99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2766

 

Introduced 2/17/2016, by Sen. William R. Haine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 125/1-2  from Ch. 111 1/2, par. 1402
215 ILCS 125/1-3  from Ch. 111 1/2, par. 1402.1
215 ILCS 125/2-1  from Ch. 111 1/2, par. 1403
215 ILCS 125/2-4  from Ch. 111 1/2, par. 1406
215 ILCS 125/2-6  from Ch. 111 1/2, par. 1406.2
215 ILCS 125/3-1  from Ch. 111 1/2, par. 1407.3
215 ILCS 125/5-3  from Ch. 111 1/2, par. 1411.2

    Amends the Health Maintenance Organization Act. Makes changes to the definition of "organization" and "admitted assets". Removes language providing that a foreign corporation may qualify for a certification of authority to establish and operate a Health Maintenance Organization under the Act and makes conforming changes. Removes language concerning allocations of net worth and contingent reserves for certain companies. Removes obsolete and duplicative language concerning statutory deposits for certain organizations. Provides that Health Maintenance Organizations are subject to certain financial examination provisions of the Illinois Insurance Code. Makes technical changes. Effective immediately.


LRB099 16157 EGJ 43559 b

 

 

A BILL FOR

 

SB2766LRB099 16157 EGJ 43559 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Health Maintenance Organization Act is
5amended by changing Sections 1-2, 1-3, 2-1, 2-4, 2-6, 3-1, and
65-3 as follows:
 
7    (215 ILCS 125/1-2)  (from Ch. 111 1/2, par. 1402)
8    Sec. 1-2. Definitions. As used in this Act, unless the
9context otherwise requires, the following terms shall have the
10meanings ascribed to them:
11    (1) "Advertisement" means any printed or published
12material, audiovisual material and descriptive literature of
13the health care plan used in direct mail, newspapers,
14magazines, radio scripts, television scripts, billboards and
15similar displays; and any descriptive literature or sales aids
16of all kinds disseminated by a representative of the health
17care plan for presentation to the public including, but not
18limited to, circulars, leaflets, booklets, depictions,
19illustrations, form letters and prepared sales presentations.
20    (2) "Director" means the Director of Insurance.
21    (3) "Basic health care services" means emergency care, and
22inpatient hospital and physician care, outpatient medical
23services, mental health services and care for alcohol and drug

 

 

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1abuse, including any reasonable deductibles and co-payments,
2all of which are subject to the limitations described in
3Section 4-20 of this Act and as determined by the Director
4pursuant to rule.
5    (4) "Enrollee" means an individual who has been enrolled in
6a health care plan.
7    (5) "Evidence of coverage" means any certificate,
8agreement, or contract issued to an enrollee setting out the
9coverage to which he is entitled in exchange for a per capita
10prepaid sum.
11    (6) "Group contract" means a contract for health care
12services which by its terms limits eligibility to members of a
13specified group.
14    (7) "Health care plan" means any arrangement whereby an any
15organization undertakes to provide or arrange for and pay for
16or reimburse the cost of basic health care services, excluding
17any reasonable deductibles and copayments, from providers
18selected by the Health Maintenance Organization and such
19arrangement consists of arranging for or the provision of such
20health care services, as distinguished from mere
21indemnification against the cost of such services, except as
22otherwise authorized by Section 2-3 of this Act, on a per
23capita prepaid basis, through insurance or otherwise. A "health
24care plan" also includes any arrangement whereby an
25organization undertakes to provide or arrange for or pay for or
26reimburse the cost of any health care service for persons who

 

 

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1are enrolled under Article V of the Illinois Public Aid Code or
2under the Children's Health Insurance Program Act through
3providers selected by the organization and the arrangement
4consists of making provision for the delivery of health care
5services, as distinguished from mere indemnification. A
6"health care plan" also includes any arrangement pursuant to
7Section 4-17. Nothing in this definition, however, affects the
8total medical services available to persons eligible for
9medical assistance under the Illinois Public Aid Code.
10    (8) "Health care services" means any services included in
11the furnishing to any individual of medical or dental care, or
12the hospitalization or incident to the furnishing of such care
13or hospitalization as well as the furnishing to any person of
14any and all other services for the purpose of preventing,
15alleviating, curing or healing human illness or injury.
16    (9) "Health Maintenance Organization" means an any
17organization formed under the laws of this or another state to
18provide or arrange for one or more health care plans under a
19system which causes any part of the risk of health care
20delivery to be borne by the organization or its providers.
21    (10) "Net worth" means admitted assets, as defined in
22Section 1-3 of this Act, minus liabilities.
23    (11) "Organization" means a domestic any insurance
24company, a nonprofit corporation authorized under the Dental
25Service Plan Act or the Voluntary Health Services Plans Act, or
26a corporation organized under the laws of this or another state

 

 

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1for the purpose of operating one or more health care plans and
2doing no business other than that of a Health Maintenance
3Organization or an insurance company. "Organization" shall
4also mean the University of Illinois Hospital as defined in the
5University of Illinois Hospital Act or a unit of local
6government health system operating within a county with a
7population of 3,000,000 or more.
8    (12) "Provider" means any physician, hospital facility,
9facility licensed under the Nursing Home Care Act, or facility
10or long-term care facility as those terms are defined in the
11Nursing Home Care Act or other person which is licensed or
12otherwise authorized to furnish health care services and also
13includes any other entity that arranges for the delivery or
14furnishing of health care service.
15    (13) "Producer" means a person directly or indirectly
16associated with a health care plan who engages in solicitation
17or enrollment.
18    (14) "Per capita prepaid" means a basis of prepayment by
19which a fixed amount of money is prepaid per individual or any
20other enrollment unit to the Health Maintenance Organization or
21for health care services which are provided during a definite
22time period regardless of the frequency or extent of the
23services rendered by the Health Maintenance Organization,
24except for copayments and deductibles and except as provided in
25subsection (f) of Section 5-3 of this Act.
26    (15) "Subscriber" means a person who has entered into a

 

 

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1contractual relationship with the Health Maintenance
2Organization for the provision of or arrangement of at least
3basic health care services to the beneficiaries of such
4contract.
5(Source: P.A. 98-651, eff. 6-16-14; 98-841, eff. 8-1-14; 99-78,
6eff. 7-20-15.)
 
