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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||
5 | Insurance Industry Innovation Act. | ||||||||||||||||||||||||
6 | Section 5. Definitions. In this Act:
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7 | "Covered entity" means an entity that offers or intends to | ||||||||||||||||||||||||
8 | offer an insurance innovation by submitting a petition to the | ||||||||||||||||||||||||
9 | Department of Insurance.
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10 | "Department" means the Department of Insurance. | ||||||||||||||||||||||||
11 | "Director" means the Director of Insurance.
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12 | "Enforceable compliance agreement" means a contractual | ||||||||||||||||||||||||
13 | agreement described in subsection (a) of Section 20.
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14 | "Innovation Division" means the Innovation Division in the | ||||||||||||||||||||||||
15 | Department of Insurance. | ||||||||||||||||||||||||
16 | "Insurance innovation" means an innovative service or | ||||||||||||||||||||||||
17 | product that is or may be subject to regulation by the | ||||||||||||||||||||||||
18 | Department of Insurance. | ||||||||||||||||||||||||
19 | Section 10. Innovation Division. The Department shall | ||||||||||||||||||||||||
20 | establish an Innovation Division to promote insurance product | ||||||||||||||||||||||||
21 | innovations and to assist a covered person whose petition has | ||||||||||||||||||||||||
22 | been approved under Section 20. |
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1 | Section 15. Petition to the Department.
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2 | (a) A covered entity may submit a petition to the | ||||||
3 | Department through the Innovation Division, in such form and in | ||||||
4 | such manner as the Innovation Division may require, to request | ||||||
5 | to enter into an enforceable compliance agreement containing a | ||||||
6 | modification or waiver of Department rule or State law under | ||||||
7 | which the Department has rulemaking authority with respect to | ||||||
8 | the covered entity or an insurance innovation the covered | ||||||
9 | entity offers or intends to offer.
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10 | (b) A petition submitted under this Section shall:
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11 | (1) include an alternative compliance strategy that | ||||||
12 | proposes a method to achieve the public policy goals of the | ||||||
13 | Department rule or State law; and
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14 | (2) demonstrate that under the alternative compliance | ||||||
15 | strategy, the insurance innovation:
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16 | (A) would serve the public interest; | ||||||
17 | (B) improves access to insurance products or | ||||||
18 | services; and | ||||||
19 | (C) does not present systemic risk to the State and | ||||||
20 | promotes consumer protection. | ||||||
21 | (c) One or more covered entities that offers or intends to | ||||||
22 | offer similar innovations may jointly submit a petition under | ||||||
23 | this Section.
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24 | (d) No later than 30 days after receiving a petition, the | ||||||
25 | Department shall publish the petition on the Department's |
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1 | website and provide a 60-day period for public notice and | ||||||
2 | comment. | ||||||
3 | The Department may waive the notice and comment period if | ||||||
4 | the Department determines that the covered entity submitting | ||||||
5 | the petition is similarly situated to another covered entity | ||||||
6 | that has been granted approval of an identical petition | ||||||
7 | pursuant to this Section. | ||||||
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The Department shall maintain the confidentiality of any | ||||||
9 | non-publicly available data or information in any petition | ||||||
10 | submitted under this Section. The Department shall give | ||||||
11 | reasonable consideration to maintaining the confidentiality of | ||||||
12 | data or information identified by the covered person in the | ||||||
13 | petition submitted under this Section as non-publicly | ||||||
14 | available data or information. | ||||||
15 | Section 20. Department determination of petition.
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16 | (a) No later than 30 days after the end of the comment | ||||||
17 | period pursuant to subsection (d) of Section 15 or, if the | ||||||
18 | comment period was waived, not later than 60 days after receipt | ||||||
19 | of a petition under Section 15, the Director shall complete a | ||||||
20 | review of the petition and notify the covered entity, in | ||||||
21 | writing, of the Department's determination of the petition.
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22 | (b) If the covered entity submitting the petition | ||||||
23 | demonstrates to the Department that the alternative compliance | ||||||
24 | strategy meets the requirements of paragraph (2) in subsection | ||||||
25 | (b) of Section 15, the Department may approve the petition. If |
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1 | the petition is approved, the Department shall enter into an | ||||||
2 | enforceable compliance agreement with the covered entity in | ||||||
3 | accordance with the requirements of Section 25.
