(215 ILCS 5/Art. I heading)
SHORT TITLE, DEFINITIONS AND CLASSIFICATIONS
(215 ILCS 5/1) (from Ch. 73, par. 613)
Sec. 1. Short
title. This Act shall be known and may be cited as the Illinois Insurance Code.
(Source: P.A. 96-328, eff. 8-11-09.)
(215 ILCS 5/2) (from Ch. 73, par. 614)
Sec. 2.
General
definitions.
In this Code, unless the context otherwise requires,
(a) “Director” means the Director of Insurance.
(b) “Department” means the Department of Insurance.
(c) “State” or “State of the United States” includes the District of
Columbia and a territory or possession of the United States.
(d) “Country” or “Foreign Country” includes a state, province or
political subdivision thereof.
(e) “Company” means an insurance or surety company and shall be deemed
to include a corporation, company, partnership, association, society,
order, individual or aggregation of individuals engaging in or proposing or
attempting to engage in any kind of insurance or surety business, including
the exchanging of reciprocal or inter-insurance contracts between
individuals, partnerships and corporations.
(f) “Domestic Company” means a company incorporated or organized under
the laws of this State.
(g) “Foreign Company” means a company incorporated or organized under
the laws of any state of the United States other than this State.
(h) “Alien Company” means a company incorporated or organized under the
laws of any country other than the United States.
(i) “Mutual Legal Reserve Life Company” means a mutual life company
issuing contracts without contingent liability on the policyholder.
(j) “Assessment Legal Reserve Life Company” means a life company issuing
contracts providing for contingent liability on the policyholder.
(k) “Reciprocal” includes Inter-Insurance Exchange.
(l) “Person” includes an individual, aggregation of individuals,
corporation, association and partnership.
(m) Personal pronouns include all genders, the singular includes the
plural and the plural includes the singular.
(n) “Policy” means an insurance policy or contract and includes
certificates of fraternal benefit societies, assessment companies, mutual
benefit associations, and burial societies.
(o) “Policyholder” means a holder of an insurance policy or contract and
includes holders of certificates of fraternal benefit societies, assessment
companies, mutual benefit associations, and burial societies.
(p) “Articles of Incorporation” means the basic instrument of an
incorporated company and all amendments thereto and includes “Charter,”
“Articles of Organization,” “Articles of Reorganization,” “Articles of
Association,” and “Deed of Settlement.”
(q) “Officer” when used to refer to an officer of a company includes an
attorney-in-fact for a reciprocal or Lloyds.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/2.1) (from Ch. 73, par. 614.1)
Sec. 2.1.
Public
Policy.
It is declared to be the public policy of this State, pursuant to
paragraphs (h) and (i) of Section 6 of Article VII of the Illinois
Constitution of 1970, that any power or function set forth in this Act to
be exercised by the State is an exclusive State power or function. Such
power or function shall not be exercised concurrently, either directly or
indirectly, by any unit of local government, including home rule units,
except as otherwise provided in this Act. Provided further that the fees,
charges and taxes provided for by this Act shall, as provided for in
Section 415 of this Act, be in lieu of all license fees or privilege or
occupation taxes or other fees levied or assessed by any home rule unit and
said Section 415 of this Act is declared to be a denial and limitation of
the powers of home rule units pursuant to paragraph (g) of Section 6 of
Article VII of the Illinois Constitution of 1970.
(Source: P.A. 78-1224.)
(215 ILCS 5/2.5)
Sec. 2.5.
Exemption.
This Code shall not be construed to apply to the
administration of the Drycleaner Environmental Response Trust Fund under the
Drycleaner Environmental Response Trust Fund Act.
(Source: P.A. 90-502, eff. 8-19-97.)
(215 ILCS 5/3.1) (from Ch. 73, par. 615.1)
Sec. 3.1.
Definitions of admitted assets.
“Admitted Assets” includes the
investments authorized or permitted by this Code, the credit for reinsurance
allowed by this Code, and in addition thereto, only the following:
(1) Amounts, other than premium, receivable from affiliates,
not outstanding for more than 3 months, and arising under,
management contracts or
service agreements which meet the requirements of Section 141.1 of the
Illinois Insurance Code to the extent that the affiliate has liquid assets
sufficient to pay the balance. The amount of those
receivables included in admitted assets may not exceed the
lesser of 5% of the company’s admitted assets or 10% of the company’s surplus
as regards policyholders. For purposes of this
subsection, “affiliate” has the meaning given that term in Article VIII 1/2 of
the Illinois Insurance Code.