7    (215 ILCS 125/1-3)  (from Ch. 111 1/2, par. 1402.1)
8    Sec. 1-3. Definitions of admitted assets. "Admitted assets
9Assets" includes the investments authorized or permitted by
10Section 3-1 of this Act and, in addition thereto, only the
11following:
12        (1) Amounts due from affiliates pursuant to management
13    contracts or service agreements which meet the
14    requirements of Section 141.1 of the Illinois Insurance
15    Code to the extent that the affiliate has liquid assets
16    with which to pay the balance and maintain its accounts on
17    a current basis; provided that the aggregate amount due
18    from affiliates may not exceed the lesser of 10% of the
19    organization's admitted assets or 25% of the
20    organization's net worth as defined in Section 3-1. Any
21    amount outstanding more than 3 months shall be deemed not
22    current. For purpose of this subsection "affiliates" are as
23    defined in Article VIII 1/2 of the Illinois Insurance Code.
24        (2) Amounts advanced to providers under contract to the
25    organization for services to be rendered to enrollees

 

 

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1    pursuant to the contract. Amounts advanced must be for
2    period of not more than 3 months and must be based on
3    historical or estimated utilization patterns with the
4    provider and must be reconciled against actual incurred
5    claims at least semi-annually. Amounts due in the aggregate
6    may not exceed 50% of the organization's net worth as
7    defined in Section 3-1. Amounts due from a single provider
8    may not exceed the lesser of 5% of the organization's
9    admitted assets or 10% of the organization's net worth.
10        (3) Amounts permitted under Section 2-7.
11(Source: P.A. 91-357, eff. 7-29-99; 91-549, eff. 8-14-99;
1292-16, eff. 6-28-01.)
 
13    (215 ILCS 125/2-1)  (from Ch. 111 1/2, par. 1403)
14    Sec. 2-1. Certificate of authority - Exception for
15corporate employee programs - Applications - Material
16modification of operation.
17    (a) No organization shall establish or operate a Health
18Maintenance Organization in this State without obtaining a
19certificate of authority under this Act. No person other than
20an organization may lawfully establish or operate a Health
21Maintenance Organization in this State. This Act shall not
22apply to the establishment and operation of a Health
23Maintenance Organization exclusively providing or arranging
24for health care services to employees of a corporate affiliate
25of such Health Maintenance Organization. This exclusion shall

 

 

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1be available only to those Health Maintenance Organizations
2which require employee contributions which equal less than 50%
3of the total cost of the health care plan, with the remainder
4of the cost being paid by the corporate affiliate which is the
5employer of the participants in the plan. This Act shall not
6apply to the establishment and operation of a Health
7Maintenance Organization exclusively providing or arranging
8health care services under contract with the State to persons
9committed to the custody of the Illinois Department of
10Corrections.
11    This Act does not apply to the establishment and operation
12of managed care community networks that are certified as
13risk-bearing entities under Section 5-11 of the Illinois Public
14Aid Code and that contract with the Department of Healthcare
15and Family Services (formerly Illinois Department of Public
16Aid) pursuant to that Section.
17    (b) Any organization may apply to the Director for and
18obtain a certificate of authority to establish and operate a
19Health Maintenance Organization in compliance with this Act. A
20foreign corporation may qualify under this Act, subject to its
21registration to do business in this State as a foreign
22corporation.
23    (c) Each application for a certificate of authority shall
24be filed in triplicate and verified by an officer or authorized
25representative of the applicant, shall be in a form prescribed
26by the Director, and shall set forth, without limiting what may

 

 

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1be required by the Director, the following:
2        (1) A copy of the organizational document;
3        (2) A copy of the bylaws, rules and regulations, or
4    similar document regulating the conduct of the internal
5    affairs of the applicant, which shall include a mechanism
6    to afford the enrollees an opportunity to participate in an
7    advisory capacity in matters of policy and operations;
8        (3) A list of the names, addresses, and official
9    positions of the persons who are to be responsible for the
10    conduct of the affairs of the applicant; including, but not
11    limited to, all members of the board of directors,
12    executive committee, the principal officers, and any
13    person or entity owning or having the right to acquire 10%
14    or more of the voting securities or subordinated debt of
15    the applicant;
16        (4) A statement generally describing the applicant,
17    geographic area to be served, its facilities, personnel and
18    the health care services to be offered;
19        (5) A copy of the form of any contract made or to be
20    made between the applicant and any providers regarding the
21    provision of health care services to enrollees;
22        (6) A copy of the form of any contract made or to be
23    made between the applicant and any person listed in
24    paragraph (3) of this subsection;
25        (7) A copy of the form of any contract made or to be
26    made between the applicant and any person, corporation,

 

 

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1    partnership or other entity for the performance on the
2    applicant's behalf of any functions including, but not
3    limited to, marketing, administration, enrollment,
4    investment management and subcontracting for the provision
5    of health services to enrollees;
6        (8) A copy of the form of any group contract which is
7    to be issued to employers, unions, trustees, or other
8    organizations and a copy of any form of evidence of
9    coverage to be issued to any enrollee or subscriber and any
10    advertising material;
11        (9) Descriptions of the applicant's procedures for
12    resolving enrollee grievances which must include
13    procedures providing for enrollees participation in the
14    resolution of grievances;
15        (10) A copy of the applicant's most recent financial
16    statements audited by an independent certified public
17    accountant. If the financial affairs of the applicant's
18    parent company are audited by an independent certified
19    public accountant but those of the applicant are not, then
20    a copy of the most recent audited financial statement of
21    the applicant's parent, attached to which shall be
22    consolidating financial statements of the parent including
23    separate unaudited financial statements of the applicant,
24    unless the Director determines that additional or more
25    recent financial information is required for the proper
26    administration of this Act;

 

 

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1        (11) A copy of the applicant's financial plan,
2    including a three-year projection of anticipated operating
3    results, a statement of the sources of working capital, and
4    any other sources of funding and provisions for
5    contingencies;
6        (12) A description of rate methodology;
7        (13) A description of the proposed method of marketing;
8        (14) A copy of every filing made with the Illinois
9    Secretary of State which relates to the applicant's
10    registered agent or registered office;
11        (15) A description of the complaint procedures to be
12    established and maintained as required under Section 4-6 of
13    this Act;
14        (16) A description, in accordance with regulations
15    promulgated by the Illinois Department of Public Health, of
16    the quality assessment and utilization review procedures
17    to be utilized by the applicant;
18        (17) The fee for filing an application for issuance of
19    a certificate of authority provided in Section 408 of the
20    Illinois Insurance Code, as now or hereafter amended; and
21        (18) Such other information as the Director may
22    reasonably require to make the determinations required by
23    this Act.
24(Source: P.A. 95-331, eff. 8-21-07.)
 
