Full Text of SB2884 93rd General Assembly
SB2884 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 SB2884
Introduced 2/6/2004, by Denny Jacobs SYNOPSIS AS INTRODUCED: |
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215 ILCS 125/6-2 |
from Ch. 111 1/2, par. 1418.2 |
215 ILCS 125/6-4 |
from Ch. 111 1/2, par. 1418.4 |
215 ILCS 125/6-5 |
from Ch. 111 1/2, par. 1418.5 |
215 ILCS 125/6-8 |
from Ch. 111 1/2, par. 1418.8 |
215 ILCS 125/6-9 |
from Ch. 111 1/2, par. 1418.9 |
215 ILCS 125/6-10 |
from Ch. 111 1/2, par. 1418.10 |
215 ILCS 125/6-11 |
from Ch. 111 1/2, par. 1418.11 |
215 ILCS 125/6-12 |
from Ch. 111 1/2, par. 1418.12 |
215 ILCS 125/6-14 |
from Ch. 111 1/2, par. 1418.14 |
215 ILCS 125/6-17 |
from Ch. 111 1/2, par. 1418.17 |
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Amends the Health Maintenance Organization Act concerning the operation of
the
Health Maintenance Organization Guaranty Association.
Provides that the Guaranty Association is subrogated to certain rights of
persons having claims covered by it. Limits the liability of the Guaranty
Association with respect to claims based upon marketing materials,
misrepresentations, and certain other acts of a health maintenance
organization. Provides for the continuation of services by providers.
Requires that suits against the Guaranty Association be brought in Cook County.
Provides for the Director of Insurance to monitor capital levels of health
maintenance organization.
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| FISCAL NOTE ACT MAY APPLY | |
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A BILL FOR
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SB2884 |
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LRB093 18702 SAS 44430 b |
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| AN ACT concerning health maintenance organizations.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Health Maintenance Organization Act is | 5 |
| amended by changing
Sections 6-2, 6-4, 6-5, 6-8, 6-9, 6-10, | 6 |
| 6-11, 6-12, 6-14, and 6-17 as follows:
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| (215 ILCS 125/6-2) (from Ch. 111 1/2, par. 1418.2)
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| Sec. 6-2. Purpose. The purpose of this Article is to | 9 |
| protect
enrollees of health care plans who reside in this | 10 |
| State, and their
beneficiaries, payees and assignees, subject | 11 |
| to certain limitations,
against failure in the performance of | 12 |
| contractual obligations due to the
impairment or insolvency of | 13 |
| the organization operating such health care
plans. Nonresident | 14 |
| enrollees of such health care plans shall be
protected by this | 15 |
| Association if: (1) they reside in states which have
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| associations similar to the Association created by this | 17 |
| Article; (2) they
are not eligible for coverage by such | 18 |
| associations; (3) the organization which
operates such health | 19 |
| care plan never held a license or certificate of
authority in | 20 |
| such states; and (4) such organization was domiciled in this
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| State. To provide this protection, (1) an association of health
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| maintenance organizations is created to enable the guaranty of | 23 |
| payment
of benefits and of continuation of coverages, either on | 24 |
| a prepaid or
indemnity basis, (2) members of the Association
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| are subject to assessment to provide funds to carry out the | 26 |
| purpose of this
Article, and (3) the Association is authorized | 27 |
| to assist the Director, in
the prescribed manner, in the | 28 |
| detection and prevention of health care plan
impairments or | 29 |
| insolvencies.
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| (Source: P.A. 86-620.)
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| (215 ILCS 125/6-4) (from Ch. 111 1/2, par. 1418.4)
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| Sec. 6-4. Construction. This Article is to be liberally | 2 |
| construed to
be for the benefit of the member organizations' | 3 |
| enrollees and to
effect the purpose under Section 6-2 which | 4 |
| constitutes an aid and guide to
interpretation .
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| (Source: P.A. 85-20.)
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| (215 ILCS 125/6-5) (from Ch. 111 1/2, par. 1418.5)
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| Sec. 6-5. Definitions. As used in this Act:
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| (1) "Association" means the Illinois Health Maintenance | 9 |
| Organization
Guaranty Association created under Section 6-6.
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| (2) "Director" means the Director of Insurance of this | 11 |
| State.
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| (3) "Contractual obligation" means any obligation of the | 13 |
| member
organization under covered
health care plan | 14 |
| certificates.
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| (4) "Covered person" means any enrollee who is entitled to | 16 |
| the
protection of the Association as described in Section 6-2.
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| (5) "Covered health care plan certificate" means any health | 18 |
| care plan
certificate, contract or other evidence of coverage | 19 |
| within the scope
of this Article under Section 6-3.
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| (6) "Fund" means the fund created under Section 6-6.
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| (7) "Impaired organization" means a member organization | 22 |
| determined
deemed by the
Director in a written notice to the | 23 |
| Association after the effective date of
this Article to be | 24 |
| potentially unable
to fulfill its contractual obligations and | 25 |
| not an insolvent organization.
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| (8) "Insolvent organization" means a member organization | 27 |
| that is found to
be
which
becomes insolvent and is placed under | 28 |
| a final order of liquidation or
rehabilitation by a court of | 29 |
| competent jurisdiction.
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| (9) "Member organization" means any person licensed or who | 31 |
| holds a
certificate of authority to transact in this
State any | 32 |
| kind of business to which this Article applies under
Section | 33 |
| 6-3. For purposes of this Article "member organization" | 34 |
| includes
any person whose certificate of authority may have | 35 |
| been suspended pursuant
to Section 5-5 of this Act.
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LRB093 18702 SAS 44430 b |
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| (10) "Premiums" means direct gross premiums or | 2 |
| subscriptions
received on covered health care plan | 3 |
| certificates.
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| (11) "Person" means any individual, corporation, trust, | 5 |
| limited liability
company, partnership,
association , | 6 |
| governmental body or entity, or voluntary organization.
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| (12) "Resident" means any person who resides in this State | 8 |
| at the time the
organization is issued a Notice of Impairment | 9 |
| by the Director or at the time a
complaint for liquidation or | 10 |
| rehabilitation is filed and to whom
contractual obligations are | 11 |
| owed. A person may be a resident of only one
state which, in | 12 |
| the case of a person other than a natural person, shall be
its | 13 |
| principal place of business.
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| (Source: P.A. 88-297.)
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| (215 ILCS 125/6-8) (from Ch. 111 1/2, par. 1418.8)
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| Sec. 6-8. Powers and duties of the Association. In addition | 17 |
| to
the powers and duties enumerated in other Sections of this | 18 |
| Article, the
Association shall have the powers set forth in | 19 |
| this Section.
