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1 | AN ACT concerning insurance.
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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 5. The Illinois Insurance Code is amended by adding | ||||||||||||||||||||||||
5 | Article XLV as follows: | ||||||||||||||||||||||||
6 | (215 ILCS 5/Art. XLV heading new) | ||||||||||||||||||||||||
7 | ARTICLE XLV. LONG-TERM CARE PROGRAM | ||||||||||||||||||||||||
8 | (215 ILCS 5/1500 new)
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9 | Sec. 1500. Definitions. In this Article: | ||||||||||||||||||||||||
10 | "Applicant" means an individual who applies for long-term | ||||||||||||||||||||||||
11 | care insurance through an individual insurance policy or
a | ||||||||||||||||||||||||
12 | prospective holder of a certificate issued under a group | ||||||||||||||||||||||||
13 | long-term care insurance policy.
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14 | "Certificate" means a document issued to a member of the | ||||||||||||||||||||||||
15 | group covered under a group insurance policy, which policy has | ||||||||||||||||||||||||
16 | been delivered or issued for delivery in this State, to signify | ||||||||||||||||||||||||
17 | that the individual named in the certificate is covered under | ||||||||||||||||||||||||
18 | the policy.
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19 | "Certificate holder" means an individual to whom a | ||||||||||||||||||||||||
20 | certificate is issued.
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21 | "Department" means the Department of Healthcare and Family | ||||||||||||||||||||||||
22 | Services.
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1 | "Division" means the Division of Insurance of the | ||||||
2 | Department of Financial and Professional Regulation.
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3 | "Health maintenance organization" has the same meaning | ||||||
4 | ascribed to the term in the Health Maintenance Organization | ||||||
5 | Act.
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6 | "Insurance policy" means any policy, contract, subscriber | ||||||
7 | agreement, rider, or endorsement delivered or issued for | ||||||
8 | delivery in this State by an insurer, a fraternal benefit | ||||||
9 | society, a nonprofit corporation, a health maintenance | ||||||
10 | organization, a limited service health maintenance | ||||||
11 | organization, a preferred provider arrangement, or any other | ||||||
12 | organization.
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13 | "Long-term care" means the provision of the following | ||||||
14 | services in a setting, other than an acute care wing of a | ||||||
15 | hospital, to enable individuals whose functional capacities | ||||||
16 | are chronically impaired to be maintained at their maximum | ||||||
17 | level of health and well-being: | ||||||
18 | (1) physician's services; | ||||||
19 | (2) nursing services; | ||||||
20 | (3) diagnostic services; | ||||||
21 | (4) therapeutic services, including physical therapy, | ||||||
22 | speech therapy, and occupational therapy; | ||||||
23 | (5) rehabilitative services; | ||||||
24 | (6) maintenance services; | ||||||
25 | (7) personal care services, including companion | ||||||
26 | services and assistance in bathing, dressing, and other |
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1 | skills of daily living; | ||||||
2 | (8) transportation services; | ||||||
3 | (9) day care services; | ||||||
4 | (10) home health care services; | ||||||
5 | (11) respite care services; and | ||||||
6 | (12) services provided by chiropractors, podiatrists, | ||||||
7 | and optometrists. | ||||||
8 | "Long-term care insurance" means insurance coverage for at | ||||||
9 | least 12 consecutive months for each covered person on an | ||||||
10 | expense incurred, indemnity, or prepaid basis for one or more | ||||||
11 | necessary long-term care services provided in a setting other | ||||||
12 | than an acute care wing of a hospital. "Long-term care | ||||||
13 | insurance" does not include payment: | ||||||
14 | (1) of coinsurance, deductibles, or premiums for other | ||||||
15 | insurance policies; | ||||||
16 | (2) for services covered by other insurance policies; | ||||||
17 | or | ||||||
18 | (3) for services covered by Parts A and B of the | ||||||
19 | Medicare program (42 U.S.C. 1395).
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20 | "Long-term care facility" has the same meaning ascribed to | ||||||
21 | that term in the Nursing Home Care Act.
