Full Text of HB5337 94th General Assembly
HB5337eng 94TH GENERAL ASSEMBLY
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the | 5 |
| Viatical and Life Settlements Act of 2006. | 6 |
| Section 5. Definitions. | 7 |
| "Advertising" means any written, electronic, or printed | 8 |
| communication or any communication by means of recorded | 9 |
| telephone messages or transmitted on radio, television, the | 10 |
| Internet, or similar communications media, including film | 11 |
| strips, motion pictures, and videos published, disseminated, | 12 |
| circulated, or placed directly before the public in this State, | 13 |
| for the purpose of creating an interest in or inducing a person | 14 |
| to sell, assign, devise, bequest, or transfer the death benefit | 15 |
| or ownership of a policy pursuant to a viatical settlement | 16 |
| contract. | 17 |
| "Business of viatical settlements" means any activity | 18 |
| involved in the offering, solicitation, negotiation, | 19 |
| procurement, effectuation, purchasing, investing, financing, | 20 |
| monitoring, tracking, underwriting, selling, transferring, | 21 |
| assigning, pledging, or hypothecating of viatical settlement | 22 |
| contracts or any other action affecting viatical settlement | 23 |
| contracts. | 24 |
| "Chronically ill" means: | 25 |
| (1) having a level of disability as determined by the | 26 |
| Secretary of Health and Human Services or being unable to | 27 |
| perform at least 2 activities of daily living, such as | 28 |
| eating, toileting, transferring, bathing, dressing, or | 29 |
| continence; or | 30 |
| (2) requiring substantial supervision to protect the | 31 |
| individual from threats to health and safety due to severe | 32 |
| cognitive impairment. |
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| "Department" means the Department of Financial and | 2 |
| Professional Regulation. | 3 |
| "Financing entity" means an underwriter, placement agent, | 4 |
| lender, purchaser of securities, purchaser of a policy or | 5 |
| certificate from a viatical settlement provider, credit | 6 |
| enhancer, or an entity that has a direct ownership in a policy | 7 |
| that is the subject of a viatical settlement contract and: | 8 |
| (1) whose principal activity related to the | 9 |
| transaction is providing funds to effect the viatical | 10 |
| settlement or purchase of one or more viaticated policies; | 11 |
| and | 12 |
| (2) who has an agreement in writing with one or more | 13 |
| licensed viatical settlement providers to finance the | 14 |
| acquisition of viatical settlement contracts or to provide | 15 |
| stop loss insurance. | 16 |
| "Financing entity" does not include a nonaccredited investor. | 17 |
| "Fraudulent viatical settlement act" includes: | 18 |
| (1) Acts or omissions committed by a person who, | 19 |
| knowingly or with intent to defraud for the purpose of | 20 |
| depriving another of property or for pecuniary gain, | 21 |
| commits or permits its employees or its agents to engage in | 22 |
| acts including: | 23 |
| (A) presenting, causing to be presented, or | 24 |
| preparing with knowledge or belief that it will be | 25 |
| presented to or by a viatical settlement provider, | 26 |
| financing entity, insurer, insurance producer, or | 27 |
| another person, false material information or | 28 |
| concealing material information as part of, in support | 29 |
| of, or concerning a fact material to one or more of the | 30 |
| following: | 31 |
| (i) an application for the issuance of a | 32 |
| viatical settlement contract or policy; | 33 |
| (ii) the underwriting of a viatical settlement | 34 |
| contract or policy;
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| (iii) a claim for payment or benefit pursuant | 36 |
| to a viatical settlement contract or policy;
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| (iv) premiums paid on a policy; | 2 |
| (v) payments and changes in ownership or | 3 |
| beneficiary made in accordance with the terms of a | 4 |
| viatical settlement contract or policy; | 5 |
| (vi) the reinstatement or conversion of a | 6 |
| policy; | 7 |
| (vii) in the solicitation, offer, | 8 |
| effectuation, or sale of a viatical settlement | 9 |
| contract or policy; | 10 |
| (viii) the issuance of written evidence of a | 11 |
| viatical settlement contract or policy; or | 12 |
| (ix) a financing transaction; | 13 |
| (B) employing any device, scheme, or artifice to | 14 |
| defraud related to viaticated policies. | 15 |
| (2) In the furtherance of a fraud or to prevent the | 16 |
| detection of a fraud a person commits or permits its | 17 |
| employees or its agents to: | 18 |
| (A) remove, conceal, alter, destroy, or sequester | 19 |
| from the Secretary the assets or records of a licensee | 20 |
| or other person engaged in the business of viatical | 21 |
| settlements; | 22 |
| (B) misrepresent or conceal the financial | 23 |
| condition of a licensee, financing entity, insurer, or | 24 |
| other person; | 25 |
| (C) transact the business of viatical settlements | 26 |
| in violation of laws requiring a license, certificate | 27 |
| of authority, or other legal authority for the | 28 |
| transaction of the business of viatical settlements; | 29 |
| or | 30 |
| (D) file with the Secretary or the chief insurance | 31 |
| regulatory official of another jurisdiction a document | 32 |
| containing false information or otherwise conceals | 33 |
| information about a material fact from the Secretary. | 34 |
| (3) Embezzlement, theft, misappropriation, or | 35 |
| conversion of monies, funds, premiums, credits, or other | 36 |
| property of a life insurance producer acting as a viatical |
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| settlement broker or another person engaged in the business | 2 |
| of viatical settlements or insurance. | 3 |
| (4) Recklessly entering into, negotiating, or | 4 |
| otherwise dealing in a viatical settlement contract, the | 5 |
| subject of which is a policy that was obtained by | 6 |
| presenting false information concerning a fact material to | 7 |
| the policy, or by concealing, for the purpose of misleading | 8 |
| another, information concerning a fact material to the | 9 |
| policy, where the viator or the viator's agent intended to | 10 |
| defraud the insurance company that issued the policy. | 11 |
| "Recklessly" means engaging in the conduct in conscious and | 12 |
| clearly unjustifiable disregard of a substantial | 13 |
| likelihood of the existence of the relevant facts or risks, | 14 |
| this disregard involving a gross deviation from acceptable | 15 |
| standards of conduct. | 16 |
| (5) Facilitating the change of state of residency of a | 17 |
| policy or a viator to avoid the provisions of this Act. | 18 |
| (6) Attempting to commit, assist, aid, or abet in the | 19 |
| commission of or conspiracy to commit the acts or omissions | 20 |
| specified in this definition. | 21 |
| "Licensee" means any viatical settlement provider or any | 22 |
| life insurance producer acting as a viatical settlement broker. | 23 |
| "Life insurance producer" means a person licensed as a | 24 |
| resident or nonresident insurance producer pursuant to Article | 25 |
| XXXI of the Illinois Insurance Code with a life line of | 26 |
| authority pursuant to Section 500-35 of the Illinois Insurance | 27 |
| Code. | 28 |
| "Person" means any natural or artificial entity including, | 29 |
| but not limited to, individuals, partnerships, limited | 30 |
| liability company, associations, trusts, or corporations. | 31 |
| "Policy" means an individual or group policy, group | 32 |
| certificate, contract, or arrangement of life insurance | 33 |
| affecting the rights of a resident of this State or bearing a | 34 |
| reasonable relation to this State, regardless of whether | 35 |
| delivered or issued for delivery in this State. | 36 |
| "Related provider trust" means a titling trust or other |
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| trust established by a licensed viatical settlement provider or | 2 |
| a financing entity for the sole purpose of holding the | 3 |
| ownership or beneficial interest in purchased policies in | 4 |
| connection with a financing transaction. The trust shall have a | 5 |
| written agreement with the licensed viatical settlement | 6 |
| provider under which the licensed viatical settlement provider | 7 |
| is responsible for ensuring compliance with all statutory and | 8 |
| regulatory requirements and under which the trust agrees to | 9 |
| make all records and files related to viatical settlement | 10 |
| transactions available to the Secretary as if those records and | 11 |
| files were maintained directly by the licensed viatical | 12 |
| settlement provider. | 13 |
| "Secretary" means the Secretary of Financial and | 14 |
| Professional Regulation. | 15 |
| "Special purpose entity" means a corporation, partnership, | 16 |
| trust, limited liability company, or other similar entity | 17 |
| formed only to provide, directly or indirectly, access to | 18 |
| institutional capital markets for a financing entity or | 19 |
| licensed viatical settlement provider. | 20 |
| "Terminally ill" means having an illness or sickness that | 21 |
| reasonably is expected to result in death in 24 months or less. | 22 |
| "Viatical settlement broker" means a person who, on behalf | 23 |
| of a viator and for a fee, commission, or other valuable | 24 |
| consideration, offers or attempts to negotiate viatical | 25 |
| settlement contracts between a viator and one or more viatical | 26 |
| settlement providers. Irrespective of the manner in which the | 27 |
| viatical settlement broker is compensated, a viatical | 28 |
| settlement broker is deemed to represent only the viator and | 29 |
| not the insurer or viatical settlement provider and owes a duty | 30 |
| to the viator to act according to the viator's instructions and | 31 |
| in the best interests of the viator. | 32 |
| "Viatical settlement contract" means a written agreement | 33 |
| that establishes the terms under which compensation or anything | 34 |
| of value is paid, which compensation or anything of value is | 35 |
| less than the expected death benefits of the policy, in return | 36 |
| for the viator's assignment, transfer, sale, devise, or bequest |
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| of the death benefit or ownership of any portion of the policy. | 2 |
| "Viatical settlement contract" includes any agreement under | 3 |
| which the insured, viator, or policyholder or the designee of | 4 |
| the insured, viator, or policyholder receives or is to receive | 5 |
| consideration in exchange for the designation of or consent to | 6 |
| assignment or transfer for the ownership or beneficiary | 7 |
| interest in a policy regardless of the date that the | 8 |
| consideration is provided to the person or the transfer or | 9 |
| assignment occurs. "Viatical settlement contract" also | 10 |
| includes any premium financing transaction or agreement | 11 |
| collateral thereto that provides a guarantee of a policy's | 12 |
| viatical settlement value. "Viatical settlement contract" does | 13 |
| not include a policy loan by an insurer pursuant to the policy | 14 |
| terms or a loan by a licensed lending institution that takes a | 15 |
| collateral assignment of a policy solely as security for a loan | 16 |
| and not as part of or in connection with an agreement | 17 |
| guaranteeing a viatical settlement value. | 18 |
| "Viatical settlement provider" means a person, other than a | 19 |
| viator, who enters into or effectuates a viatical settlement | 20 |
| contract. "Viatical settlement provider" does not include: | 21 |
| (1) a bank, savings and loan association, credit union, | 22 |
| or other licensed lending institution that takes an | 23 |
| assignment of a policy as collateral for a loan; | 24 |
| (2) the issuer of a policy providing accelerated | 25 |
| benefits under the policy; | 26 |
| (3) an authorized or eligible insurer that provides | 27 |
| stop loss coverage to a viatical settlement provider, | 28 |
| financing entity, special purpose entity, or related | 29 |
| provider trust; | 30 |
| (4) a natural person who enters into or effectuates no | 31 |
| more than one agreement in a calendar year for the transfer | 32 |
| of policies for any value less than the expected death | 33 |
| benefit; | 34 |
| (5) a financing entity; | 35 |
| (6) a special purpose entity; | 36 |
| (7) a related provider trust; or |
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| (8) an accredited investor or qualified institutional | 2 |
| buyer as defined, respectively, in Regulation D, Rule 501 | 3 |
| or Rule 144A of the Federal Securities Act of 1933, as | 4 |
| amended, and who purchases a purchased policy from a | 5 |
| viatical settlement provider. | 6 |
| "Viaticated policy" means a life insurance policy that has | 7 |
| been acquired by a viatical settlement provider pursuant to a | 8 |
| viatical settlement contract. | 9 |
| "Viator" means the owner of a life insurance policy or a | 10 |
| life insurance certificate holder who is a resident of this | 11 |
| State, who enters or seeks to enter into a viatical settlement | 12 |
| contract. For the purposes of this Act, a viator is not limited | 13 |
| to an owner of a policy insuring the life of an individual with | 14 |
| a terminal or chronic illness or condition except where | 15 |
| specifically addressed. If there is more than one owner on a | 16 |
| single policy and the owners are residents of different states, | 17 |
| the transaction shall be governed by the law of the state in | 18 |
| which the owner having the largest percentage ownership resides | 19 |
| or, if the owners hold equal ownership, the state of residence | 20 |
| of one owner agreed upon in writing by all owners. Viator does | 21 |
| not include: | 22 |
| (1) a licensee under this Act, including a life | 23 |
| insurance producer acting as a viatical settlement broker; | 24 |
| (2) an accredited investor or qualified institutional | 25 |
| buyer as defined, respectively, in Regulation D, Rule 501 | 26 |
| or Rule 144A of the Federal Securities Act of 1933, as | 27 |
| amended; | 28 |
| (3) a financing entity; | 29 |
| (4) a special purpose entity; or | 30 |
| (5) a related provider trust.
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| Section 10. License Requirements. | 32 |
| (a) A person shall not operate as a viatical settlement | 33 |
| broker unless the person is a life insurance producer and | 34 |
| satisfies the requirements of subsection (b) of this Section. | 35 |
| (b) A life insurance producer, as defined in this Act, who |
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| has been licensed for at least one year, shall be permitted to | 2 |
| act as a viatical settlement broker and negotiate viatical | 3 |
| settlement contracts between a viator and one or more viatical | 4 |
| settlement providers. For purposes of this Section, the one | 5 |
| year requirement is deemed to be satisfied if the person has | 6 |
| been licensed as a resident life insurance producer in his or | 7 |
| her home state for at least one year. Not later than 30 days | 8 |
| from the first day of negotiating a viatical settlement | 9 |
| contract on behalf of a viator, the life insurance producer | 10 |
| shall notify the Secretary of the activity on a form prescribed | 11 |
| by the Secretary, and shall pay any applicable fees as | 12 |
| determined by the Secretary. Notification must include an | 13 |
| acknowledgment by the producer that he or she will operate in | 14 |
| accordance with this Act. | 15 |
| Irrespective of the manner in which the viatical settlement | 16 |
| broker is compensated, a viatical settlement broker is deemed | 17 |
| to represent only the viator and not the insurer or viatical | 18 |
| settlement provider and owes a duty to the viator to act | 19 |
| according to the viator's instructions and in the best | 20 |
| interests of the viator. The insurer that issued the policy | 21 |
| being viaticated shall not be responsible for any act or | 22 |
| omission of a viatical settlement broker or viatical settlement | 23 |
| provider arising out of or in connection with the viatical | 24 |
| settlement transaction, unless the insurer receives | 25 |
| compensation from the viatical settlement provider or viatical | 26 |
| settlement broker for the viatical settlement contract. | 27 |
| (c) Notwithstanding any other provision of this Section, a | 28 |
| person licensed as an attorney, certified public accountant, or | 29 |
| financial planner accredited by a nationally recognized | 30 |
| accreditation agency who is retained to represent the viator | 31 |
| and whose compensation is not paid directly or indirectly by | 32 |
| the viatical settlement provider may negotiate viatical | 33 |
| settlement contracts without having to obtain a license as a | 34 |
| life insurance producer. | 35 |
| (d) A person shall not operate as a viatical settlement | 36 |
| provider from within this State or for persons residing in this |
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| State without first having obtained a viatical settlement | 2 |
| provider license from the Secretary.
