtained by the examiners. The
report shall be verified by the examiners.
(e) (Blank). If a report is made, the Director shall
either deliver a duplicate report to the pharmacy benefit
manager being examined or send such duplicate by certified or
registered mail to the pharmacy benefit manager's address
specified in the records of the Department. The Director shall
afford the pharmacy benefit manager an opportunity to request
a hearing to object to the report. The pharmacy benefit
manager may request a hearing within 30 days after receipt of
the duplicate report by giving the Director written notice of
such request together with written objections to the report.
Any hearing shall be conducted in accordance with Sections 402
and 403 of this Code. The right to a hearing is waived if the
delivery of the report is refused or the report is otherwise
undeliverable or the pharmacy benefit manager does not timely
request a hearing. After the hearing or upon expiration of the

HB4126 - 57 - LRB103 33572 RJT 63384 b
time period during which a pharmacy benefit manager may
request a hearing, if the examination reveals that the
pharmacy benefit manager is operating in violation of any
applicable provision of this Code, any applicable Part of
Title 50 of the Illinois Administrative Code, a provision of
this Article, or prior order, the Director, in the written
order, may require the pharmacy benefit manager to take any
action the Director considers necessary or appropriate in
accordance with the report or examination hearing. If the
Director issues an order, it shall be issued within 90 days
after the report is filed, or if there is a hearing, within 90
days after the conclusion of the hearing. The order is subject
to review under the Administrative Review Law.
(Source: P.A. 101-452, eff. 1-1-20.)
Section 15. The Network Adequacy and Transparency Act is
amended by changing Sections 3, 5, 10, 15, 20, 25, and 30 and
by adding Sections 35 and 40 as follows:
(215 ILCS 124/3)
Sec. 3. Applicability of Act. This Act applies to an
individual or group policy of accident and health insurance
coverage with a network plan amended, delivered, issued, or
renewed in this State on or after January 1, 2019. This Act
does not apply to an individual or group policy for excepted
benefits or short-term, limited-duration health insurance

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coverage dental or vision insurance or a limited health
service organization with a network plan amended, delivered,
issued, or renewed in this State on or after January 1, 2019,
except to the extent that federal law establishes network
adequacy and transparency standards for stand-alone dental
plans, which the Department shall enforce.
(Source: P.A. 100-502, eff. 9-15-17; 100-601, eff. 6-29-18.)
(215 ILCS 124/5)
Sec. 5. Definitions. In this Act:
"Authorized representative" means a person to whom a
beneficiary has given express written consent to represent the
beneficiary; a person authorized by law to provide substituted
consent for a beneficiary; or the beneficiary's treating
provider only when the beneficiary or his or her family member
is unable to provide consent.
"Beneficiary" means an individual, an enrollee, an
insured, a participant, or any other person entitled to
reimbursement for covered expenses of or the discounting of
provider fees for health care services under a program in
which the beneficiary has an incentive to utilize the services
of a provider that has entered into an agreement or
arrangement with an issuer insurer.
"Department" means the Department of Insurance.
"Essential community provider" has the meaning ascribed to
that term in 45 CFR 156.235.

HB4126 - 59 - LRB103 33572 RJT 63384 b
"Excepted benefits" has the meaning ascribed to that term
in 42 U.S.C. 300gg-91(c).
"Director" means the Director of Insurance.
"Family caregiver" means a relative, partner, friend, or
neighbor who has a significant relationship with the patient
and administers or assists the patient with activities of
daily living, instrumental activities of daily living, or
other medical or nursing tasks for the quality and welfare of
that patient.
"Group health plan" has the meaning ascribed to that term
in Section 5 of the Illinois Health Insurance Portability and
Accountability Act.
"Health insurance coverage" has the meaning ascribed to
that term in Section 5 of the Illinois Health Insurance
Portability and Accountability Act. "Health insurance
coverage" does not include any coverage or benefits under
Medicare or under the medical assistance program established
under Article V of the Illinois Public Aid Code.
"Issuer" means a "health insurance issuer" as defined in
Section 5 of the Illinois Health Insurance Portability and
Accountability Act.
"Insurer" means any entity that offers individual or group
accident and health insurance, including, but not limited to,
health maintenance organizations, preferred provider
organizations, exclusive provider organizations, and other
plan structures requiring network participation, excluding the

HB4126 - 60 - LRB103 33572 RJT 63384 b
medical assistance program under the Illinois Public Aid Code,
the State employees group health insurance program, workers
compensation insurance, and pharmacy benefit managers.
"Material change" means a significant reduction in the
number of providers available in a network plan, including,
but not limited to, a reduction of 10% or more in a specific
type of providers within any county, the removal of a major
health system that causes a network to be significantly
different within any county from the network when the
beneficiary purchased the network plan, or any change that
would cause the network to no longer satisfy the requirements
of this Act or the Department's rules for network adequacy and
transparency.
"Network" means the group or groups of preferred providers
providing services to a network plan.
"Network plan" means an individual or group policy of
accident and health insurance coverage that either requires a
covered person to use or creates incentives, including
financial incentives, for a covered person to use providers
managed, owned, under contract with, or employed by the issuer
or by a third party contracted to arrange, contract for, or
administer such provider-related incentives for the issuer
insurer.
"Ongoing course of treatment" means (1) treatment for a
life-threatening condition, which is a disease or condition
for which likelihood of death is probable unless the course of

HB4126 - 61 - LRB103 33572 RJT 63384 b
the disease or condition is interrupted; (2) treatment for a
serious acute condition, defined as a disease or condition
requiring complex ongoing care that the covered person is
currently receiving, such as chemotherapy, radiation therapy,
or post-operative visits, or a serious and complex condition
as defined under 42 U.S.C. 300gg-113(b)(2); (3) a course of
treatment for a health condition that a treating provider
attests that discontinuing care by that provider would worsen
the condition or interfere with anticipated outcomes; or (4)
the third trimester of pregnancy through the post-partum
period ; (5) undergoing a course of institutional or inpatient
care from the provider within the meaning of 42 U.S.C.
300gg-113(b)(1)(B); (6) being scheduled to undergo nonelective
surgery from the provider, including receipt of postoperative
care from such provider with respect to such a surgery; or (7)
being determined to be terminally ill, as determined under 42
U.S.C. 1395x(dd)(3)(A), and receiving treatment for such
illness from such provider.
"Preferred provider" means any provider who has entered,
either directly or indirectly, into an agreement with an
employer or risk-bearing entity relating to health care
services that may be rendered to beneficiaries under a network
plan.
"Providers" means physicians licensed to practice medicine
in all its branches, other health care professionals,
hospitals, or other health care institutions or facilities

