by Larry Gorski
(Note: Due to the length and complexity of the new investment article, the following information should not be viewed as a complete discussion of all aspects of the investment article. Copies of Senate Bill 801 may be obtained by calling the Office of the Secretary of State, Index Division at 217-782-6537.)
On August 15, 1997, the Illinois Investment Article was completely rewritten when Governor Jim Edgar signed Senate Bill 801. This legislation reflects many hours of work by both the Illinois Department of Insurance and the insurance industry. While the investment article contains many similarities to the NAIC Investments of Insurers Model Act (Defined Limits Version), there are some differences.
Definitions - A Key Component
A complete understanding of the new investment article begins with definitions. Some of the key concepts defined are: asset-backed securities, health insurer, equity interest, rated credit instrument, and special rated credit instrument. An example of the importance of the definitions is illustrated by considering the limit imposed on insurers in certain US government agency debt issues. Some insurers have assumed that the limit established in these sections applies to all securities issued by US government agencies. The limitation contained in Section 126.10 C. (2) and Section 126.24 C. (2) does not apply to asset-backed securities. The definition of asset-backed securities includes mortgage related securities including debt issues collateralized by credit card receivables and other similar obligations. Other key definitions for insurers investing in collateralized mortgage obligations (CMOs) and catastrophe-linked securities are the definitions of rated credit instrument and special rated credit instrument. Instruments classified as special rated credit instruments are subject to a limitation of 5% of an insurer's admitted assets.
Board Responsibilities
A significant component of the new investment article is the requirement that each insurer's board of directors adopt a written investment plan. The investment plan should specify "guidelines as to the quality, maturity and diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs and its capital and surplus." The written investment plan must be adopted by the insurer's board of directors within three months of the effective day of the new investment article.
Discretionary Authority
Another provision that each insurer should be aware of is Section 126.3 K. This section gives the Director, with good cause, the authority to "order an insurer to nonadmit, limit, dispose of, withdraw from or discontinue an investment or investment practice. . . ." This section allows the Director, with good cause, to take action even if an insurer's investments satisfy the quantitative limitations in the new investment article.
Noteworthy Features
Many of the aggregate and per issue limits are consistent with comparable limits in the prior investment law. In other areas, such as equity investments and foreign investments, the limits have been increased to reflect insurer interest in these investment classes. In addition, the new investment article does contain some innovative features.
Insurers can participate in both short and long term investment pools, but must meet certain requirements for pool participants, the pool manager, and the pooling agreement. In addition, investments in long term investment pools are counted against any applicable investment class limitations.
The aggregate limit on foreign investments, as compared to the prior investment article, is increased. However, a separate limit is placed on foreign currency exposure. Another thing to note when testing for compliance with the foreign investment limit is the definition of foreign investment. Some investments that may have qualified as a domestic investment under the prior investment article may be classified as a foreign investment under the new article.
One of the areas of greatest change is with respect to derivative instruments. Derivative instruments are permitted for hedging and some forms of income generation. Using derivative instruments for replication purposes is prohibited. Hedging is defined in terms of risk reduction and not simply risk management. Specific quantitative limits are provided on a class of instrument basis. The new investment article specifically discusses the following types of derivative instruments: options, futures, swaps, and forwards. Also, the terms replication, income generation and hedging are defined.
Reserve Coverage Requirements
While the provisions of the new investment article that apply to life insurers are very similar to the provisions which apply to property and casualty insurers, there is one major difference. Section 126.22 imposes a requirement on all property and casualty insurers and some life insurers that write primarily health insurance to maintain assets in specifically identified categories at least equal to the lesser of $250,000,000 or 100% of the sum of adjusted loss reserves and loss adjusted expense reserves, adjusted unearned premium reserves and statutorily required policy and contract reserves. Of course, all of these terms, including accident and health insurer, are defined in the new investment article.
Department Contacts
Because there are differences between the provisions applicable to life insurers and property and casualty insurers, the Department has designated several individuals to answer questions on the new Illinois Investment Article. The contact persons for life insurers are:
P.J. Grosboll (217) 782-1759; and
Paul Ebelherr (217) 785-5755.
The contact persons for property and casualty insurers are:
Tom Lurkins (217) 524-5942;
Kathleen Taylor (217) 524-8362; and
Mindy Lucht (217) 785-4079.
The following information was provided by the Illinois Secretary of State's office. Questions on the new law should be referred to Gordon Wayman in their Driver Services Department at (217) 785-0432.