25    (215 ILCS 125/2-4)  (from Ch. 111 1/2, par. 1406)

 

 

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1    Sec. 2-4. Required minimum net worth; special contingent
2reserve; deficiency; impairment.
3    (a) A health maintenance organization issued a certificate
4of authority on or after the effective date of this amendatory
5Act of 1987 shall have and at all times maintain net worth of
6not less than $1,500,000. As an allocation of net worth,
7organizations certified prior to the effective date of this
8amendatory Act of 1987 shall maintain a special contingent
9reserve. The special contingent reserve for an organization
10certified between January 1, 1986 and the effective date of
11this amendatory Act of 1987 shall be equal to 5% of its net
12earned subscription revenue for health care services through
13December 31st of the year in which certified. In subsequent
14years such organization shall accumulate additions to the
15contingent reserve in an amount which is equal to 2% of its net
16earned subscription revenue for each calendar year. For
17purposes of this Section, net earned subscription revenue means
18premium minus reinsurance expenses. Maintenance of the
19contingent reserve requires that net worth equals or exceeds
20the contingent reserve at any balance sheet date.
21    (b) (Blank). Additional accumulations under subsection (a)
22will no longer be required at such time that the total special
23contingent reserve required by subsection (a) is equal to
24$1,500,000.
25    (c) A deficiency in meeting amounts required in subsections
26(a), (b), and (d-5) (d) will require (1) filing with the

 

 

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1Director a plan for correction of the deficiency, acceptable to
2the Director and (2) correction of the deficiency within a
3reasonable time, not to exceed 60 days unless an extension of
4time, not to exceed 60 additional days, is granted by the
5Director. Such a deficiency will be deemed an impairment, and
6failure to correct the deficiency in the prescribed time shall
7be grounds for suspension or revocation pursuant to subsection
8(h) of Section 5-5.
9    (d) (Blank). All health maintenance organizations issued a
10certificate of authority on or prior to December 31, 1985 and
11regulated under this Act must have and at all times maintain,
12prior to December 31, 1988, the net worth and special
13contingent reserve that was required for that particular
14organization at the time it was certified. All such
15organizations must have by December 31, 1988 and thereafter
16maintain at all times, net worth of not less than $300,000 and
17a special contingent reserve calculated and accumulated in the
18same manner as required of a health maintenance organization
19issued a certificate of authority on or between January 1, 1986
20and the effective date of this amendatory Act of 1987. Such
21calculation shall commence with the financial reporting period
22first following certification.
23    All organizations issued a certificate of authority
24between January 1, 1986 and the effective date of this
25amendatory Act of 1987 must have and at all times maintain the
26net worth and special contingent reserve that was required for

 

 

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1that particular organization at the time it was certified.
2    (d-5) A health maintenance organization that offers a
3point-of-service product must maintain minimum net worth of not
4less than:
5        (1) the greater of 300% of the "authorized control
6    level" as defined by Article IIA of the Illinois Insurance
7    Code; or
8        (2) $3,500,000 if the health maintenance
9    organization's annual projected out-of-plan claims are
10    less than $500,000; or
11        (3) $4,500,000 if the health maintenance
12    organization's annual projected out-of-plan claims are
13    equal to or greater than $500,000 but less than $1,000,000;
14    or
15        (4) $6,000,000 if the health maintenance
16    organization's annual projected out-of-plan claims are
17    $1,000,000 or greater.
18    (e) Unless allowed by the Director, no health maintenance
19organization, officer, director, trustee, producer, or
20employee of such organization may renew, issue, or deliver, or
21cause to be renewed, issued or delivered, any certificate,
22agreement, or contract of coverage in this State, for which a
23premium is charged or collected, when the organization writing
24such coverage is insolvent or impaired, and the fact of such
25insolvency or impairment is known to the organization, officer,
26director, trustee, producer, or employee of such organization.

 

 

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1An organization is impaired when a deficiency exists in meeting
2the amounts required in subsections (a), (b), and (d-5) (d) of
3Section 2-4.
4    However, the existence of an impairment does not prevent
5the issuance or renewal of a certificate, agreement or contract
6when the enrollee exercises an option granted under the plan to
7obtain new, renewed or converted coverage.
8    Any organization, officer, director, trustee, producer, or
9employee of such organization violating this subsection shall
10be guilty of a Class A misdemeanor.
11(Source: P.A. 92-135, eff. 1-1-02.)
 
12    (215 ILCS 125/2-6)  (from Ch. 111 1/2, par. 1406.2)
13    Sec. 2-6. Statutory deposits.
14    (a) An organization subject to the provisions of this Act
15shall make and maintain with the Director through December 30,
161993, for the protection of enrollees of the organization, a
17deposit of securities which are authorized investments under
18paragraphs (1) and (2) of subsection (h) of Section 3-1 having
19a fair market value equal to at least $100,000. Effective
20December 31, 1993 and through December 30, 1994, the deposit
21shall have a fair market value at least equal to $200,000.
22Effective December 31, 1994 and thereafter, the deposit shall
23have a fair market value at least equal to $300,000. An
24organization issued a certificate of authority on or after the
25effective date of this Amendatory Act of 1993, shall make and

 

 

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1maintain with the Director; for the protection of enrollees of
2the organization, a deposit of securities which are authorized
3investments under paragraphs (1) and (2) of subsection (h) of
4Section 3-1 having a fair market value equal to at least
5$300,000. The amount on deposit shall remain as an admitted
6asset of the organization in the determination of its net
7worth. The Director may release the required deposit of
8securities upon receipt of an order of a court having proper
9jurisdiction or upon: (i) certification by the organization
10that it has no outstanding enrollee creditors, enrollees,
11certificate holders, or enrollee obligations in effect and no
12plans to engage in the business of insurance as a health
13maintenance organization; (ii) receipt of a lawful resolution
14of the organization's governing body effecting the surrender of
15its certificate of authority, articles of incorporation, or
16other organizational documents to their issuing governmental
17officer for voluntary or administrative dissolution; and (iii)
18receipt of the name and forwarding address for each of the
19final officers and directors of the organization, together with
20a plan of dissolution approved by the Director.
21    (b) An organization that offers a point-of-service
22product, as permitted by Article 4.5, must maintain an
23additional deposit in an amount that is not less than the
24greater of 125% of the organization's annual projected
25point-of-service claims or $300,000.
26(Source: P.A. 92-75, eff. 7-12-01; 92-135, eff. 1-1-02; 92-651,

 

 

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1eff. 7-11-02.)
 