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22 | "Long-term care policy" means an insurance policy that | ||||||
23 | provides coverage for at least 12 consecutive months for each | ||||||
24 | covered person on an
expense incurred, indemnity, prepaid, or | ||||||
25 | other basis for one or more necessary diagnostic, preventive, | ||||||
26 | therapeutic, rehabilitative, maintenance, or personal care |
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1 | services provided in a setting other than an acute care wing of | ||||||
2 | a hospital. "Long-term care policy" includes the following: | ||||||
3 | (1) A policy advertised, marketed, or offered as | ||||||
4 | long-term care insurance. | ||||||
5 | (2) A group or individual annuity, a life insurance | ||||||
6 | policy, or riders that provide directly or supplement | ||||||
7 | long-term care insurance. | ||||||
8 | (3) A policy or rider that provides for payment of | ||||||
9 | benefits based upon cognitive impairment or the loss of | ||||||
10 | functional capacity. | ||||||
11 | "Long-term care policy" does not include the following: | ||||||
12 | (1) An insurance policy that is offered primarily to | ||||||
13 | provide basic hospital expense coverage, basic medical and | ||||||
14 | surgical expense coverage, hospital confinement indemnity | ||||||
15 | coverage, major medical expense coverage, disability | ||||||
16 | income protection coverage, accident only coverage, | ||||||
17 | specified disease or specified accident coverage, | ||||||
18 | comprehensive coverage, catastrophic coverage, or limited | ||||||
19 | benefit health coverage. | ||||||
20 | (2) A life insurance policy that accelerates the death | ||||||
21 | benefit specifically for terminal illness, a medical | ||||||
22 | condition requiring extraordinary medical intervention, or | ||||||
23 | a permanent institutional confinement and that provides | ||||||
24 | the option of a lump sum payment for those benefits and in | ||||||
25 | which neither the benefits nor the eligibility for the | ||||||
26 | benefits is conditioned upon the receipt of long-term care. |
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1 | (3) An insurance policy that is offered primarily to | ||||||
2 | provide basic Medicare supplemental coverage. | ||||||
3 | (215 ILCS 5/1505 new)
| ||||||
4 | Sec. 1505. Illinois long-term care program. | ||||||
5 | (a) The Illinois long-term care program is established to | ||||||
6 | do the following: | ||||||
7 | (1) provide incentives for individuals to insure | ||||||
8 | against the costs of providing for their long-term care | ||||||
9 | needs; | ||||||
10 | (2) provide a mechanism for individuals to qualify for | ||||||
11 | coverage of the costs of their long-term care needs under | ||||||
12 | the Medicaid program without first being required to | ||||||
13 | substantially exhaust all their resources; | ||||||
14 | (3) assist in developing methods for increasing access | ||||||
15 | to and the affordability of a long-term care policy; | ||||||
16 | (4) provide counseling services to individuals in | ||||||
17 | planning for their long-term care needs; and | ||||||
18 | (5) alleviate the financial burden on the State's | ||||||
19 | medical assistance program by encouraging the pursuit of | ||||||
20 | private initiatives. | ||||||
21 | (b) The Department and the Division shall administer the | ||||||
22 | program. The Division shall develop and coordinate a plan to | ||||||
23 | provide counseling services under the program. | ||||||
24 | (215 ILCS 5/1510 new)
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1 | Sec. 1510. Information on program. | ||||||
2 | (a) The Division or the agency with which the Division has | ||||||
3 | contracted shall make available to any individual interested in | ||||||
4 | participating in the Illinois long-term care program | ||||||
5 | information
concerning the following: | ||||||
6 | (1) The Illinois long-term care program. | ||||||
7 | (2) Long-term care insurance policies. | ||||||
8 | (3) Medicare supplement insurance policies. | ||||||
9 | (4) Parts A and B of the Medicare program (42 U.S.C. | ||||||
10 | 1395). | ||||||
11 | (5) Health maintenance organizations that have | ||||||
12 | contracted with the Medicare program. | ||||||
13 | (6) The Medicaid program. | ||||||
14 | (b) If an individual elects to pursue any of the options | ||||||
15 | under subsection (a) of this Section, the Division shall assist | ||||||
16 | the individual in doing so. | ||||||
17 | (215 ILCS 5/1515 new)
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18 | Sec. 1515. Eligibility. An individual who is either:
(1) | ||||||
19 | the beneficiary of a qualified long-term care policy approved | ||||||
20 | by the Division; or