HB4126 - 62 - LRB103 33572 RJT 63384 b
that provide health care services.
"Short-term, limited-duration health insurance coverage"
has the meaning ascribed to that term in Section 5 of the
Short-Term, Limited-Duration Health Insurance Coverage Act.
"Stand-alone dental plan" has the meaning ascribed to that
term in 45 CFR 156.400.
"Telehealth" has the meaning given to that term in Section
356z.22 of the Illinois Insurance Code.
"Telemedicine" has the meaning given to that term in
Section 49.5 of the Medical Practice Act of 1987.
"Tiered network" means a network that identifies and
groups some or all types of provider and facilities into
specific groups to which different provider reimbursement,
covered person cost-sharing or provider access requirements,
or any combination thereof, apply for the same services.
"Woman's principal health care provider" means a physician
licensed to practice medicine in all of its branches
specializing in obstetrics, gynecology, or family practice.
(Source: P.A. 102-92, eff. 7-9-21; 102-813, eff. 5-13-22.)
(215 ILCS 124/10)
Sec. 10. Network adequacy.
(a) Before issuing, delivering, or renewing a network
plan, an issuer An insurer providing a network plan shall file
a description of all of the following with the Director:
(1) The written policies and procedures for adding

HB4126 - 63 - LRB103 33572 RJT 63384 b
providers to meet patient needs based on increases in the
number of beneficiaries, changes in the
patient-to-provider ratio, changes in medical and health
care capabilities, and increased demand for services.
(2) The written policies and procedures for making
referrals within and outside the network.
(3) The written policies and procedures on how the
network plan will provide 24-hour, 7-day per week access
to network-affiliated primary care, emergency services,
and women's principal health care providers.
An issuer insurer shall not prohibit a preferred provider
from discussing any specific or all treatment options with
beneficiaries irrespective of the insurer's position on those
treatment options or from advocating on behalf of
beneficiaries within the utilization review, grievance, or
appeals processes established by the issuer insurer in
accordance with any rights or remedies available under
applicable State or federal law.
(b) Before issuing, delivering, or renewing a network
plan, an issuer Insurers must file for review a description of
the services to be offered through a network plan. The
description shall include all of the following:
(1) A geographic map of the area proposed to be served
by the plan by county service area and zip code, including
marked locations for preferred providers.
(2) As deemed necessary by the Department, the names,

HB4126 - 64 - LRB103 33572 RJT 63384 b
addresses, phone numbers, and specialties of the providers
who have entered into preferred provider agreements under
the network plan.
(3) The number of beneficiaries anticipated to be
covered by the network plan.
(4) An Internet website and toll-free telephone number
for beneficiaries and prospective beneficiaries to access
current and accurate lists of preferred providers,
additional information about the plan, as well as any
other information required by Department rule.
(5) A description of how health care services to be
rendered under the network plan are reasonably accessible
and available to beneficiaries. The description shall
address all of the following:
(A) the type of health care services to be
provided by the network plan;
(B) the ratio of physicians and other providers to
beneficiaries, by specialty and including primary care
physicians and facility-based physicians when
applicable under the contract, necessary to meet the
health care needs and service demands of the currently
enrolled population;
(C) the travel and distance standards for plan
beneficiaries in county service areas; and
(D) a description of how the use of telemedicine,
telehealth, or mobile care services may be used to

HB4126 - 65 - LRB103 33572 RJT 63384 b
partially meet the network adequacy standards, if
applicable.
(6) A provision ensuring that whenever a beneficiary
has made a good faith effort, as evidenced by accessing
the provider directory, calling the network plan, and
calling the provider, to utilize preferred providers for a
covered service and it is determined the insurer does not
have the appropriate preferred providers due to
insufficient number, type, unreasonable travel distance or
delay, or preferred providers refusing to provide a
covered service because it is contrary to the conscience
of the preferred providers, as protected by the Health
Care Right of Conscience Act, the issuer insurer shall
ensure, directly or indirectly, by terms contained in the
payer contract, that the beneficiary will be provided the
covered service at no greater cost to the beneficiary than
if the service had been provided by a preferred provider.
This paragraph (6) does not apply to: (A) a beneficiary
who willfully chooses to access a non-preferred provider
for health care services available through the panel of
preferred providers, or (B) a beneficiary enrolled in a
health maintenance organization. In these circumstances,
the contractual requirements for non-preferred provider
reimbursements shall apply unless Section 356z.3a of the
Illinois Insurance Code requires otherwise. In no event
shall a beneficiary who receives care at a participating

HB4126 - 66 - LRB103 33572 RJT 63384 b
health care facility be required to search for
participating providers under the circumstances described
in subsection (b) or (b-5) of Section 356z.3a of the
Illinois Insurance Code except under the circumstances
described in paragraph (2) of subsection (b-5).
(7) A provision that the beneficiary shall receive
emergency care coverage such that payment for this
coverage is not dependent upon whether the emergency
services are performed by a preferred or non-preferred
provider and the coverage shall be at the same benefit
level as if the service or treatment had been rendered by a
preferred provider. For purposes of this paragraph (7),
"the same benefit level" means that the beneficiary is
provided the covered service at no greater cost to the
beneficiary than if the service had been provided by a
preferred provider. This provision shall be consistent
with Section 356z.3a of the Illinois Insurance Code.
(8) A limitation that, if the plan provides that the
beneficiary will incur a penalty for failing to
pre-certify inpatient hospital treatment, the penalty may
not exceed $1,000 per occurrence in addition to the plan
cost sharing provisions.
(9) For a network plan in the individual or small group
market other than a grandfathered health plan, evidence that
the network plan:
(A) contracts with at least 35% of the essential