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| (1) If a domestic organization is an impaired organization, | 21 |
| the Association
may, subject to any conditions imposed by the | 22 |
| Association other than
those which impair the contractual | 23 |
| obligations of the impaired organization,
and approved by the | 24 |
| impaired organization and the Director:
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| (a) guarantee or reinsure, or cause to be guaranteed, | 26 |
| assumed or
reinsured, any or all of the covered health care | 27 |
| plan certificates of
covered persons of the impaired | 28 |
| organization; and
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| (b) provide such monies, pledges, notes, guarantees, | 30 |
| or other means
as are proper to effectuate paragraph (a), | 31 |
| and assure payment of the
contractual obligations of the | 32 |
| impaired organization pending action under
paragraph (a) . ; | 33 |
| and
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| (c) loan money to the impaired organization.
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| (2) If a domestic, foreign, or alien organization is an |
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| insolvent
organization, the Association shall, subject to the | 2 |
| approval of the Director:
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| (a) guarantee, assume, indemnify or reinsure or cause | 4 |
| to be guaranteed,
assumed, indemnified or reinsured the | 5 |
| covered health care plan benefits
of covered persons of the | 6 |
| insolvent organization; however, in the event
that the | 7 |
| Director of the Department of Public Aid
assigns | 8 |
| individuals that are recipients of public aid from an | 9 |
| insolvent
organization to another organization, the | 10 |
| Director of the Department of
Public Aid shall, before | 11 |
| fixing the rates to be paid by the Department of
Public Aid | 12 |
| to the transferee organization on account of such | 13 |
| individuals,
consult with the Director of the Department of | 14 |
| Insurance as to the
reasonableness of such rates in light | 15 |
| of the health care needs of such
individuals and the costs | 16 |
| of providing health care services to such
individuals;
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| (b) assure payment of the contractual obligations of | 18 |
| the insolvent
organization to covered persons;
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| (c) make payments to providers of health care, or | 20 |
| indemnity payments
to covered persons, so as to assure the | 21 |
| continued payment of benefits
substantially similar to | 22 |
| those provided for under covered health care plan
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| certificate issued by the insolvent organization to | 24 |
| covered persons; and
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| (d) provide such monies, pledges, notes, guaranties, | 26 |
| or other means
as are reasonably necessary to discharge | 27 |
| such duties.
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| This subsection (2) shall not apply when the
Director has | 29 |
| determined that the foreign or alien organization's
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| domiciliary jurisdiction or state of entry provides, by | 31 |
| statute, protection
substantially similar to that provided by | 32 |
| this Article for residents of
this State and such protection | 33 |
| will be provided in a timely manner.
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| (3) There shall be no liability on the part of and no cause | 35 |
| of action
shall arise against the Association or against any | 36 |
| transferee from the
Association in connection with the transfer |
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LRB093 18702 SAS 44430 b |
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| by reinsurance or otherwise of
all or any part of an impaired | 2 |
| or insolvent organization's business by
reason of any action | 3 |
| taken or any failure to take any action by the
impaired or | 4 |
| insolvent organization at any time.
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| (4) If the Association fails to act within a reasonable | 6 |
| period of
time as provided in subsection (2) of this Section | 7 |
| with respect to an
insolvent organization, the Director may | 8 |
| assume
shall have the powers
and duties of
the Association | 9 |
| under this Article with regard to such insolvent organization.
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| (5) The Association or its designated representatives may | 11 |
| render
assistance and advice to the Director, upon his request, | 12 |
| concerning
rehabilitation, payment of claims, continuations of | 13 |
| coverage, or the
performance of other contractual obligations | 14 |
| of any impaired or insolvent
organization.
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| (6) The Association has standing to appear or intervene
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| before any court
or agency concerning
all matters germane to | 17 |
| the powers and duties of
the Association, including, but not | 18 |
| limited to, proposals for reinsuring
or guaranteeing the | 19 |
| covered health care plan certificates of the impaired
or | 20 |
| insolvent organization and the determination of the covered | 21 |
| health care plan
certificates and contractual obligations.
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| (7) (a) Any person receiving benefits under this Article is | 23 |
| deemed
to have assigned to the Association the rights under the | 24 |
| covered health
care plan
certificates , and any causes of action | 25 |
| against any person for losses arising
under, resulting from, or | 26 |
| otherwise relating to , the covered health
care
plan
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| certificates, in each case
Association to the extent of the | 28 |
| benefits
received
because of this Article ( whether the benefits | 29 |
| are payments of contractual
obligations or continuation of | 30 |
| coverage ) . The Association may require an
assignment to it of | 31 |
| such rights by any payee, enrollee or beneficiary as a
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| condition precedent to the receipt of any rights or benefits | 33 |
| conferred by
this Article upon such person. The Association is | 34 |
| subrogated to these
rights against the assets of any insolvent | 35 |
| organization and against any
other party who may be liable to | 36 |
| such payee, enrollee or beneficiary.
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LRB093 18702 SAS 44430 b |
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| (b) The subrogation rights of the Association under this | 2 |
| subsection
have the same priority against the assets of the | 3 |
| insolvent organization as
that possessed by the person entitled | 4 |
| to receive benefits under this
Article.
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| (c) In addition to paragraphs (a) and (b) of this | 6 |
| subsection, the
Association shall
have all common law
rights of | 7 |
| subrogation and any other equitable or legal remedy that would | 8 |
| have
been available to the
impaired or insolvent organization | 9 |
| or owner or beneficiary or payee of a
covered
health care plan
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| certificate with respect to the covered health care plan | 11 |
| certificate.
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| (d) If the Association has provided benefits with respect | 13 |
| to a covered
health care plan
certificate and a person recovers | 14 |
| amounts as to which the Association has
rights as described in
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| paragraphs (a), (b), or (c) of this subsection, the person | 16 |
| shall pay
to the
Association the portion of the
recovery | 17 |
| attributable to the health care plan certificate (or portion | 18 |
| thereof)
covered by the
Association.
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| (8) (a) The contractual obligations of the insolvent | 20 |
| organization for
which the Association becomes or may become | 21 |
| liable are as great as but no
greater than the contractual | 22 |
| obligations of the insolvent organization would
have been in | 23 |
| the absence of an insolvency unless such obligations are
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| reduced as permitted by subsection (3), but the aggregate | 25 |
| liability of the
Association shall not exceed $300,000 with | 26 |
| respect to any one natural person.