(2) enrolled in a health maintenance | ||||||
21 | organization that both provides long-term care services and | ||||||
22 | meets the requirements of this Article
is eligible for | ||||||
23 | assistance under the Medicaid program using the asset disregard | ||||||
24 | under Section 1525 of this Code. |
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1 | (215 ILCS 5/1520 new)
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2 | Sec. 1520. Policy provisions. | ||||||
3 | (a) An insurer or other person who issues a qualified | ||||||
4 | long-term care policy under this Article must at a minimum | ||||||
5 | offer to each policyholder or prospective policyholder a policy | ||||||
6 | that provides both: | ||||||
7 | (1) long-term care facility coverage; and | ||||||
8 | (2) home and community care coverage. | ||||||
9 | (b) An insurer or other person who complies with subsection | ||||||
10 | (a) of this Section may also elect to offer a qualified | ||||||
11 | long-term care policy that provides only long-term care | ||||||
12 | facility coverage. | ||||||
13 | (215 ILCS 5/1525 new)
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14 | Sec. 1525. Asset disregard adjustment. | ||||||
15 | (a) As used in this Section, "asset disregard" means one of the | ||||||
16 | following: | ||||||
17 | (1) A one dollar increase in the amount of assets an | ||||||
18 | individual who:
(A) purchases a qualified long-term care | ||||||
19 | policy; and
(B) meets the requirements under Section 1515 | ||||||
20 | of this Code
may retain under the Medicaid program for each | ||||||
21 | one dollar of benefit paid out under the individual's | ||||||
22 | long-term care policy for long-term care services. | ||||||
23 | (2) The total assets an individual owns and may retain | ||||||
24 | under
the Medicaid program and still qualify for benefits | ||||||
25 | at the time the individual applies for benefits if the |
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1 | individual: | ||||||
2 | (A) is the beneficiary of a qualified long-term | ||||||
3 | care policy that provides maximum benefits at the time | ||||||
4 | of purchase of at least $140,000 and includes a | ||||||
5 | provision under which the daily benefit increases by at | ||||||
6 | least 5% per year, compounded at least annually; | ||||||
7 | (B) meets the requirements under Section 1515 of | ||||||
8 | this Article; and | ||||||
9 | (C) has exhausted the benefits of the qualified | ||||||
10 | long-term care policy. | ||||||
11 | (b) When the Department determines whether an individual is | ||||||
12 | eligible for Medicaid, the Department shall make an asset | ||||||
13 | disregard adjustment for any individual who purchases a | ||||||
14 | qualified long-term care policy. The asset disregard must be | ||||||
15 | available after benefits of the long-term care policy have been | ||||||
16 | applied to the cost of long-term care as required under this | ||||||
17 | Article. | ||||||
18 | (c) The qualified long-term care policy an individual must | ||||||
19 | purchase to be eligible for the asset disregard under | ||||||
20 | subsection (a)(2) of this Section must have maximum benefits at | ||||||
21 | the time of purchase equal to at least $140,000 plus 5% | ||||||
22 | interest compounded annually beginning January 1, 2008. | ||||||
23 | (215 ILCS 5/1530 new)
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24 | Sec. 1530. Public programs; asset disregard. A public | ||||||
25 | program administered by the State that (i) provides long-term |
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1 | care services and
(ii) bases eligibility upon the amount of the | ||||||
2 | individual's assets must apply the asset disregard under | ||||||
3 | Section 1525 of this Code in determining the amount of the | ||||||
4 | individual's assets. | ||||||
5 | |||||||
6 | (215 ILCS 5/1535 new)
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7 | Sec. 1535. Discontinuation of program. If the Illinois | ||||||
8 | long-term care program is discontinued, an individual who | ||||||
9 | purchased a qualified long-term care policy prior to the date | ||||||
10 | the program is discontinued is eligible to receive an asset | ||||||
11 | disregard as defined under Section 1525 of this Code. | ||||||
12 | (215 ILCS 5/1540 new)
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13 | Sec. 1540. Reciprocal agreements to extend asset | ||||||
14 | disregard. The Department may enter into reciprocal agreements | ||||||
15 | with other states to extend the asset disregard under Section | ||||||
16 | 1525 of this Article to residents who had purchased qualified | ||||||
17 | long-term care policies in other states. | ||||||
18 | (215 ILCS 5/1545 new)
