96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB0240

 

Introduced 2/4/2009, by Sen. William R. Haine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/4   from Ch. 73, par. 616

    Amends the Illinois Insurance Code. In the provisions concerning the classification of insurance and insurance businesses, provides that the insurance laws of this State, including the Act, do not apply to a religious organization or members of the organization when the organization adheres to specified provisions. Sets forth the verbatim written disclaimer that all such organizations shall provide on all applications for membership or participation. Effective immediately.


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A BILL FOR

 

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1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by
5 changing Section 4 as follows:
 
6     (215 ILCS 5/4)  (from Ch. 73, par. 616)
7     Sec. 4. Classes of insurance. Insurance and insurance
8 business shall be classified as follows:
9     Class 1. Life, Accident and Health.
10     (a) Life. Insurance on the lives of persons and every
11 insurance appertaining thereto or connected therewith and
12 granting, purchasing or disposing of annuities. Policies of
13 life or endowment insurance or annuity contracts or contracts
14 supplemental thereto which contain provisions for additional
15 benefits in case of death by accidental means and provisions
16 operating to safeguard such policies or contracts against
17 lapse, to give a special surrender value, or special benefit,
18 or an annuity, in the event, that the insured or annuitant
19 shall become totally and permanently disabled as defined by the
20 policy or contract, or which contain benefits providing
21 acceleration of life or endowment or annuity benefits in
22 advance of the time they would otherwise be payable, as an
23 indemnity for long term care which is certified or ordered by a

 

 

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1 physician, including but not limited to, professional nursing
2 care, medical care expenses, custodial nursing care,
3 non-nursing custodial care provided in a nursing home or at a
4 residence of the insured, or which contain benefits providing
5 acceleration of life or endowment or annuity benefits in
6 advance of the time they would otherwise be payable, at any
7 time during the insured's lifetime, as an indemnity for a
8 terminal illness shall be deemed to be policies of life or
9 endowment insurance or annuity contracts within the intent of
10 this clause.
11     Also to be deemed as policies of life or endowment
12 insurance or annuity contracts within the intent of this clause
13 shall be those policies or riders that provide for the payment
14 of up to 75% of the face amount of benefits in advance of the
15 time they would otherwise be payable upon a diagnosis by a
16 physician licensed to practice medicine in all of its branches
17 that the insured has incurred a covered condition listed in the
18 policy or rider.
19     "Covered condition", as used in this clause, means: heart
20 attack, stroke, coronary artery surgery, life threatening
21 cancer, renal failure, alzheimer's disease, paraplegia, major
22 organ transplantation, total and permanent disability, and any
23 other medical condition that the Department may approve for any
24 particular filing.
25     The Director may issue rules that specify prohibited policy
26 provisions, not otherwise specifically prohibited by law,

 

 

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1 which in the opinion of the Director are unjust, unfair, or
2 unfairly discriminatory to the policyholder, any person
3 insured under the policy, or beneficiary.
4     (b) Accident and health. Insurance against bodily injury,
5 disablement or death by accident and against disablement
6 resulting from sickness or old age and every insurance
7 appertaining thereto, including stop-loss insurance. Stop-loss
8 insurance is insurance against the risk of economic loss issued
9 to a single employer self-funded employee disability benefit
10 plan or an employee welfare benefit plan as described in 29
11 U.S.C. 100 et seq. The insurance laws of this State, including
12 this Act, do not apply to a religious organization or members
13 of the organization when the organization:
14         (i) is a nonprofit religious organization;
15         (ii) is limited to participants who are members of the
16     same religion;
17         (iii) facilitates payments between participants who
18     have financial, physical, or medical needs and
19     participants with the present ability to pay for the
20     benefit of those participants with present financial,
21     physical, or medical needs; nothing in this item (iii)
22     shall prevent the organization from establishing
23     qualifications of participation relating to the health of
24     the prospective participant nor shall it prevent the
25     participants from limiting the financial or medical needs
26     that may be eligible for payment among the participants;

 

 