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| (e) Application for a viatical settlement provider license | 4 |
| shall be made to the Secretary by the applicant on a form | 5 |
| prescribed by the Secretary. The application shall be | 6 |
| accompanied by a fee of $1,500, which shall be deposited into | 7 |
| the Insurance Producer Administration Fund. | 8 |
| Viatical settlement providers' licenses may be renewed | 9 |
| from year to year on the anniversary date of the license upon | 10 |
| (i) submission of renewal forms prescribed by the Secretary and | 11 |
| (ii) payment of the annual renewal fee of $750, which shall be | 12 |
| deposited into the Insurance Producer Administration Fund. | 13 |
| Failure to pay the fee within the terms prescribed by the | 14 |
| Secretary shall result in the expiration of the license. | 15 |
| (f) Applicants for a viatical settlement provider's | 16 |
| license shall provide information prescribed by the Secretary | 17 |
| on forms prescribed by the Secretary. The Secretary shall have | 18 |
| authority, at any time, to require the applicant to fully | 19 |
| disclose the identity of all stockholders, partners, officers, | 20 |
| members, and employees, except stockholders owning fewer than | 21 |
| 5% of the shares of an applicant whose shares are publicly | 22 |
| traded. The Secretary may, in the exercise of discretion, | 23 |
| refuse to issue a license in the name of a legal entity, if not | 24 |
| satisfied that an officer, employee, stockholder, member, or | 25 |
| partner thereof who may materially influence the applicant's | 26 |
| conduct meets the standards of this Act. | 27 |
| (g) A viatical settlement provider's license issued to a | 28 |
| legal entity authorizes all partners, members, officers, and | 29 |
| designated employees to act as viatical settlement providers, | 30 |
| as applicable, under the license. All those persons must be | 31 |
| named in the application and any supplements thereto. | 32 |
| (h) Upon the filing of an application for a viatical | 33 |
| settlement provider's license and the payment of the license | 34 |
| fee, the Secretary may request information from the applicant | 35 |
| relating to the applicant's qualifications to be licensed as a | 36 |
| viatical settlement provider and shall issue a license if the |
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| Secretary finds that the applicant: | 2 |
| (1) has provided a detailed plan of operation; | 3 |
| (2) is competent and trustworthy and intends to act in | 4 |
| good faith in the capacity authorized by the license | 5 |
| applied for; | 6 |
| (3) has a good business reputation and has had | 7 |
| experience, training, or education so as to be qualified in | 8 |
| the business for which the license is applied for; | 9 |
| (4) provides a certificate of good standing from the | 10 |
| state of its domicile if the applicant is a legal entity; | 11 |
| and | 12 |
| (5) has provided an anti-fraud plan that meets the | 13 |
| requirements of this Act. | 14 |
| The Secretary may not issue a license to a nonresident | 15 |
| applicant unless a written designation of an agent for service | 16 |
| of process is filed and maintained with the Secretary or the | 17 |
| applicant has filed with the Secretary the applicant's written | 18 |
| irrevocable consent that any action against the applicant may | 19 |
| be commenced against the applicant by service of process on the | 20 |
| Secretary. | 21 |
| A viatical settlement provider shall provide to the | 22 |
| Secretary new or revised information about officers, 10% or | 23 |
| more stockholders, partners, directors, members, or designated | 24 |
| employees within 30 days of a change.
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| Section 15. License suspension, denial, nonrenewal, and | 26 |
| revocation. | 27 |
| (a) The Secretary may refuse to issue or renew or may | 28 |
| suspend or revoke the license of any viatical settlement | 29 |
| provider if the Secretary finds any of the following: | 30 |
| (1) there was material misrepresentation in the | 31 |
| application for the license; | 32 |
| (2) the licensee or any officer, partner, member, or | 33 |
| key management personnel has been convicted of fraudulent | 34 |
| or dishonest practices, is subject to a final | 35 |
| administrative action, or is otherwise shown to be |
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| untrustworthy or incompetent; | 2 |
| (3) the licensee demonstrates a pattern of | 3 |
| unreasonable payments to viators; | 4 |
| (4) the licensee or any officer, partner, member, or | 5 |
| key management personnel has been found guilty of, or | 6 |
| pleaded guilty or nolo contendere to, any felony or | 7 |
| misdemeanor involving fraud or moral turpitude, regardless | 8 |
| of whether a judgment or conviction has been entered by the | 9 |
| court;
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| (5) the licensee has entered into any viatical | 11 |
| settlement contract that has not been approved pursuant to | 12 |
| this Act; | 13 |
| (6) the licensee has failed to honor contractual | 14 |
| obligations set out in a viatical settlement contract; | 15 |
| (7) the licensee no longer meets the requirements for | 16 |
| initial licensure; | 17 |
| (8) the licensee has assigned, transferred, or pledged | 18 |
| a purchased policy to a person other than a viatical | 19 |
| settlement provider licensed in this State, an accredited | 20 |
| investor or qualified institutional buyer as defined, | 21 |
| respectively, in Regulation D, Rule 501 or Rule 144A of the | 22 |
| Federal Securities Act of 1933, as amended, a financing | 23 |
| entity, a special purpose entity, or a related provider | 24 |
| trust; or | 25 |
| (9) the licensee or any officer, partner, member, or | 26 |
| key management personnel has violated any of the provisions | 27 |
| of this Act. | 28 |
| (b) The Secretary may suspend, revoke, or refuse to renew | 29 |
| the license of a life insurance producer acting as a viatical | 30 |
| settlement broker if the Secretary finds that the life | 31 |
| insurance producer acting as a viatical settlement broker has | 32 |
| violated the provisions of this Act. | 33 |
| (c) Before the Secretary denies a license application or | 34 |
| suspends, revokes, or refuses to renew the license of a | 35 |
| viatical settlement provider or a life insurance producer | 36 |
| acting as a viatical settlement broker the Secretary shall |
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| conduct a hearing in accordance with the Illinois | 2 |
| Administrative Procedure Act. | 3 |
| Section 20. Approval of viatical settlement contracts. No | 4 |
| viatical settlement provider or viatical settlement broker may | 5 |
| use a viatical settlement contract or provide to a viator a | 6 |
| disclosure statement form in this State unless it has been | 7 |
| filed with and approved by the Secretary. A viatical settlement | 8 |
| contract form filed with the Secretary shall be deemed approved | 9 |
| if it has not been disapproved within 60 days of the filing.
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| The Secretary shall disapprove a viatical settlement contract | 11 |
| form or a disclosure statement form if, in the Secretary's | 12 |
| opinion, the contract or provisions contained therein are | 13 |
| unreasonable, contrary to the interests of the public, or | 14 |
| otherwise misleading or unfair to the viator. At the | 15 |
| Secretary's discretion, the Secretary may require the viatical | 16 |
| settlement provider or viatical settlement broker to submit | 17 |
| copies of its advertising material.
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| Section 25. Reporting requirements. | 19 |
| (a) Each viatical settlement provider shall file with the | 20 |
| Secretary on or before March 1 of each year an annual statement | 21 |
| containing information that the Secretary may prescribe by | 22 |
| rule. This information shall not include individual | 23 |
| transaction data regarding the business of viatical | 24 |
| settlements or data that compromises the privacy of personal, | 25 |
| financial, and health information of the viator or insured. | 26 |
| (b) Any information relating to the identity of an insured | 27 |
| individual or an insured individual's financial or medical | 28 |
| information collected, received, or maintained by any entity | 29 |
| directly or indirectly involved with a viatical settlement | 30 |
| transaction, including a viatical settlement provider, life | 31 |
| insurance producer acting as a viatical settlement broker, | 32 |
| information bureau, rating agency or company, or any other | 33 |
| person with actual knowledge of a viator's or insured's | 34 |
| identity, shall be subject to the requirements of Article XL of |
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| the Illinois Insurance Code, except as provided below or | 2 |
| otherwise allowed or required by law. The information may not | 3 |
| be disclosed unless the disclosure is: | 4 |
| (1) necessary to effect a viatical settlement contract | 5 |
| between the viator and a viatical settlement provider and | 6 |
| the viator or insured or both, as may be required, have | 7 |
| provided prior written consent to the disclosure; | 8 |
| (2) provided in response to an investigation or | 9 |
| examination by the Secretary or another governmental | 10 |
| officer or agency; | 11 |
| (3) a term of or condition to the transfer of a policy | 12 |
| by one viatical settlement provider to another viatical | 13 |
| settlement provider; | 14 |
| (4) necessary to permit a financing entity, related | 15 |
| provider trust, or special purpose entity to finance the | 16 |
| purchase of policies by a viatical settlement provider and | 17 |
| the viator and insured have provided prior written consent | 18 |
| to the disclosure; | 19 |
| (5) necessary to allow the viatical settlement | 20 |
| provider or their authorized representatives to make | 21 |
| contacts for the purpose of determining health status; or | 22 |
| (6) required to purchase stop loss coverage.