HB4126 - 67 - LRB103 33572 RJT 63384 b
community providers in the service area of the network
plan that are available to participate in the provider
network of the network plan, as calculated using the
methodology contained in the most recent Letter to Issuers
in the Federally-facilitated Marketplaces issued by the
federal Centers for Medicare and Medicaid Services. The
Director may specify a different percentage by rule.
(B) offers contracts in good faith to all available
Indian health care providers in the service area of the
network plan, including, without limitation, the Indian
Health Service, Indian tribes, tribal organizations, and
urban Indian organizations, as defined in 25 U.S.C. 1603,
which apply the special terms and conditions necessitated
by federal statutes and regulations as referenced in the
Model Qualified Health Plan Addendum for Indian Health
Care Providers issued by the federal Centers for Medicare
and Medicaid Services.
(C) offers contracts in good faith to at least one
essential community provider in each category of essential
community provider, as contained in the most recent Letter
to Issuers in the Federally-facilitated Marketplaces, in
each county in the service area of the network plan, where
an essential community provider in that category is
available and provides medical or dental services that are
covered by the network plan. To offer a contract in good
faith, a network plan must offer contract terms comparable

HB4126 - 68 - LRB103 33572 RJT 63384 b
to the terms that an issuer would offer to a similarly
situated provider that is not an essential community
provider, except for terms that would not be applicable to
an essential community provider, including, without
limitation, because of the type of services that an
essential community provider provides. A network plan must
be able to provide verification of such offers if the
Centers for Medicare and Medicaid Services of the United
States Department of Health and Human Services requests to
verify compliance with this policy.
(c) The issuer network plan shall demonstrate to the
Director a minimum ratio of providers to plan beneficiaries as
required by the Department for each network plan.
(1) The minimum ratio of physicians or other providers
to plan beneficiaries shall be established annually by the
Department in consultation with the Department of Public
Health based upon the guidance from the federal Centers
for Medicare and Medicaid Services. The Department shall
not establish ratios for vision or dental providers who
provide services under dental-specific or vision-specific
benefits, except to the extent provided under federal law
for stand-alone dental plans. The Department shall
consider establishing ratios for the following physicians
or other providers:
(A) Primary Care;
(B) Pediatrics;

HB4126 - 69 - LRB103 33572 RJT 63384 b
(C) Cardiology;
(D) Gastroenterology;
(E) General Surgery;
(F) Neurology;
(G) OB/GYN;
(H) Oncology/Radiation;
(I) Ophthalmology;
(J) Urology;
(K) Behavioral Health;
(L) Allergy/Immunology;
(M) Chiropractic;
(N) Dermatology;
(O) Endocrinology;
(P) Ears, Nose, and Throat (ENT)/Otolaryngology;
(Q) Infectious Disease;
(R) Nephrology;
(S) Neurosurgery;
(T) Orthopedic Surgery;
(U) Physiatry/Rehabilitative;
(V) Plastic Surgery;
(W) Pulmonary;
(X) Rheumatology;
(Y) Anesthesiology;
(Z) Pain Medicine;
(AA) Pediatric Specialty Services;
(BB) Outpatient Dialysis; and

HB4126 - 70 - LRB103 33572 RJT 63384 b
(CC) HIV.
(2) The Director shall establish a process for the
review of the adequacy of these standards, along with an
assessment of additional specialties to be included in the
list under this subsection (c).
(3) Notwithstanding any other law or rule, the minimum
ratio for each provider type shall be no less than any such
ratio established for qualified health plans in
Federally-Facilitated Exchanges by federal law or by the
federal Centers for Medicare and Medicaid Services, even
if the network plan is issued in the large group market or
is otherwise not issued through an exchange. Federal
standards for stand-alone dental plans shall only apply to
such network plans. In the absence of an applicable
Department rule, the federal standards shall apply for the
time period specified in the federal law, regulation, or
guidance. If the Centers for Medicare and Medicaid
Services establish standards that are more stringent than
the standards in effect under any Department rule, the
Department may amend its rules to conform to the more
stringent federal standards.
(4) Prior to the enactment of an applicable Department
rule or the promulgation of federal standards for
qualified health plans or stand-alone dental plans, the
minimum ratios for any network plan issued, delivered,
amended, or renewed during 2024 shall be the following,

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expressed in terms of providers to beneficiaries for
health care professionals and in terms of providers per
county for facilities:
(A) primary care physician, general practice,
family practice, internal medicine, pediatrician,
primary care physician assistant, or primary care
nurse practitioner - 1:500;
(B) allergy/immunology - 1:15,000;
(C) cardiology - 1:10,000;
(D) chiropractic - 1:10,000;
(E) dermatology - 1:10,000;
(F) endocrinology - 1:10,000;
(G) ENT/otolaryngology - 1:15,000;
(H) gastroenterology - 1:10,000;
(I) general surgery - 1:5,000;
(J) gynecology or OB/GYN - 1:2,500;
(K) infectious diseases - 1:15,000;
(L) nephrology - 1:10,000;
(M) neurology - 1:20,000;
(N) oncology/radiation - 1:15,000;
(O) ophthalmology - 1:10,000;
(P) orthopedic surgery - 1:10,000;
(Q) physiatry/rehabilitative medicine - 1:15,000;
(R) plastic surgery - 1:20,000;
(S) behavioral health - 1:5,000;
(T) pulmonology - 1:10,000;

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(U) rheumatology - 1:10,000;
(V) urology - 1:10,000;
(W) acute inpatient hospital with emergency
services available 24 hours a day, 7 days a week - one
per county; and
(X) inpatient or residential behavioral health
facility - one per county.
(d) The network plan shall demonstrate to the Director
maximum travel and distance standards and appointment wait
time standards for plan beneficiaries, which shall be
established annually by the Department in consultation with
the Department of Public Health based upon the guidance from
the federal Centers for Medicare and Medicaid Services. These
standards shall consist of the maximum minutes or miles to be
traveled by a plan beneficiary for each county type, such as
large counties, metro counties, or rural counties as defined
by Department rule.
The maximum travel time and distance standards must
include standards for each physician and other provider
category listed for which ratios have been established.
The Director shall establish a process for the review of
the adequacy of these standards along with an assessment of
additional specialties to be included in the list under this
subsection (d).
Notwithstanding any other law or Department rule, the
maximum travel and distance standards and appointment wait