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1         (iv) facilitates the payments provided for in item
2     (iii) of this subsection (b) through payments made directly
3     from one participant to another; the requirements of this
4     item (iv) can be satisfied by means of payments between
5     members made in person, through the United States postal
6     service, expedited delivery service, or by wire or other
7     form of electronic transfer;
8         (v) specifies amounts that participants may give with
9     no assumption of risk or promise to pay either among the
10     participants or between the participants and the
11     organization; nothing in this item (v) shall prevent the
12     organization from canceling the membership of a
13     participant when that participant indicates their
14     unwillingness to participate by failing to make a payment
15     to another participant for a period in excess of 60 days;
16     and
17         (vi) provides the following verbatim written
18     disclaimer on all applications for membership or
19     participation:
20     "NOTICE: This organization is not insurance or an insurance
21     policy nor is it offered through an insurance company.
22     Whether anyone chooses to assist you with your medical
23     bills will be totally voluntary, as no other member will be
24     compelled by law to contribute toward your medical bills.
25     As such, this organization should never be considered to be
26     insurance. Whether you receive any payments for medical

 

 

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1     expenses and whether or not this organization continues to
2     operate, you are always personally responsible for the
3     payment of your own medical bills. This organization is not
4     subject to the regulatory requirements or consumer
5     protections of your State's Insurance Code or Statutes.".
6     (c) Legal Expense Insurance. Insurance which involves the
7 assumption of a contractual obligation to reimburse the
8 beneficiary against or pay on behalf of the beneficiary, all or
9 a portion of his fees, costs, or expenses related to or arising
10 out of services performed by or under the supervision of an
11 attorney licensed to practice in the jurisdiction wherein the
12 services are performed, regardless of whether the payment is
13 made by the beneficiaries individually or by a third person for
14 them, but does not include the provision of or reimbursement
15 for legal services incidental to other insurance coverages. The
16 insurance laws of this State, including this Act do not apply
17 to:
18         (i) Retainer contracts made by attorneys at law with
19     individual clients with fees based on estimates of the
20     nature and amount of services to be provided to the
21     specific client, and similar contracts made with a group of
22     clients involved in the same or closely related legal
23     matters;
24         (ii) Plans owned or operated by attorneys who are the
25     providers of legal services to the plan;
26         (iii) Plans providing legal service benefits to groups

 

 

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1     where such plans are owned or operated by authority of a
2     state, county, local or other bar association;
3         (iv) Any lawyer referral service authorized or
4     operated by a state, county, local or other bar
5     association;
6         (v) The furnishing of legal assistance by labor unions
7     and other employee organizations to their members in
8     matters relating to employment or occupation;
9         (vi) The furnishing of legal assistance to members or
10     dependents, by churches, consumer organizations,
11     cooperatives, educational institutions, credit unions, or
12     organizations of employees, where such organizations
13     contract directly with lawyers or law firms for the
14     provision of legal services, and the administration and
15     marketing of such legal services is wholly conducted by the
16     organization or its subsidiary;
17         (vii) Legal services provided by an employee welfare
18     benefit plan defined by the Employee Retirement Income
19     Security Act of 1974;
20         (viii) Any collectively bargained plan for legal
21     services between a labor union and an employer negotiated
22     pursuant to Section 302 of the Labor Management Relations
23     Act as now or hereafter amended, under which plan legal
24     services will be provided for employees of the employer
25     whether or not payments for such services are funded to or
26     through an insurance company.

 

 

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1     Class 2. Casualty, Fidelity and Surety.
2     (a) Accident and health. Insurance against bodily injury,
3 disablement or death by accident and against disablement
4 resulting from sickness or old age and every insurance
5 appertaining thereto, including stop-loss insurance. Stop-loss
6 insurance is insurance against the risk of economic loss issued
7 to a single employer self-funded employee disability benefit
8 plan or an employee welfare benefit plan as described in 29
9 U.S.C. 1001 et seq.
10     (b) Vehicle. Insurance against any loss or liability
11 resulting from or incident to the ownership, maintenance or use
12 of any vehicle (motor or otherwise), draft animal or aircraft.
13 Any policy insuring against any loss or liability on account of
14 the bodily injury or death of any person may contain a
15 provision for payment of disability benefits to injured persons
16 and death benefits to dependents, beneficiaries or personal
17 representatives of persons who are killed, including the named
18 insured, irrespective of legal liability of the insured, if the
19 injury or death for which benefits are provided is caused by
20 accident and sustained while in or upon or while entering into
21 or alighting from or through being struck by a vehicle (motor
22 or otherwise), draft animal or aircraft, and such provision
23 shall not be deemed to be accident insurance.
24     (c) Liability. Insurance against the liability of the
25 insured for the death, injury or disability of an employee or
26 other person, and insurance against the liability of the