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19 | Sec. 1545. Rules. The Director of Healthcare and Family | ||||||
20 | Services may adopt rules necessary to implement this Act. | ||||||
21 | (215 ILCS 5/1550 new)
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22 | Sec. 1550. Compliance with statutory requirements. An |
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1 | insurance policy may be marketed, advertised, offered, or sold | ||||||
2 | in this State as long-term care insurance only if that policy | ||||||
3 | complies with the requirements of this Article. | ||||||
4 | (215 ILCS 5/1555 new)
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5 | Sec. 1555. Standards for policy disclosure, marketing | ||||||
6 | practices, continuing education, penalties, and reporting | ||||||
7 | practices. | ||||||
8 | (a) The Director of the Division shall adopt rules | ||||||
9 | establishing standards of full and fair disclosure concerning | ||||||
10 | long-term care insurance policies. The standards must require | ||||||
11 | disclosure of information concerning the following: | ||||||
12 | (1) the sale of the policies; | ||||||
13 | (2) terms of renewability; | ||||||
14 | (3) initial and subsequent terms of eligibility; | ||||||
15 | (4) nonduplication of coverage provisions; | ||||||
16 | (5) coverage of dependents; | ||||||
17 | (6) preexisting conditions; | ||||||
18 | (7) termination of insurance coverage; | ||||||
19 | (8) probationary periods; | ||||||
20 | (9) limitations on coverage; | ||||||
21 | (10) exceptions to coverage; | ||||||
22 | (11) reductions from coverage; | ||||||
23 | (12) elimination periods; | ||||||
24 | (13) requirements for replacement; | ||||||
25 | (14) recurrent conditions; |
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1 | (15) definitions of terms; and | ||||||
2 | (16) continuation or conversion of coverage. | ||||||
3 | (b) The Director of the Division may establish minimum | ||||||
4 | standards concerning: | ||||||
5 | (1) marketing practices; | ||||||
6 | (2) insurance producer continuing education; | ||||||
7 | (3) penalties; and | ||||||
8 | (4) reporting practices for long-term care insurance. | ||||||
9 | (c) Rules adopted by the Director of the Division under | ||||||
10 | this Section must: | ||||||
11 | (1) recognize the unique, developing, and experimental | ||||||
12 | nature of long-term care insurance; and | ||||||
13 | (2) where necessary or appropriate, recognize the | ||||||
14 | distinctions between group insurance policies and | ||||||
15 | individual insurance policies. | ||||||
16 | (215 ILCS 5/1560 new)
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17 | Sec. 1560. Qualification of long-term care policies; | ||||||
18 | rules. The Division shall adopt rules that establish standards | ||||||
19 | for the qualification of a long-term care policy. The rules | ||||||
20 | must include the following: | ||||||
21 | (1) The standards adopted under Section 1555 of this | ||||||
22 | Code. | ||||||
23 | (2) The requirement that an insurer or other person who | ||||||
24 | issues a qualified long-term care policy must at a minimum | ||||||
25 | offer to each policyholder or prospective policyholder a |
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1 | policy that provides both: | ||||||
2 | (A) long-term care facility coverage; and | ||||||
3 | (B) home and community care coverage. | ||||||
4 | (3) A provision that an insurer or other person who | ||||||
5 | complies with subdivision (2) of this Section may elect to | ||||||
6 | also offer a qualified long-term care policy that provides | ||||||
7 | only long-term care facility coverage. | ||||||
8 | (4) The submission of data by insurers that will allow | ||||||
9 | the Division and the Department to administer the Illinois
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10 | long-term care program. | ||||||
11 | (5) Other standards needed to administer the Illinois | ||||||
12 | long-term care program. | ||||||
13 | (215 ILCS 5/1565 new)
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14 | Sec. 1565. Loss ratio standards rule. The Director of the | ||||||
15 | Division may not adopt a rule establishing loss ratio standards | ||||||
16 | that apply to long-term care insurance policies unless the rule | ||||||
17 | exclusively concerns long-term care insurance. | ||||||
18 | (215 ILCS 5/1570 new)
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19 | Sec. 1570. Termination of policy on grounds of age or | ||||||
20 | deteriorated health. An insurer that issues a long-term care | ||||||
21 | insurance policy may not cancel, decline to renew, or otherwise | ||||||
22 | terminate the policy solely on the grounds of the age or | ||||||
23 | deterioration in mental or physical health of the insured | ||||||
24 | individual or certificate holder. |