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| Section 30. Examination of applicants and licensees. | 24 |
| (a) The Secretary may conduct an examination of a licensee | 25 |
| as often as the Secretary in his or her sole discretion deems | 26 |
| appropriate. The Secretary has the authority to order a | 27 |
| licensee or applicant to produce any records, books, files, or | 28 |
| other information reasonably necessary to ascertain whether or | 29 |
| not the licensee or applicant is acting or has acted in | 30 |
| violation of the law or otherwise contrary to the interests of | 31 |
| the public. | 32 |
| For purposes of completing an examination of a licensee | 33 |
| under this Act, the Secretary may examine or investigate any | 34 |
| person, or the business of any person, insofar as the | 35 |
| examination or investigation is, in the sole discretion of the |
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| Secretary, necessary or material to the examination of the | 2 |
| licensee. | 3 |
| In lieu of an examination under this Act of any foreign or | 4 |
| alien licensee licensed in this State, the Secretary may, at | 5 |
| the Secretary's discretion, accept an examination report on the | 6 |
| licensee as prepared by the chief insurance regulatory official | 7 |
| for the licensee's state of domicile or port-of-entry state. | 8 |
| (b) A person required to be licensed by this Act shall for | 9 |
| 5 years retain copies of: | 10 |
| (1) proposed, offered, or executed contracts, | 11 |
| underwriting documents, policy forms, and applications | 12 |
| from the date of the proposal, offer, or execution of the | 13 |
| contract, whichever is later; | 14 |
| (2) all checks, drafts, or other evidence and | 15 |
| documentation related to the payment, transfer, deposit, | 16 |
| or release of funds from the date of the transaction; | 17 |
| (3) all complaints received against the licensee and | 18 |
| those viatical settlement agents representing the | 19 |
| licensee; and | 20 |
| (4) all other records and documents related to the | 21 |
| requirements of this Act. | 22 |
| This subsection (b) does not relieve a person of the | 23 |
| obligation to produce these documents to the Secretary after | 24 |
| the retention period has expired if the person has retained the | 25 |
| documents. | 26 |
| Records required to be retained by this subsection (b) must | 27 |
| be legible and complete and may be retained in paper, | 28 |
| photograph, micro process, magnetic, mechanical, or electronic | 29 |
| media, or by any process that accurately reproduces or forms a | 30 |
| durable medium for the reproduction of a record. | 31 |
| The Secretary may adopt rules to prescribe the minimum | 32 |
| records that must be maintained by licensees. | 33 |
| (c) Upon determining that an examination should be | 34 |
| conducted, the Secretary shall issue an examination warrant | 35 |
| appointing one or more examiners to perform the examination and | 36 |
| instructing them as to the scope of the examination. In |
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| conducting the examination, the examiner may employ guidelines | 2 |
| or procedures that the Secretary may deem appropriate. | 3 |
| Every licensee, its officers, directors, and agents, and | 4 |
| any other person from whom information is sought shall provide | 5 |
| to the examiners timely, convenient, and free access at all | 6 |
| reasonable hours at its offices to all books, records, | 7 |
| accounts, papers, documents, assets, and computer or other | 8 |
| recordings relating to the property, assets, business, and | 9 |
| affairs of the licensee being examined. The officers, | 10 |
| directors, employees, and agents of the licensee or person | 11 |
| shall facilitate the examination and aid in the examination so | 12 |
| far as it is in their power to do so. The refusal of a licensee | 13 |
| by its officers, directors, employees, or agents, to submit to | 14 |
| examination or to comply with any reasonable written request of | 15 |
| the Secretary shall be grounds for suspension or refusal to | 16 |
| renew of any license or authority held by the licensee to | 17 |
| engage in the viatical settlement business or other business | 18 |
| subject to the Secretary's jurisdiction. Any proceedings for | 19 |
| suspension, revocation, or refusal of any license or authority | 20 |
| shall be conducted pursuant to the Illinois Administrative | 21 |
| Procedures Act. | 22 |
| The Secretary or any of his or her examiners shall have the | 23 |
| power to issue subpoenas, to administer oaths, and to examine | 24 |
| under oath any person as to any matter pertinent to the | 25 |
| examination. Upon the failure or refusal of a person to obey a | 26 |
| subpoena, the Secretary may petition a court of competent | 27 |
| jurisdiction, and upon proper showing, the court may enter an | 28 |
| order compelling the witness to appear and testify or produce | 29 |
| documentary evidence. Failure to obey the court order shall be | 30 |
| punishable as contempt of court. | 31 |
| When making an examination under this Act, the Secretary | 32 |
| may retain attorneys, appraisers, independent actuaries, | 33 |
| independent certified public accountants, or other | 34 |
| professionals and specialists as examiners, the reasonable | 35 |
| cost of which shall be borne by the licensee that is the | 36 |
| subject of the examination. |
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| (d) Nothing contained in this Act shall be construed to | 2 |
| limit the Secretary's authority to terminate or suspend an | 3 |
| examination in order to pursue other legal or regulatory action | 4 |
| pursuant to the insurance laws of this State. Findings of fact | 5 |
| and conclusions made pursuant to any examination shall be prima | 6 |
| facie evidence in any legal or regulatory action. | 7 |
| (e) Nothing contained in this Act shall be construed to | 8 |
| limit the Secretary's authority to use and, if appropriate, to | 9 |
| make public any final report. | 10 |
| (f) The Secretary may charge the expenses incurred in any | 11 |
| examination authorized by this Section to the person being | 12 |
| examined. The charge shall be reasonably related to the cost of | 13 |
| the examination, including, but not limited to, a per diem | 14 |
| charge of $300 per examiner, electronic data processing costs, | 15 |
| costs related to the supervision and preparation of an | 16 |
| examination report, and lodging and travel expenses. All | 17 |
| lodging and travel expenses shall be in accordance with the | 18 |
| applicable travel rules published by the Department of Central | 19 |
| Management Services and approved by the Governor's Travel | 20 |
| Control Board, except that out-of-state lodging and travel | 21 |
| expenses shall be in accordance with travel rates prescribed | 22 |
| under 41 C.F.R. 301-7.2 for reimbursement of subsistence | 23 |
| expenses incurred during official travel. All lodging and | 24 |
| travel expenses may be reimbursed directly upon authorization | 25 |
| by the Secretary. All electronic data processing costs incurred | 26 |
| by the Department in the performance of any examination shall | 27 |
| be billed directly to the person being examined for payment to | 28 |
| the Statistical Services Revolving Fund. With the exception of | 29 |
| the direct reimbursements authorized by the Secretary, all | 30 |
| other examination charges collected by the Department shall be | 31 |
| paid to the Insurance Producers Administration Fund. | 32 |
| The payment of fees or charges shall be made by separate | 33 |
| check, or other payment method approved by the Secretary, for | 34 |
| each invoice issued by the Department. | 35 |
| Any fee or charge assessed pursuant to this Part for which | 36 |
| a payment due date has not been established must be paid within |
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| 1 |
| 30 days after the date of the Department's invoice. | 2 |
| Any company, person, or entity failing to make any payment | 3 |
| of $100 or more as required under this subsection (f) is | 4 |
| liable, in addition to the tax and any penalties, for interest | 5 |
| on the deficiency at the rate of 12% per annum or at higher | 6 |
| adjusted rates as are or may be established under subsection | 7 |
| (b) of Section 6621 of the Internal Revenue Code, from the date | 8 |
| that payment was due, determined without regard to any | 9 |
| extensions, to the date of payment of the amount. | 10 |
| If a licensee fails to pay the full amount of any fee of | 11 |
| $200 or more due under this subsection (f), there shall be | 12 |
| added to the amount due, as a penalty, the greater of $100 or | 13 |
| an amount equal to 10% of the deficiency for each month or part | 14 |
| of a month that the deficiency remains unpaid. | 15 |
| If a licensee fails to timely pay the full amount of any | 16 |
| fee or charge of $100 or more due under this subsection (f), | 17 |
| there may be added to the amount due, as a penalty, the greater | 18 |
| of $50 or an amount equal to 5% of the deficiency for each | 19 |
| month or part of a month that the deficiency remains unpaid. In | 20 |
| addition to the fee or charge, interest on the deficiency shall | 21 |
| be assessed at the rate of 12% per annum or at higher adjusted | 22 |
| rates as are or may be established under subsection (b) of | 23 |
| Section 6621 of the Internal Revenue Code, from the date that | 24 |
| payment of the fee or charge was due to the date of payment of | 25 |
| the amount. | 26 |
| Any person or company required to pay a fee or charge | 27 |
| pursuant to this Section may request a hearing to be held for | 28 |
| the purposes of determining if the assessed fee or charge is | 29 |
| appropriate. The hearing request shall be made pursuant to 50 | 30 |
| Ill. Admin. Code 2500.50 and shall be based only on (i) the | 31 |
| grounds set forth in Section 412 of the Illinois Insurance | 32 |
| Code, (ii) a mistake of fact, (iii) an error in calculation, or | 33 |
| (iv) an erroneous interpretation of a statute of this or any | 34 |
| other state.
| 35 |
| (g) Examination reports shall be comprised only of facts | 36 |
| appearing upon the books, records, or other documents of the |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| licensee, its agents, or other persons examined, or as | 2 |
| ascertained from the testimony of its officers or agents or | 3 |
| other persons examined concerning its affairs and the | 4 |
| conclusions and recommendations that the examiners find | 5 |
| reasonably warranted from the facts. | 6 |
| (h) No later than 60 days following completion of the | 7 |
| examination, the examiner in charge shall file with the | 8 |
| Secretary a verified written report of examination under oath. | 9 |
| Upon receipt of the verified report, the Secretary shall | 10 |
| transmit the report to the licensee examined, together with a | 11 |
| notice that shall afford the licensee examined a reasonable | 12 |
| opportunity of not more than 30 days to make a written | 13 |
| submission or rebuttal with respect to any matters contained in | 14 |
| the examination report. | 15 |
| Within 30 days after the end of the period allowed for the | 16 |
| receipt of written submissions or rebuttals the Secretary shall | 17 |
| fully consider and review the report, together with any written | 18 |
| submissions or rebuttals and any relevant portions of the | 19 |
| examiner's workpapers and enter an order doing one of the | 20 |
| following: | 21 |
| (1) Adopting the examination report as filed or with | 22 |
| modification or corrections. If the examination report | 23 |
| reveals that the company is operating in violation of any | 24 |
| law, rule, or prior order of the Secretary, the Secretary | 25 |
| may order the company to take any action the Secretary | 26 |
| considers necessary and appropriate to cure the violation. | 27 |
| (2) Rejecting the examination report with directions | 28 |
| to the examiners to reopen the examination for purposes of | 29 |
| obtaining additional data, documentation, or information | 30 |
| and refiling. | 31 |
| (3) Calling for an investigatory hearing with no less | 32 |
| than 20 days notice to the company for purposes of | 33 |
| obtaining additional documentation, data, information, and | 34 |
| testimony. | 35 |
| All orders entered pursuant to this subsection (h) shall be | 36 |
| accompanied by findings and conclusions resulting from the |
|
|
|
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| 1 |
| Secretary's consideration and review of the examination | 2 |
| report, relevant examiner workpapers, and any written | 3 |
| submissions or rebuttals. Any order issued pursuant to this | 4 |
| subsection (h) shall be considered a final administrative | 5 |
| decision and may be appealed pursuant to the Administrative | 6 |
| Review Law and shall be served upon the company by certified | 7 |
| mail, together with a copy of the adopted examination report. | 8 |
| Within 30 days of the issuance of the adopted report the | 9 |
| company shall file affidavits executed by each of its directors | 10 |
| stating under oath that they have received a copy of the | 11 |
| adopted report and related orders. | 12 |
| (i) Hearings conducted pursuant to this Section shall be | 13 |
| subject to the following requirements: | 14 |
| (1) Any hearing conducted pursuant to this Section by | 15 |
| the Secretary or the Secretary's authorized representative | 16 |
| shall be conducted as a nonadversarial confidential | 17 |
| investigatory proceeding as necessary for the resolution | 18 |
| of any inconsistencies, discrepancies, or disputed issues | 19 |
| apparent upon the face of the filed examination report or | 20 |
| raised by or as a result of the Secretary's review of | 21 |
| relevant workpapers or by the written submission or | 22 |
| rebuttal of the company. Within 20 days of the conclusion | 23 |
| of any hearing, the Secretary shall enter an order pursuant | 24 |
| to paragraph (1) of subsection (h) of this Section. | 25 |
| (2) The Secretary may appoint an authorized | 26 |
| representative to conduct the hearing, except that the | 27 |
| authorized representative may not be an examiner. The | 28 |
| hearing shall proceed expeditiously with discovery by the | 29 |
| company limited to the examiner's workpapers that tend to | 30 |
| substantiate any assertions set forth in any written | 31 |
| submission or rebuttal. The Secretary or the Secretary's | 32 |
| representative may issue subpoenas for the attendance of | 33 |
| any witnesses or the production of any documents considered | 34 |
| relevant to the investigation whether under the control of | 35 |
| the Secretary, the company, or other persons. The documents | 36 |
| produced shall be included in the record and testimony |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| taken by the Secretary or the Secretary's representative | 2 |
| shall be under oath and preserved for the record. Nothing | 3 |
| contained in this Section shall require the Secretary to | 4 |
| disclose any information or records that would indicate or | 5 |
| show the existence or content of any investigation or | 6 |
| activity of a criminal justice agency. | 7 |
| (3) The hearing shall proceed with the Secretary or the | 8 |
| Secretary's representative posing questions to the persons | 9 |
| subpoenaed. Thereafter, the company and the Secretary may | 10 |
| present testimony relevant to the investigation. | 11 |
| Cross-examination may be conducted only by the Secretary or | 12 |
| the Secretary's representative. The company and the | 13 |
| Secretary shall be permitted to make closing statements and | 14 |
| may be represented by the counsel of their choice. | 15 |
| (j) In the event the Secretary determines that regulatory | 16 |
| action is appropriate as a result of an examination, the | 17 |
| Secretary may initiate any proceedings or actions provided by | 18 |
| law. | 19 |
| (k) Names and individual identification data for all | 20 |
| viators shall be considered private and confidential | 21 |
| information and shall not be disclosed by the Secretary unless | 22 |
| required by law.
| 23 |
| Except as otherwise provided in this Act, all examination | 24 |
| reports, working papers, recorded information, documents and | 25 |
| copies thereof produced by, obtained by or disclosed to the | 26 |
| Secretary or any other person in the course of an examination | 27 |
| made under this Act or the law of another state or jurisdiction | 28 |
| that is substantially similar to this Act, or in the course of | 29 |
| analysis or investigation by the Secretary of the financial | 30 |
| condition or market conduct of a licensee are
(i) confidential | 31 |
| by law and privileged,
(ii) not subject to the Freedom of | 32 |
| Information Act,
(iii) not subject to subpoena, and
(iv) not | 33 |
| subject to discovery or admissible in evidence in any private | 34 |
| civil action. | 35 |
| The Secretary is authorized to use the documents, | 36 |
| materials, or other information in the furtherance of any |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| regulatory or legal action brought as part of the Secretary's | 2 |
| official duties. | 3 |
| Documents, materials, or other information, including, but | 4 |
| not limited to, all working papers and copies thereof, in the | 5 |
| possession or control of the NAIC and its affiliates and | 6 |
| subsidiaries are: | 7 |
| (1) confidential by law and privileged; | 8 |
| (2) not subject to subpoena; and | 9 |
| (3) not subject to discovery or admissible in evidence | 10 |
| in any private civil action if they are: | 11 |
| (A) created, produced or obtained by or disclosed | 12 |
| to the NAIC and its affiliates and subsidiaries in the | 13 |
| course of assisting an examination made under this Act | 14 |
| or assisting the Secretary in the analysis or | 15 |
| investigation of the financial condition or market | 16 |
| conduct of a licensee; or | 17 |
| (B) disclosed to the NAIC and its affiliates and | 18 |
| subsidiaries under this subsection (k) by the | 19 |
| Secretary. | 20 |
| The Secretary or any person that received the documents, | 21 |
| material, or other information while acting under the authority | 22 |
| of the Secretary, including, but not limited to, the NAIC and | 23 |
| its affiliates and subsidiaries, is permitted to testify in any | 24 |
| private civil action concerning any confidential documents, | 25 |
| materials, or information subject to this subsection (k). | 26 |
| (l) In order to assist in the performance of the | 27 |
| Secretary's duties, the Secretary may: | 28 |
| (1) share documents, materials, or other information, | 29 |
| including the confidential and privileged documents, | 30 |
| materials, or information subject to subsection (k) of this | 31 |
| Section, with other state, federal, and international | 32 |
| regulatory agencies, with the NAIC and its affiliates and | 33 |
| subsidiaries, and with state, federal, and international | 34 |
| law enforcement authorities, provided that the recipient | 35 |
| agrees to maintain the confidentiality and privileged | 36 |
| status of the document, material, communication, or other |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| information; | 2 |
| (2) receive documents, materials, communications, or | 3 |
| information, including otherwise confidential and | 4 |
| privileged documents, materials, or information, from the | 5 |
| NAIC and its affiliates and subsidiaries and from | 6 |
| regulatory and law enforcement officials of other foreign | 7 |
| or domestic jurisdictions, and shall maintain as | 8 |
| confidential or privileged any document, material, or | 9 |
| information received with notice or the understanding that | 10 |
| it is confidential or privileged under the laws of the | 11 |
| jurisdiction that is the source of the document, material, | 12 |
| or information; and | 13 |
| (3) enter into agreements governing sharing and use of | 14 |
| information consistent with this Section. | 15 |
| (m) No waiver of any applicable privilege or claim of | 16 |
| confidentiality in the documents, materials, or information | 17 |
| shall occur as a result of disclosure to the Secretary under | 18 |
| this Section or as a result of sharing as authorized in | 19 |
| subsection (l) of this Section. | 20 |
| (n) A privilege established under the law of any state or | 21 |
| jurisdiction that is substantially similar to the privilege | 22 |
| established under this Section shall be available and enforced | 23 |
| in any proceeding in any court of this State. | 24 |
| (o) Nothing contained in this Act shall prevent or be | 25 |
| construed as prohibiting the Secretary from disclosing the | 26 |
| content of an examination report, preliminary examination | 27 |
| report or results, or any matter relating thereto, to the chief | 28 |
| insurance regulatory official of any other state or country, or | 29 |
| to law enforcement officials of this or any other state or | 30 |
| agency of the federal government at any time or to the NAIC, so | 31 |
| long as the agency or office receiving the report or matters | 32 |
| relating thereto agrees in writing to hold it confidential and | 33 |
| in a manner consistent with this Act. | 34 |
| (p) An examiner may not be appointed by the Secretary if | 35 |
| the examiner, either directly or indirectly, has a conflict of | 36 |
| interest or is affiliated with the management of or owns a |
|
|
|
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| 1 |
| pecuniary interest in any person subject to examination under | 2 |
| this Act. This Section shall not be construed to automatically | 3 |
| preclude an examiner from being: | 4 |
| (1) a viator; | 5 |
| (2) an insured in a purchased policy; or | 6 |
| (3) a beneficiary in an insurance policy that is | 7 |
| proposed to be the subject of a viatical settlement | 8 |
| contract. | 9 |
| Notwithstanding the requirements of this subsection (p), | 10 |
| the Secretary may retain from time to time, on an individual | 11 |
| basis, qualified actuaries, certified public accountants, or | 12 |
| other similar individuals who are independently practicing | 13 |
| their professions, even though these persons may from time to | 14 |
| time be similarly employed or retained by persons subject to | 15 |
| examination under provisions of this Act. | 16 |
| (q) The expenses incurred in conducting any examination | 17 |
| shall be paid by the licensee or applicant. | 18 |
| (r) No cause of action shall arise nor shall any liability | 19 |
| be imposed against the Secretary, the Secretary's authorized | 20 |
| representatives, or any examiner appointed by the Secretary for | 21 |
| any statements made or conduct performed in good faith while | 22 |
| carrying out the provisions of this Section. | 23 |
| No cause of action shall arise, nor shall any liability be | 24 |
| imposed against any person for the act of communicating or | 25 |
| delivering information or data to the Secretary or the | 26 |
| Secretary's authorized representative or examiner pursuant to | 27 |
| an examination made under this Section, if the act of | 28 |
| communication or delivery was performed in good faith and | 29 |
| without fraudulent intent or the intent to deceive. This | 30 |
| subsection (r) does not abrogate or modify in any way any | 31 |
| common law or statutory privilege or immunity heretofore | 32 |
| enjoyed by any person identified in this subsection (r). | 33 |
| A person identified in this subsection (r) shall be | 34 |
| entitled to an award of attorney's fees and costs if he or she | 35 |
| is the prevailing party in a civil cause of action for libel, | 36 |
| slander, or any other relevant tort arising out of activities |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| in carrying out the provisions of this Section and the party | 2 |
| bringing the action was not substantially justified in doing | 3 |
| so. For purposes of this Section, a proceeding is | 4 |
| "substantially justified" if it had a reasonable basis in law | 5 |
| or fact at the time that it was initiated. | 6 |
| (s)
The Secretary may investigate suspected fraudulent | 7 |
| viatical settlement acts and persons engaged in the business of | 8 |
| viatical settlements.