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| (b) Furthermore, the Association shall not be required to | 28 |
| pay, and shall
have no liability to, any provider of health | 29 |
| care services to an enrollee:
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| (i) if such provider, or his or its affiliates or | 31 |
| members of his
immediate family, at any time within the one | 32 |
| year prior to the date of the
issuance of the first order, | 33 |
| by a court of competent jurisdiction, of
conservation, | 34 |
| rehabilitation or liquidation pertaining to the health
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| maintenance organization:
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| (A) was a securityholder of such organization (but |
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LRB093 18702 SAS 44430 b |
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| excluding any
securityholder holding an equity | 2 |
| interest of 5% or less);
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| (B) exercised control over the organization by | 4 |
| means such as serving as
an officer or director, | 5 |
| through a management agreement or as a principal
member | 6 |
| of a not-for-profit organization;
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| (C) had a representative serving by virtue or his | 8 |
| or her official
position as a representative of such | 9 |
| provider on the board of any entity
which exercised | 10 |
| control over the organization;
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| (D) received provider payments made by such | 12 |
| organization pursuant to a
contract which was not a | 13 |
| product of arms-length bargaining; or
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| (E) received distributions other than for | 15 |
| physician services from a
not-for-profit organization | 16 |
| on account of such provider's status as a
member of | 17 |
| such organization.
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| For purposes of this subparagraph (i), the terms | 19 |
| "affiliate," "person,"
"control" and "securityholder" | 20 |
| shall have the meanings ascribed to such
terms in Section | 21 |
| 131.1 of the Illinois Insurance Code; or
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| (ii) if and to the extent such a provider has agreed by | 23 |
| contract not
to seek payment from the enrollee for services | 24 |
| provided to such enrollee
or if, and to the extent, as a | 25 |
| matter of law such provider may not seek
payment from the | 26 |
| enrollee for services provided to such enrollee.
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| (c) Furthermore, the Association shall not be required to | 28 |
| pay, and shall
have no liability
for any of the following:
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| (i) Any claim under a covered health care plan | 30 |
| certificate to the extent
that the
assessments with respect | 31 |
| to the certificate are prohibited or preempted by
federal | 32 |
| or State law.
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| (ii) Any claim that does not arise under the express | 34 |
| written terms of a
health care
plan certificate, contract, | 35 |
| or other evidence of coverage issued by the
insolvent | 36 |
| organization,
including without limitation:
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LRB093 18702 SAS 44430 b |
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| (A) claims based on marketing materials;
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| (B) claims based on side letters, riders, or other | 3 |
| documents that were
issued
by the insolvent | 4 |
| organization without meeting applicable form filing or
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| approval
requirements;
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| (C) misrepresentations of or regarding health care | 7 |
| plan benefits;
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| (D) bad faith claims; or
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| (E) claims for penalties or consequential or | 10 |
| incidental damages.
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| (iii) Any claim that was not submitted to the insolvent | 12 |
| organization
prior to the
date of its final order of | 13 |
| liquidation and which is not submitted to the
Association | 14 |
| within one
year after the date of the final order of | 15 |
| liquidation.
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| (iv) Any claim that had been previously submitted to | 17 |
| and denied by the
insolvent
organization prior to the date | 18 |
| on which the organization became an insolvent
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| organization, if
not re-submitted to the Association for | 20 |
| its review and determination within one
year of the
date of | 21 |
| the final order of liquidation.
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| (v) Any claim for services provided by a provider or | 23 |
| other person more
than one
year prior to the date of the | 24 |
| final order of liquidation.
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| (vi) Any claim of any provider to the extent that any | 26 |
| other provider or
person has,
under an agreement with the | 27 |
| insolvent organization, agreed to pay, reimburse,
or
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| otherwise
accept responsibility for the claim.
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| (vii) Any claim to the extent covered by a policy, | 30 |
| program, contract, or
health care
plan certificate issued | 31 |
| by an insurer, another organization, or employer. A
person | 32 |
| who has a
claim against any such entity under a provision | 33 |
| in a policy, contract, or
certificate (other than
one | 34 |
| issued by the impaired or insolvent organization), that | 35 |
| also is a
contractual obligation
under this Article must | 36 |
| first exhaust his right under that policy, contract, or
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LRB093 18702 SAS 44430 b |
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| certificate. The
amount of an approved claim under this | 2 |
| Article shall be reduced by the policy
limits of or
amount | 3 |
| paid under that policy contract or certificate, whichever | 4 |
| amount is
greater. If a
claimant exhausts his right under a | 5 |
| policy, contract, or certificate (other
than
one issued by | 6 |
| the
impaired or insolvent organization), the insurer, | 7 |
| organization, or employer
issuing that policy,
contract, | 8 |
| or certificate is not entitled to sue or continue a suit | 9 |
| against the
enrollee of the
impaired or insolvent | 10 |
| organization to recover an amount paid the claimant under
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| that policy,
contract, or certificate.
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| (d) (i) The Association shall have no obligation under a | 13 |
| covered health
care
plan
certificate to convert coverage to an | 14 |
| individual or group HMO contract or to
any other form of health
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| care coverage or to offer any other conversion product.
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| (ii) In the event that the insolvent organization acted | 17 |
| with an insurer in
the issuance
of a point-of-service | 18 |
| product offered by both the insolvent organization and an
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| insurer (i.e., a product
offering both health care plan | 20 |
| services from the insolvent organization and
indemnity by | 21 |
| the insurer
for out-of-plan health care services), the | 22 |
| Association shall be responsible
only for those covered
| 23 |
| health care plan services obtained from providers at that | 24 |
| time employed by or
under contract with the
insolvent | 25 |
| organization or the Association (or providers to whom the | 26 |
| enrollee
was properly referred by
such providers) and for | 27 |
| covered health care plan emergency services.