 

 

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1 insured for damage to or destruction of another person's
2 property.
3     (d) Workers' compensation. Insurance of the obligations
4 accepted by or imposed upon employers under laws for workers'
5 compensation.
6     (e) Burglary and forgery. Insurance against loss or damage
7 by burglary, theft, larceny, robbery, forgery, fraud or
8 otherwise; including all householders' personal property
9 floater risks.
10     (f) Glass. Insurance against loss or damage to glass
11 including lettering, ornamentation and fittings from any
12 cause.
13     (g) Fidelity and surety. Become surety or guarantor for any
14 person, copartnership or corporation in any position or place
15 of trust or as custodian of money or property, public or
16 private; or, becoming a surety or guarantor for the performance
17 of any person, copartnership or corporation of any lawful
18 obligation, undertaking, agreement or contract of any kind,
19 except contracts or policies of insurance; and underwriting
20 blanket bonds. Such obligations shall be known and treated as
21 suretyship obligations and such business shall be known as
22 surety business.
23     (h) Miscellaneous. Insurance against loss or damage to
24 property and any liability of the insured caused by accidents
25 to boilers, pipes, pressure containers, machinery and
26 apparatus of any kind and any apparatus connected thereto, or

 

 

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1 used for creating, transmitting or applying power, light, heat,
2 steam or refrigeration, making inspection of and issuing
3 certificates of inspection upon elevators, boilers, machinery
4 and apparatus of any kind and all mechanical apparatus and
5 appliances appertaining thereto; insurance against loss or
6 damage by water entering through leaks or openings in
7 buildings, or from the breakage or leakage of a sprinkler,
8 pumps, water pipes, plumbing and all tanks, apparatus, conduits
9 and containers designed to bring water into buildings or for
10 its storage or utilization therein, or caused by the falling of
11 a tank, tank platform or supports, or against loss or damage
12 from any cause (other than causes specifically enumerated under
13 Class 3 of this Section) to such sprinkler, pumps, water pipes,
14 plumbing, tanks, apparatus, conduits or containers; insurance
15 against loss or damage which may result from the failure of
16 debtors to pay their obligations to the insured; and insurance
17 of the payment of money for personal services under contracts
18 of hiring.
19     (i) Other casualty risks. Insurance against any other
20 casualty risk not otherwise specified under Classes 1 or 3,
21 which may lawfully be the subject of insurance and may properly
22 be classified under Class 2.
23     (j) Contingent losses. Contingent, consequential and
24 indirect coverages wherein the proximate cause of the loss is
25 attributable to any one of the causes enumerated under Class 2.
26 Such coverages shall, for the purpose of classification, be

 

 

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1 included in the specific grouping of the kinds of insurance
2 wherein such cause is specified.
3     (k) Livestock and domestic animals. Insurance against
4 mortality, accident and health of livestock and domestic
5 animals.
6     (l) Legal expense insurance. Insurance against risk
7 resulting from the cost of legal services as defined under
8 Class 1(c).
9     Class 3. Fire and Marine, etc.
10     (a) Fire. Insurance against loss or damage by fire, smoke
11 and smudge, lightning or other electrical disturbances.
12     (b) Elements. Insurance against loss or damage by
13 earthquake, windstorms, cyclone, tornado, tempests, hail,
14 frost, snow, ice, sleet, flood, rain, drought or other weather
15 or climatic conditions including excess or deficiency of
16 moisture, rising of the waters of the ocean or its tributaries.
17     (c) War, riot and explosion. Insurance against loss or
18 damage by bombardment, invasion, insurrection, riot, strikes,
19 civil war or commotion, military or usurped power, or explosion
20 (other than explosion of steam boilers and the breaking of fly
21 wheels on premises owned, controlled, managed, or maintained by
22 the insured.)
23     (d) Marine and transportation. Insurance against loss or
24 damage to vessels, craft, aircraft, vehicles of every kind,
25 (excluding vehicles operating under their own power or while in
26 storage not incidental to transportation) as well as all goods,