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1 | (215 ILCS 5/1575 new)
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2 | Sec. 1575. Exclusion of coverage; limitations. | ||||||
3 | (a) As used in this Section, "preexisting condition" means | ||||||
4 | the existence of either
symptoms that would cause an ordinarily | ||||||
5 | prudent person to seek diagnosis, care, or treatment or a | ||||||
6 | condition for which medical advice or treatment was recommended | ||||||
7 | by or received from a provider of health care services within a | ||||||
8 | period not to exceed either: | ||||||
9 | (1) 12 months preceding the effective date of coverage | ||||||
10 | of an insured person who is 65 years of age or older on the | ||||||
11 | effective date of coverage; or | ||||||
12 | (2) 24 months preceding the effective date of coverage | ||||||
13 | of an insured person who is less than 65 years of age on | ||||||
14 | the effective date of coverage. | ||||||
15 | (b) A long-term care insurance policy may exclude coverage | ||||||
16 | for a loss or confinement that is the result of a preexisting | ||||||
17 | condition only if that loss or confinement begins within: | ||||||
18 | (1) 12 months following the effective date of coverage | ||||||
19 | of an insured person who is 65 years of age or older on the | ||||||
20 | effective date of coverage; or | ||||||
21 | (2) 24 months following the effective date of coverage | ||||||
22 | of an insured person who is under 65 years of age on the | ||||||
23 | effective date of coverage. | ||||||
24 | (c) The Director of the Division may extend the limitation | ||||||
25 | periods set forth in this Section concerning specific age group |
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1 | categories in specific policies upon a finding that the | ||||||
2 | extension is in the best interests of the public. | ||||||
3 | (215 ILCS 5/1580 new)
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4 | Sec. 1580. Loss or confinement resulting from a preexisting | ||||||
5 | condition. | ||||||
6 | (a) As used in this Section, "preexisting condition" means | ||||||
7 | a condition for which medical advice or treatment was | ||||||
8 | recommended by or received from a provider of health care | ||||||
9 | services within 6 months preceding the effective date of | ||||||
10 | coverage of an insured individual. | ||||||
11 | (b) A long-term care insurance policy may not use a | ||||||
12 | definition of preexisting condition that is more restrictive | ||||||
13 | than the definition contained in subsection (a) of this | ||||||
14 | Section. | ||||||
15 | (c) A long-term care insurance policy may not exclude | ||||||
16 | coverage for a loss or confinement that is the result of a | ||||||
17 | preexisting condition unless the loss or confinement begins | ||||||
18 | within 6 months following the effective date of coverage of an | ||||||
19 | insured individual. | ||||||
20 | (d) The Director of the Division may extend the limitation | ||||||
21 | period under subsections (a) and (c) of this Section concerning | ||||||
22 | a specific age group category in a specific policy form upon a | ||||||
23 | finding by the Director that the extension is in the best | ||||||
24 | interest of the public. | ||||||
25 | (e) This Section does not prohibit an insurer from doing |
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1 | any of the following: | ||||||
2 | (1) Using an application form designed to elicit the | ||||||
3 | complete health history of an applicant. | ||||||
4 | (2) Based on an application, underwriting in | ||||||
5 | accordance with the insurer's established underwriting | ||||||
6 | standards. | ||||||
7 | (f) Unless otherwise provided in the policy or certificate, | ||||||
8 | a preexisting condition, regardless of whether the condition is | ||||||
9 | disclosed on the application, need not be covered until after | ||||||
10 | the waiting period described in subsection (c) of this Section. | ||||||
11 | (g) A long-term care insurance policy may not exclude or | ||||||
12 | use a waiver or rider to exclude, limit, or reduce coverage or | ||||||
13 | benefits for a specifically named or described preexisting | ||||||
14 | disease or physical condition beyond the waiting period | ||||||
15 | described in subsection (c) of this Section. | ||||||
16 | (215 ILCS 5/1585 new)
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17 | Sec. 1585. Conditions on eligibility for benefits; | ||||||
18 | restrictions. | ||||||
19 | (a) A long-term care insurance policy may not be delivered | ||||||
20 | or issued for delivery in this State if the policy: | ||||||
21 | (1) conditions eligibility for any benefits on a prior | ||||||
22 | hospitalization requirement; | ||||||