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4 | (c) The Department shall not approve a petition for a | ||||||
5 | waiver of Department rule or State law concerning:
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6 | (1) assets, deposits, investments, capital, surplus, | ||||||
7 | or other solvency requirements applicable to insurance | ||||||
8 | companies; | ||||||
9 | (2) required participation in an assigned risk plan, | ||||||
10 | market, or guaranty fund;
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11 | (3) a law or regulation required for the Department to | ||||||
12 | maintain its accreditation by the National Association of | ||||||
13 | Insurance Commissioners, unless the law or regulation | ||||||
14 | permits variances, waivers, or no action letters; or | ||||||
15 | (4) application of any taxes or fees. | ||||||
16 | (d) If the covered entity submitting the petition fails to | ||||||
17 | demonstrate to the Department that the alternative compliance | ||||||
18 | strategy meets the requirements of paragraph (2) of subsection | ||||||
19 | (b) of Section 15, the Department shall deny the petition. If | ||||||
20 | the Department denies a petition, the Director shall provide | ||||||
21 | the covered entity with a written notice explaining the reason | ||||||
22 | for denying the petition. | ||||||
23 | Section 25. Enforceable compliance agreement.
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24 | (a) If the Department approves a petition under Section 15, | ||||||
25 | the covered entity shall enter into an enforceable compliance |
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1 | agreement with the Department. | ||||||
2 | (b) Any compliance agreement entered into by the Department | ||||||
3 | and a covered entity shall, at a minimum, include: | ||||||
4 | (1) the terms under which the covered entity may | ||||||
5 | develop or offer the approved insurance innovation to the | ||||||
6 | public and any requirements of the covered entity and the | ||||||
7 | Department with respect to the insurance innovation; | ||||||
8 | (2) procedures for modifying the terms of the | ||||||
9 | agreement; | ||||||
10 | (3) consequences for failure to comply with the terms | ||||||
11 | of the agreement;
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12 | (4) a compliance examination process that occurs at | ||||||
13 | least annually;
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14 | (5) a termination date for the agreement that is at | ||||||
15 | least one year after the date on which the agreement is | ||||||
16 | entered into;
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17 | (6) procedures for extending the termination date;
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18 | (7) procedures for judicial review; and | ||||||
19 | (8) procedures for maintaining the confidentiality of | ||||||
20 | any information disclosed to the Department in making the | ||||||
21 | agreement.
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22 | (c) If a covered entity and the Department enter into an | ||||||
23 | enforceable compliance agreement, another agency may not | ||||||
24 | commence an enforcement action against the covered entity with | ||||||
25 | respect to the insurance innovation that is the subject of the | ||||||
26 | enforceable compliance agreement.
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1 | (d) Notwithstanding subsection (c), the State may commence | ||||||
2 | an enforcement action against a covered entity with respect to | ||||||
3 | an insurance innovation that is the subject of an enforceable | ||||||
4 | compliance agreement if, in an action brought by the State in a | ||||||
5 | court of competent jurisdiction, the court determines that the | ||||||
6 | Department's action was arbitrary and capricious and the | ||||||
7 | insurance innovation has substantially harmed consumers within | ||||||
8 | the State. | ||||||
9 | (e) A covered entity may elect to arbitrate an action | ||||||
10 | initiated by another person relating to a financial innovation | ||||||
11 | that is the subject of the enforceable compliance agreement.
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12 | Section 30. Report to the General Assembly. No later than | ||||||
13 | July 1, 2019 and every July 1 thereafter, the Department shall | ||||||
14 | submit to the General Assembly a report on the aggregate impact | ||||||
15 | of enforceable compliance agreements entered into under this | ||||||
16 | Act that shall include: | ||||||
17 | (1) the number and characteristics of the agreements; | ||||||
18 | (2) the most innovative and least burdensome tools that | ||||||
19 | the Innovation Division has implemented for achieving | ||||||
20 | regulatory ends; | ||||||
21 | (3) the existing State laws, rules, or practices that | ||||||
22 | the Department identifies as the most burdensome to | ||||||
23 | innovation in developing or providing insurance products | ||||||
24 | and services, that adversely affect competition in the | ||||||
25 | insurance industry, or that restrict improvements for |
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1 | consumers of insurance products or services; and | ||||||
2 | (4) recommendations for reducing, consolidating, or | ||||||
3 | eliminating regulations. | ||||||
4 | Section 35. Funding. The Department, by rule, shall | ||||||
5 | establish the cost of each application for petition. | ||||||
6 | Section 40. Rulemaking authority. The Director may adopt | ||||||
7 | reasonable rules as necessary to implement the purposes and | ||||||
8 | provisions of this Act. | ||||||
9 | Section 45. Repeal. This Act is repealed on January 1, | ||||||
10 | 2024.
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11 | Section 99. Effective date. This Act takes effect upon | ||||||
12 | becoming law.
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