2    (215 ILCS 125/3-1)  (from Ch. 111 1/2, par. 1407.3)
3    Sec. 3-1. Investment Regulations.
4    (a) Any health maintenance organization may invest its
5funds as provided in this Section and not otherwise. A health
6maintenance organization that is organized as a domestic an
7insurance company may also acquire the investment assets
8authorized for an Illinois-domiciled insurance company
9insurance company pursuant to the laws applicable to an
10insurance company in the organization's state of domicile.
11Notwithstanding the provisions of this Section, the Director
12may, after notice and hearing, order an organization to limit
13or withdraw from certain investments, or discontinue certain
14investment practices, to the extent the Director finds that
15such investments or investment practices are hazardous to the
16financial condition of the organization.
17    (b) No investment or loan shall be made or engaged in by
18any health maintenance organization unless the same have been
19authorized or ratified by the board of directors or by a
20committee thereof charged with the duty of supervising
21investments and loans. Nothing contained in this subsection
22shall prevent the board of directors of any such organization
23from depositing any of its securities with a committee
24appointed for the purpose of protecting the interest of
25security holders or with the authorities of any state where it

 

 

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1is necessary to do so in order to secure permission to transact
2its appropriate business therein, and nothing contained in this
3subsection shall prevent the board of directors of such
4organization from depositing any securities as collateral for
5the securing of any bond required for the business of the
6organization.
7    (c) No health maintenance organization shall pay any
8commission or brokerage for the purchase or sale of property
9whether real or personal, in excess of that usual and customary
10at the time and in the locality where such purchases or sales
11are made, and information regarding payments of commissions and
12brokerage shall be maintained.
13    (d) A health maintenance organization may not directly or
14indirectly, unless it has notified the Director in writing of
15its intention to enter into the transaction at least 30 days
16prior thereto, or any shorter period as the Director may
17permit, and the Director has not disapproved it within that
18period:
19        (1) make a loan to or other investment in an officer or
20    director of the organization or a person in which the
21    officer or director has any direct or indirect financial
22    interest;
23        (2) make a guarantee for the benefit of or in favor of
24    an officer or director of the organization or a person in
25    which the officer or director has any direct or indirect
26    financial interest; or

 

 

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1        (3) enter into an agreement for the purchase or sale of
2    property from or to an officer or director of the
3    organization or a person in which the officer or director
4    has any direct or indirect financial interest.
5    For the purposes of this Section, an officer or director
6shall not be deemed to have a financial interest by reason of
7an interest that is held directly or indirectly through the
8ownership of equity interests representing less than 2% of all
9outstanding equity interests issued by a person that is a party
10to the transaction, or solely by reason of that individual's
11position as a director or officer of a person that is a party
12to the transaction.
13    This subsection does not apply to a transaction between an
14organization and any of its subsidiaries or affiliates that is
15entered into in compliance with Section 131.20a of the Illinois
16Insurance Code, other than a transaction between an insurer and
17its officer or director.
18    (e) In applying the percentage limitations imposed by this
19Section there shall be used as a base the total of all assets
20which would be admitted by this Section without regard to
21percentage limitations. All legal measurements used as a base
22in the determination of all investment qualifications shall
23consist of the amounts determined at the most recent year end
24adjusted for subsequent acquisition and disposition of
25investments.
26    (f) Valuation of investments. Investments shall be valued

 

 

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1in accordance with the published valuation standards of the
2National Association of Insurance Commissioners. Securities
3investments as to which the National Association of Insurance
4Commissioners has not published valuation standards in its
5Valuations of Securities manual or its successor publication
6shall be valued as follows:
7        (1) All obligations having a fixed term and rate shall,
8    if not in default as to principal or interest, be valued as
9    follows: if purchased at par, at the par value; if
10    purchased above or below par, on the basis of the purchase
11    price adjusted so as to bring the value to par at maturity
12    and so as to yield in the meantime the effective rate of
13    interest at which the purchase was made;
14        (2) Common, preferred or guaranteed stocks shall be
15    valued at market value.
16        (3) Other security investments shall be valued in
17    accordance with regulations promulgated by the Director
18    pursuant to paragraph (6) of this subsection.
19        (4) Other investments, including real property, shall
20    be valued in accordance with regulations promulgated by the
21    Director pursuant to paragraph (6) of this subsection, but
22    in no event shall such other investments be valued at more
23    than the purchase price. The purchase price for real
24    property includes capitalized permanent improvements, less
25    depreciation spread evenly over the life of the property
26    or, at the option of the company, less depreciation

 

 

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1    computed on any basis permitted under the Internal Revenue
2    Code and regulations thereunder. Such investments that
3    have been affected by permanent declines in value shall be
4    valued at not more than market value.
5        (5) Any investment, including real property, not
6    purchased by the Health Maintenance Organization but
7    acquired in satisfaction of a debt or otherwise shall be
8    valued in accordance with the applicable procedures for
9    that type of investment contained in this subsection. For
10    purposes of applying the valuation procedures, the
11    purchase price shall be deemed to be the market value at
12    the time the investment is acquired or, in the case of any
13    investment acquired in satisfaction of debt, the amount of
14    the debt, including interest, taxes and expenses,
15    whichever amount is less.
16        (6) The Director shall promulgate rules and
17    regulations for determining and calculating values to be
18    used in financial statements submitted to the Department
19    for investments.
20    (g) Definitions. As used in this Section, unless the
21context otherwise requires.
22        (1) "Business Corporation" means corporations
23    organized for other than not for profit purposes.
24        (2) "Business Entity" includes sole proprietorships,
25    corporations, associations, partnerships and business
26    trusts.

