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| [ Introduced ] | [ Engrossed ] | [ Senate Amendment 001 ] |
92_SB0879enr SB879 Enrolled LRB9204099JSpc 1 AN ACT concerning insurance. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short title. This Act may be cited as the 5 Insurance Claims Fraud Prevention Act. 6 Section 5. Patient and client procurement. 7 (a) Except as otherwise permitted or authorized by law, 8 it is unlawful to knowingly offer or pay any remuneration 9 directly or indirectly, in cash or in kind, to induce any 10 person to procure clients or patients to obtain services or 11 benefits under a contract of insurance or that will be the 12 basis for a claim against an insured person or the person's 13 insurer. Nothing in this Act shall be construed to affect 14 any contracts or arrangements between or among insuring 15 entities including health maintenance organizations, health 16 care professionals, or health care facilities which are 17 hereby excluded. 18 (b) A person who violates any provision of this Act or 19 Article 46 of the Criminal Code of 1961 shall be subject, in 20 addition to any other penalties that may be prescribed by 21 law, to a civil penalty of not less than $5,000 nor more than 22 $10,000, plus an assessment of not more than 3 times the 23 amount of each claim for compensation under a contract of 24 insurance. The court shall have the power to grant other 25 equitable relief, including temporary injunctive relief, as 26 is necessary to prevent the transfer, concealment, or 27 dissipation of illegal proceeds, or to protect the public. 28 The penalty prescribed in this subsection shall be assessed 29 for each fraudulent claim upon a person in which the 30 defendant participated. 31 (c) The penalties set forth in subsection (b) are SB879 Enrolled -2- LRB9204099JSpc 1 intended to be remedial rather than punitive, and shall not 2 preclude, nor be precluded by, a criminal prosecution for the 3 same conduct. If the court finds, after considering the goals 4 of disgorging unlawful profit, restitution, compensating the 5 State for the costs of investigation and prosecution, and 6 alleviating the social costs of increased insurance rates due 7 to fraud, that such a penalty would be punitive and would 8 preclude, or be precluded by, a criminal prosecution, the 9 court shall reduce that penalty appropriately. 10 Section 10. Action by State's Attorney or Attorney 11 General. The State's Attorney of the county in which the 12 conduct occurred or Attorney General may bring a civil action 13 under this Act. Before the Attorney General may bring the 14 action, the Attorney General shall present the evidence 15 obtained to the appropriate State's Attorney for possible 16 criminal or civil filing. If the State's Attorney elects not 17 to pursue the matter, then the Attorney General may proceed 18 with the action. 19 Section 15. Action by interested person. 20 (a) An interested person, including an insurer, may 21 bring a civil action for a violation of this Act for the 22 person and for the State of Illinois. The action shall be 23 brought in the name of the State. The action may be dismissed 24 only if the court and the State's Attorney or the Attorney 25 General, whichever is participating, gives written consent to 26 the dismissal stating their reasons for consenting. 27 (b) A copy of the complaint and a written disclosure of 28 substantially all material evidence and information the 29 person possesses shall be served on the State's Attorney and 30 Attorney General. The complaint shall be filed in camera, 31 shall remain under seal for at least 60 days, and shall not 32 be served on the defendant until the court so orders. The SB879 Enrolled -3- LRB9204099JSpc 1 State's Attorney or Attorney General may elect to intervene 2 and proceed with the action within 60 days after he or she 3 receives both the complaint and the material evidence and 4 information. If more than one governmental entity elects to 5 intervene, the State's Attorney shall have precedence. 6 (c) The State's Attorney or Attorney General may, for 7 good cause shown, move the court for extensions of the time 8 during which the complaint shall remain under seal under 9 subsection (b). The motions may be supported by affidavits or 10 other submissions in camera. The defendant shall not be 11 required to respond to any complaint filed under this Section 12 until 20 days after the complaint is unsealed and served upon 13 the defendant. 14 (d) Before the expiration of the 60-day period or any 15 extensions obtained under subsection (c), the State's 16 Attorney or Attorney General shall either: 17 (1) proceed with the action, in which case the 18 action shall be conducted by the State's Attorney or 19 Attorney General; or 20 (2) notify the court that it declines to take over 21 the action, in which case the person bringing the action 22 shall have the right to conduct the action. 