(2) Amounts permitted under Section 136.
(Source: P.A. 90-418, eff. 8-15-97; 91-549, eff. 8-14-99.)
(215 ILCS 5/4) (from Ch. 73, par. 616)
Sec. 4. Classes of insurance. Insurance and insurance business shall
be classified as follows:
Class 1. Life, Accident and Health.
(a) Life. Insurance on the lives of persons and every insurance
appertaining thereto or connected therewith and granting, purchasing or
disposing of annuities. Policies of life or endowment insurance or
annuity contracts or contracts supplemental thereto which contain
provisions for additional benefits in case of death by accidental means
and provisions operating to safeguard such policies or contracts against
lapse, to give a special surrender value, or special benefit, or an
annuity, in the event, that the insured or annuitant shall become
a person with a total and permanent disability as defined by the policy or contract,
or which contain benefits providing acceleration of life or endowment or
annuity benefits in advance of the time they would otherwise be
payable, as an indemnity for long term care which is certified or
ordered by a physician, including but not limited to, professional nursing
care, medical care expenses, custodial nursing care, non-nursing custodial
care provided in a nursing home or at a residence of the insured, or
which contain benefits providing acceleration of life or endowment or
annuity benefits in advance of the time they would otherwise be payable, at
any time during the insured’s
lifetime, as an indemnity for a terminal illness shall be deemed to be
policies of life or endowment insurance or annuity contracts within the
intent of this clause.
Also to be deemed as policies of life or endowment insurance or annuity
contracts within the intent of this clause shall be those policies or
riders that provide for the payment of up to 75% of the face amount
of
benefits in advance of the time they would otherwise be payable upon a
diagnosis by a physician licensed to practice medicine in all of its
branches that the insured has incurred a covered
condition listed
in the policy or rider.
“Covered condition”, as used in this clause, means:
heart attack, stroke, coronary artery surgery,
life threatening cancer, renal failure,
Alzheimer’s disease,
paraplegia, major organ transplantation, total and permanent
disability, and any other medical condition that the Department may approve for
any particular filing.
The Director may issue rules that specify prohibited policy provisions,
not otherwise specifically prohibited by law, which in the opinion of the
Director are unjust, unfair, or unfairly discriminatory to the
policyholder,
any person insured under the policy, or beneficiary.
(b) Accident and health. Insurance against bodily injury,
disablement or death by accident and against disablement resulting from
sickness or old age and every insurance appertaining thereto, including
stop-loss insurance. Stop-loss insurance is insurance against the risk of
economic loss issued to a single employer self-funded employee disability
benefit plan or an employee welfare benefit plan as described in 29 U.S.C. 100
et seq. The insurance laws of this State, including
this Code, do not apply to arrangements between a religious organization and the organization’s members
or participants when the arrangement and organization meet all of the
following criteria:
- (i) the organization is described in Section 501(c)(3) of the Internal Revenue Code and is exempt from taxation under Section 501(a) of the Internal Revenue Code;
- (ii) members of the organization share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the state in which a member resides or is employed;
- (iii) no funds that have been given for the purpose of the sharing of medical expenses among members described in paragraph (ii) of this subsection (b) are held by the organization in an off-shore trust or bank account;
- (iv) the organization provides at least monthly to all of its members a written statement listing the dollar amount of qualified medical expenses that members have submitted for sharing, as well as the amount of expenses actually shared among the members;
- (v) members of the organization retain membership even after they develop a medical condition;
- (vi) the organization or a predecessor organization has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999;
- (vii) the organization conducts an annual audit that is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and is made available to the public upon request;
- (viii) the organization includes the following statement, in writing, on or accompanying all applications and guideline materials:
- “Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation constitute or create an insurance policy. Any assistance you receive with your medical bills will be totally voluntary. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Whether or not you receive any payments for medical expenses and whether or not this organization continues to operate, you are always personally responsible for the payment of your own medical bills.”;
- (ix) any membership card or similar document issued by the organization and any written communication sent by the organization to a hospital, physician, or other health care provider shall include a statement that the organization does not issue health insurance and that the member or participant is personally liable for payment of his or her medical bills;
- (x) the organization provides to a participant, within 30 days after the participant joins, a complete set of its rules for the sharing of medical expenses, appeals of decisions made by the organization, and the filing of complaints;
- (xi) the organization does not offer any other services that are regulated under any provision of the Illinois Insurance Code or other insurance laws of this State; and
- (xii) the organization does not amass funds as reserves intended for payment of medical services, rather the organization facilitates the payments provided for in this subsection (b) through payments made directly from one participant to another.