23 | (2) conditions eligibility for benefits provided in an | ||||||
24 | institutional
care setting on the receipt of a higher level | ||||||
25 | of institutional care; or |
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1 | (3) conditions eligibility for a benefit other than: | ||||||
2 | (A) a waiver of premium; | ||||||
3 | (B) postconfinement; | ||||||
4 | (C) postacute care; or | ||||||
5 | (D) recuperative benefits
on a prior | ||||||
6 | institutionalization requirement. | ||||||
7 | (b) A long-term care insurance policy containing a | ||||||
8 | postconfinement, postacute, or recuperative benefit must | ||||||
9 | clearly label in a separate paragraph of the policy a statement | ||||||
10 | entitled "limitations or conditions on eligibility for | ||||||
11 | benefits". Under the statement, the policy must outline any | ||||||
12 | limitations or conditions for benefits. | ||||||
13 | (c) A long-term care insurance policy or rider that | ||||||
14 | conditions eligibility of noninstitutional benefits on the | ||||||
15 | prior receipt of institutional care must not require a prior | ||||||
16 | institutional stay of more than 30 days. | ||||||
17 | (d) A long-term care insurance policy or rider that | ||||||
18 | provides benefits only following institutionalization may not | ||||||
19 | condition such benefits upon admission to a facility for the | ||||||
20 | same or related conditions within a period of less than 30 days | ||||||
21 | after discharge from the institution. | ||||||
22 | (215 ILCS 5/1590 new)
| ||||||
23 | Sec. 1590. Establishment of new waiting period. A | ||||||
24 | long-term care insurance policy may not: | ||||||
25 | (1) contain a provision establishing a new waiting |
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1 | period if an existing policy is converted to or replaced by | ||||||
2 | a new form issued by the same insurer, except in the case | ||||||
3 | of an increase in benefits voluntarily selected by the | ||||||
4 | insured individual or group policyholder; | ||||||
5 | (2) be canceled, nonrenewed, or otherwise terminated | ||||||
6 | on the grounds of age or the deterioration of the mental or | ||||||
7 | physical health of the insured individual or certificate | ||||||
8 | holder; | ||||||
9 | (3) provide coverage for skilled nursing care only; or | ||||||
10 | (4) provide significantly more coverage for skilled | ||||||
11 | care than coverage for a lower level of care.
| ||||||
12 | This Section does not prohibit an insurer from voluntarily | ||||||
13 | waiving any authorized waiting period. | ||||||
14 | (215 ILCS 5/1595 new)
| ||||||
15 | Sec. 1595. No obligation return period; notice. | ||||||
16 | (a) An individual long-term care insurance policyholder | ||||||
17 | may return the policy within 30 days after its delivery and | ||||||
18 | have the premium refunded if, after examination of the policy, | ||||||
19 | the policyholder is not satisfied for any reason. | ||||||
20 | (b) Each individual long-term care insurance policy must | ||||||
21 | have prominently printed on or attached to its first page a | ||||||
22 | notice setting forth in substance the provisions of subsection | ||||||
23 | (a) of this Section. | ||||||
24 | (215 ILCS 5/1600 new)
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| |||||||
1 | Sec. 1600. Direct response solicitation issued policies. | ||||||
2 | (a) A person insured under a long-term care insurance | ||||||
3 | policy or certificate issued under a direct response | ||||||
4 | solicitation may return the policy or certificate within 30 | ||||||
5 | days after its delivery and have the premium refunded if the | ||||||
6 | insured person is not satisfied for any reason. | ||||||
7 | (b) Each long-term care insurance policy or certificate | ||||||
8 | issued under a direct response solicitation must have printed | ||||||
9 | on or attached to its first page a notice setting forth in | ||||||
10 | substance the provisions of subsection (a) of this Section. | ||||||
11 | (215 ILCS 5/1605 new)
| ||||||
12 | Sec. 1605. Outline of coverage; contents. | ||||||
13 | (a) The insurer shall deliver an outline of the coverage | ||||||
14 | provided by an individual long-term care insurance policy to | ||||||
15 | the prospective applicant at the time of initial solicitation | ||||||
16 | through means that prominently direct the attention of the | ||||||
17 | recipient to the document and the document's purpose. | ||||||
18 | (b) The Director of the Division shall prescribe a standard | ||||||
19 | format regarding:
(1) style;
(2) arrangement;
(3) overall | ||||||
20 | appearance; and
(4) content
for an outline of coverage. | ||||||
21 | (c) An insurance producer who solicits a long-term care | ||||||