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time standards shall be no greater than any such standards
established for qualified health plans in
Federally-Facilitated Exchanges by federal law or by the
federal Centers for Medicare and Medicaid Services, even if
the network plan is issued in the large group market or is
otherwise not issued through an exchange. Federal standards
for stand-alone dental plans shall only apply to such network
plans. In the absence of an applicable Department rule, the
federal standards shall apply for the time period specified in
the federal law, regulation, or guidance. If the Centers for
Medicare and Medicaid Services establish standards that are
more stringent than the standards in effect under any
Department rule, the Department may amend its rules to conform
to the more stringent federal standards.
If the federal area designations for the maximum time or
distance or appointment wait time standards required are
changed by the most recent Letter to Issuers in the
Federally-facilitated Marketplaces, the Department shall post
on its website notice of such changes and may amend its rules
to conform to those designations if the Director deems
appropriate.
(d-5)(1) Every issuer insurer shall ensure that
beneficiaries have timely and proximate access to treatment
for mental, emotional, nervous, or substance use disorders or
conditions in accordance with the provisions of paragraph (4)
of subsection (a) of Section 370c of the Illinois Insurance

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Code. Issuers Insurers shall use a comparable process,
strategy, evidentiary standard, and other factors in the
development and application of the network adequacy standards
for timely and proximate access to treatment for mental,
emotional, nervous, or substance use disorders or conditions
and those for the access to treatment for medical and surgical
conditions. As such, the network adequacy standards for timely
and proximate access shall equally be applied to treatment
facilities and providers for mental, emotional, nervous, or
substance use disorders or conditions and specialists
providing medical or surgical benefits pursuant to the parity
requirements of Section 370c.1 of the Illinois Insurance Code
and the federal Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008. Notwithstanding the
foregoing, the network adequacy standards for timely and
proximate access to treatment for mental, emotional, nervous,
or substance use disorders or conditions shall, at a minimum,
satisfy the following requirements:
(A) For beneficiaries residing in the metropolitan
counties of Cook, DuPage, Kane, Lake, McHenry, and Will,
network adequacy standards for timely and proximate access
to treatment for mental, emotional, nervous, or substance
use disorders or conditions means a beneficiary shall not
have to travel longer than 30 minutes or 30 miles from the
beneficiary's residence to receive outpatient treatment
for mental, emotional, nervous, or substance use disorders

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or conditions. Beneficiaries shall not be required to wait
longer than 10 business days between requesting an initial
appointment and being seen by the facility or provider of
mental, emotional, nervous, or substance use disorders or
conditions for outpatient treatment or to wait longer than
20 business days between requesting a repeat or follow-up
appointment and being seen by the facility or provider of
mental, emotional, nervous, or substance use disorders or
conditions for outpatient treatment; however, subject to
the protections of paragraph (3) of this subsection, a
network plan shall not be held responsible if the
beneficiary or provider voluntarily chooses to schedule an
appointment outside of these required time frames.
(B) For beneficiaries residing in Illinois counties
other than those counties listed in subparagraph (A) of
this paragraph, network adequacy standards for timely and
proximate access to treatment for mental, emotional,
nervous, or substance use disorders or conditions means a
beneficiary shall not have to travel longer than 60
minutes or 60 miles from the beneficiary's residence to
receive outpatient treatment for mental, emotional,
nervous, or substance use disorders or conditions.
Beneficiaries shall not be required to wait longer than 10
business days between requesting an initial appointment
and being seen by the facility or provider of mental,
emotional, nervous, or substance use disorders or

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conditions for outpatient treatment or to wait longer than
20 business days between requesting a repeat or follow-up
appointment and being seen by the facility or provider of
mental, emotional, nervous, or substance use disorders or
conditions for outpatient treatment; however, subject to
the protections of paragraph (3) of this subsection, a
network plan shall not be held responsible if the
beneficiary or provider voluntarily chooses to schedule an
appointment outside of these required time frames.
(2) For beneficiaries residing in all Illinois counties,
network adequacy standards for timely and proximate access to
treatment for mental, emotional, nervous, or substance use
disorders or conditions means a beneficiary shall not have to
travel longer than 60 minutes or 60 miles from the
beneficiary's residence to receive inpatient or residential
treatment for mental, emotional, nervous, or substance use
disorders or conditions.
(3) If there is no in-network facility or provider
available for a beneficiary to receive timely and proximate
access to treatment for mental, emotional, nervous, or
substance use disorders or conditions in accordance with the
network adequacy standards outlined in this subsection, the
issuer insurer shall provide necessary exceptions to its
network to ensure admission and treatment with a provider or
at a treatment facility in accordance with the network
adequacy standards in this subsection.

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(4) If the federal Centers for Medicare and Medicaid
Services establish or law requires more stringent standards
for qualified health plans in the Federally-Facilitated
Exchanges, the federal standards shall control for the time
period specified in the federal law, regulation, or guidance,
even if the network plan is issued in the large group market or
is otherwise not issued through an exchange.
(e) Except for network plans solely offered as a group
health plan, these ratio and time and distance standards apply
to the lowest cost-sharing tier of any tiered network.
(f) The network plan may consider use of other health care
service delivery options, such as telemedicine or telehealth,
mobile clinics, and centers of excellence, or other ways of
delivering care to partially meet the requirements set under
this Section.
(g) Except for the requirements set forth in subsection
(d-5), issuers insurers who are not able to comply with the
provider ratios and time and distance or appointment wait time
standards established under this Act by the Department may
request an exception to these requirements from the
Department. The Department may grant an exception in the
following circumstances:
(1) if no providers or facilities meet the specific
time and distance standard in a specific service area and
the issuer insurer (i) discloses information on the
distance and travel time points that beneficiaries would