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| (e) (i)
(c) In no event shall the Association be required | 29 |
| to pay
any
provider
participating in the insolvent organization
| 30 |
| any amount for in-plan services rendered by such provider prior | 31 |
| to the
insolvency of the organization in excess of (1) the | 32 |
| amount
provided by a capitation or other contract between the
a
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| physician
provider and the
insolvent organization for such | 34 |
| services; or (2) the
amounts provided by contract between the
a
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| hospital provider and the
Department of
Public Aid for similar | 36 |
| services to recipients of public aid; or (3) in the
event |
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LRB093 18702 SAS 44430 b |
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| neither (1) nor (2) above is applicable, then the amounts paid | 2 |
| under
the Medicare area prevailing rate for the area where the | 3 |
| services were
provided, or if no such rate exists with respect | 4 |
| to such services, then 80%
of the usual and customary rates | 5 |
| established by the Health Insurance
Association of America. The | 6 |
| payments required to be made by the Association
under this | 7 |
| Section shall constitute full and complete payment for such
| 8 |
| provider services to the enrollee.
| 9 |
| (ii) Any provider whose contract with the insolvent
| 10 |
| organization remains in-force on the date of the order of | 11 |
| liquidation (or on
the date of the order of conservation or | 12 |
| rehabilitation, if any such order was
entered) shall be | 13 |
| obliged, at the request of
(d) the Association
shall not be
| 14 |
| required to pay more than an
aggregate of $300,000
and for
and | 15 |
| on behalf of the Association, to continue
any organization | 16 |
| which is declared to
provide the same services required under | 17 |
| the contract for a period after
the order of
liquidation | 18 |
| specified by the Association (which may not exceed 4 months
| 19 |
| after the order of
liquidation) with respect
be
insolvent prior
| 20 |
| to those
July 1, 1987, and such funds shall be
distributed | 21 |
| first
to enrollees that remain from time to time covered
who | 22 |
| are not public
aid recipients pursuant to a plan
recommended by | 23 |
| the Association and approved by the Association during such
| 24 |
| period
Director and
that are assigned by the Association to | 25 |
| such provider
the court
having jurisdiction over the | 26 |
| liquidation .
If the Association requests such services,
the | 27 |
| Association
will be obliged, notwithstanding the limitations | 28 |
| of subdivision (8)(b) of
Section 6-8, to pay
for such | 29 |
| post-liquidation services during such period, on the basis of | 30 |
| the
payment provisions
of such
contracts, with respect to the | 31 |
| enrollees that are from time to time covered by
the Association
| 32 |
| during such period and assigned to such provider.
| 33 |
| (f) The payments required to be made by the Association | 34 |
| under this
Section
shall
constitute full and complete payment | 35 |
| for such provider services to the
enrollee. The enrollee shall
| 36 |
| have no liability, and the provider may not seek any payment |
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LRB093 18702 SAS 44430 b |
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| from the enrollee,
for or with respect to
any amounts not paid | 2 |
| to the provider on account of the exclusions or
limitations on | 3 |
| the liability or
obligations of the Association under this | 4 |
| Article.
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| (9) The Association may:
| 6 |
| (a) Enter into such contracts as are necessary or | 7 |
| proper to carry
out the provisions and purposes of this | 8 |
| Article.
| 9 |
| (b) Sue or be sued, including taking any legal actions | 10 |
| necessary or
proper for recovery of any unpaid assessments | 11 |
| under Section 6-9 and to settle
any litigation, threatened | 12 |
| or potential litigation, claims or potential claims
by or | 13 |
| against the Association . The
Association shall not be | 14 |
| liable for punitive or exemplary damages.
| 15 |
| (c) Borrow money to effect the purposes of this | 16 |
| Article. Any notes
or other evidence of indebtedness of the | 17 |
| Association not in default are
legal investments for | 18 |
| domestic organizations and may be carried as admitted
| 19 |
| assets.
| 20 |
| (d) Employ or retain such persons as are necessary or | 21 |
| appropriate to
handle the
financial transactions of the | 22 |
| Association, and to perform such other
functions as become | 23 |
| necessary or proper under this Article.
| 24 |
| (e) Negotiate and contract with any liquidator, | 25 |
| rehabilitator,
conservator, or ancillary receiver to carry | 26 |
| out the powers and duties of
the Association.
| 27 |
| (f) Take such legal action as may be necessary or | 28 |
| appropriate to avoid
or recover payment of
improper claims.
| 29 |
| (g) Exercise, for the purposes of this Article and to | 30 |
| the extent
approved by the Director, the powers of a | 31 |
| domestic
organization, but in no case may the Association | 32 |
| issue evidence of coverage
other than that issued to | 33 |
| perform the contractual
obligations of the impaired or | 34 |
| insolvent organization.
| 35 |
| (h) Exercise all the rights of the Director under | 36 |
| Section 193(4) of
the Illinois Insurance Code with respect |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| to covered health care plan
certificates after the | 2 |
| association becomes obligated by statute.
| 3 |
| (i) Request information from a person seeking coverage | 4 |
| or provider
seeking
payment from
the Association in order | 5 |
| to aid the Association in determining its obligations
under | 6 |
| this Article. The
person or provider shall promptly comply | 7 |
| with the request as a condition
precedent to the receipt of
| 8 |
| any rights or benefits conferred by this Article.
| 9 |
| (j) Take other necessary or appropriate action to | 10 |
| discharge its duties and
obligations under
this Article or | 11 |
| to exercise its powers under this Article.
| 12 |
| (10) The obligations of the Association under this Article | 13 |
| shall not
relieve any reinsurer, insurer or other person of its | 14 |
| obligations to the
insolvent organization (or its conservator, | 15 |
| rehabilitator, liquidator or
similar official) or its | 16 |
| enrollees, including without limitation any
reinsurer, insurer | 17 |
| or other person liable to the insolvent insurer (or its
| 18 |
| conservator, rehabilitator, liquidator or similar official) or | 19 |
| its
enrollees under any contract of reinsurance, any contract | 20 |
| providing stop
loss coverage or similar coverage or any health | 21 |
| care contract. With
respect to covered health care plan | 22 |
| certificates for which the
Association becomes obligated after | 23 |
| an entry of an order of liquidation
or rehabilitation, the | 24 |
| Association may elect to succeed to the rights of
the insolvent | 25 |
| organization arising after the date of the order of
liquidation | 26 |
| or rehabilitation under any contract of reinsurance, any
| 27 |
| contract providing stop loss coverage or similar coverages or | 28 |
| any health
care service contract to which the insolvent | 29 |
| organization was a party, on
the terms set forth under such | 30 |
| contract, to the extent that such contract
provides coverage | 31 |
| for health care services provided after the date of the
order | 32 |
| of liquidation or rehabilitation. As a condition to making this
| 33 |
| election, the Association must pay premiums for coverage | 34 |
| relating to
periods after the date of the order of liquidation | 35 |
| or rehabilitation.
| 36 |
| (11) The Association shall be entitled to collect premiums |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| due under or with
respect to covered health care certificates | 2 |
| for a period from the date on which
the domestic, foreign, or | 3 |
| alien organization became an insolvent organization
until the | 4 |
| Association no longer has obligations under subsection (2) of
| 5 |
| this Section with respect to such certificates. The | 6 |
| Association's
obligations under subsection (2) of this Section | 7 |
| with respect to
any covered health care plan certificates shall | 8 |
| terminate in the event that
all such premiums due under or with | 9 |
| respect to such covered health care plan
certificates are not | 10 |
| paid to the Association (i) within 30 days of the
Association's | 11 |
| demand therefor, or (ii) in the event that such certificates
| 12 |
| provide for a longer grace period for payment of premiums after | 13 |
| notice of
non-payment or demand therefor, within the lesser of | 14 |
| (A) the period provided
for in such certificates or (B) 60 | 15 |
| days.