22 | insurance policy shall deliver the outline of coverage before | ||||||
23 | the presentation of an application or enrollment form. | ||||||
24 | (d) The outline of coverage must be presented in | ||||||
25 | conjunction with any application or enrollment form when there |
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1 | is a direct response solicitation of long-term care insurance. | ||||||
2 | (e) An outline of coverage required under this Section must | ||||||
3 | include the following: | ||||||
4 | (1) A description of the principal benefits and | ||||||
5 | coverage provided in the policy. | ||||||
6 | (2) A statement of the principal exclusions, | ||||||
7 | reductions, and limitations set forth in the policy. | ||||||
8 | (3) A statement of the policy's renewal provisions, | ||||||
9 | including any reservation by the insurer of a right to | ||||||
10 | change premiums. | ||||||
11 | (4) A statement that the outline of coverage is a | ||||||
12 | summary of the policy issued or applied for and that the | ||||||
13 | policy should be consulted to determine the exact terms of | ||||||
14 | the coverage provided
by the policy. | ||||||
15 | (5) A description of the terms under which the policy | ||||||
16 | may be returned and the premium refunded. | ||||||
17 | (6) A brief description of the relationship of the cost | ||||||
18 | of care and benefits. | ||||||
19 | (7) A statement of the terms under which the policy or | ||||||
20 | certificate may continue or be discontinued, including any | ||||||
21 | reservation in the policy of the right to change the | ||||||
22 | premium. | ||||||
23 | (215 ILCS 5/1610 new)
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24 | Sec. 1610. Policy summary; requirements. | ||||||
25 | (a) A policy summary must be delivered, at the time of |
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1 | policy delivery, for an individual life insurance policy that | ||||||
2 | provides long-term care benefits within the policy or by a | ||||||
3 | rider. | ||||||
4 | (b) The insurer shall deliver the policy summary upon the | ||||||
5 | applicant's request when there is a direct response | ||||||
6 | solicitation. If there is no request, the insurer shall deliver | ||||||
7 | the policy summary not later than when the policy is delivered. | ||||||
8 | (c) The policy summary must include the following: | ||||||
9 | (1) An explanation of how long a long-term care benefit | ||||||
10 | interacts with other components of the policy, including | ||||||
11 | deductions from a death benefit. | ||||||
12 | (2) An illustration of the amount of a benefit, the | ||||||
13 | length of a benefit, and the guaranteed lifetime benefits | ||||||
14 | for each covered person. | ||||||
15 | (3) Any exclusion, reduction, or limitation on | ||||||
16 | benefits of long-term care. | ||||||
17 | (d) A policy summary required under this Section must also | ||||||
18 | include the following information, if applicable: | ||||||
19 | (1) A disclosure of any effect of exercising rights | ||||||
20 | under the policy other than rights referred to in | ||||||
21 | subsection (c) of this Section. | ||||||
22 | (2) A disclosure of any guarantee related to long-term | ||||||
23 | care costs of insurance charges. | ||||||
24 | (3) Current and projected maximum lifetime benefits. | ||||||
25 | (215 ILCS 5/1615 new)
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1 | Sec. 1615. Benefits funded through life insurance by | ||||||
2 | acceleration of death benefits. If a long-term care benefit, | ||||||
3 | funded through a life insurance vehicle by the acceleration of | ||||||
4 | the death benefit, is in benefit payment status, a monthly | ||||||
5 | report containing the following must be provided to the | ||||||
6 | policyholder: | ||||||
7 | (1) Any long-term care benefit paid out during the | ||||||
8 | month. | ||||||
9 | (2) An explanation of any change in the policy, | ||||||
10 | including a change in death benefit or cash value due to | ||||||
11 | long-term care
benefits being paid. | ||||||
12 | (3) The amount of long-term care benefits remaining | ||||||
13 | under the policy. | ||||||
14 | (215 ILCS 5/1620 new)
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15 | Sec. 1620. Group policy certificate; contents. A | ||||||
16 | certificate issued under a group long-term care insurance | ||||||
17 | policy that is delivered or issued for delivery in this State | ||||||
18 | must include the following: | ||||||
19 | (1) a description of the principal benefits and | ||||||
20 | coverage provided in the policy; | ||||||
21 | (2) a statement of the principal exclusions, | ||||||
22 | reductions, and limitations set forth in the policy; and | ||||||
23 | (3) a statement that the group master policy should be | ||||||