(c) Legal Expense Insurance. Insurance which involves
the assumption of a contractual obligation to reimburse the beneficiary
against or pay on behalf of the beneficiary, all or a portion of his fees,
costs, or expenses related to or arising out of services performed by or
under the supervision of an attorney licensed to practice in the jurisdiction
wherein the services are performed, regardless of whether the payment is made
by the beneficiaries individually or by a third person for them, but does
not include the provision of or reimbursement for legal services incidental
to other insurance coverages. The insurance laws of this State, including
this Act do not apply to:
- (i) retainer contracts made by attorneys at law with individual clients with fees based on estimates of the nature and amount of services to be provided to the specific client, and similar contracts made with a group of clients involved in the same or closely related legal matters;
- (ii) plans owned or operated by attorneys who are the providers of legal services to the plan;
- (iii) plans providing legal service benefits to groups where such plans are owned or operated by authority of a state, county, local or other bar association;
- (iv) any lawyer referral service authorized or operated by a state, county, local or other bar association;
- (v) the furnishing of legal assistance by labor unions and other employee organizations to their members in matters relating to employment or occupation;
- (vi) the furnishing of legal assistance to members or dependents, by churches, consumer organizations, cooperatives, educational institutions, credit unions, or organizations of employees, where such organizations contract directly with lawyers or law firms for the provision of legal services, and the administration and marketing of such legal services is wholly conducted by the organization or its subsidiary;
- (vii) legal services provided by an employee welfare benefit plan defined by the Employee Retirement Income Security Act of 1974;
- (viii) any collectively bargained plan for legal services between a labor union and an employer negotiated pursuant to Section 302 of the Labor Management Relations Act as now or hereafter amended, under which plan legal services will be provided for employees of the employer whether or not payments for such services are funded to or through an insurance company.
Class 2. Casualty, Fidelity and Surety.
(a) Accident and health. Insurance against bodily injury,
disablement or death by accident and against disablement resulting from
sickness or old age and every insurance appertaining thereto, including
stop-loss insurance. Stop-loss insurance is insurance against the risk of
economic loss issued to a single employer self-funded employee disability
benefit plan or
an employee welfare benefit plan as described in 29 U.S.C. 1001 et seq.
(b) Vehicle. Insurance against any loss or liability resulting from
or incident to the ownership, maintenance or use of any vehicle (motor
or otherwise), draft animal or aircraft. Any policy insuring against any
loss or liability on account of the bodily injury or death of any person
may contain a provision for payment of disability benefits to injured
persons and death benefits to dependents, beneficiaries or personal
representatives of persons who are killed, including the named insured,
irrespective of legal liability of the insured, if the injury or death
for which benefits are provided is caused by accident and sustained
while in or upon or while entering into or alighting from or through
being struck by a vehicle (motor or otherwise), draft animal or
aircraft, and such provision shall not be deemed to be accident
insurance.
(c) Liability. Insurance against the liability of the insured for
the death, injury or disability of an employee or other person, and
insurance against the liability of the insured for damage to or
destruction of another person’s property.
(d) Workers’ compensation. Insurance of the obligations accepted by
or imposed upon employers under laws for workers’ compensation.
(e) Burglary and forgery. Insurance against loss or damage by
burglary, theft, larceny, robbery, forgery, fraud or otherwise;
including all householders’ personal property floater risks.
(f) Glass. Insurance against loss or damage to glass including
lettering, ornamentation and fittings from any cause.
(g) Fidelity and surety. Become surety or guarantor for any person,
copartnership or corporation in any position or place of trust or as
custodian of money or property, public or private; or, becoming a surety
or guarantor for the performance of any person, copartnership or
corporation of any lawful obligation, undertaking, agreement or contract
of any kind, except contracts or policies of insurance; and underwriting
blanket bonds. Such obligations shall be known and treated as suretyship
obligations and such business shall be known as surety business.