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have to travel beyond the required criterion to reach the
next closest contracted provider outside of the service
area and (ii) provides contact information, including
names, addresses, and phone numbers for the next closest
contracted provider or facility;
(2) if patterns of care in the service area do not
support the need for the requested number of provider or
facility type and the issuer insurer provides data on
local patterns of care, such as claims data, referral
patterns, or local provider interviews, indicating where
the beneficiaries currently seek this type of care or
where the physicians currently refer beneficiaries, or
both; or
(3) other circumstances deemed appropriate by the
Department consistent with the requirements of this Act.
(h) Issuers Insurers are required to report to the
Director any material change to an approved network plan
within 15 days after the change occurs and any change that
would result in failure to meet the requirements of this Act.
The issuer shall submit a revised version of the complete
network adequacy filing based on the material change, and the
issuer shall attach versions with the changes indicated for
each document that was revised from the previous version of
the filing. Upon notice from the issuer insurer, the Director
shall reevaluate the network plan's compliance with the
network adequacy and transparency standards of this Act. For

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every day past 15 days that the issuer fails to submit a
revised network adequacy filing to the Director, the Director
shall order a fine of $1,000 per day.
(i) If a network plan is inadequate under this Act with
respect to a provider type in a county, and if the network plan
does not have an approved exception for that provider type in
that county pursuant to subsection (g), an issuer shall
process out-of-network claims for covered health care services
received from that provider type within that county at the
in-network benefit level and shall retroactively adjudicate
and reimburse beneficiaries to achieve that objective if their
claims were processed at the out-of-network level contrary to
this subsection.
(j) If the Director determines that a network is
inadequate in any county and no exception has been granted
under subsection (g) and the issuer does not have a process in
place to comply with subsection (d-5), the Director may
prohibit the network plan from being issued or renewed within
that county until the Director determines that the network is
adequate apart from processes and exceptions described in
subsections (d-5) and (g). Nothing in this subsection shall be
construed to terminate any beneficiary's health insurance
coverage under a network plan before the expiration of the
beneficiary's policy period if the Director makes a
determination under this subsection after the issuance or
renewal of the beneficiary's policy or certificate because of

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a material change. Policies or certificates issued or renewed
in violation of this subsection shall subject the issuer to a
civil penalty of $1,000 per policy.
(Source: P.A. 102-144, eff. 1-1-22; 102-901, eff. 7-1-22;
102-1117, eff. 1-13-23.)
(215 ILCS 124/15)
Sec. 15. Notice of nonrenewal or termination.
(a) A network plan must give at least 60 days' notice of
nonrenewal or termination of a provider to the provider and to
the beneficiaries served by the provider. The notice shall
include a name and address to which a beneficiary or provider
may direct comments and concerns regarding the nonrenewal or
termination and the telephone number maintained by the
Department for consumer complaints. Immediate written notice
may be provided without 60 days' notice when a provider's
license has been disciplined by a State licensing board or
when the network plan reasonably believes direct imminent
physical harm to patients under the provider's providers care
may occur. The notice to the beneficiary shall provide the
individual with an opportunity to notify the issuer of the
individual's need for transitional care.
(b) Primary care providers must notify active affected
patients of nonrenewal or termination of the provider from the
network plan, except in the case of incapacitation.
(Source: P.A. 100-502, eff. 9-15-17.)

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(215 ILCS 124/20)
Sec. 20. Transition of services.
(a) A network plan shall provide for continuity of care
for its beneficiaries as follows:
(1) If a beneficiary's physician or hospital provider
leaves the network plan's network of providers for reasons
other than termination of a contract in situations
involving imminent harm to a patient or a final
disciplinary action by a State licensing board and the
provider remains within the network plan's service area,
if benefits provided under such network plan with respect
to such provider or facility are terminated because of a
change in the terms of the participation of such provider
or facility in such plan, or if a contract between a group
health plan and a health insurance issuer offering a
network plan in connection with the group health plan is
terminated and results in a loss of benefits provided
under such plan with respect to such provider, then the
network plan shall permit the beneficiary to continue an
ongoing course of treatment with that provider during a
transitional period for the following duration:
(A) 90 days from the date of the notice to the
beneficiary of the provider's disaffiliation from the
network plan if the beneficiary has an ongoing course
of treatment; or

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(B) if the beneficiary has entered the third
trimester of pregnancy at the time of the provider's
disaffiliation, a period that includes the provision
of post-partum care directly related to the delivery.
(2) Notwithstanding the provisions of paragraph (1) of
this subsection (a), such care shall be authorized by the
network plan during the transitional period in accordance
with the following:
(A) the provider receives continued reimbursement
from the network plan at the rates and terms and
conditions applicable under the terminated contract
prior to the start of the transitional period;
(B) the provider adheres to the network plan's
quality assurance requirements, including provision to
the network plan of necessary medical information
related to such care; and
(C) the provider otherwise adheres to the network
plan's policies and procedures, including, but not
limited to, procedures regarding referrals and
obtaining preauthorizations for treatment.
(3) The provisions of this Section governing health
care provided during the transition period do not apply if
the beneficiary has successfully transitioned to another
provider participating in the network plan, if the
beneficiary has already met or exceeded the benefit
limitations of the plan, or if the care provided is not

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medically necessary.
(b) A network plan shall provide for continuity of care
for new beneficiaries as follows:
(1) If a new beneficiary whose provider is not a
member of the network plan's provider network, but is
within the network plan's service area, enrolls in the
network plan, the network plan shall permit the
beneficiary to continue an ongoing course of treatment
with the beneficiary's current physician during a
transitional period:
(A) of 90 days from the effective date of
enrollment if the beneficiary has an ongoing course of
treatment; or
(B) if the beneficiary has entered the third
trimester of pregnancy at the effective date of
enrollment, that includes the provision of post-partum
care directly related to the delivery.
(2) If a beneficiary, or a beneficiary's authorized
representative, elects in writing to continue to receive
care from such provider pursuant to paragraph (1) of this
subsection (b), such care shall be authorized by the
network plan for the transitional period in accordance
with the following:
(A) the provider receives reimbursement from the
network plan at rates established by the network plan;
(B) the provider adheres to the network plan's