23 (e) When a person or governmental agency brings an 24 action under this Act, no person other than the State's 25 Attorney or Attorney General may intervene or bring a related 26 action based on the facts underlying the pending action 27 unless another statute or common law authorizes that action. 28 Section 20. Role of State's Attorney or Attorney 29 General. 30 (a) If the State's Attorney or Attorney General proceeds 31 with the action, he or she shall have the primary 32 responsibility for prosecuting the action, and shall not be 33 bound by an act of the person bringing the action. That SB879 Enrolled -4- LRB9204099JSpc 1 person shall have the right to continue as a party to the 2 action, subject to the limitations set forth in subsection 3 (b). 4 (b) The State's Attorney or Attorney General may dismiss 5 the action notwithstanding the objections of the person 6 initiating the action if the person has been notified by the 7 State's Attorney or Attorney General of the filing of the 8 motion, and the court has provided the person with an 9 opportunity for a hearing on the motion. 10 The State's Attorney or Attorney General may settle the 11 action with the defendant notwithstanding the objections of 12 the person initiating the action if the court determines, 13 after a hearing, that the proposed settlement is fair, 14 adequate, and reasonable under all the circumstances. Upon a 15 showing of good cause, the hearing may be held in camera. 16 Upon a showing by the State's Attorney or Attorney 17 General that unrestricted participation during the course of 18 the litigation by the person initiating the action would 19 interfere with or unduly delay the State's Attorney's or 20 Attorney General's prosecution of the case, or would be 21 repetitious, irrelevant, or for purposes of harassment, the 22 court may, in its discretion, impose limitations on the 23 person's participation, including, but not limited to, the 24 following: 25 (1) limiting the number of witnesses the person may 26 call; 27 (2) limiting the length of the testimony of those 28 witnesses; 29 (3) limiting the person's cross-examination of 30 witnesses; and 31 (4) otherwise limiting the participation by the 32 person in the litigation. 33 Upon a showing by the defendant that unrestricted 34 participation during the course of the litigation by the SB879 Enrolled -5- LRB9204099JSpc 1 person initiating the action would be for purposes of 2 harassment or would cause the defendant undue burden or 3 unnecessary expense, the court may limit the participation by 4 the person in the litigation. 5 (c) If the State's Attorney or Attorney General elects 6 not to proceed with the action, the person who initiated the 7 action shall have the right to conduct the action. If the 8 State's Attorney or Attorney General so requests, he or she 9 shall be served with copies of all pleadings filed in the 10 action and shall be supplied with copies of all deposition 11 transcripts, at the State's Attorney's or Attorney General's 12 expense. When a person proceeds with the action, the court, 13 without limiting the status and rights of the person 14 initiating the action, may nevertheless permit the State's 15 Attorney or Attorney General to intervene at a later date 16 upon a showing of good cause. 17 (d) If at any time both a civil action for penalties and 18 equitable relief pursuant to this Act and a criminal action 19 are pending against a defendant for substantially the same 20 conduct, whether brought by the government or a private 21 party, the civil action shall be stayed until the criminal 22 action has been concluded at the trial court level. The stay 23 shall not preclude the court from granting or enforcing 24 temporary equitable relief while the actions are pending. 25 Whether or not the State's Attorney or Attorney General 26 proceeds with the action, upon a showing by the State's 27 Attorney or Attorney General that certain actions of 28 discovery by the person initiating the action would interfere 29 with a law enforcement or governmental agency investigation 30 or prosecution of a criminal or civil matter arising out of 31 the same facts, the court may stay discovery for a period of 32 not more than 180 days. A hearing on a request for the stay 33 shall be conducted in camera. The court may extend the 34 180-day period upon a further showing in camera that the SB879 Enrolled -6- LRB9204099JSpc 1 agency has pursued the criminal or civil investigation or 2 proceedings with reasonable diligence and any proposed 3 discovery in the civil action will interfere with the ongoing 4 criminal or civil investigation or proceedings. 