24 | consulted to determine the exact terms of the coverage | ||||||
25 | provided by the policy. |
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1 | (215 ILCS 5/1625 new)
| ||||||
2 | Sec. 1625. Application of general insurance law. All other | ||||||
3 | applicable provisions of this Code not in conflict with the | ||||||
4 | provisions of this Article shall apply to insurance policies | ||||||
5 | issued under this Article. | ||||||
6 | (215 ILCS 5/1630 new)
| ||||||
7 | Sec. 1630. Group policies issued in another state; | ||||||
8 | requirements. Group long-term care insurance may not be offered | ||||||
9 | to a resident of this State under a group policy issued in | ||||||
10 | another state unless the Director of the Division determines | ||||||
11 | that the group long-term care insurance policy substantially | ||||||
12 | complies with insurance requirements similar to those | ||||||
13 | established under this Article. | ||||||
14 | (215 ILCS 5/1635 new)
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15 | Sec. 1635. Compensation of insurance producers; | ||||||
16 | restrictions. | ||||||
17 | (a) As used in this Section, "compensation" includes | ||||||
18 | pecuniary and nonpecuniary remuneration of any kind relating to | ||||||
19 | the sale or renewal of the policy or certificate including, but | ||||||
20 | not limited to, the following: | ||||||
21 | (1) bonuses; | ||||||
22 | (2) gifts; | ||||||
23 | (3) prizes; |
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1 | (4) awards; and | ||||||
2 | (5) finders fees. | ||||||
3 | (b) An insurer or other entity that provides a commission | ||||||
4 | or other compensation to an insurance producer or other | ||||||
5 | representative for the sale of a long-term care insurance | ||||||
6 | policy may not violate the
following conditions: | ||||||
7 | (1) The amount of the first year commission or first | ||||||
8 | year compensation for selling or servicing the policy may | ||||||
9 | not exceed 200% of the amount of the commission or other | ||||||
10 | compensation paid in the second year. | ||||||
11 | (2) The amount of commission or other compensation | ||||||
12 | provided in years after the second year must be equal to | ||||||
13 | the amount provided in the second year. | ||||||
14 | (3) A commission or other compensation must be provided | ||||||
15 | each year for at least 5 years after the first year. | ||||||
16 | (c) If an existing long-term care policy or certificate is | ||||||
17 | replaced, the insurer or other entity that issues the | ||||||
18 | replacement policy may not provide, and its insurance producer | ||||||
19 | may not accept, compensation in an amount greater than the | ||||||
20 | renewal compensation payable by the replacing insurer on | ||||||
21 | renewal policies, unless the benefits of the replacement policy | ||||||
22 | or certificate are clearly and substantially greater than the | ||||||
23 | benefits under the replaced policy or certificate. | ||||||
24 | (d) This Section does not apply to the following: | ||||||
25 | (1) Life insurance policies and certificates. | ||||||
26 | (2) A policy or certificate that is sponsored by an |
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| |||||||
1 | employer for the benefit of: | ||||||
2 | (A) the employer's employees; or | ||||||
3 | (B) the employer's employees and their dependents. | ||||||
4 | (215 ILCS 5/1640 new)
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5 | Sec. 1640. Violations; civil penalty; amount. | ||||||
6 | (a) In addition to any other sanction provided under this | ||||||
7 | Article, the Director of the Division may impose a civil | ||||||
8 | penalty against an insurer who has violated this Article or | ||||||
9 | rules adopted under this Article. A penalty imposed under this | ||||||
10 | Article must be the greater of: | ||||||
11 | (1) 3 times the amount of the commissions paid for each | ||||||
12 | policy involved in the violation; or | ||||||
13 | (2) $10,000. | ||||||
14 | (b) In addition to any other sanction provided under this | ||||||
15 | Article, the Director of the Division may impose a penalty | ||||||
16 | against an insurance producer who has violated this Article or | ||||||
17 | rules adopted under this Article. The penalty must be the | ||||||
18 | greater of: | ||||||
19 | (1) up to 3 times the amount of the commissions paid to | ||||||
20 | that insurance producer for each policy involved in the | ||||||
21 | violation; or | ||||||
22 | (2)$2,500.
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23 | (215 ILCS 5/Art. XIXA rep.) | ||||||
24 | Section 10. The Illinois Insurance Code is amended by |
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1 | repealing Article XIXA.
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