(h) Miscellaneous. Insurance against loss or damage to property and
any liability of the insured caused by accidents to boilers, pipes,
pressure containers, machinery and apparatus of any kind and any
apparatus connected thereto, or used for creating, transmitting or
applying power, light, heat, steam or refrigeration, making inspection
of and issuing certificates of inspection upon elevators, boilers,
machinery and apparatus of any kind and all mechanical apparatus and
appliances appertaining thereto; insurance against loss or damage by
water entering through leaks or openings in buildings, or from the
breakage or leakage of a sprinkler, pumps, water pipes, plumbing and all
tanks, apparatus, conduits and containers designed to bring water into
buildings or for its storage or utilization therein, or caused by the
falling of a tank, tank platform or supports, or against loss or damage
from any cause (other than causes specifically enumerated under Class 3
of this Section) to such sprinkler, pumps, water pipes, plumbing, tanks,
apparatus, conduits or containers; insurance against loss or damage
which may result from the failure of debtors to pay their obligations to
the insured; and insurance of the payment of money for personal services
under contracts of hiring.
(i) Other casualty risks. Insurance against any other casualty risk
not otherwise specified under Classes 1 or 3, which may lawfully be the
subject of insurance and may properly be classified under Class 2.
(j) Contingent losses. Contingent, consequential and indirect
coverages wherein the proximate cause of the loss is attributable to any
one of the causes enumerated under Class 2. Such coverages shall, for
the purpose of classification, be included in the specific grouping of
the kinds of insurance wherein such cause is specified.
(k) Livestock and domestic animals. Insurance against mortality,
accident and health of livestock and domestic animals.
(l) Legal expense insurance. Insurance against risk resulting from the
cost of legal services as defined under Class 1(c).
Class 3. Fire and Marine, etc.
(a) Fire. Insurance against loss or damage by fire, smoke and
smudge, lightning or other electrical disturbances.
(b) Elements. Insurance against loss or damage by earthquake,
windstorms, cyclone, tornado, tempests, hail, frost, snow, ice, sleet,
flood, rain, drought or other weather or climatic conditions including
excess or deficiency of moisture, rising of the waters of the ocean or
its tributaries.
(c) War, riot and explosion. Insurance against loss or damage by
bombardment, invasion, insurrection, riot, strikes, civil war or
commotion, military or usurped power, or explosion (other than explosion
of steam boilers and the breaking of fly wheels on premises owned,
controlled, managed, or maintained by the insured).
(d) Marine and transportation. Insurance against loss or damage to
vessels, craft, aircraft, vehicles of every kind, (excluding vehicles
operating under their own power or while in storage not incidental to
transportation) as well as all goods, freights, cargoes, merchandise,
effects, disbursements, profits, moneys, bullion, precious stones,
securities, choses in action, evidences of debt, valuable papers,
bottomry and respondentia interests and all other kinds of property and
interests therein, in respect to, appertaining to or in connection with
any or all risks or perils of navigation, transit, or transportation,
including war risks, on or under any seas or other waters, on land or in
the air, or while being assembled, packed, crated, baled, compressed or
similarly prepared for shipment or while awaiting the same or during any
delays, storage, transshipment, or reshipment incident thereto,
including marine builder’s risks and all personal property floater
risks; and for loss or damage to persons or property in connection with
or appertaining to marine, inland marine, transit or transportation
insurance, including liability for loss of or damage to either arising
out of or in connection with the construction, repair, operation,
maintenance, or use of the subject matter of such insurance, (but not
including life insurance or surety bonds); but, except as herein
specified, shall not mean insurances against loss by reason of bodily
injury to the person; and insurance against loss or damage to precious
stones, jewels, jewelry, gold, silver and other precious metals whether
used in business or trade or otherwise and whether the same be in course
of transportation or otherwise, which shall include jewelers’ block
insurance; and insurance against loss or damage to bridges, tunnels and
other instrumentalities of transportation and communication (excluding
buildings, their furniture and furnishings, fixed contents and supplies
held in storage) unless fire, tornado, sprinkler leakage, hail,
explosion, earthquake, riot and civil commotion are the only hazards to
be covered; and to piers, wharves, docks and slips, excluding the risks
of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot
and civil commotion; and to other aids to navigation and transportation,
including dry docks and marine railways, against all risk.