5 (e) Notwithstanding Section 15, the State's Attorney or 6 Attorney General may elect to pursue its claim through any 7 alternate remedy available to the State's Attorney or 8 Attorney General. 9 Section 25. Costs and proceeds of action. 10 (a) If the State's Attorney or Attorney General proceeds 11 with an action brought by a person under Section 15, that 12 person is entitled to receive an amount that the court 13 determines is reasonable based upon the extent to which the 14 person contributed to the prosecution of the action. Subject 15 to subsection (d), the amount awarded to the person who 16 brought the action shall not be less than 30% of the proceeds 17 of the action or settlement of the claim, and shall be paid 18 from the proceeds. 19 (b) If the State's Attorney or Attorney General does not 20 proceed with an action brought by a person under Section 15, 21 that person shall receive an amount that the court decides is 22 reasonable for collecting the civil penalty and damages. 23 Subject to subsection (d), the amount shall not be less than 24 40% of the proceeds of the action or settlement, and shall be 25 paid from the proceeds. 26 (c) If the person bringing the action as a result of a 27 violation of this Act has paid money to the defendant or to 28 an attorney acting on behalf of the defendant in the 29 underlying claim, then he or she shall be entitled to up to 30 double the amount paid to the defendant or the attorney if 31 that amount is greater than 50% of the proceeds. 32 (d) Where the action is one that the court finds to be 33 based primarily on disclosures of specific information, other SB879 Enrolled -7- LRB9204099JSpc 1 than information provided by the person bringing the action 2 under Section 15, relating to allegations or transactions in 3 a criminal, civil, or administrative hearing, in a 4 legislative or administrative report, hearing, audit, or 5 investigation, or from the news media, the court may award 6 those sums that it considers appropriate, but in no case more 7 than 10% of the proceeds, taking into account the 8 significance of the information and the role of the person 9 bringing the action in advancing the case to litigation. 10 (e) Any payment to a person under subsection (a), (b), 11 (c), or (d) shall be made from the proceeds. The person shall 12 also receive an amount for reasonable expenses that the court 13 finds to have been necessarily incurred, plus reasonable 14 attorney's fees and costs. All of those expenses, fees, and 15 costs shall be awarded against the defendant. 16 (f) If a local State's Attorney has proceeded with an 17 action under this Act, the Treasurer of the County where the 18 action was brought shall receive an amount for reasonable 19 expenses that the court finds to have been necessarily 20 incurred by the State's Attorney, including reasonable 21 attorney's fees and costs, plus 50% of the funds not awarded 22 to a private party. Those amounts shall be used to 23 investigate and prosecute insurance fraud, augmenting 24 existing budgets rather than replacing them. All remaining 25 funds shall go to the State and be deposited in the General 26 Revenue Fund and, when appropriated, shall be allocated to 27 appropriate State agencies for enhanced insurance fraud 28 investigation, prosecution, and prevention efforts. 29 (g) If the Attorney General has proceeded with an action 30 under this Act, all funds not awarded to a private party, 31 shall go to the State and be deposited in the General Revenue 32 Fund and, when appropriated, shall be allocated to 33 appropriate State agencies for enhanced insurance fraud 34 investigation, prosecution, and prevention efforts. SB879 Enrolled -8- LRB9204099JSpc 1 (h) If neither a local State's Attorney or the Attorney 2 General has proceeded with an action under this Act, 50% of 3 the funds not awarded to a private party shall be deposited 4 with the Treasurer of the County where the action was brought 5 and shall be disbursed to the State's Attorney of the County 6 where the action was brought. Those funds shall be used by 7 the State's Attorney solely to investigate, prosecute, and 8 prevent insurance fraud, augmenting existing budgets rather 9 than replacing them. All remaining funds shall go to the 10 State and be deposited in the General Revenue Fund and, when 11 appropriated, shall be allocated to appropriate State 12 agencies for enhanced insurance fraud investigation, 13 prosecution, and prevention efforts. 