| 16 |
| (12) The Association may take all necessary or appropriate | 17 |
| action
to non-renew any
covered health care plan certificate on | 18 |
| the earliest date after the final order
of liquidation on which | 19 |
| the
certificate may be non-renewed by the insolvent | 20 |
| organization, provided that the
Association provides notice
of | 21 |
| non-renewal on or before the date specified in the certificate | 22 |
| (or, if no
date is specified in the certificate, at
least 90 | 23 |
| days prior to the effective date of non-renewal).
| 24 |
| (13) The Board of Directors of the Association shall have | 25 |
| discretion and
may exercise reasonable
business judgment to | 26 |
| determine the means by which the Association is to provide
the | 27 |
| benefits of this Article
in an economical and efficient manner.
| 28 |
| (14) Where the Association has arranged or offered to | 29 |
| provide the benefits
of this Article to a
covered person under | 30 |
| a plan or arrangement that fulfills the Association's
| 31 |
| obligations under this Article, the
person shall not be | 32 |
| entitled to benefits from the Association in addition to or
| 33 |
| other than those provided under
the plan or arrangement.
| 34 |
| (15) Venue in a suit against the Association arising under | 35 |
| this Article
shall be in Cook County. The
Association shall not | 36 |
| be required to give an appeal bond in any case or
proceeding |
|
|
|
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LRB093 18702 SAS 44430 b |
|
| 1 |
| that arises from or is based
in whole or in part on claims or | 2 |
| other rights asserted under this Article.
| 3 |
| (Source: P.A. 90-655, eff. 7-30-98.)
| 4 |
| (215 ILCS 125/6-9) (from Ch. 111 1/2, par. 1418.9)
| 5 |
| Sec. 6-9. Assessments. (1) For the purpose of providing | 6 |
| the funds
necessary to carry out the powers and duties of the | 7 |
| Association, the board
of directors shall assess the member | 8 |
| organizations, at such
times and for such amounts as the board | 9 |
| finds necessary. Assessments shall
be due not less than 30 days | 10 |
| after written notice to the member organizations
and shall | 11 |
| accrue interest from the due date at such adjusted rate as is
| 12 |
| established under Section 531.09 of the Illinois Insurance Code | 13 |
| and
such interest shall be compounded daily.
| 14 |
| (2) There shall be 2 classes of assessments, as follows:
| 15 |
| (a) Class A assessments shall be made for the purpose of | 16 |
| meeting
administrative costs and other general expenses and | 17 |
| examinations conducted
under the authority of the Director | 18 |
| under subsection (5) of Section 6-12.
| 19 |
| (b) Class B assessments shall be made to the extent | 20 |
| necessary to carry
out the powers and duties of the Association | 21 |
| under Section 6-8 with regard
to an impaired or insolvent | 22 |
| domestic organization or insolvent foreign or
alien | 23 |
| organizations.
| 24 |
| (3) (a) The amount of any Class A assessment shall be | 25 |
| determined by the
Board and may be made on a non-pro rata | 26 |
| basis.
| 27 |
| (b) Class B assessments against member organizations shall
| 28 |
| be in the proportion that the premiums received on health | 29 |
| maintenance
organization business in this State
by each | 30 |
| assessed member organization on covered health care plan | 31 |
| certificates for
the calendar year preceding the assessment | 32 |
| bears to such premiums received
on health maintenance | 33 |
| organization business in this State for the calendar
year | 34 |
| preceding the assessment by all assessed member organizations.
| 35 |
| (c) Assessments to meet the requirements of the Association
|
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| with respect to an impaired or insolvent organization shall not | 2 |
| be made until
necessary to implement the purposes of this | 3 |
| Article. Classification
of assessments under subsection (2) | 4 |
| and computations of assessments under
this subsection shall be | 5 |
| made with a reasonable degree of accuracy,
recognizing that | 6 |
| exact determinations may not always be possible.
| 7 |
| (4) (a) The Association may abate or defer, in whole or in | 8 |
| part, the
assessment of a member organization if, in the | 9 |
| opinion of the board,
payment of the assessment would endanger | 10 |
| the ability of the member
organization to fulfill its | 11 |
| contractual obligations.
| 12 |
| (b) The total of all assessments upon a member organization
| 13 |
| may not in any one calendar year exceed 2% of such | 14 |
| organization's premiums
in this State during the calendar year | 15 |
| preceding the assessment on the
covered health care plan | 16 |
| certificates.
| 17 |
| (5) In the event an assessment against a member | 18 |
| organization is abated,
or deferred, in whole or in part, | 19 |
| because of the limitations set forth in
subsection (4) of this | 20 |
| Section, the amount by which such assessment is
abated or | 21 |
| deferred, may be assessed against the other member | 22 |
| organizations
in a manner consistent with the basis for | 23 |
| assessments set forth in this
Section. If the maximum | 24 |
| assessment, together with the other assets of the
Association, | 25 |
| does not provide in any one year an amount sufficient to carry
| 26 |
| out the responsibilities of the Association, the necessary | 27 |
| additional funds
may be assessed as soon thereafter as | 28 |
| permitted by this Article.
| 29 |
| (6) The board may, by an equitable method as established in | 30 |
| the
plan of operation, refund to member organizations , in | 31 |
| proportion to the
contribution of each organization, the amount | 32 |
| by which the assets of the fund
exceed the amount the board | 33 |
| finds is necessary to carry out during the coming
year the | 34 |
| obligations of the Association, including
assets accruing from | 35 |
| net realized gains and income from investments. A
reasonable | 36 |
| amount may be retained in the fund to provide moneys for the
|
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| continuing expenses of the Association and for future claims
| 2 |
| losses if
refunds are
impractical.
| 3 |
| (7) An assessment is deemed to occur on the date upon which | 4 |
| the board
votes such assessment. The board may defer calling | 5 |
| the payment of the
assessment or may call for payment in one or | 6 |
| more installments.
| 7 |
| (8) It is proper for any member organization, in | 8 |
| determining its rates
to consider the amount reasonably | 9 |
| necessary to meet its assessment
obligations under this | 10 |
| Article.