| 9 |
| Section 35. Disclosure. | 10 |
| (a) With each application for a viatical settlement | 11 |
| contract, a viatical settlement provider or viatical | 12 |
| settlement broker shall provide the viator with at least the | 13 |
| following disclosures no later than the time the viatical | 14 |
| settlement contract is signed by all parties. The disclosures | 15 |
| must be provided in a separate document that is signed by the | 16 |
| viator and the viatical settlement provider or viatical | 17 |
| settlement broker, and shall provide the following | 18 |
| information: | 19 |
| (1) That there exist possible alternatives to a | 20 |
| viatical settlement contract including any accelerated | 21 |
| death benefits or policy loans offered under the viator's | 22 |
| life insurance policy. | 23 |
| (2) That a life insurance producer acting as a viatical | 24 |
| settlement broker negotiating a viatical settlement | 25 |
| contract represents only the viator and not the insurer or | 26 |
| the viatical settlement provider and owes a duty to the | 27 |
| viator to act according to the viator's instructions. | 28 |
| (3) That some or all of the proceeds of the viatical | 29 |
| settlement contract may be taxable under federal income tax | 30 |
| and state franchise and income taxes, and assistance may be | 31 |
| sought from a professional tax advisor. | 32 |
| (4) That proceeds of the viatical settlement contract | 33 |
| may be subject to the claims of creditors. | 34 |
| (5) That receipt of the proceeds of a viatical | 35 |
| settlement contract may adversely affect the viator's |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| eligibility for Medicaid or other government benefits or | 2 |
| entitlements, and advice may be obtained from the | 3 |
| appropriate government agencies. | 4 |
| (6) That the viator has the right to rescind a viatical | 5 |
| settlement contract before the earlier of 30 calendar days | 6 |
| after the date the viatical settlement contract is executed | 7 |
| by all parties or for 15 calendar days after the receipt of | 8 |
| the viatical settlement proceeds by the viator. | 9 |
| Rescission, if exercised by the viator, is effective only | 10 |
| if both notice of the rescission is given and repayment of | 11 |
| all proceeds and any premiums, loans, and loan interest to | 12 |
| the viatical settlement provider is made within the | 13 |
| rescission period. If the insured dies during the | 14 |
| rescission period, the viatical settlement contract is | 15 |
| deemed to have been rescinded, subject to repayment being | 16 |
| made to the viatical settlement provider of all viatical | 17 |
| settlement proceeds and any premiums, loans, and loan | 18 |
| interest within 45 days after the death of the insured. | 19 |
| (7) That funds must be sent to the viator within 3 | 20 |
| business days after the viatical settlement provider has | 21 |
| received the insurer or group administrator's | 22 |
| acknowledgment that ownership of the purchased policy has | 23 |
| been transferred and the beneficiary has been designated. | 24 |
| (8) That entering into a viatical settlement contract | 25 |
| may cause other rights or benefits, including conversion | 26 |
| rights and waiver of premium benefits that may exist under | 27 |
| the policy, to be forfeited by the viator. Assistance may | 28 |
| be sought from a financial adviser. | 29 |
| (9) That the disclosure to a viator must include | 30 |
| distribution of a brochure, approved by the Secretary, | 31 |
| describing the process of viatical settlements. | 32 |
| (10) That the disclosure document must contain the | 33 |
| following language: "All medical, financial, or personal | 34 |
| information solicited or obtained by a viatical settlement | 35 |
| provider or a life insurance producer about an insured, | 36 |
| including the insured's identity or the identity of family |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| members, a spouse, or a significant other may be disclosed | 2 |
| as necessary to effect the viatical settlement contract | 3 |
| between the viator and the viatical settlement provider. If | 4 |
| you are asked to provide this information, you will be | 5 |
| asked to consent to the disclosure. The information may be | 6 |
| provided to someone who buys the policy or provides funds | 7 |
| for the purchase. You may be asked to renew your permission | 8 |
| to share information every 2 years.". | 9 |
| (11) That the insured may be contacted by either the | 10 |
| viatical settlement provider or its authorized | 11 |
| representative for the purpose of determining the | 12 |
| insured's health status. This contact is limited to once | 13 |
| every 3 months if the insured has a life expectancy of more | 14 |
| than one year, and no more than once each month if the | 15 |
| insured has a life expectancy of one year or less. | 16 |
| (b) A viatical settlement provider shall provide the viator | 17 |
| with at least the following disclosures no later than the date | 18 |
| the viatical settlement contract is signed by all parties. The | 19 |
| disclosures must be displayed conspicuously in the viatical | 20 |
| settlement contract or in a separate document signed by the | 21 |
| viator and the viatical settlement provider, and provide the | 22 |
| following information: | 23 |
| (1) The affiliation, if any, between the viatical | 24 |
| settlement provider and the issuer of the insurance policy | 25 |
| to be acquired pursuant to a viatical settlement contract. | 26 |
| (2) The name, address, and telephone number of the | 27 |
| viatical settlement provider. | 28 |
| (3) If a policy to be acquired pursuant to a viatical | 29 |
| settlement contract has been issued as a joint policy or | 30 |
| involves family riders or any coverage of a life other than | 31 |
| the insured under the policy to be acquired pursuant to a | 32 |
| viatical settlement contract, the viator must be informed | 33 |
| of the possible loss of coverage on the other lives under | 34 |
| the policy and must be advised to consult with his or her | 35 |
| insurance producer or the insurer issuing the policy for | 36 |
| advice on the proposed viatical settlement contract. |
|
|
|
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LRB094 19270 LJB 54901 b |
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| 1 |
| (4) The dollar amount of the current death benefit | 2 |
| payable to the viatical settlement provider under the | 3 |
| policy. If known, the viatical settlement provider also | 4 |
| shall disclose the availability of additional guaranteed | 5 |
| insurance benefits, the dollar amount of accidental death | 6 |
| and dismemberment benefits under the policy or | 7 |
| certificate, and the viatical settlement provider's | 8 |
| interest in those benefits. | 9 |
| (5) The name, business address, and telephone number of | 10 |
| the independent third party escrow agent, and the fact that | 11 |
| the viator may inspect or receive copies of the relevant | 12 |
| escrow or trust agreements or documents. | 13 |
| (c) If the viatical settlement provider transfers | 14 |
| ownership or changes the beneficiary of the policy, the | 15 |
| viatical settlement provider shall communicate the change in | 16 |
| ownership or beneficiary to the insured within 20 days after | 17 |
| the change. | 18 |
| Section 40. General rules. | 19 |
| (a) A viatical settlement provider entering into a viatical | 20 |
| settlement contract shall first obtain: | 21 |
| (1) if the viator is the insured, a written statement | 22 |
| from a licensed attending physician that the viator is of | 23 |
| sound mind and under no constraint or undue influence to | 24 |
| enter into a viatical settlement contract; and | 25 |
| (2) a document in which the insured consents to the | 26 |
| release of his or her medical records to a viatical | 27 |
| settlement provider or viatical settlement broker and, if | 28 |
| the policy was issued less than 3 years from the date of | 29 |
| application for a viatical settlement contract, to the | 30 |
| insurance company that issued the policy. | 31 |
| (b) The insurer shall respond to a request for verification | 32 |
| of coverage submitted by a viatical settlement provider or | 33 |
| viatical settlement broker not later than 30 calendar days | 34 |
| after the date the request is received. The request for | 35 |
| verification of coverage must be made on a form approved by the |
|
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HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| Secretary and signed by the policyowner or certificate holder. | 2 |
| The insurer shall complete and issue the verification of | 3 |
| coverage or indicate in which respects it is unable to respond. | 4 |
| In its response, the insurer shall indicate whether, based on | 5 |
| the medical evidence and documents provided, the insurer | 6 |
| intends to pursue an investigation at that time regarding the | 7 |
| validity of the insurance contract or possible fraud. | 8 |
| (c) Before or at the time of execution of the viatical | 9 |
| settlement contract, the viatical settlement provider shall | 10 |
| obtain a witnessed document in which the viator consents to the | 11 |
| viatical settlement contract, represents that the viator has a | 12 |
| full and complete understanding of the viatical settlement | 13 |
| contract and the benefits of the policy, acknowledges that the | 14 |
| viator is entering into the viatical settlement contract freely | 15 |
| and voluntarily, and, for persons with a terminal or chronic | 16 |
| illness or condition, acknowledges that the insured has a | 17 |
| terminal or chronic illness or condition and that the terminal | 18 |
| or chronic illness or condition was diagnosed after the policy | 19 |
| was issued. | 20 |
| (d) If a viatical settlement broker performs any of these | 21 |
| activities required of the viatical settlement provider, the | 22 |
| viatical settlement provider is deemed to have fulfilled the | 23 |
| requirements of this Section. | 24 |
| (e) All medical information solicited or obtained by any | 25 |
| licensee shall be subject to the requirements of Article XL of | 26 |
| the Illinois Insurance Code. | 27 |
| (f) A viatical settlement contract entered into in this | 28 |
| State shall provide the viator with an unconditional right to | 29 |
| rescind the contract before the earlier of 30 calendar days | 30 |
| after the date the viatical settlement contract is executed by | 31 |
| all parties or 15 calendar days from the receipt of the | 32 |
| viatical settlement proceeds by the viator. Rescission, if | 33 |
| exercised by the viator, is effective only if both notice of | 34 |
| the rescission is given and repayment of all proceeds and any | 35 |
| premiums, loans, and loan interest to the viatical settlement | 36 |
| provider is made within the rescission period. If the insured |
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HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| dies during the rescission period, the viatical settlement | 2 |
| contract shall be deemed to have been rescinded, subject to | 3 |
| repayment being made to the viatical settlement provider of all | 4 |
| viatical settlement proceeds and any premiums, loans, and loan | 5 |
| interest within 90 days after the death of the insured. | 6 |
| (g) The viatical settlement provider shall instruct the | 7 |
| viator to send the executed documents required to effect the | 8 |
| change in ownership, assignment, or change in beneficiary | 9 |
| directly to the independent escrow agent. Within 3 business | 10 |
| days after the date the escrow agent receives the documents, or | 11 |
| within 3 days after the date the viatical settlement provider | 12 |
| receives the documents if the viator erroneously provides the | 13 |
| documents directly to the viatical settlement provider, the | 14 |
| viatical settlement provider shall pay or transfer the proceeds | 15 |
| of the viatical settlement contract into an escrow or trust | 16 |
| account maintained in a State or federally chartered financial | 17 |
| institution whose deposits are insured by the Federal Reserve | 18 |
| System. Upon payment of the viatical settlement proceeds into | 19 |
| the escrow account, the escrow agent shall deliver the original | 20 |
| change in ownership, assignment, or change in beneficiary forms | 21 |
| to the viatical settlement provider or related provider trust. | 22 |
| Upon the escrow agent's receipt of the acknowledgment of the | 23 |
| properly completed transfer of ownership, assignment, or | 24 |
| designation of beneficiary from the insurance company, the | 25 |
| escrow agent shall pay the viatical settlement proceeds to the | 26 |
| viator. | 27 |
| (h) Failure to tender consideration to the viator for the | 28 |
| viatical settlement by contract within the time disclosed | 29 |
| pursuant to this Code renders the viatical settlement contract | 30 |
| voidable by the viator for lack of consideration until the time | 31 |
| consideration is tendered to and accepted by the viator. | 32 |
| (i) Contact with the insured, for the purpose of | 33 |
| determining the health status of the insured by the viatical | 34 |
| settlement provider after the viatical settlement contract has | 35 |
| been executed, may only be made by the licensed viatical | 36 |
| settlement provider or its authorized representatives and is |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| limited to once every 3 months for insureds with a life | 2 |
| expectancy of more than one year, and not more than once each | 3 |
| month for insureds with a life expectancy of one year or less. | 4 |
| The viatical settlement provider shall explain the procedure | 5 |
| for these contacts at the time the viatical settlement contract | 6 |
| is entered into. The limitations provided for in this | 7 |
| subsection (i) do not apply to a contact with an insured for | 8 |
| reasons other than determining the insured's health status. A | 9 |
| viatical settlement provider is responsible for the actions of | 10 |
| its authorized representatives.