14 (i) Whether or not the State's Attorney or Attorney 15 General proceeds with the action, if the court finds that the 16 action was brought by a person who planned and initiated the 17 violation of this Act, that person shall be dismissed from 18 the civil action and shall not receive any share of the 19 proceeds of the action. The dismissal shall not prejudice the 20 right of the State's Attorney or Attorney General to continue 21 the action on behalf of the State. 22 (j) If the State's Attorney or Attorney General does not 23 proceed with the action, and the person bringing the action 24 conducts the action, the court may award to the defendant its 25 reasonable attorney's fees and expenses if the defendant 26 prevails in the action and the court finds that the claim of 27 the person bringing the action was clearly frivolous, clearly 28 vexatious, or brought primarily for purposes of harassment. 29 Section 30. Limitation on bringing actions. 30 (a) In no event may a person bring an action under 31 Section 15 that is based upon allegations or transactions 32 that are the subject of a civil suit or an administrative 33 civil money penalty proceeding in which the State's Attorney SB879 Enrolled -9- LRB9204099JSpc 1 or Attorney General is already a party. 2 (b) A court may not have jurisdiction over an action 3 under this Act based upon the public disclosure of 4 allegations or transactions in a criminal, civil, or 5 administrative hearing, in a legislative or administrative 6 report, hearing, audit, or investigation, or from the news 7 media, unless the action is brought by the State's Attorney, 8 the Attorney General, or a person who is an original source 9 of the information. For purposes of this subsection, 10 "original source" means an individual who has direct and 11 independent knowledge of the information on which the 12 allegations are based and has voluntarily provided the 13 information to the State's Attorney or Attorney General 14 before filing an action under this Act based on the 15 information. 16 Section 35. Expenses and sanctions. 17 (a) Except as provided in subsection (b), the State's 18 Attorney or Attorney General is not liable for expenses that 19 a person incurs in bringing an action under this Act. 20 (b) In civil actions brought under this Act in which the 21 Attorney General or a State's Attorney is a party, the court 22 shall retain discretion to impose sanctions otherwise allowed 23 by law, including the ability to order a party to pay 24 expenses as provided in the Code of Civil Procedure. 25 Section 40. Retaliatory discharge; remedy. An employee 26 who is discharged, demoted, suspended, threatened, harassed, 27 or in any other manner discriminated against in the terms and 28 conditions of employment by his or her employer because of 29 lawful acts done by the employee on behalf of the employee or 30 others in furtherance of an action under this Act, including 31 investigation for, initiation of, testimony for, or 32 assistance in an action filed or to be filed under this Act, SB879 Enrolled -10- LRB9204099JSpc 1 shall be entitled to all relief necessary to make the 2 employee whole. That relief shall include reinstatement with 3 the same seniority status the employee would have had but for 4 the discrimination, 2 times the amount of backpay, interest 5 on the backpay, and compensation for any special damages 6 sustained as a result of the discrimination, including 7 litigation costs and reasonable attorney's fees. An employee 8 may bring an action in the appropriate court for the relief 9 provided in this Section. The remedies under this Section are 10 in addition to any other remedies provided by existing law. 11 Section 45. Time limitations. 12 (a) Except as provided in subsection (b), an action 13 pursuant to this Act may not be filed more than 3 years after 14 the discovery of the facts constituting the grounds for 15 commencing the action. 16 (b) Notwithstanding subsection (a), an action may be 17 filed pursuant to this Act within not more than 8 years after 18 the commission of an act constituting a violation of this Act 19 or a violation of Article 46 of the Criminal Code of 1961. 20 Section 90. The Illinois Insurance Code is amended by 21 changing Sections 155.23 and 155.24 as follows: 22 (215 ILCS 5/155.23) (from Ch. 73, par. 767.23) 23 Sec. 155.23. FraudClaimsreporting. 24 (1) The Directorof Insuranceis authorized to 25 promulgate reasonable rules requiring insurers, as 26 defined in Section 155.24, doing businessinsurance27companies licensedin the State of Illinois to report 28 factual information in their possession thatwhichis 29 pertinent to suspected fraudulentcasualty and property30 insurance claims, fraudulent insurance applications, or 31 premium fraudincluding claims involving the theft ofSB879 Enrolled -11- LRB9204099JSpc 1automobiles,after he has made a determination that the 2suchinformation is necessary to detect fraud or arson. 