 

 

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1        (3) "Bank or Trust Company" means any bank or trust
2    company organized under the laws of the United States or
3    any State thereof if said bank or trust company is
4    regularly examined pursuant to such laws and said bank or
5    trust company has the insurance protection afforded by an
6    agency of the United States government.
7        (4) "Capital" means capital stock paid-up, if any, and
8    its use in a provision does not imply that a non-profit
9    Health Maintenance Organization without stated capital
10    stock is excluded from the provision. The capital of such
11    an organization will be zero.
12        (5) "Direct" when used in connection with "obligation"
13    means that the designated obligor shall be primarily liable
14    on the instrument representing the obligation.
15        (6) "Facility" means and includes real estate and any
16    and all forms of tangible personal property and services
17    used constituting an operating unit.
18        (7) "Guaranteed or insured" means that the guarantor or
19    insurer will perform or insure the obligation of the
20    obligor or will purchase the obligation to the extent of
21    the guaranty or insurance.
22        (8) "Mortgage" shall include a trust deed or other lien
23    on real property securing an obligation for the payment of
24    money.
25        (9) "Servicer" means a business entity that has a
26    contractual obligation to service a pool of mortgage loans.

 

 

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1    The service provided shall include, but is not limited to,
2    collection of principal and interest, keeping the accounts
3    current, maintaining or confirming in force hazard
4    insurance and tax status and providing supportive
5    accounting services.
6        (10) "Single credit risk" means the direct, guaranteed
7    or insured obligations of any one business entity including
8    affiliates thereof.
9        (11) "Surplus" means the amount properly shown as total
10    net worth on a company's balance sheet, plus all voluntary
11    reserves, but not including capital paid-up.
12        (12) "Tangible net worth" means the par value of all
13    issued and outstanding capital stock of a corporation (or
14    in the case of shares having no par value, the stated
15    value) and the amounts of all surplus accounts less the sum
16    of (a) such intangible assets as deferred charges,
17    organization and development expense, discount and expense
18    incurred in securing capital, good will, trade-marks,
19    trade-names and patents, (b) leasehold improvements, and
20    (c) any reserves carried by the corporation and not
21    otherwise deducted from assets.
22        (13) "Unconditional" when used in connection with
23    "obligation" means that nothing remains to be done or to
24    occur to make the designated obligor liable on the
25    instrument, and that the legal holder shall have the status
26    at least equal to that of general creditor of the obligor.

 

 

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1    (h) Authorized investments. Any Health Maintenance
2Organization, except those organized as a domestic an insurance
3company, may acquire the assets set forth in paragraphs 1
4through 17, inclusive. A Health Maintenance Organization that
5is organized as an insurance company may acquire the investment
6assets authorized for an insurance company pursuant to the laws
7applicable to an Illinois-domiciled insurance company in the
8organization's state of domicile. Any restriction, exclusion
9or provision appearing in any paragraph shall apply only with
10respect to the authorization of the particular paragraph in
11which it appears and shall not constitute a general prohibition
12and shall not be applicable to any other paragraph. The
13qualifications or disqualifications of an investment under one
14paragraph shall not prevent its qualification in whole or in
15part under another paragraph, and an investment authorized by
16more than one paragraph may be held under whichever authorizing
17paragraph the organization elects. An investment which
18qualified under any paragraph at the time it was acquired or
19entered into by an organization shall continue to be qualified
20under that paragraph. An investment in whole or in part may be
21transferred from time to time, at the election of the
22organization, to the authority of any paragraph under which it
23qualifies, whether originally qualifying thereunder or not.
24        (1) Direct obligations of the United States for the
25    payment of money, or obligations for the payment of money
26    to the extent guaranteed or insured as to the payment of

 

 

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1    principal and interest by the United States.
2        (2) Direct obligations for the payment of money, issued
3    by an agency or instrumentality of the United States, or
4    obligations for the payment of money to the extent
5    guaranteed or insured as to the payment of principal and
6    interest by an agency or instrumentality of the United
7    States.
8        (3) Direct, general obligations of any state of the
9    United States for the payment of money, or obligations for
10    the payment of money to the extent guaranteed or insured as
11    to the payment of principal and interest by any state of
12    the United States, on the following conditions:
13            (i) Such state has the power to levy taxes for the
14        prompt payment of the principal and interest of such
15        obligations; and
16            (ii) Such state shall not be in default in the
17        payment of principal or interest on any of its direct,
18        guaranteed or insured obligations at the date of such
19        investment.
20        (4) Direct, general obligations of any political
21    subdivision of any state of the United States for the
22    payment of money, or obligations for the payment of money
23    to the extent guaranteed as to the payment of principal and
24    interest by any political subdivision of any state of the
25    United States, on the following conditions:
26            (i) The obligations are payable or guaranteed from

 

 

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1        ad valorem taxes;
2            (ii) Such political subdivision is not in default
3        in the payment of principal or interest on any of its
4        direct or guaranteed obligations;
5            (iii) No investment shall be made under this
6        paragraph in obligations which are secured only by
7        special assessments for local improvements; and
8            (iv) An organization shall not invest under this
9        paragraph more than 2% of its admitted assets in
10        obligations issued or guaranteed by any one such
11        political subdivision.
12        (5) Anticipation obligations of any political
13    subdivision of any state of the United States, including
14    but not limited to bond anticipation notes, tax
15    anticipation notes and construction anticipation notes,
16    for the payment of money within 12 months from the issuance
17    of the obligation, on the following conditions:
18            (i) Such anticipation notes must be a direct
19        obligation of the issuer under conditions set forth in
20        paragraph 4;
21            (ii) Such political subdivision is not in default
22        in the payment of the principal or interest on any of
23        its direct general obligations or any obligation
24        guaranteed by such political subdivision;
25            (iii) The anticipated funds must be specifically
26        pledged to secure the obligation;

 

 

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1            (iv) An organization shall not invest under this
2        paragraph more than 2% of its admitted assets in the
3        anticipation obligations issued by any one such
4        political subdivision.
5        (6) Obligations of any state of the United States, a
6    political subdivision thereof, or a public instrumentality
7    of any one or more of the foregoing, for the payment of
8    money, on the following conditions:
9            (i) The obligations are payable from revenues or
10        earnings of a public utility of such state, political
11        subdivision, or public instrumentality which are
12        specifically pledged therefor;
13            (ii) The law under which the obligations are issued
14        requires such rates for service shall be charged and
15        collected at all times that they will produce
16        sufficient revenue or earnings together with any other
17        revenues or moneys pledged to pay all operating and
18        maintenance charges of the public utility and all
19        principal and interest on such obligations;
20            (iii) No prior or parity obligations payable from
21        the revenues or earnings of that public utility are in
22        default at the date of such investment;
23            (iv) An organization shall not invest more than 20%
24        of its admitted assets under this paragraph; and
25            (v) An organization shall not invest under this
26        Section more than 2% of its admitted assets in the