| 11 |
| Section 45. Authority to adopt rules. | 12 |
| (a) The Secretary shall have the authority to do all the | 13 |
| following: | 14 |
| (1) Issue rules implementing this Act. | 15 |
| (2) Establish standards for evaluating reasonableness | 16 |
| of payments under a viatical settlement contract for a | 17 |
| person who is terminally or chronically ill. This authority | 18 |
| includes, but is not limited to, regulation of discount | 19 |
| rates used to determine the amount paid in exchange for | 20 |
| assignment, transfer, sale, devise, or bequest of a benefit | 21 |
| under a policy. A viatical settlement provider, where the | 22 |
| insured is not terminally or chronically ill, shall pay an | 23 |
| amount greater than the cash surrender value or accelerated | 24 |
| death benefit then available. | 25 |
| (3) Establish appropriate licensing requirements, | 26 |
| fees, and standards for continued licensure for a viatical | 27 |
| settlement provider and a fee for life insurance producers | 28 |
| acting as viatical settlement brokers. | 29 |
| (4) Require a bond or other mechanism for financial | 30 |
| accountability for a viatical settlement provider. | 31 |
| (5) Adopt rules governing the relationship and | 32 |
| responsibilities of an insurer and a viatical settlement | 33 |
| provider, viatical settlement broker, and others in the | 34 |
| business of viatical settlements during the period of | 35 |
| consideration or effectuation of a viatical settlement |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| contract. | 2 |
| (b) Any rules adopted pursuant to the authority granted in | 3 |
| the Viatical Settlements Act shall remain in effect until | 4 |
| repealed or modified by rules adopted by the Secretary pursuant | 5 |
| to this Act. | 6 |
| Section 50. Application. | 7 |
| (a) A viatical settlement provider lawfully transacting | 8 |
| business in this State may continue to do so pending approval | 9 |
| or disapproval of the viatical settlement provider's | 10 |
| application for a license under this Act as long as the | 11 |
| application is filed with the Secretary not later than 30 days | 12 |
| after the effective date of this Act. | 13 |
| (b) A viatical settlement provider licensed in this State | 14 |
| on or before the effective date of this Act may continue to | 15 |
| transact business under that license, but must revise any | 16 |
| licensing information at the time of the license renewal, if | 17 |
| applicable. All viatical settlement contract forms and | 18 |
| disclosure statement forms of the provider shall be deemed to | 19 |
| be in continued force and effect, provided, however, that the | 20 |
| forms shall be modified by the licensed viatical settlement | 21 |
| provider to conform with the provisions of Section 35 of this | 22 |
| Act within 90 days after the effective date of this Act. | 23 |
| (c) A person who has lawfully negotiated viatical | 24 |
| settlement contracts between a viator and one or more viatical | 25 |
| settlement providers in this State for at least one year | 26 |
| immediately prior to the effective date of this Act may | 27 |
| continue to negotiate viatical settlements in this State for a | 28 |
| period of 60 days after the effective date of this Act, at | 29 |
| which time the person must either become a licensed life | 30 |
| insurance producer permitted to act as a viatical settlement | 31 |
| broker or cease negotiating viatical settlement contracts. | 32 |
| Section 55. Violations. It is a violation of this Act for a | 33 |
| person to enter into a viatical settlement contract at any time | 34 |
| prior to the application for or issuance of a policy which is |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| the subject of a viatical settlement contract or for a 2-year | 2 |
| period commencing with the date of issuance of the policy | 3 |
| unless the viator certifies to the viatical settlement provider | 4 |
| that one or more of the following conditions have been met | 5 |
| within the 2-year period: | 6 |
| (1) The policy was issued upon the viator's exercise of | 7 |
| conversion rights arising out of a group or individual | 8 |
| policy, provided the total of the time covered under the | 9 |
| conversion policy plus the time covered under the prior | 10 |
| policy is at least 24 months. The time covered under a | 11 |
| group policy must be calculated without regard to a change | 12 |
| in insurance carriers, provided the coverage has been | 13 |
| continuous and under the same group sponsorship. | 14 |
| (2) The viator submits independent evidence to the | 15 |
| viatical settlement provider that one or more of the | 16 |
| following conditions have been met within the 2-year | 17 |
| period: | 18 |
| (A) the viator or insured is terminally or | 19 |
| chronically ill; or | 20 |
| (B) the viator or insured disposes of his ownership | 21 |
| interests in a closely held corporation, pursuant to | 22 |
| the terms of a buyout or other similar agreement in | 23 |
| effect at the time the insurance policy was initially | 24 |
| issued. | 25 |
| Copies of the independent evidence described in paragraph | 26 |
| (2) of this Section and documents required by this Act must be | 27 |
| submitted to the insurer when the viatical settlement provider | 28 |
| submits a request to the insurer for verification of coverage. | 29 |
| The copies must be accompanied by a letter of attestation from | 30 |
| the viatical settlement provider that the copies are true and | 31 |
| correct copies of the documents received by the viatical | 32 |
| settlement provider. | 33 |
| If the viatical settlement provider submits to the insurer | 34 |
| a copy of independent evidence provided for in paragraph (2) of | 35 |
| this Section when the viatical settlement provider submits a | 36 |
| request to the insurer to effect the transfer of the policy to |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| the viatical settlement provider, the copy is deemed to | 2 |
| conclusively establish that the viatical settlement contract | 3 |
| satisfies the requirements of this Section and the insurer | 4 |
| shall respond timely to the request. | 5 |
| Section 60. Advertisements. | 6 |
| (a) The purpose of this Section is to provide a prospective | 7 |
| viator with clear and unambiguous statements in the | 8 |
| advertisement of a viatical settlement contract and to assure | 9 |
| the clear, truthful, and adequate disclosure of the benefits, | 10 |
| risks, limitations, and exclusions of a viatical settlement | 11 |
| contract. This purpose is to be accomplished by the | 12 |
| establishment of guidelines and standards of permissible and | 13 |
| impermissible conduct in the advertising of a viatical | 14 |
| settlement contract to assure that a product description is | 15 |
| presented in a manner that prevents unfair, deceptive, or | 16 |
| misleading advertising and is conducive to accurate | 17 |
| presentation and description of a viatical settlement contract | 18 |
| through the advertising media and material used by a licensee.
| 19 |
| (b) This Section applies to an advertising of a viatical | 20 |
| settlement contract or a related product or service intended | 21 |
| for dissemination in this State, including Internet | 22 |
| advertising viewed by a person located in this State. Where | 23 |
| disclosure requirements are established pursuant to federal | 24 |
| regulation, this Section must be interpreted so as to minimize | 25 |
| or eliminate conflict with federal regulation wherever | 26 |
| possible. | 27 |
| (c) Each viatical settlement licensee shall establish and | 28 |
| at all times maintain a system of control over the content, | 29 |
| form, and method of dissemination of an advertisement of its | 30 |
| contracts, products, and services. An advertisement, | 31 |
| regardless of who wrote, created, designed, or presented, is | 32 |
| the responsibility of the licensee, as well as the individual | 33 |
| who created or presented the advertisement. A system of control | 34 |
| by the licensee must include regular routine notification at | 35 |
| least once a year to agents and others authorized to |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
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| 1 |
| disseminate advertisements of the requirements and procedures | 2 |
| for approval before the use of an advertisement not furnished | 3 |
| by the licensee. | 4 |
| (d) An advertisement must be truthful and not misleading in | 5 |
| fact or by implication. The form and content of an | 6 |
| advertisement of a viatical settlement contract must be | 7 |
| sufficiently complete and clear so as to avoid deception. It | 8 |
| shall not have the capacity or tendency to mislead or deceive. | 9 |
| Whether an advertisement has the capacity or tendency to | 10 |
| mislead or deceive shall be determined by the Secretary from | 11 |
| the overall impression that the advertisement may be reasonably | 12 |
| expected to create upon a person of average education or | 13 |
| intelligence within the segment of the public to which it is | 14 |
| directed. | 15 |
| (e) The information required to be disclosed pursuant to | 16 |
| the provisions of this Section may not be minimized, rendered | 17 |
| obscure, or presented in an ambiguous fashion or intermingled | 18 |
| with the text of the advertisement so as to be confusing or | 19 |
| misleading. | 20 |
| (1) An advertisement may not omit material information | 21 |
| or use words, phrases, statements, references, or | 22 |
| illustrations if the omission or use has the capacity, | 23 |
| tendency, or effect of misleading or deceiving the public | 24 |
| as to the nature or extent of any benefit, loss covered, or | 25 |
| State or federal tax consequence. The fact that the | 26 |
| viatical settlement contract offered is made available for | 27 |
| inspection before consummation of the sale, or an offer is | 28 |
| made to refund the payment if the viator is not satisfied, | 29 |
| or that the viatical settlement contract includes a "free | 30 |
| look" period that satisfies or exceeds legal requirements | 31 |
| does not remedy misleading statements. | 32 |
| (2) An advertisement may not use the name or title of a | 33 |
| life insurance company or a life insurance policy unless | 34 |
| the advertisement has been approved by the insurer. | 35 |
| (3) An advertisement may not state or imply that | 36 |
| interest charged on an accelerated death benefit or a |
|
|
|
HB5337 Engrossed |
- 35 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| policy loan is unfair, inequitable, or in any manner an | 2 |
| incorrect or improper practice. | 3 |
| (4) The words "free", "no cost", "without cost", "no | 4 |
| additional cost", "at no extra cost", or words of similar | 5 |
| import may not be used with respect to a benefit or service | 6 |
| unless true. An advertisement may specify the charge for a | 7 |
| benefit or service or may state that a charge is included | 8 |
| in the payment or use other appropriate language. | 9 |
| (5) Any testimonial, appraisal, or analysis used in an | 10 |
| advertisement must: | 11 |
| (A) be genuine; | 12 |
| (B) represent the current opinion of the author; | 13 |
| (C) be applicable to the viatical settlement | 14 |
| contract, product, or service advertised, if any; and | 15 |
| (D) be accurately reproduced with sufficient | 16 |
| completeness to avoid misleading or deceiving | 17 |
| prospective viators as to the nature or scope of any | 18 |
| testimonial, appraisal, analysis, or endorsement. | 19 |
| In using any testimonial, appraisal, or analysis, the | 20 |
| viatical settlement licensee makes as its own all the | 21 |
| statements contained in them, and the statements are | 22 |
| subject to all the provisions of this Section. | 23 |
| If the individual making a testimonial, appraisal, | 24 |
| analysis, or an endorsement has a financial interest in the | 25 |
| viatical settlement provider or related entity as a | 26 |
| stockholder, director, officer, employee, or otherwise or | 27 |
| receives a benefit, directly or indirectly, other than | 28 |
| required union scale wages, that fact must be disclosed | 29 |
| prominently in the advertisement. | 30 |
| An advertisement may not state or imply that a viatical | 31 |
| settlement contract, benefit, or service has been approved | 32 |
| or endorsed by a group of individuals, society, | 33 |
| association, or other organization, unless that is the fact | 34 |
| and unless any relationship between an organization and the | 35 |
| licensee is disclosed. If the entity making the endorsement | 36 |
| or testimonial is owned, controlled, or managed by the |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| licensee or receives payment or other consideration from | 2 |
| the licensee for making an endorsement or testimonial, that | 3 |
| fact must be disclosed in the advertisement. | 4 |
| If an endorsement refers to benefits received under a | 5 |
| viatical settlement contract, all pertinent information | 6 |
| must be retained for a period of 5 years after its use. | 7 |
| (f) An advertisement may not contain statistical | 8 |
| information unless it accurately reflects recent and relevant | 9 |
| facts. The source of all statistics used in an advertisement | 10 |
| must be identified. | 11 |
| (g) An advertisement may not disparage insurers, viatical | 12 |
| settlement providers, insurance producers, policies, services, | 13 |
| or methods of marketing. | 14 |
| (h) The name of the viatical settlement licensee must be | 15 |
| identified clearly in all advertisements about the licensee or | 16 |
| its viatical settlement contract, products, or services, and if | 17 |
| any specific viatical settlement contract is advertised, the | 18 |
| viatical settlement contract must be identified either by form | 19 |
| number or some other appropriate description. If an application | 20 |
| is part of the advertisement, the name of the viatical | 21 |
| settlement provider must be shown on the application. | 22 |
| (i) An advertisement shall not use a trade name, group | 23 |
| designation, name of the parent company of a licensee, name of | 24 |
| a particular division of the licensee, service mark, slogan, | 25 |
| symbol, or other device or reference without disclosing the | 26 |
| name of the licensee if the advertisement has the capacity or | 27 |
| tendency to mislead or deceive as to the true identity of the | 28 |
| licensee or to create the impression that a company other than | 29 |
| the licensee has any responsibility for the financial | 30 |
| obligation under a viatical settlement contract. | 31 |
| (j) An advertisement shall not use any combination of | 32 |
| words, symbols, or physical materials that by their content, | 33 |
| phraseology, shape, color, or other characteristics are so | 34 |
| similar to a combination of words, symbols, or physical | 35 |
| materials used by a government program or agency or otherwise | 36 |
| appear to be of such a nature that they tend to mislead |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| prospective viators into believing that the solicitation is in | 2 |
| some manner connected with a government program or agency. | 3 |
| (k) An advertisement may state that a licensee is licensed | 4 |
| in the state where the advertisement appears, provided it does | 5 |
| not exaggerate that fact or suggest or imply that the competing | 6 |
| licensee may not be so licensed. The advertisement may ask the | 7 |
| audience to consult the licensee's web site or contact that | 8 |
| state's department of insurance to find out if that state | 9 |
| requires licensing and, if so, whether the licensee or any | 10 |
| other company is licensed. | 11 |
| (l) An advertisement may not create the impression that the | 12 |
| viatical settlement provider, its financial condition or | 13 |
| status, the payment of its claims, or the merits, desirability, | 14 |
| or advisability of its viatical settlement contracts are | 15 |
| recommended or endorsed by any government entity. | 16 |
| (m) The name of the actual licensee must be stated in all | 17 |
| of its advertisements. An advertisement may not use a trade | 18 |
| name, any group designation, name of any affiliate or | 19 |
| controlling entity of the licensee, service mark, slogan, | 20 |
| symbol, or other device in a manner that has the capacity or | 21 |
| tendency to mislead or deceive as to the true identity of the | 22 |
| actual licensee or create the false impression that an | 23 |
| affiliate or controlling entity has any responsibility for the | 24 |
| financial obligation of the licensee. | 25 |
| (n) An advertisement may not, directly or indirectly, | 26 |
| create the impression that any division or agency of the State | 27 |
| or of the United States government endorses, approves, or | 28 |
| favors: | 29 |
| (1) a licensee or its business practices or methods of | 30 |
| operation; | 31 |
| (2) the merits, desirability, or advisability of a | 32 |
| viatical settlement contract; | 33 |
| (3) any viatical settlement contract; or | 34 |
| (4) any policy or life insurance company. | 35 |
| (o) If the advertiser emphasizes the speed with which the | 36 |
| viatical settlement contract occurs, the advertising must |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| disclose the average time frame from completed application to | 2 |
| the date of offer and from acceptance of the offer to receipt | 3 |
| of the funds by the viator. | 4 |
| (p) If the advertising emphasizes the dollar amounts | 5 |
| available to viators, the advertising shall disclose the | 6 |
| average purchase price as a percent of face value obtained by | 7 |
| viators contracting with the licensee during the past 6 months. | 8 |
| (q) Certain viatical settlement advertisements are deemed | 9 |
| false and misleading on their face and are prohibited. False | 10 |
| and misleading viatical settlement advertisements include, but | 11 |
| are not limited to, the following representations: | 12 |
| (1) "guaranteed", "fully secured", "100 percent | 13 |
| secured", "fully insured", "secure", "safe", "backed by | 14 |
| rated insurance companies", "backed by federal law", | 15 |
| "backed by state law", "state guaranty funds", or similar | 16 |
| representations; | 17 |
| (2) "no risk", "minimal risk", "low risk", "no | 18 |
| speculation", "no fluctuation", or similar | 19 |
| representations; | 20 |
| (3) "qualified or approved for individual retirement | 21 |
| accounts (IRAs), Roth IRAs, 401(k) plans, simplified | 22 |
| employee pensions (SEP), 403(b), Keogh plans, TSA, and | 23 |
| other retirement account rollovers", "tax deferred", or | 24 |
| similar representations; | 25 |
| (4) use of the word "guaranteed" to describe the fixed | 26 |
| return, annual return, principal, earnings, profits, | 27 |
| investment, or similar representations; | 28 |
| (5) "no sales charges or fees" or similar | 29 |
| representations; | 30 |
| (6) "high yield", "superior return", "excellent | 31 |
| return", "high return", "quick profit", or similar | 32 |
| representations; and | 33 |
| (7) purported favorable representations or | 34 |
| testimonials about the benefits of viatical settlement | 35 |
| contracts or viatical settlement purchase agreements as an | 36 |
| investment taken out of context from newspapers, trade |
|
|
|
HB5337 Engrossed |
- 39 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| papers, journals, radio and television programs, and all | 2 |
| other forms of print and electronic media. | 3 |
| Section 65. Fraudulent viatical settlement acts. | 4 |
| (a) A person may not commit a fraudulent viatical | 5 |
| settlement act.