3ThisClaim information may include: 4 (a) Dates and description of accident or loss. 5 (b) Any insurance policy relevant to the accident 6 or loss. 7 (c) Name of the insurance company claims adjustor 8 and claims adjustor supervisor processing or reviewing 9 any claim or claims made under any insurance policy 10 relevant to the accident or loss. 11 (d) Name of claimant's or insured's attorney. 12 (e) Name of claimant's or insured's physician, or 13 any person rendering or purporting to render medical 14 treatment. 15 (f) Description of alleged injuries, damage or 16 loss. 17 (g) History of previous claims made by the claimant 18 or insured. 19 (h) Places of medical treatment. 20 (i) Policy premium payment record. 21 (j) Material relating to the investigation of the 22 accident or loss, including statements of any person, 23 proof of loss, and any other relevant evidence. 24 (k) any facts evidencing fraud or arson. 25 The Director shall establish reporting requirements for 26 application and premium fraud information reporting by rule. 27 (2) The Director of Insurance may designate one or more 28 data processing organizations or governmental agencies to 29 assist him in gathering such information and making 30 compilations thereof, and may by rule establish the form and 31 procedure for gathering and compiling such information. The 32 rules maySuch rule shallname any organization or agency 33 designated by the Director to provide this service, and may 34shallin such case provide for a fee to be paid by the SB879 Enrolled -12- LRB9204099JSpc 1 reporting insurerscompaniesdirectly to the designated 2 organization or agency to cover any of the costs associated 3 with providing this service. After determination by the 4 Director of substantial evidence of false or fraudulent 5 claims, fraudulent applications, or premium fraud, the 6 information shall be forwarded by the Director or the 7 Director'shisdesignee to the proper law enforcement agency 8 or prosecutorState's Attorney and U.S. Attorney. Insurers 9Insurance companiesshall have access to, and may use, the 10claimsinformation compiled under the provisions of this 11 Section. InsurersInsurance companiesshall release 12 informationconcerning claims against themto, and shall 13 cooperate with, any law enforcement agency requesting such 14 information. 15 In the absence of malice, no insurerinsurance company, 16 or person who furnishes information on its behalf, is liable 17 for damages in a civil action or subject to criminal 18 prosecution for any oral or written statement made or any 19 other action taken that is necessary to supply information 20 required pursuant to this Section. 21 (Source: P.A. 83-851.) 22 (215 ILCS 5/155.24) (from Ch. 73, par. 767.24) 23 Sec. 155.24. Motor Vehicle Theft and Motor Insurance 24 Fraud Reporting and Immunity Law. 25 (a) As used in this Section: 26 (1) "authorized governmental agency" means the 27 Illinois Department of State Police, a local governmental 28 police department, a county sheriff's office, a State's 29 Attorney, the Attorney General, a municipal attorney, a 30 United States district attorney, a duly constituted 31 criminal investigative agency of the United States 32 government, the Illinois Department of Insurance, the 33 Illinois Department of Professional Regulation and the SB879 Enrolled -13- LRB9204099JSpc 1 office of the Illinois Secretary of State; 2 (2) "relevant" means having a tendency to make the 3 existence of any information that is of consequence to an 4 investigation of motor vehicle theft or insurance fraud 5 investigation or a determination of such issue more 6 probable or less probable than it would be without such 7 information;and8 (3) information will be "deemed important" if 9 within the sole discretion of the authorized governmental 10 agency such information is requested by that authorized 11 governmental agency;.12 (4) "Illinois authorized governmental agency" means 13 an authorized governmental agency as defined in item (1) 14 that is a part of the government of the State of Illinois 15 or any of the counties or municipalities of this State or 16 any other authorized entity; and 17 (5) For the purposes of this Section and Section 18 155.23, "insurer" means insurance companies, insurance 19 support organizations, self-insured entities, and other 20 providers of insurance products and services doing 21 business in the State of Illinois. 22 (b) Upon written request to an insurer by an authorized 23 governmental agency, an insurer or agent authorized by an 24 insurer to act on its behalf shall release to the requesting 25 authorized governmental agency any or all relevant 26 information deemed important to the authorized governmental 27 agency which the insurer may possess relating to any specific 28 motor vehicle theft or motor vehicle insurance fraud. 