Public Act 097-0705
 
HB3443 EnrolledLRB097 05656 RPM 45718 b

    AN ACT concerning insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 4 as follows:
 
    (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 totally and permanently disabled 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) members of the organization retain membership
    even after they develop a medical condition;
        (iv) 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;
        (v) 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;
        (vi) 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. Neither the organization nor any
        other participant can be compelled by law to contribute
        toward your medical bills. 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."; and
        (vii) 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.
    (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, chooses
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. 90-741, eff. 8-13-98; 90-810, eff. 1-6-99.)