| 6 |
| (b) A person, knowingly or intentionally, may not interfere | 7 |
| with the enforcement of the provisions of this Act or | 8 |
| investigations of suspected or actual violations of this Act. | 9 |
| (c) A person in the business of viatical settlements may | 10 |
| not knowingly or intentionally permit a person convicted of a | 11 |
| felony involving dishonesty or breach of trust to participate | 12 |
| in the business of viatical settlements. | 13 |
| (d) A viatical settlement contract and an application for a | 14 |
| viatical settlement contract, regardless of the form of | 15 |
| transmission, must contain the following statement or a | 16 |
| substantially similar statement: "Any person who knowingly | 17 |
| presents false information in an application for insurance or | 18 |
| viatical settlement contract is guilty of a crime and, upon | 19 |
| conviction, may be subject to fines or confinement in prison or | 20 |
| both.". | 21 |
| The lack of a statement as provided for in this subsection | 22 |
| (d) does not constitute a defense in any prosecution for a | 23 |
| fraudulent viatical settlement act. | 24 |
| (e) A person engaged in the business of viatical | 25 |
| settlements having knowledge or a reasonable belief that a | 26 |
| fraudulent viatical settlement act is being, will be, or has | 27 |
| been committed shall provide to the Secretary the information | 28 |
| required by the Secretary in a manner prescribed by the | 29 |
| Secretary. | 30 |
| Another person having knowledge or a reasonable belief that | 31 |
| a fraudulent viatical settlement act is being, will be, or has | 32 |
| been committed may provide to the Secretary the information | 33 |
| required by the Secretary in a manner prescribed by the | 34 |
| Secretary. | 35 |
| (f) Civil liability may not be imposed on and a cause of |
|
|
|
HB5337 Engrossed |
- 40 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| action may not arise from a person's furnishing information | 2 |
| concerning suspected, anticipated, or completed fraudulent | 3 |
| viatical settlement acts, or suspected or completed fraudulent | 4 |
| insurance acts, if the information is provided to or received | 5 |
| from: | 6 |
| (A) the Secretary or the Secretary's employees, | 7 |
| agents, or representatives; | 8 |
| (B) federal, state, or local law enforcement or | 9 |
| regulatory officials or their employees, agents, or | 10 |
| representatives; | 11 |
| (C) a person involved in the prevention and | 12 |
| detection of fraudulent viatical settlement acts or | 13 |
| that person's agents, employees, or representatives; | 14 |
| (D) the National Association of Insurance | 15 |
| Commissioners (NAIC), National Association of | 16 |
| Securities Dealers (NASD), the North American | 17 |
| Securities Administrators Association (NASAA), or | 18 |
| their employees, agents, or representatives, or other | 19 |
| regulatory body overseeing life insurance or viatical | 20 |
| settlement contracts; or | 21 |
| (E) the insurer that issued the policy covering the | 22 |
| life of the insured. | 23 |
| This subsection (f) does not apply to a statement made with | 24 |
| actual malice. In an action brought against a person for filing | 25 |
| a report or furnishing other information concerning a | 26 |
| fraudulent viatical settlement act or a fraudulent insurance | 27 |
| act, the party bringing the action shall plead specifically any | 28 |
| allegation that this subsection (f) does not apply because the | 29 |
| person filing the report or furnishing the information did so | 30 |
| with actual malice. | 31 |
| A person identified in this subsection (f) is entitled to | 32 |
| an award of attorney's fees and costs if he or she is the | 33 |
| prevailing party in a civil cause of action for libel, slander, | 34 |
| or another relevant tort arising out of activities in carrying | 35 |
| out the provisions of this Act and the party bringing the | 36 |
| action was not substantially justified in doing so. For |
|
|
|
HB5337 Engrossed |
- 41 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| purposes of this Section, a proceeding is "substantially | 2 |
| justified" if it had a reasonable basis in law or fact at the | 3 |
| time that it was initiated. | 4 |
| This Section does not abrogate or modify common law or | 5 |
| statutory privileges or immunities enjoyed by a person | 6 |
| described in this subsection (f). | 7 |
| This subsection (f) does not apply to a person's furnishing | 8 |
| information concerning his own suspected, anticipated, or | 9 |
| completed fraudulent viatical settlement acts or suspected, | 10 |
| anticipated, or completed fraudulent insurance acts. | 11 |
| (g) The documents and evidence provided pursuant to | 12 |
| subsection (f) of this Section or obtained by the Secretary in | 13 |
| an investigation of suspected or actual fraudulent viatical | 14 |
| settlement acts are privileged and confidential and are not a | 15 |
| public record and are not subject to discovery or subpoena in a | 16 |
| civil or criminal action. | 17 |
| The provisions of this subsection (g) do not prohibit | 18 |
| release by the Secretary of documents and evidence obtained in | 19 |
| an investigation of suspected or actual fraudulent viatical | 20 |
| settlement acts: | 21 |
| (1) in administrative or judicial proceedings to | 22 |
| enforce laws administered by the Secretary; | 23 |
| (2) to federal, state, or local law enforcement or | 24 |
| regulatory agencies, to an organization established for | 25 |
| the purpose of detecting and preventing fraudulent | 26 |
| viatical settlement acts, or to the NAIC; or | 27 |
| (3) at the discretion of the Secretary, to a person in | 28 |
| the business of viatical settlements that is aggrieved by a | 29 |
| fraudulent viatical settlement act. | 30 |
| Release of documents and evidence as provided by this | 31 |
| subsection (g) does not abrogate or modify the privilege | 32 |
| granted in this subsection (g). | 33 |
| (h) This Act does not: | 34 |
| (1) preempt the authority or relieve the duty of other | 35 |
| law enforcement or regulatory agencies to investigate, | 36 |
| examine, and prosecute suspected violations of law; |
|
|
|
HB5337 Engrossed |
- 42 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| (2) prevent or prohibit a person from disclosing | 2 |
| voluntarily information concerning fraudulent viatical | 3 |
| settlement acts to a law enforcement or regulatory agency | 4 |
| other than the Department of Financial and Professional | 5 |
| Regulation; or | 6 |
| (3) limit the powers granted elsewhere by the laws of | 7 |
| this State to the Secretary or an insurance fraud unit to | 8 |
| investigate and examine possible violations of law and to | 9 |
| take appropriate action against wrongdoers. | 10 |
| (i) A viatical settlement provider shall adopt anti-fraud | 11 |
| initiatives reasonably calculated to detect, assist in the | 12 |
| prosecution of, and prevent fraudulent viatical settlement | 13 |
| acts. The Secretary may order or, if a licensee requests, may | 14 |
| grant these modifications of the following required | 15 |
| initiatives as necessary to ensure an effective anti-fraud | 16 |
| program. The modifications may be more or less restrictive than | 17 |
| the required initiatives so long as the modifications | 18 |
| reasonably may be expected to accomplish the purpose of this | 19 |
| Section. Anti-fraud initiatives include, but are not limited | 20 |
| to: | 21 |
| (1) Fraud investigators, who may be a viatical | 22 |
| settlement provider or employees or independent | 23 |
| contractors of those viatical settlement providers. | 24 |
| (2) An anti-fraud plan that shall always be available | 25 |
| to the Secretary. The anti-fraud plan must include, but is | 26 |
| not limited to: | 27 |
| (A) a description of the procedures for detecting | 28 |
| and investigating possible fraudulent viatical | 29 |
| settlement acts and procedures for resolving material | 30 |
| inconsistencies between medical records and insurance | 31 |
| applications; | 32 |
| (B) a description of the procedures for reporting | 33 |
| possible fraudulent viatical settlement acts to the | 34 |
| Secretary; | 35 |
| (C) a description of the plan for anti-fraud | 36 |
| education and training of underwriters and other |
|
|
|
HB5337 Engrossed |
- 43 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| personnel; and | 2 |
| (D) a chart outlining the organizational | 3 |
| arrangement of the anti-fraud personnel who are | 4 |
| responsible for the investigation and reporting of | 5 |
| possible fraudulent viatical settlement acts and | 6 |
| investigating unresolved material inconsistencies | 7 |
| between medical records and insurance applications. | 8 |
| Anti-fraud plans submitted to the Secretary are privileged | 9 |
| and confidential and are not a public record pursuant to the | 10 |
| provisions of the Freedom of Information Act and are not | 11 |
| subject to discovery or subpoena in a civil or criminal action. | 12 |
| Section 70. Additional penalties. | 13 |
| (a) In addition to the penalties and other enforcement | 14 |
| provisions of this Act, if a person violates the provisions of | 15 |
| this Act or any rule implementing this Act, the Secretary may | 16 |
| seek an injunction in a court of competent jurisdiction and may | 17 |
| apply for temporary and permanent orders as the Secretary | 18 |
| determines are necessary to restrain the person from committing | 19 |
| the violation. | 20 |
| (b) A person damaged by the acts of a person in violation | 21 |
| of this Act may bring a civil action against the person | 22 |
| committing the violation in a court of competent jurisdiction. | 23 |
| (c) The Secretary may issue a cease and desist order upon a | 24 |
| person that violates any provision of this Act, any rule or | 25 |
| order adopted by the Secretary, or any written agreement | 26 |
| entered into with the Secretary. | 27 |
| (d) When the Secretary finds that an activity in violation | 28 |
| of this Act presents an immediate danger to the public that | 29 |
| requires an immediate final order, the Secretary may issue an | 30 |
| emergency cease and desist order reciting with particularity | 31 |
| the facts underlying the findings. The emergency cease and | 32 |
| desist order is effective immediately upon service of a copy of | 33 |
| the order on the respondent and remains effective for 90 days. | 34 |
| If the Secretary begins nonemergency cease and desist | 35 |
| proceedings, the emergency cease and desist order remains |
|
|
|
HB5337 Engrossed |
- 44 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| effective absent an order by a court of competent jurisdiction. | 2 |
| (e) In addition to the penalties and other enforcement | 3 |
| provisions of this Act, a person who violates this Act is | 4 |
| subject to civil penalties of up to $10,000 for each violation. | 5 |
| Imposition of civil penalties is pursuant to an order of the | 6 |
| Secretary. The Secretary's order may require a person found to | 7 |
| be in violation of this Act to make restitution to a person | 8 |
| aggrieved by violations of this Act. | 9 |
| (f) A person who violates a provision of this Act, upon | 10 |
| conviction, must be ordered to pay restitution to a person | 11 |
| aggrieved by the violation of this Act. Restitution must be | 12 |
| ordered in addition to a fine or imprisonment and not instead | 13 |
| of a fine or imprisonment. | 14 |
| (g) A person who violates a provision of this Act, upon | 15 |
| conviction, must be sentenced based on the greater of the value | 16 |
| of property, services, or other benefits wrongfully obtained or | 17 |
| attempted to be obtained, or the aggregate economic loss | 18 |
| suffered by any person as a result of the violation. A person | 19 |
| convicted of theft of property through a viatical settlement | 20 |
| transaction in which the value of viatical settlement contract: | 21 |
| (1) exceeds $500,000 is guilty of a Class 1 | 22 |
| non-probationable felony; | 23 |
| (2) exceeds $100,000 but does not exceed $500,000 is | 24 |
| guilty of a Class 1 felony; | 25 |
| (3) exceeds $10,000 but does not exceed $100,000 is | 26 |
| guilty of a Class 2 felony; or | 27 |
| (4) exceeds $300 but does not exceed $10,000 is guilty | 28 |
| of a Class 3 felony. | 29 |
| (h) A person convicted of a fraudulent viatical settlement | 30 |
| act must be ordered to pay restitution to a person aggrieved by | 31 |
| the fraudulent viatical settlement act. Restitution must be | 32 |
| ordered in addition to a fine or imprisonment but not instead | 33 |
| of a fine or imprisonment. | 34 |
| (i) In a prosecution provided under subsection (h) of this | 35 |
| Section, the value of a viatical settlement contract within a | 36 |
| 6-month period may be aggregated and the defendant charged |
|
|
|
HB5337 Engrossed |
- 45 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| accordingly in applying the provisions of subsection (g) of | 2 |
| this Section. If 2 or more offenses are committed by the same | 3 |
| person in 2 or more counties, the accused may be prosecuted in | 4 |
| a county in which one of the offenses was committed for all of | 5 |
| the offenses aggregated as provided by this Section. The | 6 |
| statute of limitations does not begin to run until the | 7 |
| insurance company or law enforcement agency is aware of the | 8 |
| fraud, but the prosecution may not be commenced later than 7 | 9 |
| years after the act has occurred.