29 Relevant information may include, but is not limited to: 30 (1) Insurance policy information relevant to the 31 motor vehicle theft or motor vehicle insurance fraud 32 under investigation, including any application for such a 33 policy. 34 (2) Policy premium payment records which are SB879 Enrolled -14- LRB9204099JSpc 1 available. 2 (3) History of previous claims made by the insured. 3 (4) Information relating to the investigation of 4 the motor vehicle theft or motor vehicle insurance fraud, 5 including statements of any person, proofs of loss and 6 notice of loss. 7 (c) When an insurer knows or reasonably believes to know 8 the identity of a person whom it has reason to believe 9 committed a criminal or fraudulent act relating to a motor 10 vehicle theft or a motor vehicle insurance claim or has 11 knowledge of such a criminal or fraudulent act which is 12 reasonably believed not to have been reported to an 13 authorized governmental agency, then for the purpose of 14 notification and investigation, the insurer or an agent 15 authorized by an insurer to act on its behalf shall notify an 16 authorized governmental agency of such knowledge or 17 reasonable belief and provide any additional relevant 18 information in accordance with subsectionparagraph(b) of 19 this Section. When the motor vehicle theft or motor vehicle 20 claim that gives rise to the suspected criminal or fraudulent 21 act has already generated an incident report to an Illinois 22 authorized governmental agency, the insurer shall report the 23 suspected criminal or fraudulent act to that agency. When no 24 prior incident report has been made, the insurer shall report 25 the suspected criminal or fraudulent act to the Attorney 26 General or State's Attorney in the county or counties where 27 the incident is claimed to have occurred. When the incident 28 that gives rise to the suspected criminal or fraudulent act 29 is claimed to have occurred outside the State of Illinois, 30 but the suspected criminal or fraudulent act occurs within 31 the State of Illinois, the insurer shall make the report to 32 the Attorney General or State's Attorney in the county or 33 counties where the suspected criminal or fraudulent act 34 occurred. When the fraud occurs in multiple counties the SB879 Enrolled -15- LRB9204099JSpc 1 report shall also be sent to the Attorney General. 2 (d) When an insurer provides any of the authorized 3 governmental agencies with notice pursuant to this Section it 4 shall be deemed sufficient notice to all authorized 5 governmental agencies for the purpose of this Act. 6 (e) The authorized governmental agency provided with 7 information pursuant to this Section may release or provide 8 such information to any other authorized governmental agency. 9 (f) Any insurer providing information to an authorized 10 governmental agency pursuant to this Section shall have the 11 right to request and receive relevant information from such 12 authorized governmental agency, and receive within a 13 reasonable time after the completion of the investigation, 14 not to exceed 30 days, the information requested. 15 (g) Any information furnished pursuant to this Section 16 shall be privileged and not a part of any public record. 17 Except as otherwise provided by law, any authorized 18 governmental agency, insurer, or an agent authorized by an 19 insurer to act on its behalf which receives any information 20 furnished pursuant to this Section, shall not release such 21 information to public inspection. Such evidence or 22 information shall not be subject to subpoena duces tecum in a 23 civil or criminal proceeding unless, after reasonable notice 24 to any insurer, agent authorized by an insurer to act on its 25 behalf and authorized governmental agency which has an 26 interest in such information and a hearing, the court 27 determines that the public interest and any ongoing 28 investigation by the authorized governmental agency, insurer, 29 or any agent authorized by an insurer to act on its behalf 30 will not be jeopardized by obedience to such a subpoena duces 31 tecum. 32 (h) No insurer, or agent authorized by an insurer on its 33 behalf, authorized governmental agency or their respective 34 employees shall be subject to any civil or criminal liability SB879 Enrolled -16- LRB9204099JSpc 1 in a cause of action of any kind for releasing or receiving 2 any information pursuant to this Section. Nothing herein is 3 intended to or does in any way or manner abrogate or lessen 4 the common and statutory law privileges and immunities of an 5 insurer, agent authorized by an insurer to act on its behalf 6 or authorized governmental agency or any of their respective 7 employees. 8 (Source: P.A. 85-1292.)