HB4126 - 84 - LRB103 33572 RJT 63384 b
quality assurance requirements, including provision to
the network plan of necessary medical information
related to such care; and
(C) the provider otherwise adheres to the network
plan's policies and procedures, including, but not
limited to, procedures regarding referrals and
obtaining preauthorization for treatment.
(3) The provisions of this Section governing health
care provided during the transition period do not apply if
the beneficiary has successfully transitioned to another
provider participating in the network plan, if the
beneficiary has already met or exceeded the benefit
limitations of the plan, or if the care provided is not
medically necessary.
(c) In no event shall this Section be construed to require
a network plan to provide coverage for benefits not otherwise
covered or to diminish or impair preexisting condition
limitations contained in the beneficiary's contract.
(d) A provider shall comply with the requirements of 42
U.S.C. 300gg-138.
(Source: P.A. 100-502, eff. 9-15-17.)
(215 ILCS 124/25)
Sec. 25. Network transparency.
(a) A network plan shall post electronically an
up-to-date, accurate, and complete provider directory for each

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of its network plans, with the information and search
functions, as described in this Section.
(1) In making the directory available electronically,
the network plans shall ensure that the general public is
able to view all of the current providers for a plan
through a clearly identifiable link or tab and without
creating or accessing an account or entering a policy or
contract number.
(2) The network plan shall update the online provider
directory at least monthly. An issuer's failure to update
a network plan's directory shall subject the issuer to a
civil penalty of $5,000 per month. Providers shall notify
the network plan electronically or in writing of any
changes to their information as listed in the provider
directory, including the information required in
subparagraph (K) of paragraph (1) of subsection (b). If a
provider is no longer accepting new patients, the provider
must give notice to the issuer within 5 business days
after deciding to cease accepting new patients, or within
5 business days after the effective date of this
amendatory Act of the 103rd General Assembly, whichever is
later. The network plan shall update its online provider
directory in a manner consistent with the information
provided by the provider within 2 10 business days after
being notified of the change by the provider. Nothing in
this paragraph (2) shall void any contractual relationship

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between the provider and the plan.
(3) At least once every 90 days, the The network plan
shall audit each periodically at least 25% of its print
and online provider directories for accuracy, make any
corrections necessary, and retain documentation of the
audit. The network plan shall submit the audit to the
Director upon request. As part of these audits, the
network plan shall contact any provider in its network
that has not submitted a claim to the plan or otherwise
communicated his or her intent to continue participation
in the plan's network. The audits shall comply with 42
U.S.C. 300gg-115(a)(2), except that "provider directory
information" shall include all information required to be
included in a provider directory pursuant to this Act.
(4) A network plan shall provide a print copy of a
current provider directory or a print copy of the
requested directory information upon request of a
beneficiary or a prospective beneficiary. Print copies
must be updated quarterly and an errata that reflects
changes in the provider network must be updated quarterly.
(5) For each network plan, a network plan shall
include, in plain language in both the electronic and
print directory, the following general information:
(A) in plain language, a description of the
criteria the plan has used to build its provider
network;

HB4126 - 87 - LRB103 33572 RJT 63384 b
(B) if applicable, in plain language, a
description of the criteria the issuer insurer or
network plan has used to create tiered networks;
(C) if applicable, in plain language, how the
network plan designates the different provider tiers
or levels in the network and identifies for each
specific provider, hospital, or other type of facility
in the network which tier each is placed, for example,
by name, symbols, or grouping, in order for a
beneficiary-covered person or a prospective
beneficiary-covered person to be able to identify the
provider tier; and
(D) if applicable, a notation that authorization
or referral may be required to access some providers.
(6) A network plan shall make it clear for both its
electronic and print directories what provider directory
applies to which network plan, such as including the
specific name of the network plan as marketed and issued
in this State. The network plan shall include in both its
electronic and print directories a customer service email
address and telephone number or electronic link that
beneficiaries or the general public may use to notify the
network plan of inaccurate provider directory information
and contact information for the Department's Office of
Consumer Health Insurance.
(7) A provider directory, whether in electronic or

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print format, shall accommodate the communication needs of
individuals with disabilities, and include a link to or
information regarding available assistance for persons
with limited English proficiency.
(b) For each network plan, a network plan shall make
available through an electronic provider directory the
following information in a searchable format:
(1) for health care professionals:
(A) name;
(B) gender;
(C) participating office locations;
(D) specialty, if applicable;
(E) medical group affiliations, if applicable;
(F) facility affiliations, if applicable;
(G) participating facility affiliations, if
applicable;
(H) languages spoken other than English, if
applicable;
(I) whether accepting new patients;
(J) board certifications, if applicable; and
(K) use of telehealth or telemedicine, including,
but not limited to:
(i) whether the provider offers the use of
telehealth or telemedicine to deliver services to
patients for whom it would be clinically
appropriate;

HB4126 - 89 - LRB103 33572 RJT 63384 b
(ii) what modalities are used and what types
of services may be provided via telehealth or
telemedicine; and
(iii) whether the provider has the ability and
willingness to include in a telehealth or
telemedicine encounter a family caregiver who is
in a separate location than the patient if the
patient wishes and provides his or her consent;
(2) for hospitals:
(A) hospital name;
(B) hospital type (such as acute, rehabilitation,
children's, or cancer);
(C) participating hospital location; and
(D) hospital accreditation status; and
(3) for facilities, other than hospitals, by type:
(A) facility name;
(B) facility type;
(C) types of services performed; and
(D) participating facility location or locations,
including for each location where the health care
professional is at the location at least 3 days per
week.
(c) For the electronic provider directories, for each
network plan, a network plan shall make available all of the
following information in addition to the searchable
information required in this Section:

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(1) for health care professionals:
(A) contact information, including both a
telephone number and digital contact information if
the provider has supplied digital contact information;
and
(B) languages spoken other than English by
clinical staff, if applicable;
(2) for hospitals, telephone number and digital
contact information; and
(3) for facilities other than hospitals, telephone
number.
(d) The issuer insurer or network plan shall make
available in print, upon request, the following provider
directory information for the applicable network plan:
(1) for health care professionals:
(A) name;
(B) contact information, including telephone
number and digital contact information if the provider
has supplied digital contact information;
(C) participating office location or locations,
including for each location where the health care
professional is at the location at least 3 days per
week;
(D) specialty, if applicable;
(E) languages spoken other than English, if
applicable;