| 10 |
| Section 75. Unfair methods of competition or unfair and | 11 |
| deceptive acts or practices. A violation of this Act is | 12 |
| considered an unfair method of competition or unfair and | 13 |
| deceptive act or practice pursuant to the provisions of Article | 14 |
| XXVI of the Illinois Insurance Code and subject to the | 15 |
| penalties contained in that Article. | 16 |
| Section 80. Illinois Securities Law of 1953. Nothing in | 17 |
| this Act preempts or otherwise limits the provisions of the | 18 |
| Illinois Securities Law of 1953, as amended, or any | 19 |
| regulations, orders, policy statements, notices, bulletins, or | 20 |
| other interpretations issued by or through the Secretary of | 21 |
| State or his or her designee acting pursuant to the Illinois | 22 |
| Securities Law of 1953, as amended. Compliance with the | 23 |
| provisions of this Act does not constitute compliance with any | 24 |
| applicable provision of the Illinois Securities Law of 1953, as | 25 |
| amended, and any amendments thereto or any regulations, orders, | 26 |
| policy statements, notices, bulletins, or other | 27 |
| interpretations issued by or through the Secretary of State or | 28 |
| his or her designee acting pursuant to the Illinois Securities | 29 |
| Law of 1953, as amended.
| 30 |
| (215 ILCS 158/Act rep.)
| 31 |
| Section 900. The Viatical Settlements Act is repealed. | 32 |
| Section 905. The Freedom of Information Act is amended by |
|
|
|
HB5337 Engrossed |
- 46 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| changing Section 7 as follows: | 2 |
| (5 ILCS 140/7) (from Ch. 116, par. 207) | 3 |
| Sec. 7. Exemptions.
| 4 |
| (1) The following shall be exempt from inspection and | 5 |
| copying:
| 6 |
| (a) Information specifically prohibited from | 7 |
| disclosure by federal or
State law or rules and regulations | 8 |
| adopted under federal or State law.
| 9 |
| (b) Information that, if disclosed, would constitute a | 10 |
| clearly
unwarranted invasion of personal privacy, unless | 11 |
| the disclosure is
consented to in writing by the individual | 12 |
| subjects of the information. The
disclosure of information | 13 |
| that bears on the public duties of public
employees and | 14 |
| officials shall not be considered an invasion of personal
| 15 |
| privacy. Information exempted under this subsection (b) | 16 |
| shall include but
is not limited to:
| 17 |
| (i) files and personal information maintained with | 18 |
| respect to
clients, patients, residents, students or | 19 |
| other individuals receiving
social, medical, | 20 |
| educational, vocational, financial, supervisory or
| 21 |
| custodial care or services directly or indirectly from | 22 |
| federal agencies
or public bodies;
| 23 |
| (ii) personnel files and personal information | 24 |
| maintained with
respect to employees, appointees or | 25 |
| elected officials of any public body or
applicants for | 26 |
| those positions;
| 27 |
| (iii) files and personal information maintained | 28 |
| with respect to any
applicant, registrant or licensee | 29 |
| by any public body cooperating with or
engaged in | 30 |
| professional or occupational registration, licensure | 31 |
| or discipline;
| 32 |
| (iv) information required of any taxpayer in | 33 |
| connection with the
assessment or collection of any tax | 34 |
| unless disclosure is otherwise required
by State | 35 |
| statute;
|
|
|
|
HB5337 Engrossed |
- 47 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| (v) information revealing the identity of persons | 2 |
| who file complaints
with or provide information to | 3 |
| administrative, investigative, law enforcement
or | 4 |
| penal agencies; provided, however, that identification | 5 |
| of witnesses to
traffic accidents, traffic accident | 6 |
| reports, and rescue reports may be provided
by agencies | 7 |
| of local government, except in a case for which a | 8 |
| criminal
investigation is ongoing, without | 9 |
| constituting a clearly unwarranted per se
invasion of | 10 |
| personal privacy under this subsection; and
| 11 |
| (vi) the names, addresses, or other personal | 12 |
| information of
participants and registrants in park | 13 |
| district, forest preserve district, and
conservation | 14 |
| district programs.
| 15 |
| (c) Records compiled by any public body for | 16 |
| administrative enforcement
proceedings and any law | 17 |
| enforcement or correctional agency for
law enforcement | 18 |
| purposes or for internal matters of a public body,
but only | 19 |
| to the extent that disclosure would:
| 20 |
| (i) interfere with pending or actually and | 21 |
| reasonably contemplated
law enforcement proceedings | 22 |
| conducted by any law enforcement or correctional
| 23 |
| agency;
| 24 |
| (ii) interfere with pending administrative | 25 |
| enforcement proceedings
conducted by any public body;
| 26 |
| (iii) deprive a person of a fair trial or an | 27 |
| impartial hearing;
| 28 |
| (iv) unavoidably disclose the identity of a | 29 |
| confidential source or
confidential information | 30 |
| furnished only by the confidential source;
| 31 |
| (v) disclose unique or specialized investigative | 32 |
| techniques other than
those generally used and known or | 33 |
| disclose internal documents of
correctional agencies | 34 |
| related to detection, observation or investigation of
| 35 |
| incidents of crime or misconduct;
| 36 |
| (vi) constitute an invasion of personal privacy |
|
|
|
HB5337 Engrossed |
- 48 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| under subsection (b) of
this Section;
| 2 |
| (vii) endanger the life or physical safety of law | 3 |
| enforcement personnel
or any other person; or
| 4 |
| (viii) obstruct an ongoing criminal investigation.
| 5 |
| (d) Criminal history record information maintained by | 6 |
| State or local
criminal justice agencies, except the | 7 |
| following which shall be open for
public inspection and | 8 |
| copying:
| 9 |
| (i) chronologically maintained arrest information, | 10 |
| such as traditional
arrest logs or blotters;
| 11 |
| (ii) the name of a person in the custody of a law | 12 |
| enforcement agency and
the charges for which that | 13 |
| person is being held;
| 14 |
| (iii) court records that are public;
| 15 |
| (iv) records that are otherwise available under | 16 |
| State or local law; or
| 17 |
| (v) records in which the requesting party is the | 18 |
| individual
identified, except as provided under part | 19 |
| (vii) of
paragraph (c) of subsection (1) of this | 20 |
| Section.
| 21 |
| "Criminal history record information" means data | 22 |
| identifiable to an
individual and consisting of | 23 |
| descriptions or notations of arrests,
detentions, | 24 |
| indictments, informations, pre-trial proceedings, trials, | 25 |
| or
other formal events in the criminal justice system or | 26 |
| descriptions or
notations of criminal charges (including | 27 |
| criminal violations of local
municipal ordinances) and the | 28 |
| nature of any disposition arising therefrom,
including | 29 |
| sentencing, court or correctional supervision, | 30 |
| rehabilitation and
release. The term does not apply to | 31 |
| statistical records and reports in
which individuals are | 32 |
| not identified and from which
their identities are not | 33 |
| ascertainable, or to information that is for
criminal | 34 |
| investigative or intelligence purposes.
| 35 |
| (e) Records that relate to or affect the security of | 36 |
| correctional
institutions and detention facilities.
|
|
|
|
HB5337 Engrossed |
- 49 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| (f) Preliminary drafts, notes, recommendations, | 2 |
| memoranda and other
records in which opinions are | 3 |
| expressed, or policies or actions are
formulated, except | 4 |
| that a specific record or relevant portion of a
record | 5 |
| shall not be exempt when the record is publicly cited
and | 6 |
| identified by the head of the public body. The exemption | 7 |
| provided in
this paragraph (f) extends to all those records | 8 |
| of officers and agencies
of the General Assembly that | 9 |
| pertain to the preparation of legislative
documents.
| 10 |
| (g) Trade secrets and commercial or financial | 11 |
| information obtained from
a person or business where the | 12 |
| trade secrets or information are
proprietary, privileged | 13 |
| or confidential, or where disclosure of the trade
secrets | 14 |
| or information may cause competitive harm, including: | 15 |
| (i) All
information determined to be confidential | 16 |
| under Section 4002 of the
Technology Advancement and | 17 |
| Development Act. | 18 |
| (ii) All trade secrets and commercial or financial | 19 |
| information obtained by a public body, including a | 20 |
| public pension fund, from a private equity fund or a | 21 |
| privately held company within the investment portfolio | 22 |
| of a private equity fund as a result of either | 23 |
| investing or evaluating a potential investment of | 24 |
| public funds in a private equity fund. The exemption | 25 |
| contained in this item does not apply to the aggregate | 26 |
| financial performance information of a private equity | 27 |
| fund, nor to the identity of the fund's managers or | 28 |
| general partners. The exemption contained in this item | 29 |
| does not apply to the identity of a privately held | 30 |
| company within the investment portfolio of a private | 31 |
| equity fund, unless the disclosure of the identity of a | 32 |
| privately held company may cause competitive harm.
| 33 |
| Nothing contained in this
paragraph (g) shall be construed | 34 |
| to prevent a person or business from
consenting to disclosure.
| 35 |
| (h) Proposals and bids for any contract, grant, or | 36 |
| agreement, including
information which if it were |
|
|
|
HB5337 Engrossed |
- 50 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| disclosed would frustrate procurement or give
an advantage | 2 |
| to any person proposing to enter into a contractor | 3 |
| agreement
with the body, until an award or final selection | 4 |
| is made. Information
prepared by or for the body in | 5 |
| preparation of a bid solicitation shall be
exempt until an | 6 |
| award or final selection is made.
| 7 |
| (i) Valuable formulae,
computer geographic systems,
| 8 |
| designs, drawings and research data obtained or
produced by | 9 |
| any public body when disclosure could reasonably be | 10 |
| expected to
produce private gain or public loss.
The | 11 |
| exemption for "computer geographic systems" provided in | 12 |
| this paragraph
(i) does not extend to requests made by news | 13 |
| media as defined in Section 2 of
this Act when the | 14 |
| requested information is not otherwise exempt and the only
| 15 |
| purpose of the request is to access and disseminate | 16 |
| information regarding the
health, safety, welfare, or | 17 |
| legal rights of the general public.
| 18 |
| (j) Test questions, scoring keys and other examination | 19 |
| data used to
administer an academic examination or | 20 |
| determined the qualifications of an
applicant for a license | 21 |
| or employment.
| 22 |
| (k) Architects' plans, engineers' technical | 23 |
| submissions, and
other
construction related technical | 24 |
| documents for
projects not constructed or developed in | 25 |
| whole or in part with public funds
and the same for | 26 |
| projects constructed or developed with public funds, but
| 27 |
| only to the extent
that disclosure would compromise | 28 |
| security, including but not limited to water
treatment | 29 |
| facilities, airport facilities, sport stadiums, convention | 30 |
| centers,
and all government owned, operated, or occupied | 31 |
| buildings.
| 32 |
| (l) Library circulation and order records identifying | 33 |
| library users with
specific materials.
| 34 |
| (m) Minutes of meetings of public bodies closed to the
| 35 |
| public as provided in the Open Meetings Act until the | 36 |
| public body
makes the minutes available to the public under |
|
|
|
HB5337 Engrossed |
- 51 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| Section 2.06 of the Open
Meetings Act.
| 2 |
| (n) Communications between a public body and an | 3 |
| attorney or auditor
representing the public body that would | 4 |
| not be subject to discovery in
litigation, and materials | 5 |
| prepared or compiled by or for a public body in
| 6 |
| anticipation of a criminal, civil or administrative | 7 |
| proceeding upon the
request of an attorney advising the | 8 |
| public body, and materials prepared or
compiled with | 9 |
| respect to internal audits of public bodies.
| 10 |
| (o) Information received by a primary or secondary | 11 |
| school, college or
university under its procedures for the | 12 |
| evaluation of faculty members by
their academic peers.
| 13 |
| (p) Administrative or technical information associated | 14 |
| with automated
data processing operations, including but | 15 |
| not limited to software,
operating protocols, computer | 16 |
| program abstracts, file layouts, source
listings, object | 17 |
| modules, load modules, user guides, documentation
| 18 |
| pertaining to all logical and physical design of | 19 |
| computerized systems,
employee manuals, and any other | 20 |
| information that, if disclosed, would
jeopardize the | 21 |
| security of the system or its data or the security of
| 22 |
| materials exempt under this Section.