| 11 |
| (9) The Association must issue to each organization paying | 12 |
| a
Class B assessment under this Article a certificate of | 13 |
| contribution,
in a form prescribed by the Director, for the | 14 |
| amount of the assessment so
paid. All outstanding certificates | 15 |
| are of equal dignity and priority
without reference to amounts | 16 |
| or dates of issue. A certificate of
contribution may be shown | 17 |
| by the organization in its financial statement as
an admitted | 18 |
| asset in such form and for such amount, if any, and period of
| 19 |
| time as the Director may approve, provided the organization | 20 |
| shall in any
event at its option have the right to show a | 21 |
| certificate of contribution as
an asset at percentages of the | 22 |
| original face amount for calendar years as follows:
| 23 |
| 100% for the calendar year after the year of issuance;
| 24 |
| 80% for the second calendar year after the year of | 25 |
| issuance;
| 26 |
| 60% for the third calendar year after the year of issuance;
| 27 |
| 40% for the fourth calendar year after the year of | 28 |
| issuance;
| 29 |
| 20% for the fifth calendar year after the year of issuance.
| 30 |
| (Source: P.A. 85-20.)
| 31 |
| (215 ILCS 125/6-10) (from Ch. 111 1/2, par. 1418.10)
| 32 |
| Sec. 6-10. Plan of Operation. (1) (a) The Association must
| 33 |
| submit to the Director a plan of operation and any amendments | 34 |
| thereto necessary
or suitable to assure the fair, reasonable, | 35 |
| and equitable administration of the
Association. The plan of |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| operation and any amendments thereto become effective
upon | 2 |
| approval in writing by the Director.
| 3 |
| (b) If the Association fails to submit a suitable plan of | 4 |
| operation
within 90 days following the effective date of this | 5 |
| Article or if at any time
thereafter the Association fails to | 6 |
| submit suitable amendments to the plan, the
Director may, after | 7 |
| notice and hearing, adopt and promulgate such reasonable
rules | 8 |
| as are necessary or advisable to effectuate the provisions of | 9 |
| this
Article. Such rules are in force until modified by the | 10 |
| Director or
superseded by a plan submitted by the Association | 11 |
| and approved by the Director.
| 12 |
| (2) All member organizations must comply with the plan of | 13 |
| operation.
| 14 |
| (3) The plan of operation must, in addition to requirements | 15 |
| enumerated
elsewhere in this Article:
| 16 |
| (a) Establish procedures for handling the assets of the | 17 |
| Association;
| 18 |
| (b) Establish the amount and method of reimbursing members | 19 |
| of the
board of directors under Section 6-7;
| 20 |
| (c) Establish regular places and times for meetings | 21 |
| including telephone
conference calls of the board
of directors;
| 22 |
| (d) Establish procedures for records to be kept of all | 23 |
| financial
transactions of the Association, its agents, and the | 24 |
| board of directors;
| 25 |
| (e) Establish the procedures whereby selections for the | 26 |
| board
of directors will be made and submitted to the Director;
| 27 |
| (f) Establish any additional procedures for assessments | 28 |
| under
Section 6-9; and
| 29 |
| (g) Contain additional provisions necessary or proper for | 30 |
| the execution
of the powers and duties of the Association.
| 31 |
| (4) The plan of operation shall establish a procedure for | 32 |
| protest by
any member organization of assessments made by the | 33 |
| Association pursuant to
Section 6-9. Such procedures shall | 34 |
| require that:
| 35 |
| (a) Any member organization that wishes to protest all or | 36 |
| any part of an
assessment for any year shall first pay the full |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| amount of the assessment
as set forth in the notice provided by | 2 |
| the Association ; provided,
however, that the Association and | 3 |
| the protesting
member HMO may agree
that (A) the member HMO | 4 |
| need pay, at the time of the protest, only the portion
of the | 5 |
| entire
assessment that is under protest by the member HMO, (B) | 6 |
| the member HMO waives
any further
protest with respect to the | 7 |
| assessment, and (C) the member HMO must pay any
balance of the
| 8 |
| assessment not under protest at the time or times specified by | 9 |
| the Association
for
payment of
non-protested amounts. Any such | 10 |
| payments shall be available and may be used to
meet Association
| 11 |
| obligations during the pendency of the protest and any | 12 |
| subsequent appeal .
Such payments
shall be accompanied by a | 13 |
| statement in writing that the payment is made
under protest, | 14 |
| setting forth a brief statement of the ground for the
protest. | 15 |
| The Association shall hold such payments in a separate interest
| 16 |
| bearing account.
| 17 |
| (b) Within 30 days following the payment of an assessment | 18 |
| under
protest by any protesting member organization, the | 19 |
| Association must notify the
member organization in writing of | 20 |
| its determination with respect to the protest
unless the | 21 |
| Association notifies the member that additional time is | 22 |
| required
to resolve the issues raised by the protest.
| 23 |
| (c) In the event the Association determines that the | 24 |
| protesting member
organization is entitled to a refund, such | 25 |
| refund shall be made within 30
days following the date upon | 26 |
| which the Association makes its determination.
| 27 |
| (d) The decision of the Association with respect to a | 28 |
| protest may be
appealed to the Director pursuant to subsection | 29 |
| (3) of Section 6-11.
| 30 |
| (e) In the alternative to rendering a decision with respect | 31 |
| to any
protest based on a question regarding the assessment | 32 |
| base, the Association
may refer such protests to the Director | 33 |
| for final decision, with or without
a recommendation from the | 34 |
| Association.
| 35 |
| (f) Interest on any refund due a protesting member | 36 |
| organization shall be
paid at a rate equal to the Treasury bill |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| rate in effect from time to time
during the time
at the rate | 2 |
| actually earned by the Association held
on the amounts under | 3 |
| protest
separate account .
| 4 |
| (5) The plan of operation may provide that any or all | 5 |
| powers and duties
of the Association, except those under | 6 |
| paragraph (c) of subsection (10)
of Section 6-8 and Section 6-9 | 7 |
| are delegated to a corporation, association
or other | 8 |
| organization which performs or will perform functions similar | 9 |
| to
those of this Association, or its equivalent, in 2 or more | 10 |
| states. Such
a corporation, association or organization shall | 11 |
| be reimbursed for any payments
made on behalf of the | 12 |
| Association and shall be paid for its performance
of any | 13 |
| function of the Association. A delegation under this subsection
| 14 |
| shall take effect only with the approval of both the Board of | 15 |
| Directors
and the Director, and may be made only to a | 16 |
| corporation, association or
organization which extends | 17 |
| protection not substantially
less favorable and effective than | 18 |
| that provided by this Article.
| 19 |
| (Source: P.A. 85-20.)