(e) Vehicle. Insurance against loss or liability resulting from or
incident to the ownership, maintenance or use of any vehicle (motor or
otherwise), draft animal or aircraft, excluding the liability of the
insured for the death, injury or disability of another person.
(f) Property damage, sprinkler leakage and crop. Insurance against
the liability of the insured for loss or damage to another person’s
property or property interests from any cause enumerated in this class;
insurance against loss or damage by water entering through leaks or
openings in buildings, or from the breakage or leakage of a sprinkler,
pumps, water pipes, plumbing and all tanks, apparatus, conduits and
containers designed to bring water into buildings or for its storage or
utilization therein, or caused by the falling of a tank, tank platform
or supports or against loss or damage from any cause to such sprinklers,
pumps, water pipes, plumbing, tanks, apparatus, conduits or containers;
insurance against loss or damage from insects, diseases or other causes to
trees, crops or other products of the soil.
(g) Other fire and marine risks. Insurance against any other
property risk not otherwise specified under Classes 1 or 2, which may
lawfully be the subject of insurance and may properly be classified
under Class 3.
(h) Contingent losses. Contingent, consequential and indirect
coverages wherein the proximate cause of the loss is attributable to any
of the causes enumerated under Class 3. Such coverages shall, for the
purpose of classification, be included in the specific grouping of the
kinds of insurance wherein such cause is specified.
(i) Legal expense insurance. Insurance against risk resulting from the
cost of legal services as defined under Class 1(c).
(Source: P.A. 101-81, eff. 7-12-19.)
(215 ILCS 5/5) (from Ch. 73, par. 617)
Sec. 5.
Classes of
companies.
(1) All Companies now or hereafter authorized to transact business in
this State shall be classified according to their functions into one or
more of the classes of insurance enumerated in section 4.
(2) No company shall be authorized to transact any kind or kinds of
business other than those enumerated in its respective class, or classes,
except as otherwise specifically provided in this Code, but any company,
upon complying with all applicable provisions of this Code, may be
authorized to transact all or any part of its business on the basis of
reinsurance, except that no certificate of authority shall be limited in
whole or in part to reinsurance unless the restriction as to such
reinsurance is expressed in the articles of incorporation of said company.
(Source: Laws 1959, p. 638.)
(215 ILCS 5/5.5)
Sec. 5.5. Compliance with the Department of Healthcare and Family Services. A company authorized to do business in this State or accredited by the State to issue policies of health insurance, including but not limited to, self-insured plans, group health plans (as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that are by statute, contract, or agreement legally responsible for payment of a claim for a health care item or service as a condition of doing business in the State must:
- (1) provide to the Department of Healthcare and Family Services, or any successor agency, on at least a quarterly basis if so requested by the Department, information to determine during what period any individual may be, or may have been, covered by a health insurer and the nature of the coverage that is or was provided by the health insurer, including the name, address, and identifying number of the plan;
- (2) accept the State’s right of recovery and the assignment to the State of any right of an individual or other entity to payment from the party for an item or service for which payment has been made under the medical programs of the Department of Healthcare and Family Services, or any successor agency, under this Code or the Illinois Public Aid Code;
- (3) respond to any inquiry by the Department of Healthcare and Family Services regarding a claim for payment for any health care item or service that is submitted not later than 3 years after the date of the provision of such health care item or service; and
- (4) agree not to deny a claim submitted by the Department of Healthcare and Family Services solely on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale that is the basis of the claim if (i) the claim is submitted by the Department of Healthcare and Family Services within the 3-year period beginning on the date on which the item or service was furnished and (ii) any action by the Department of Healthcare and Family Services to enforce its rights with respect to such claim is commenced within 6 years of its submission of such claim.
The Department of Healthcare and Family Services may impose an administrative penalty as provided under Section 12-4.45 of the Illinois Public Aid Code on entities that have established a pattern of failure to provide the information required under this Section, or in cases in which the Department of Healthcare and Family Services has determined that an entity that provides health insurance coverage has established a pattern of failure to provide the information required under this Section, and has subsequently certified that determination, along with supporting documentation, to the Director of the Department of Insurance, the Director of the Department of Insurance, based upon the certification of determination made by the Department of Healthcare and Family Services, may commence regulatory proceedings in accordance with all applicable provisions of the Illinois Insurance Code.
(Source: P.A. 98-130, eff. 8-2-13.)