HB4126 - 91 - LRB103 33572 RJT 63384 b
(F) whether accepting new patients; and
(G) use of telehealth or telemedicine, including,
but not limited to:
(i) whether the provider offers the use of
telehealth or telemedicine to deliver services to
patients for whom it would be clinically
appropriate;
(ii) what modalities are used and what types
of services may be provided via telehealth or
telemedicine; and
(iii) whether the provider has the ability and
willingness to include in a telehealth or
telemedicine encounter a family caregiver who is
in a separate location than the patient if the
patient wishes and provides his or her consent;
(2) for hospitals:
(A) hospital name;
(B) hospital type (such as acute, rehabilitation,
children's, or cancer); and
(C) participating hospital location, and telephone
number, and digital contact information; and
(3) for facilities, other than hospitals, by type:
(A) facility name;
(B) facility type;
(C) types of services performed; and
(D) participating facility location or locations,

HB4126 - 92 - LRB103 33572 RJT 63384 b
and telephone numbers, and digital contact information
for each location.
(e) The network plan shall include a disclosure in the
print format provider directory that the information included
in the directory is accurate as of the date of printing and
that beneficiaries or prospective beneficiaries should consult
the issuer's insurer's electronic provider directory on its
website and contact the provider. The network plan shall also
include a telephone number in the print format provider
directory for a customer service representative where the
beneficiary can obtain current provider directory information.
(f) The Director may conduct periodic audits of the
accuracy of provider directories. A network plan shall not be
subject to any fines or penalties for information required in
this Section that a provider submits that is inaccurate or
incomplete.
(g) To the extent not otherwise provided in this Act, an
issuer shall comply with the requirements of 42 U.S.C.
300gg-115, except that "provider directory information" shall
include all information required to be included in a provider
directory pursuant to this Section.
(Source: P.A. 102-92, eff. 7-9-21.)
(215 ILCS 124/30)
Sec. 30. Administration and enforcement.
(a) Issuers Insurers, as defined in this Act, have a

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continuing obligation to comply with the requirements of this
Act. Other than the duties specifically created in this Act,
nothing in this Act is intended to preclude, prevent, or
require the adoption, modification, or termination of any
utilization management, quality management, or claims
processing methodologies of an issuer insurer.
(b) Nothing in this Act precludes, prevents, or requires
the adoption, modification, or termination of any network plan
term, benefit, coverage or eligibility provision, or payment
methodology.
(c) The Director shall enforce the provisions of this Act
pursuant to the enforcement powers granted to it by law.
(d) The Department shall adopt rules to enforce compliance
with this Act to the extent necessary.
(e) In accordance with Section 5-45.21 of the Illinois
Administrative Procedure Act, the Department may adopt
emergency rules to implement federal standards for provider
ratios, travel time and distance, and appointment wait times
if such standards apply to health insurance coverage regulated
by the Department and are more stringent than the State
standards extant at the time the final federal standards are
published.
(Source: P.A. 100-502, eff. 9-15-17.)
(215 ILCS 124/35 new)
Sec. 35. Provider requirements. Providers shall comply

HB4126 - 94 - LRB103 33572 RJT 63384 b
with 42 U.S.C. 300gg-138 and 300gg-139 and the regulations
promulgated thereunder, as well as Section 20 and paragraph
(2) of subsection (a) of Section 25 of this Act, except that
"provider directory information" includes all information
required to be included in a provider directory pursuant to
Section 25 of this Act. To the extent a provider is licensed by
the Department of Financial and Professional Regulation or by
the Department of Public Health, that agency shall have the
authority to investigate, examine, process complaints, issue
subpoenas, examine witnesses under oath, issue a fine, or take
disciplinary action against the provider's license for
violations of these requirements in accordance with the
provider's applicable licensing statute.
(215 ILCS 124/40 new)
Sec. 40. Confidentiality.
(a) All records in the custody or possession of the
Department are presumed to be open to public inspection or
copying unless exempt from disclosure by Section 7 or 7.5 of
the Freedom of Information Act. Except as otherwise provided
in this Section or other applicable law, the filings required
under this Act shall be open to public inspection or copying.
(b) The following information shall not be deemed
confidential:
(1) actual or projected ratios of providers to
beneficiaries;

HB4126 - 95 - LRB103 33572 RJT 63384 b
(2) actual or projected time and distance between
network providers and beneficiaries or actual or projected
waiting times for a beneficiary to see a network provider;
(3) geographic maps of network providers;
(4) requests for exceptions under subsection (g) of
Section 10, except with respect to any discussion of
ongoing or planned contractual negotiations with providers
that the issuer requests to be treated as confidential;
and
(5) provider directories.
(c) An issuer's work papers and reports on the results of a
self-audit of its provider directories shall remain
confidential unless expressly waived by the insurer or unless
deemed public information under federal law.
(d) The filings required under Section 10 of this Act
shall be confidential while they remain under the Department's
review but shall become open to public inspection and copying
upon completion of the review, except as provided in this
Section or under other applicable law.
(e) Nothing in this Section shall supersede the statutory
requirement that work papers obtained during a market conduct
examination be deemed confidential.
Section 20. The Managed Care Reform and Patient Rights Act
is amended by changing Sections 20 and 25 as follows:

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(215 ILCS 134/20)
Sec. 20. Notice of nonrenewal or termination. A health
care plan must give at least 60 days notice of nonrenewal or
termination of a health care provider to the health care
provider and to the enrollees served by the health care
provider. The notice shall include a name and address to which
an enrollee or health care provider may direct comments and
concerns regarding the nonrenewal or termination. Immediate
written notice may be provided without 60 days notice when a
health care provider's license has been disciplined by a State
licensing board. The notice to the enrollee shall provide the
individual with an opportunity to notify the health care plan
of the individual's need for transitional care.
(Source: P.A. 91-617, eff. 1-1-00.)
(215 ILCS 134/25)
Sec. 25. Transition of services.
(a) A health care plan shall provide for continuity of
care for its enrollees as follows:
(1) If an enrollee's health care provider physician
leaves the health care plan's network of health care
providers for reasons other than termination of a contract
in situations involving imminent harm to a patient or a
final disciplinary action by a State licensing board and
the provider physician remains within the health care
plan's service area, or if benefits provided under such