| 23 |
| (q) Documents or materials relating to collective | 24 |
| negotiating matters
between public bodies and their | 25 |
| employees or representatives, except that
any final | 26 |
| contract or agreement shall be subject to inspection and | 27 |
| copying.
| 28 |
| (r) Drafts, notes, recommendations and memoranda | 29 |
| pertaining to the
financing and marketing transactions of | 30 |
| the public body. The records of
ownership, registration, | 31 |
| transfer, and exchange of municipal debt
obligations, and | 32 |
| of persons to whom payment with respect to these | 33 |
| obligations
is made.
| 34 |
| (s) The records, documents and information relating to | 35 |
| real estate
purchase negotiations until those negotiations | 36 |
| have been completed or
otherwise terminated. With regard to |
|
|
|
HB5337 Engrossed |
- 52 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| a parcel involved in a pending or
actually and reasonably | 2 |
| contemplated eminent domain proceeding under
Article VII | 3 |
| of the Code of Civil Procedure, records, documents and
| 4 |
| information relating to that parcel shall be exempt except | 5 |
| as may be
allowed under discovery rules adopted by the | 6 |
| Illinois Supreme Court. The
records, documents and | 7 |
| information relating to a real estate sale shall be
exempt | 8 |
| until a sale is consummated.
| 9 |
| (t) Any and all proprietary information and records | 10 |
| related to the
operation of an intergovernmental risk | 11 |
| management association or
self-insurance pool or jointly | 12 |
| self-administered health and accident
cooperative or pool.
| 13 |
| (u) Information concerning a university's adjudication | 14 |
| of student or
employee grievance or disciplinary cases, to | 15 |
| the extent that disclosure
would reveal the identity of the | 16 |
| student or employee and information
concerning any public | 17 |
| body's adjudication of student or employee grievances
or | 18 |
| disciplinary cases, except for the final outcome of the | 19 |
| cases.
| 20 |
| (v) Course materials or research materials used by | 21 |
| faculty members.
| 22 |
| (w) Information related solely to the internal | 23 |
| personnel rules and
practices of a public body.
| 24 |
| (x) Information contained in or related to | 25 |
| examination, operating, or
condition reports prepared by, | 26 |
| on behalf of, or for the use of a public
body responsible | 27 |
| for the regulation or supervision of financial
| 28 |
| institutions or insurance companies, unless disclosure is | 29 |
| otherwise
required by State law.
| 30 |
| (y) Information the disclosure of which is restricted | 31 |
| under Section
5-108 of the Public Utilities Act.
| 32 |
| (z) Manuals or instruction to staff that relate to | 33 |
| establishment or
collection of liability for any State tax | 34 |
| or that relate to investigations
by a public body to | 35 |
| determine violation of any criminal law.
| 36 |
| (aa) Applications, related documents, and medical |
|
|
|
HB5337 Engrossed |
- 53 - |
LRB094 19270 LJB 54901 b |
|
| 1 |
| records received by
the Experimental Organ Transplantation | 2 |
| Procedures Board and any and all
documents or other records | 3 |
| prepared by the Experimental Organ
Transplantation | 4 |
| Procedures Board or its staff relating to applications
it | 5 |
| has received.
| 6 |
| (bb) Insurance or self insurance (including any | 7 |
| intergovernmental risk
management association or self | 8 |
| insurance pool) claims, loss or risk
management | 9 |
| information, records, data, advice or communications.
| 10 |
| (cc) Information and records held by the Department of | 11 |
| Public Health and
its authorized representatives relating | 12 |
| to known or suspected cases of
sexually transmissible | 13 |
| disease or any information the disclosure of which
is | 14 |
| restricted under the Illinois Sexually Transmissible | 15 |
| Disease Control Act.
| 16 |
| (dd) Information the disclosure of which is exempted | 17 |
| under Section 30
of the Radon Industry Licensing Act.
| 18 |
| (ee) Firm performance evaluations under Section 55 of | 19 |
| the
Architectural, Engineering, and Land Surveying | 20 |
| Qualifications Based
Selection Act.
| 21 |
| (ff) Security portions of system safety program plans, | 22 |
| investigation
reports, surveys, schedules, lists, data, or | 23 |
| information compiled, collected,
or prepared by or for the | 24 |
| Regional Transportation Authority under Section 2.11
of | 25 |
| the Regional Transportation Authority Act or the St. Clair | 26 |
| County Transit
District under the
Bi-State Transit Safety | 27 |
| Act.
| 28 |
| (gg) Information the disclosure of which is restricted | 29 |
| and
exempted under Section 50 of the Illinois Prepaid | 30 |
| Tuition Act.
| 31 |
| (hh) Information the disclosure of which is
exempted | 32 |
| under the State Officials and Employees Ethics Act.
| 33 |
| (ii) Beginning July 1, 1999, information that would | 34 |
| disclose
or might lead to the disclosure of
secret or | 35 |
| confidential information, codes, algorithms, programs, or | 36 |
| private
keys intended to be used to create electronic or |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| digital signatures under the
Electronic Commerce Security | 2 |
| Act.
| 3 |
| (jj) Information contained in a local emergency energy | 4 |
| plan submitted to
a municipality in accordance with a local | 5 |
| emergency energy plan ordinance that
is adopted under | 6 |
| Section 11-21.5-5 of the Illinois Municipal Code.
| 7 |
| (kk) Information and data concerning the distribution | 8 |
| of
surcharge moneys collected and remitted by wireless | 9 |
| carriers under the Wireless
Emergency Telephone Safety | 10 |
| Act.
| 11 |
| (ll) Vulnerability assessments, security measures, and | 12 |
| response policies
or plans that are designed to identify, | 13 |
| prevent, or respond to potential
attacks upon a community's | 14 |
| population or systems, facilities, or installations,
the | 15 |
| destruction or contamination of which would constitute a | 16 |
| clear and present
danger to the health or safety of the | 17 |
| community, but only to the extent that
disclosure could | 18 |
| reasonably be expected to jeopardize the effectiveness of | 19 |
| the
measures or the safety of the personnel who implement | 20 |
| them or the public.
Information exempt under this item may | 21 |
| include such things as details
pertaining to the | 22 |
| mobilization or deployment of personnel or equipment, to | 23 |
| the
operation of communication systems or protocols, or to | 24 |
| tactical operations.
| 25 |
| (mm) Maps and other records regarding the location or | 26 |
| security of a
utility's generation, transmission, | 27 |
| distribution, storage, gathering,
treatment, or switching | 28 |
| facilities.
| 29 |
| (nn) Law enforcement officer identification | 30 |
| information or
driver
identification
information compiled | 31 |
| by a law enforcement agency or the Department of
| 32 |
| Transportation
under Section 11-212 of the Illinois | 33 |
| Vehicle Code.
| 34 |
| (oo) Records and information provided to a residential
| 35 |
| health care
facility resident sexual assault
and death | 36 |
| review team or the Residential Health Care Facility |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| Resident Sexual
Assault and Death Review Teams Executive | 2 |
| Council under the Residential Health
Care Facility | 3 |
| Resident Sexual Assault and Death Review Team Act.
| 4 |
| (pp) Information provided to the predatory lending | 5 |
| database created pursuant to Article 3 of the Residential | 6 |
| Real Property Disclosure Act, except to the extent | 7 |
| authorized under that Article.
| 8 |
| (qq)
(pp) Defense budgets and petitions for | 9 |
| certification of compensation and expenses for court | 10 |
| appointed trial counsel as provided under Sections 10 and | 11 |
| 15 of the Capital Crimes Litigation Act. This subsection | 12 |
| (qq)
(pp) shall apply until the conclusion of the trial and | 13 |
| appeal of the case, even if the prosecution chooses not to | 14 |
| pursue the death penalty prior to trial or sentencing.
| 15 |
| (rr) Information the disclosure of which is
exempted | 16 |
| under the Viatical and Life Settlements Act of 2006.
| 17 |
| (2) This Section does not authorize withholding of | 18 |
| information or limit the
availability of records to the public, | 19 |
| except as stated in this Section or
otherwise provided in this | 20 |
| Act.
| 21 |
| (Source: P.A. 93-43, eff. 7-1-03; 93-209, eff. 7-18-03; 93-237, | 22 |
| eff. 7-22-03; 93-325, eff. 7-23-03, 93-422, eff. 8-5-03; | 23 |
| 93-577, eff. 8-21-03; 93-617, eff. 12-9-03; 94-280, eff. | 24 |
| 1-1-06; 94-508, eff. 1-1-06; 94-664, eff. 1-1-06; revised | 25 |
| 8-29-05.)
| 26 |
| Section 910. The Illinois Insurance Code is amended by | 27 |
| changing Section 424 as follows:
| 28 |
| (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 29 |
| Sec. 424. Unfair methods of competition and unfair or | 30 |
| deceptive acts or
practices defined. The following are hereby | 31 |
| defined as unfair methods of
competition and unfair and | 32 |
| deceptive acts or practices in the business of
insurance:
| 33 |
| (1) The commission by any person of any one or more of the | 34 |
| acts
defined or prohibited by Sections 134, 143.24c, 147, 148, |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| 149, 151, 155.22,
155.22a,
236, 237, 364, and 469 of this Code.
| 2 |
| (2) Entering into any agreement to commit, or by any | 3 |
| concerted
action committing, any act of boycott, coercion or | 4 |
| intimidation
resulting in or tending to result in unreasonable | 5 |
| restraint of, or
monopoly in, the business of insurance.
| 6 |
| (3) Making or permitting, in the case of insurance of the | 7 |
| types
enumerated in Classes 1, 2, and 3 of Section 4, any | 8 |
| unfair discrimination
between individuals or risks of the same | 9 |
| class or of essentially the same
hazard and expense element | 10 |
| because of the race, color, religion, or national
origin of | 11 |
| such insurance risks or applicants. The application of this | 12 |
| Article
to the types of insurance enumerated in Class 1 of | 13 |
| Section 4 shall in no way
limit, reduce, or impair the | 14 |
| protections and remedies already provided for by
Sections 236 | 15 |
| and 364 of this Code or any other provision of this Code.
| 16 |
| (4) Engaging in any of the acts or practices defined in or | 17 |
| prohibited by
Sections 154.5 through 154.8 of this Code.
| 18 |
| (5) Making or charging any rate for insurance against | 19 |
| losses arising
from the use or ownership of a motor vehicle | 20 |
| which requires a higher
premium of any person by reason of his | 21 |
| physical handicap, race, color,
religion, or national origin. | 22 |
| (6) Engaging in any of the acts or practices prohibited by | 23 |
| the Viatical and Life Settlements Act of 2006.
| 24 |
| (Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02; | 25 |
| 92-669, eff.
1-1-03.)
| 26 |
| Section 915. The Illinois Securities Law of 1953 is amended | 27 |
| by changing Section 2.1 and by adding Section 2.33 as follows:
| 28 |
| (815 ILCS 5/2.1) (from Ch. 121 1/2, par. 137.2-1)
| 29 |
| Sec. 2.1. Security. "Security" means any note, stock, | 30 |
| treasury stock,
bond, debenture, evidence of indebtedness, | 31 |
| certificate of interest or
participation in any profit-sharing | 32 |
| agreement, collateral-trust
certificate, preorganization | 33 |
| certificate or subscription, transferable
share, investment | 34 |
| contract, viatical investment, investment fund share, |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| face-amount certificate,
voting-trust certificate, certificate | 2 |
| of deposit
for a security, fractional
undivided interest in | 3 |
| oil, gas or other mineral lease, right or royalty,
any put, | 4 |
| call, straddle, option, or privilege on any security, | 5 |
| certificate
of deposit, or group or index of securities | 6 |
| (including any interest therein
or based on the value thereof), | 7 |
| or any put, call, straddle, option, or
privilege entered into, | 8 |
| relating to
foreign currency, or, in general, any interest or | 9 |
| instrument commonly known
as a "security", or any certificate | 10 |
| of interest or participation in,
temporary or interim | 11 |
| certificate for, receipt for, guarantee of, or warrant
or right | 12 |
| to subscribe to or purchase, any of the foregoing.
"Security" | 13 |
| does not mean a mineral investment contract or a mineral
| 14 |
| deferred delivery contract; provided, however, the Department | 15 |
| shall have
the authority to regulate these contracts as | 16 |
| hereinafter provided.
| 17 |
| (Source: P.A. 92-308, eff. 1-1-02; 93-927, eff. 8-12-04.)
| 18 |
| (815 ILCS 5/2.33 new)
| 19 |
| Sec. 2.33. Viatical investment. "Viatical investment" | 20 |
| means the contractual right to receive any portion of the death | 21 |
| benefit or ownership of a life insurance policy or certificate | 22 |
| for consideration that is less than the expected death benefit | 23 |
| of the life insurance policy or certificate. "Viatical | 24 |
| investment" does not include: | 25 |
| (1) any transaction between a viator and a viatical | 26 |
| settlement provider, as defined in the Viatical and Life | 27 |
| Settlements Act of 2006; | 28 |
| (2) any transfer of ownership or beneficial interest in | 29 |
| a life insurance policy from a viatical settlement provider | 30 |
| to another viatical settlement provider, as defined in the | 31 |
| Viatical and Life Settlements Act of 2006, or to any legal | 32 |
| entity formed solely for the purpose of holding ownership | 33 |
| or beneficial interest in a life insurance policy or | 34 |
| policies; | 35 |
| (3) the bona fide assignment of a life insurance policy |
|
|
|
HB5337 Engrossed |
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LRB094 19270 LJB 54901 b |
|
| 1 |
| to a bank, savings bank, savings and loan association, | 2 |
| credit union, or other licensed lending institution as | 3 |
| collateral for a loan; or | 4 |
| (4) a policy loan by a life insurance company or the | 5 |
| exercise of accelerated benefits pursuant to the terms of a | 6 |
| life insurance policy issued in accordance with the | 7 |
| Illinois Insurance Code. | 8 |
| Section 997. Severability. The provisions of this Act are | 9 |
| severable under Section 1.31 of the Statute on Statutes.
| 10 |
| Section 999. Effective date. This Act takes effect upon | 11 |
| becoming law.
|
|