 

 

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1        revenue obligations issued in connection with any one
2        facility.
3        (7) Obligations of any state of the United States, a
4    political subdivision thereof, or a public instrumentality
5    of any of the foregoing, for the payment of money, on the
6    following conditions:
7            (i) The obligations are payable from revenues or
8        earnings, excluding revenues or earnings from public
9        utilities, specifically pledged therefor by such
10        state, political subdivision or public
11        instrumentality;
12            (ii) No prior or parity obligation of the same
13        issuer payable from revenues or earnings from the same
14        source has been in default as to principal or interest
15        during the 5 years next preceding the date of such
16        investment, but such issuer need not have been in
17        existence for that period, and obligations acquired
18        under this paragraph may be newly issued;
19            (iii) An organization shall not invest in excess of
20        20% of its admitted assets under this paragraph;
21            (iv) An organization shall not invest under this
22        paragraph more than 2% of its admitted assets in the
23        revenue obligations issued in connection with any one
24        facility; and
25            (v) An organization shall not invest under this
26        paragraph more than 2% of its admitted assets in

 

 

SB2766- 28 -LRB099 16157 EGJ 43559 b

1        revenue obligations payable from revenue or earning
2        sources which are the contractual responsibility of
3        any one single credit risk.
4        (8) Direct, unconditional obligations of a solvent
5    business corporation for the payment of money, including
6    obligations to pay rent for equipment used in its business
7    or obligations for the payment of money to the extent
8    guaranteed or insured as to the payment of principal and
9    interest by any solvent business corporation, on the
10    following conditions:
11            (i) The corporation shall be incorporated under
12        the laws of the United States or any state of the
13        United States;
14            (ii) The corporation shall have tangible net worth
15        of not less than $1,000,000;
16            (iii) No such obligation, guarantee or insurance
17        of the corporation has been in default as to principal
18        or interest during the 5 years preceding the date of
19        investment, but the corporation need not have had
20        obligations guarantees or insurance outstanding during
21        that period and need not have been in existence for
22        that period, and obligations acquired under this
23        paragraph may be newly issued;
24            (iv) An organization shall not invest more than 2%
25        of its admitted assets in obligations issued,
26        guaranteed or insured by any one such corporation;

 

 

SB2766- 29 -LRB099 16157 EGJ 43559 b

1            (v) An organization may invest under this
2        paragraph up to an additional 2% of its admitted assets
3        in obligations which (i) are issued, guaranteed or
4        insured by any one or more such corporations, each
5        having a tangible net worth of not less than
6        $25,000,000 and (ii) mature within 12 months from the
7        date of acquisition;
8            (vi) An organization may invest not more than 1/2
9        of 1% of its admitted assets in such obligations of
10        corporations which do not meet the condition of
11        subparagraph (ii) of this paragraph; and
12            (vii) An organization shall not invest more than
13        75% of its admitted assets under this paragraph.
14        (9) Direct, unconditional obligations for the payment
15    of money issued or obligations for the payment of money to
16    the extent guaranteed as to principal and interest by a
17    solvent not for profit corporation, on the following
18    conditions:
19            (i) The corporation shall be incorporated under
20        the laws of the United States or of any state of the
21        United States;
22            (ii) The corporation shall have been in existence
23        for at least 5 years and shall have assets of at least
24        $2,000,000;
25            (iii) Revenues or other income from such assets and
26        the services or commodities dispensed by the

 

 

SB2766- 30 -LRB099 16157 EGJ 43559 b

1        corporation shall be pledged for the payment of the
2        obligations or guarantees;
3            (iv) No such obligation or guarantee of the
4        corporation has been in default as to principal or
5        interest during the 5 years next preceding the date of
6        such investment, but the corporation need not have had
7        obligations or guarantees outstanding during that
8        period and obligations which are acquired under this
9        paragraph may be newly issued;
10            (v) An organization shall not invest more than 15%
11        of its admitted assets under this paragraph; and
12            (vi) An organization shall not invest under this
13        paragraph more than 2% of its admitted assets in the
14        obligations issued or guaranteed by any one such
15        corporation.
16        (10) Direct, unconditional nondemand obligations for
17    the payment of money issued by a solvent bank, mutual
18    savings bank or trust company on the following conditions:
19            (i) The bank, mutual savings bank or trust company
20        shall be incorporated under the laws of the United
21        States, or of any state of the United States;
22            (ii) The bank, mutual savings bank or trust company
23        shall have tangible net worth of not less than
24        $1,000,000;
25            (iii) Such obligations must be of the type which
26        are insured by an agency of the United States or have a

 

 

SB2766- 31 -LRB099 16157 EGJ 43559 b

1        maturity of no more than 1 day;
2            (iv) An organization shall not invest under this
3        paragraph more than the amount which is fully insured
4        by an agency of the United States plus 2% of its
5        admitted assets in nondemand obligations issued by any
6        one such financial institution; and
7            (v) An organization may invest under this
8        paragraph up to an additional 8% of its admitted assets
9        in nondemand obligations which (1) are issued by any
10        such banks, mutual savings banks or trust companies,
11        each having a tangible net worth of not less than
12        $25,000,000 and (2) mature within 12 months from the
13        date of acquisition.
14        (11) Preferred or guaranteed stocks issued or
15    guaranteed by a solvent business corporation incorporated
16    under the laws of the United States or any state of the
17    United States, on the following conditions:
18            (i) The corporation shall have tangible net worth
19        of not less than $1,000,000;
20            (ii) If such stocks have been outstanding prior to
21        purchase, an organization shall not invest under this
22        paragraph in such stock if prescribed current or
23        cumulative dividends are in arrears;
24            (iii) An organization shall not invest more than 33
25        1/3% of its admitted assets under this paragraph and an
26        organization shall not invest more than 15% of its

 

 