| 20 |
| (215 ILCS 125/6-11) (from Ch. 111 1/2, par. 1418.11)
| 21 |
| Sec. 6-11. Duties and Powers of the Director. In addition | 22 |
| to
the duties and powers enumerated elsewhere in this Article, | 23 |
| the Director
shall have the powers set forth in this Section.
| 24 |
| (1) The Director must:
| 25 |
| (a) Upon request of the board of directors, provide the | 26 |
| Association with
a statement of the premiums in the | 27 |
| appropriate states for each member
organization.
| 28 |
| (b) Notify the board of directors of the existence of | 29 |
| an impaired or
insolvent organization not later than 3 days | 30 |
| after a determination of
impairment or insolvency is made | 31 |
| or when the Director receives notice of
impairment or | 32 |
| insolvency.
| 33 |
| (c) Give notice to an impaired organization as required | 34 |
| by Section
2-4 of this Act. Notice to the impaired | 35 |
| organization shall constitute
notice to its shareholders, |
|
|
|
SB2884 |
- 20 - |
LRB093 18702 SAS 44430 b |
|
| 1 |
| if any.
| 2 |
| (d) In any liquidation or rehabilitation proceeding | 3 |
| involving
a domestic organization, be appointed as the | 4 |
| liquidator or rehabilitator. If
a foreign or alien member | 5 |
| organization is subject to a liquidation proceeding
in its | 6 |
| domiciliary jurisdiction or state of entry, the Director | 7 |
| may be
appointed conservator.
| 8 |
| (2) The Director may suspend or revoke, after notice and | 9 |
| hearing,
the certificate of authority to transact business in | 10 |
| this State of any member
organization which fails to pay an | 11 |
| assessment when due or fails to comply
with the plan of | 12 |
| operation. As an alternative the Director may levy a
forfeiture | 13 |
| on any member organization which fails to pay an assessment | 14 |
| when
due. Such forfeiture may not exceed 5% of the unpaid | 15 |
| assessment per month,
but no forfeiture may be less than $100 | 16 |
| per month.
| 17 |
| (3) Any final decision or action of the board of directors | 18 |
| or the Association may be
appealed to the Director by any | 19 |
| member organization or any other person
adversely affected by | 20 |
| such action if such appeal is taken
within 30 days of the | 21 |
| action being appealed. Any final action or order of
the | 22 |
| Director is subject to judicial review in a court of competent
| 23 |
| jurisdiction. An action or order of the Director may be final | 24 |
| and subject to
judicial review even if the aggrieved party | 25 |
| seeking judicial review has not
sought reconsideration or | 26 |
| rehearing by the Director.
| 27 |
| (4) The liquidator, rehabilitator, or conservator of any | 28 |
| impaired
organization may notify all interested persons of the | 29 |
| effect of this Article. | 30 |
| (5) The Director shall require any member organization | 31 |
| whose RBC level
(as determined pursuant to Article IIA of the | 32 |
| Illinois Insurance Code) is less
than its company action level
| 33 |
| RBC (as determined pursuant to
Article IIA of the Illinois | 34 |
| Insurance Code) to maintain current information, on
a readily | 35 |
| accessible basis,
relating to its members, members'
premium | 36 |
| payments, benefits to members, providers, and payments to |
|
|
|
SB2884 |
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LRB093 18702 SAS 44430 b |
|
| 1 |
| providers. | 2 |
| (6) The Director shall share with the Association | 3 |
| information in his
possession respecting any
member | 4 |
| organization if and when either (a) such organization becomes | 5 |
| an
impaired organization under this
Article or (b) the Director | 6 |
| initiates conservation, rehabilitation, or
liquidation | 7 |
| proceedings with respect to
such organization.
| 8 |
| (Source: P.A. 86-620 .)
| 9 |
| (215 ILCS 125/6-12) (from Ch. 111 1/2, par. 1418.12)
| 10 |
| Sec. 6-12. Prevention of Insolvencies. To aid in the | 11 |
| detection and
prevention of organization insolvencies or | 12 |
| impairments:
| 13 |
| (1) It shall be the duty of the Director:
| 14 |
| (a) To notify the appropriate regulatory authority of all | 15 |
| other
states, territories of the United States, and the | 16 |
| District of Columbia when
he takes any of the following actions | 17 |
| against a member organization:
| 18 |
| (i) revocation of license;
| 19 |
| (ii) suspension of license;
| 20 |
| (iii) makes any formal order, except for an order issued | 21 |
| pursuant to
Article XII 1/2 of the Illinois Insurance Code, | 22 |
| that such company
restrict its subscriptions,
obtain | 23 |
| additional contributions to surplus, withdraw from the State,
| 24 |
| reinsure all or any part of its business, or increase capital, | 25 |
| surplus or
any other account for the security of enrollees or | 26 |
| creditors.
| 27 |
| Such notice shall be transmitted to all regulatory | 28 |
| authorities within 30 days
following the action taken or the | 29 |
| date on which the action occurs.
| 30 |
| (b) To report to the board of directors when he has taken | 31 |
| any of the actions
set forth in subparagraph (a) of this | 32 |
| paragraph or has received a report
from any other regulatory | 33 |
| authority indicating that any such action has
been taken in | 34 |
| another state. Such report to the board of directors shall
| 35 |
| contain all significant details of the action taken or the |
|
|
|
SB2884 |
- 22 - |
LRB093 18702 SAS 44430 b |
|
| 1 |
| report received
from another regulatory authority.
| 2 |
| (2) The Director may seek the advice and recommendations of | 3 |
| the board
of directors concerning any matter affecting his | 4 |
| duties and responsibilities
regarding the financial condition | 5 |
| of member organizations and organizations
seeking admission to | 6 |
| transact business in this State.
| 7 |
| (3) The board of directors may, upon majority vote, make | 8 |
| reports and
recommendations to the Director upon any matter | 9 |
| germane to the liquidation,
rehabilitation or conservation of | 10 |
| any member organization. Such reports
and recommendations | 11 |
| shall not be considered public documents.
| 12 |
| (4) The board of directors may, upon majority vote, make | 13 |
| recommendations
to the Director for the detection and | 14 |
| prevention of health maintenance
organization insolvencies.
| 15 |
| (5) The board of directors may
shall , at the conclusion of | 16 |
| any
health maintenance organization insolvency in which the | 17 |
| Association was
obligated to make payments, prepare a report to | 18 |
| the Director containing
such information as it may have in its | 19 |
| possession bearing on the history
and causes of such | 20 |
| insolvency. The board shall cooperate
with the boards of | 21 |
| directors of guaranty associations in other states in
preparing | 22 |
| a report on the history and causes for insolvency of a | 23 |
| particular
organization, and may adopt by reference any report | 24 |
| prepared by such other
associations.