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health care plan with respect to such provider are
terminated because of a change in the terms of the
participation of such provider in such plan, or if a
contract between a group health plan, as defined in
Section 5 of the Illinois Health Insurance Portability and
Accountability Act, and a health care plan offered
connection with the group health plan is terminated and
results in a loss of benefits provided under such plan
with respect to such provider, the health care plan shall
permit the enrollee to continue an ongoing course of
treatment with that provider physician during a
transitional period:
(A) of 90 days from the date of the notice of
provider's physician's termination from the health
care plan to the enrollee of the provider's
physician's disaffiliation from the health care plan
if the enrollee has an ongoing course of treatment; or
(B) if the enrollee has entered the third
trimester of pregnancy at the time of the provider's
physician's disaffiliation, that includes the
provision of post-partum care directly related to the
delivery.
(2) Notwithstanding the provisions in item (1) of this
subsection, such care shall be authorized by the health
care plan during the transitional period only if the
provider physician agrees:

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(A) to continue to accept reimbursement from the
health care plan at the rates applicable prior to the
start of the transitional period;
(B) to adhere to the health care plan's quality
assurance requirements and to provide to the health
care plan necessary medical information related to
such care; and
(C) to otherwise adhere to the health care plan's
policies and procedures, including but not limited to
procedures regarding referrals and obtaining
preauthorizations for treatment.
(3) During an enrollee's plan year, a health care plan
shall not remove a drug from its formulary or negatively
change its preferred or cost-tier sharing unless, at least
60 days before making the formulary change, the health
care plan:
(A) provides general notification of the change in
its formulary to current and prospective enrollees;
(B) directly notifies enrollees currently
receiving coverage for the drug, including information
on the specific drugs involved and the steps they may
take to request coverage determinations and
exceptions, including a statement that a certification
of medical necessity by the enrollee's prescribing
provider will result in continuation of coverage at
the existing level; and

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(C) directly notifies by first class mail and
through an electronic transmission, if available, the
prescribing provider of all health care plan enrollees
currently prescribed the drug affected by the proposed
change; the notice shall include a one-page form by
which the prescribing provider can notify the health
care plan by first class mail that coverage of the drug
for the enrollee is medically necessary.
The notification in paragraph (C) may direct the
prescribing provider to an electronic portal through which
the prescribing provider may electronically file a
certification to the health care plan that coverage of the
drug for the enrollee is medically necessary. The
prescribing provider may make a secure electronic
signature beside the words "certification of medical
necessity", and this certification shall authorize
continuation of coverage for the drug.
If the prescribing provider certifies to the health
care plan either in writing or electronically that the
drug is medically necessary for the enrollee as provided
in paragraph (C), a health care plan shall authorize
coverage for the drug prescribed based solely on the
prescribing provider's assertion that coverage is
medically necessary, and the health care plan is
prohibited from making modifications to the coverage
related to the covered drug, including, but not limited

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to:
(i) increasing the out-of-pocket costs for the
covered drug;
(ii) moving the covered drug to a more restrictive
tier; or
(iii) denying an enrollee coverage of the drug for
which the enrollee has been previously approved for
coverage by the health care plan.
Nothing in this item (3) prevents a health care plan
from removing a drug from its formulary or denying an
enrollee coverage if the United States Food and Drug
Administration has issued a statement about the drug that
calls into question the clinical safety of the drug, the
drug manufacturer has notified the United States Food and
Drug Administration of a manufacturing discontinuance or
potential discontinuance of the drug as required by
Section 506C of the Federal Food, Drug, and Cosmetic Act,
as codified in 21 U.S.C. 356c, or the drug manufacturer
has removed the drug from the market.
Nothing in this item (3) prohibits a health care plan,
by contract, written policy or procedure, or any other
agreement or course of conduct, from requiring a
pharmacist to effect substitutions of prescription drugs
consistent with Section 19.5 of the Pharmacy Practice Act,
under which a pharmacist may substitute an interchangeable
biologic for a prescribed biologic product, and Section 25

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of the Pharmacy Practice Act, under which a pharmacist may
select a generic drug determined to be therapeutically
equivalent by the United States Food and Drug
Administration and in accordance with the Illinois Food,
Drug and Cosmetic Act.
This item (3) applies to a policy or contract that is
amended, delivered, issued, or renewed on or after January
1, 2019. This item (3) does not apply to a health plan as
defined in the State Employees Group Insurance Act of 1971
or medical assistance under Article V of the Illinois
Public Aid Code.
(b) A health care plan shall provide for continuity of
care for new enrollees as follows:
(1) If a new enrollee whose physician is not a member
of the health care plan's provider network, but is within
the health care plan's service area, enrolls in the health
care plan, the health care plan shall permit the enrollee
to continue an ongoing course of treatment with the
enrollee's current physician during a transitional period:
(A) of 90 days from the effective date of
enrollment if the enrollee has an ongoing course of
treatment; or
(B) if the enrollee has entered the third
trimester of pregnancy at the effective date of
enrollment, that includes the provision of post-partum
care directly related to the delivery.

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(2) If an enrollee elects to continue to receive care
from such physician pursuant to item (1) of this
subsection, such care shall be authorized by the health
care plan for the transitional period only if the
physician agrees:
(A) to accept reimbursement from the health care
plan at rates established by the health care plan;
such rates shall be the level of reimbursement
applicable to similar physicians within the health
care plan for such services;
(B) to adhere to the health care plan's quality
assurance requirements and to provide to the health
care plan necessary medical information related to
such care; and
(C) to otherwise adhere to the health care plan's
policies and procedures including, but not limited to
procedures regarding referrals and obtaining
preauthorization for treatment.
(c) In no event shall this Section be construed to require
a health care plan to provide coverage for benefits not
otherwise covered or to diminish or impair preexisting
condition limitations contained in the enrollee's contract. In
no event shall this Section be construed to prohibit the
addition of prescription drugs to a health care plan's list of
covered drugs during the coverage year.
(d) In this Section, "ongoing course of treatment" has the

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meaning ascribed to that term in Section 5 of the Network
Adequacy and Transparency Act.
(Source: P.A. 100-1052, eff. 8-24-18.)
Section 99. Effective date. This Act takes effect upon
becoming law.
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INDEX
Statutes amended in order of appearance