SB2766- 32 -LRB099 16157 EGJ 43559 b

1        admitted assets under this paragraph in stocks which,
2        at the time of purchase, are not Sinking Fund Stocks.
3        An issue of preferred or guaranteed stock shall be a
4        Sinking Fund Stock when (1) such issue is subject to a
5        100% mandatory sinking fund or similar arrangement
6        which will provide for the redemption of the entire
7        issue over a period not longer than 40 years from the
8        date of purchase; (2) annual mandatory sinking fund
9        installments on each issue commence not more than 10
10        years from the date of issue; and (3) each annual
11        sinking fund installment provides for the purchase or
12        redemption of at least 2 1/2% of the original number of
13        shares of such issue; and
14            (iv) An organization shall not invest under this
15        paragraph more than 2% of its admitted assets in the
16        preferred or guaranteed stocks of any one such
17        corporation.
18        (12) Common stock issued by any solvent business
19    corporation incorporated under the laws of the United
20    States, or of any state of the United States, on the
21    following conditions:
22            (i) The issuing corporation must have tangible net
23        worth of $1,000,000 or more;
24            (ii) An organization may not invest more than an
25        amount equal to its net worth under this paragraph; and
26            (iii) An organization may not invest under this

 

 

SB2766- 33 -LRB099 16157 EGJ 43559 b

1        paragraph an amount equal to more than 10% of its net
2        worth in the common stock of any one corporation.
3        (13) Shares of common stock or units of beneficial
4    interest issued by any solvent business corporation or
5    trust incorporated or organized under the laws of the
6    United States, or of any state of the United States, on the
7    following conditions:
8            (i) If the issuing corporation or trust is advised
9        by an investment advisor which is the organization or
10        an affiliate of the organization, the issuing
11        corporation or trust shall have net assets of $100,000
12        or more, or if the issuing corporation or trust has an
13        unaffiliated investment advisor, the issuing
14        corporation or trust shall have net assets of
15        $10,000,000 or more;
16            (ii) The issuing corporation or trust is
17        registered as an investment company with the
18        Securities and Exchange Commission under the
19        Investment Company Act of 1940, as amended;
20            (iii) An organization shall not invest under this
21        paragraph more than the greater of $100,000 or 10% of
22        its admitted assets in any one bond fund, municipal
23        bond fund or money market fund;
24            (iv) An organization shall not invest under this
25        paragraph more than 10% of its net worth in any one
26        common stock fund, balanced fund or income fund;

 

 

SB2766- 34 -LRB099 16157 EGJ 43559 b

1            (v) An organization shall not invest more than 50%
2        of its admitted assets in bond funds, municipal bond
3        funds and money market funds under this paragraph; and
4            (vi) An organization's investments in common stock
5        funds, balanced funds or income funds when combined
6        with its investments in common stocks made under
7        paragraph (12) shall not exceed the aggregate
8        limitation provided by subparagraph (ii) of paragraph
9        (12).
10        (14) Shares of, or accounts or deposits with savings
11    and loan associations or building and loan associations, on
12    the following conditions:
13            (i) The shares, accounts, or deposits, or
14        investments in any form legally issuable shall be of a
15        withdrawable type and issued by an association which
16        has the insurance protection afforded by the Federal
17        Savings and Loan Insurance Corporation; but
18        nonwithdrawable accounts which are not eligible for
19        insurance by the Federal Savings and Loan Insurance
20        Corporation shall not be eligible for investment under
21        this paragraph;
22            (ii) The association shall have tangible net worth
23        of not less than $1,000,000;
24            (iii) The investment shall be in the name of and
25        owned by the organization, unless the account is under
26        a trusteeship with the organization named as the

 

 

SB2766- 35 -LRB099 16157 EGJ 43559 b

1        beneficiary;
2            (iv) An organization shall not invest more than 50%
3        of its admitted assets under this paragraph; and
4            (v) Under this paragraph, an organization shall
5        not invest in any one such association an amount in
6        excess of 2% of its admitted assets or an amount which
7        is fully insured by the Federal Savings and Loan
8        Insurance Corporation, whichever is greater.
9        (15) Direct, unconditional obligations for the payment
10    of money secured by the pledge of any investment which is
11    authorized by any of the preceding paragraphs, on the
12    following conditions:
13            (i) The investment pledged shall by its terms be
14        legally assignable and shall be validly assigned to the
15        organization;
16            (ii) The investment pledged shall have a fair
17        market value which is at least 25% greater than the
18        amount invested under this paragraph, except that a
19        loan may be made up to 100% of the full fair market
20        value of collateral that would qualify as an investment
21        under paragraph (1) provided it qualifies under
22        condition (i) of this paragraph; and
23            (iii) An organization's investment under this
24        paragraph when added to its investment of the category
25        of the collateral pledged shall not cause the sum to
26        exceed the limits provided by the paragraph

 

 

SB2766- 36 -LRB099 16157 EGJ 43559 b

1        authorizing that category of investments.
2        (16) Real estate (including leasehold estates and
3    leasehold improvements) for the convenient accommodation
4    of the organization's business operations, including home
5    office, branch office, medical facilities and field office
6    operations, on the following conditions:
7            (i) Any parcel of real estate acquired under this
8        paragraph may include excess space for rent to others,
9        if it is reasonably anticipated that such excess will
10        be required by the organization for expansion or if the
11        excess is reasonably required in order to have one or
12        more buildings that will function as an economic unit;
13            (ii) Such real estate may be subject to a mortgage;
14        and
15            (iii) The greater of the admitted value of the
16        asset as determined by subsection (f) or the
17        organization's equity plus all encumbrances on such
18        real estate owned by a company under this paragraph
19        shall not exceed 20% of its admitted assets, except
20        with the permission of the Director if he finds that
21        such percentage of its admitted assets is insufficient
22        to provide convenient accommodation for the company's
23        business; provided, however, an organization that
24        directly provides medical services may invest an
25        additional 20% of its admitted assets in such real
26        estate, not requiring the permission of the Director.

 

 

SB2766- 37 -LRB099 16157 EGJ 43559 b

1        (17) Any investments of any kind, in the complete
2    discretion of the organization, without regard to any
3    condition of, restriction in, or exclusion from paragraphs
4    (1) to (16), inclusive, and regardless of whether the same
5    or a similar type of investment has been included in or
6    omitted from any such paragraph, on the following
7    condition: An organization shall not invest under this
8    paragraph more than the lesser of (i) 10% of its admitted
9    assets, or (ii) 50% of the amount by which its net worth
10    exceeds the minimum requirements of a new health
11    maintenance organization to qualify for a certificate of
12    authority.
13(Source: P.A. 92-140, eff. 7-24-01; 92-651, eff. 7-11-02.)
 