| 25 |
| (Source: P.A. 86-620.)
| 26 |
| (215 ILCS 125/6-14) (from Ch. 111 1/2, par. 1418.14)
| 27 |
| Sec. 6-14. Miscellaneous Provisions. (1) Records must be | 28 |
| kept of all
negotiations and meetings of the Board of Directors
| 29 |
| in which the
Association or its representatives
are involved to | 30 |
| discuss the activities of the Association in carrying out
its | 31 |
| powers and duties under Section 6-8. Records of the Association | 32 |
| with
respect to an impaired
such
negotiations or insolvent | 33 |
| organization
meetings may be made public
only (a) upon the | 34 |
| order of the Director or a court of competent jurisdiction
or
| 35 |
| upon a determination by the Board of Directors of the |
|
|
|
SB2884 |
- 23 - |
LRB093 18702 SAS 44430 b |
|
| 1 |
| Association
and (b) during the pendency
termination of a
| 2 |
| liquidation, rehabilitation, or conservation proceeding | 3 |
| involving the impaired
or insolvent organization, upon the | 4 |
| termination of the impairment or
insolvency of the | 5 |
| organization, or upon the order of a court showing of
| 6 |
| compelling
competent
circumstances
jurisdiction . Nothing in | 7 |
| this subsection (1) limits the
duty of the
Association to | 8 |
| submit a report of its activities under Section 6-15.
| 9 |
| (2) For the purpose of carrying out its obligations under | 10 |
| this Article,
the Association is deemed to be a creditor of the | 11 |
| impaired or insolvent
organization to the extent of assets | 12 |
| attributable to covered health care plan
certificates reduced | 13 |
| by any amounts to which the Association is entitled as
subrogee | 14 |
| (under subsection (7) of Section 6-8). All assets of the | 15 |
| impaired
or insolvent organization attributable to covered | 16 |
| health care plan
certificates must be used to continue all | 17 |
| covered health care plan
certificates and pay all contractual | 18 |
| obligations of the impaired
organization as required by this | 19 |
| Article. "Assets attributable to covered
health care plan | 20 |
| certificates", as used in this subsection (2), is that
| 21 |
| proportion of the assets which the reserves that should have | 22 |
| been
established for such health care plan certificates bear to | 23 |
| the reserve that
should have been established for all health | 24 |
| care plan certificates of the
impaired or insolvent | 25 |
| organization.
| 26 |
| (3) (a) Prior to the termination of any liquidation, | 27 |
| rehabilitation,
or conservation proceeding, the court may take | 28 |
| into consideration the
contributions of the respective | 29 |
| parties, including the Association, the
shareholders of the | 30 |
| impaired or insolvent organization, and any other party
with a | 31 |
| bona fide interest, in making an equitable distribution of the
| 32 |
| ownership rights of such impaired or insolvent organization. In | 33 |
| such a
determination, consideration must be given to the | 34 |
| welfare of the enrollees
of the continuing or successor | 35 |
| organization.
| 36 |
| (b) No distribution to stockholders, if any, of an impaired |
|
|
|
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|
| 1 |
| or insolvent
organization may be made until and unless the | 2 |
| total
amount of valid claims of the Association for funds | 3 |
| expended in carrying
out its powers and duties under Section | 4 |
| 6-8, with respect to such organization
have been fully | 5 |
| recovered by the Association.
| 6 |
| (4) (a) If an order for liquidation or rehabilitation of an | 7 |
| organization
domiciled in this State has been entered, the | 8 |
| receiver appointed under such
order has a right to recover on | 9 |
| behalf of the organization, from any
affiliate that controlled | 10 |
| it, the amount of distributions, other than stock
dividends | 11 |
| paid by the organization on its capital stock, made at any time
| 12 |
| during the 5 years preceding the petition for liquidation or | 13 |
| rehabilitation
subject to the limitations of paragraphs (b) to | 14 |
| (d).
| 15 |
| (b) No such distribution is recoverable if the organization | 16 |
| shows that when
paid the distribution was lawful and | 17 |
| reasonable, and that the organization
did not know and could | 18 |
| not reasonably have known that the distribution
might adversely | 19 |
| affect the ability of the organization to fulfill its
| 20 |
| contractual obligations.
| 21 |
| (c) Any person who was an affiliate that controlled the | 22 |
| organization at
the time the distributions were paid is liable | 23 |
| up to the amount of
distributions he received. Any person who | 24 |
| was an affiliate that controlled
the organization at the time | 25 |
| the distributions were declared, is liable up
to the amount of | 26 |
| distributions he would have received if they had been paid
| 27 |
| immediately. If 2 persons are liable with respect to the same
| 28 |
| distributions, they are jointly and severally liable.
| 29 |
| (d) The maximum amount recoverable under subsection (4) of | 30 |
| this Section is
the amount needed in excess of all other | 31 |
| available assets of the insolvent
organization to pay the | 32 |
| contractual obligations of the insolvent organization.
| 33 |
| (e) If any person liable under paragraph (c) of subsection | 34 |
| (4) of this
Section is insolvent, all its affiliates that | 35 |
| controlled it at the time the
distribution was paid are jointly | 36 |
| and severally liable for any resulting
deficiency in the amount |
|
|
|
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LRB093 18702 SAS 44430 b |
|
| 1 |
| recovered from the insolvent affiliate.
| 2 |
| (5) No member organization may voluntarily
withdraw from | 3 |
| this
State or liquidate its property, business, and affairs, | 4 |
| and no such voluntary
withdrawal or voluntary liquidation
shall | 5 |
| be effective, until such member organization has paid all | 6 |
| authorized
assessments, whether called or
uncalled, for which | 7 |
| it is liable under this Article.
| 8 |
| (Source: P.A. 86-620.)
| 9 |
| (215 ILCS 125/6-17) (from Ch. 111 1/2, par. 1418.17)
| 10 |
| Sec. 6-17. Immunity. There is no liability on the part of | 11 |
| and
no cause of action of any nature may arise against any | 12 |
| member organization
or its agents or employees, the Association | 13 |
| or its agents or employees,
members of the board of directors, | 14 |
| or the Director or his representatives,
for any action or | 15 |
| omission
taken by them in the performance of their
powers and | 16 |
| duties
under this Article.
Without limitation,
the Association | 17 |
| shall be
immune from any claim that any omission of the | 18 |
| Association or any action of the
Association, taken
separately | 19 |
| or in concert with the Director in any of his or her | 20 |
| capacities, has
caused loss or any other injury to
any impaired | 21 |
| organization or any insolvent organization.
| 22 |
| (Source: P.A. 85-20.)
|
|