 

 

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1 freights, cargoes, merchandise, effects, disbursements,
2 profits, moneys, bullion, precious stones, securities, chooses
3 in action, evidences of debt, valuable papers, bottomry and
4 respondentia interests and all other kinds of property and
5 interests therein, in respect to, appertaining to or in
6 connection with any or all risks or perils of navigation,
7 transit, or transportation, including war risks, on or under
8 any seas or other waters, on land or in the air, or while being
9 assembled, packed, crated, baled, compressed or similarly
10 prepared for shipment or while awaiting the same or during any
11 delays, storage, transshipment, or reshipment incident
12 thereto, including marine builder's risks and all personal
13 property floater risks; and for loss or damage to persons or
14 property in connection with or appertaining to marine, inland
15 marine, transit or transportation insurance, including
16 liability for loss of or damage to either arising out of or in
17 connection with the construction, repair, operation,
18 maintenance, or use of the subject matter of such insurance,
19 (but not including life insurance or surety bonds); but, except
20 as herein specified, shall not mean insurances against loss by
21 reason of bodily injury to the person; and insurance against
22 loss or damage to precious stones, jewels, jewelry, gold,
23 silver and other precious metals whether used in business or
24 trade or otherwise and whether the same be in course of
25 transportation or otherwise, which shall include jewelers'
26 block insurance; and insurance against loss or damage to

 

 

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1 bridges, tunnels and other instrumentalities of transportation
2 and communication (excluding buildings, their furniture and
3 furnishings, fixed contents and supplies held in storage)
4 unless fire, tornado, sprinkler leakage, hail, explosion,
5 earthquake, riot and civil commotion are the only hazards to be
6 covered; and to piers, wharves, docks and slips, excluding the
7 risks of fire, tornado, sprinkler leakage, hail, explosion,
8 earthquake, riot and civil commotion; and to other aids to
9 navigation and transportation, including dry docks and marine
10 railways, against all risk.
11     (e) Vehicle. Insurance against loss or liability resulting
12 from or incident to the ownership, maintenance or use of any
13 vehicle (motor or otherwise), draft animal or aircraft,
14 excluding the liability of the insured for the death, injury or
15 disability of another person.
16     (f) Property damage, sprinkler leakage and crop. Insurance
17 against the liability of the insured for loss or damage to
18 another person's property or property interests from any cause
19 enumerated in this class; insurance against loss or damage by
20 water entering through leaks or openings in buildings, or from
21 the breakage or leakage of a sprinkler, pumps, water pipes,
22 plumbing and all tanks, apparatus, conduits and containers
23 designed to bring water into buildings or for its storage or
24 utilization therein, or caused by the falling of a tank, tank
25 platform or supports or against loss or damage from any cause
26 to such sprinklers, pumps, water pipes, plumbing, tanks,

 

 

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1 apparatus, conduits or containers; insurance against loss or
2 damage from insects, diseases or other causes to trees, crops
3 or other products of the soil.
4     (g) Other fire and marine risks. Insurance against any
5 other property risk not otherwise specified under Classes 1 or
6 2, which may lawfully be the subject of insurance and may
7 properly be classified under Class 3.
8     (h) Contingent losses. Contingent, consequential and
9 indirect coverages wherein the proximate cause of the loss is
10 attributable to any of the causes enumerated under Class 3.
11 Such coverages shall, for the purpose of classification, be
12 included in the specific grouping of the kinds of insurance
13 wherein such cause is specified.
14     (i) Legal expense insurance. Insurance against risk
15 resulting from the cost of legal services as defined under
16 Class 1(c).
17 (Source: P.A. 90-741, eff. 8-13-98; 90-810, eff. 1-6-99.)
 
18     Section 99. Effective date. This Act takes effect upon
19 becoming law.