14    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
15    Sec. 5-3. Insurance Code provisions.
16    (a) Health Maintenance Organizations shall be subject to
17the provisions of Sections 132, 132.1, 132.2, 132.3, 132.4,
18132.5, 132.6, 132.7, 133, 134, 136, 137, 139, 140, 141.1,
19141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
20154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 355.2, 355.3,
21355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y, 356z.2, 356z.4,
22356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12,
23356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21,
24356z.22, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d,
25368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2,

 

 

SB2766- 38 -LRB099 16157 EGJ 43559 b

1409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
2Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
3XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
4    (b) For purposes of the Illinois Insurance Code, except for
5Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
6Maintenance Organizations in the following categories are
7deemed to be "domestic companies":
8        (1) a corporation authorized under the Dental Service
9    Plan Act or the Voluntary Health Services Plans Act;
10        (2) a corporation organized under the laws of this
11    State; or
12        (3) a corporation organized under the laws of another
13    state, 30% or more of the enrollees of which are residents
14    of this State, except a corporation subject to
15    substantially the same requirements in its state of
16    organization as is a "domestic company" under Article VIII
17    1/2 of the Illinois Insurance Code.
18    (c) In considering the merger, consolidation, or other
19acquisition of control of a Health Maintenance Organization
20pursuant to Article VIII 1/2 of the Illinois Insurance Code,
21        (1) the Director shall give primary consideration to
22    the continuation of benefits to enrollees and the financial
23    conditions of the acquired Health Maintenance Organization
24    after the merger, consolidation, or other acquisition of
25    control takes effect;
26        (2)(i) the criteria specified in subsection (1)(b) of

 

 

SB2766- 39 -LRB099 16157 EGJ 43559 b

1    Section 131.8 of the Illinois Insurance Code shall not
2    apply and (ii) the Director, in making his determination
3    with respect to the merger, consolidation, or other
4    acquisition of control, need not take into account the
5    effect on competition of the merger, consolidation, or
6    other acquisition of control;
7        (3) the Director shall have the power to require the
8    following information:
9            (A) certification by an independent actuary of the
10        adequacy of the reserves of the Health Maintenance
11        Organization sought to be acquired;
12            (B) pro forma financial statements reflecting the
13        combined balance sheets of the acquiring company and
14        the Health Maintenance Organization sought to be
15        acquired as of the end of the preceding year and as of
16        a date 90 days prior to the acquisition, as well as pro
17        forma financial statements reflecting projected
18        combined operation for a period of 2 years;
19            (C) a pro forma business plan detailing an
20        acquiring party's plans with respect to the operation
21        of the Health Maintenance Organization sought to be
22        acquired for a period of not less than 3 years; and
23            (D) such other information as the Director shall
24        require.
25    (d) The provisions of Article VIII 1/2 of the Illinois
26Insurance Code and this Section 5-3 shall apply to the sale by

 

 

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1any health maintenance organization of greater than 10% of its
2enrollee population (including without limitation the health
3maintenance organization's right, title, and interest in and to
4its health care certificates).
5    (e) In considering any management contract or service
6agreement subject to Section 141.1 of the Illinois Insurance
7Code, the Director (i) shall, in addition to the criteria
8specified in Section 141.2 of the Illinois Insurance Code, take
9into account the effect of the management contract or service
10agreement on the continuation of benefits to enrollees and the
11financial condition of the health maintenance organization to
12be managed or serviced, and (ii) need not take into account the
13effect of the management contract or service agreement on
14competition.
15    (f) Except for small employer groups as defined in the
16Small Employer Rating, Renewability and Portability Health
17Insurance Act and except for medicare supplement policies as
18defined in Section 363 of the Illinois Insurance Code, a Health
19Maintenance Organization may by contract agree with a group or
20other enrollment unit to effect refunds or charge additional
21premiums under the following terms and conditions:
22        (i) the amount of, and other terms and conditions with
23    respect to, the refund or additional premium are set forth
24    in the group or enrollment unit contract agreed in advance
25    of the period for which a refund is to be paid or
26    additional premium is to be charged (which period shall not

 

 

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1    be less than one year); and
2        (ii) the amount of the refund or additional premium
3    shall not exceed 20% of the Health Maintenance
4    Organization's profitable or unprofitable experience with
5    respect to the group or other enrollment unit for the
6    period (and, for purposes of a refund or additional
7    premium, the profitable or unprofitable experience shall
8    be calculated taking into account a pro rata share of the
9    Health Maintenance Organization's administrative and
10    marketing expenses, but shall not include any refund to be
11    made or additional premium to be paid pursuant to this
12    subsection (f)). The Health Maintenance Organization and
13    the group or enrollment unit may agree that the profitable
14    or unprofitable experience may be calculated taking into
15    account the refund period and the immediately preceding 2
16    plan years.
17    The Health Maintenance Organization shall include a
18statement in the evidence of coverage issued to each enrollee
19describing the possibility of a refund or additional premium,
20and upon request of any group or enrollment unit, provide to
21the group or enrollment unit a description of the method used
22to calculate (1) the Health Maintenance Organization's
23profitable experience with respect to the group or enrollment
24unit and the resulting refund to the group or enrollment unit
25or (2) the Health Maintenance Organization's unprofitable
26experience with respect to the group or enrollment unit and the

 

 

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1resulting additional premium to be paid by the group or
2enrollment unit.
3    In no event shall the Illinois Health Maintenance
4Organization Guaranty Association be liable to pay any
5contractual obligation of an insolvent organization to pay any
6refund authorized under this Section.
7    (g) Rulemaking authority to implement Public Act 95-1045,
8if any, is conditioned on the rules being adopted in accordance
9with all provisions of the Illinois Administrative Procedure
10Act and all rules and procedures of the Joint Committee on
11Administrative Rules; any purported rule not so adopted, for
12whatever reason, is unauthorized.
13(Source: P.A. 97-282, eff. 8-9-11; 97-343, eff. 1-1-12; 97-437,
14eff. 8-18-11; 97-486, eff. 1-1-12; 97-592, eff. 1-1-12; 97-805,
15eff. 1-1-13; 97-813, eff. 7-13-12; 98-189, eff. 1-1-14;
1698-1091, eff. 1-1-15.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.