Illinois Secretary of State George H. Ryan's proposal (HB 1253) to require uninsured motorists who cause accidents to get high-risk insurance or lose their driving privileges was signed into law by Governor Jim Edgar on July 30, 1997.
According to Ryan, complaints about at-fault uninsured drivers are among the most common received by his office. "With this law, uninsured drivers who thumb their noses at the state's mandatory auto insurance law will have to get insured before they are allowed to drive again," he said. Public Act 90-264, which takes effect on January 1, 1998, will require uninsured motorists who are at fault in a motor vehicle crash and who receive safety responsibility suspensions to buy safety responsibility insurance for a three year period. Proof of financial responsibility is commonly referred to as "SR-22 Insurance." Drivers who fail to buy the insurance or don't maintain their policies will have their licenses suspended until they buy insurance.
Unlike conventional auto insurance, companies selling high-risk insurance are required by law to notify the Secretary of State's office when policies are purchased, canceled or lapsed. Notification that a policy is canceled or lapsed will result in an immediate suspension of the motorist's driving and/or registering privileges.
Ryan says it would be unreasonable to apply a similar requirement to all motorists, who are required by state law to buy automobile insurance. About 95 to 96 percent of the 7.6 million Illinois drivers are insured because of the mandatory insurance law. He estimates the new law would apply to about 21,000 uninsured motorists each year who cause traffic accidents but are not sued in court by others involved in the incident. Currently, uninsured drivers must carry the SR-22 only if they are sued in court for damages caused in a traffic crash, or if they have a revocation on their driving record.
Back to the topEach year, the Illinois Department of Insurance Senior Health Insurance Program (SHIP) provides insurance counseling for thousands of Medicare beneficiaries and their caregivers. Our statewide network of volunteer counselors are trained in all aspects of senior insurance issues, including Medicare, Medicare supplement, Medicare HMOs and long term care insurance. Counseling services range from answering simple questions to sorting through and resolving complex claims.
With few exceptions, SHIP clients are also Medicare supplement insurance company policyholders. Insurers therefore have a stake in helping us provide the best possible service to our mutual constituencies. Here are two ways you can expedite our counseling service:
Be responsive to SHIP inquiries - To assist beneficiaries with their insurance policies, claims and benefits, SHIP counselors may need additional information from the insurance company. When a member of our staff or one of our volunteers contacts your company and identifies themselves as a SHIP counselor, please ask your employees to provide the information we need to determine the client's financial liability.
Provide clear information on ID cards - Medicare Supplement Insurance ID cards lack two important pieces of information our counselors need to assist beneficiaries: (1) the plan type (standardized plans only), and (2) the name of the insurer (as opposed to a group name). Many of our inquiries to companies could be eliminated if this information were clearly set forth on the ID card.
The Department of Insurance has addressed these concerns in a circular bulletin to all Medicare supplement writers. By working together, our staff, SHIP counselors and insurers can greatly reduce unnecessary confusion and frustration for the Medicare beneficiaries we serve.
Back to the topOn August 28, 1997, the Department of Insurance issued Company Bulletin #97-4 to all Illinois accident and health insurance carriers. The bulletin responds to inquiries about implementation of the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-911) and Illinois Senate Bill 802 (now Public Act 90-30) generally referred to as HIPAA.
Companies should especially note the policies on unfair trade practices which are reprinted below.
Q. Is it permissible for issuers not to pay commissions or to substantially reduce commissions to insurance producers who market "guaranteed issue" products? Can an issuer make a distinction for commission payment levels based upon a "good risk" or a "bad risk"?
A. No. Paying no commission or a reduced commission to discourage insurance producers from placing "bad risks" (those with substandard expected loss ratios due to health status factors) is an unfair trade practice which circumvents HIPAA. It is acceptable to have varied commission schedules based on group size or number of sales or to pay commissions only on the standard portions of the premium and not on surcharges for smokers or other substandard underwriting risk factors. (Reference: 215 ILCS 5/421 et. seq.)
Q. Can an issuer automatically charge 200% of the standard rate to a nonstandard risk that is rated 125% of the standard rate?
A. No. That or similar rate gouging is an unfair trade practice which will lead to lack of availability or accessibility in the market. ( Reference: 215 ILCS 5/421 et. seq.)
Company Bulletin #97-4 also answers questions about "all products" issues, discontinuance and replacement, late and special enrollment, health conditions, individual guaranteed renewability, preexisting conditions and creditable coverage, HIPAA CHIP issues, disclosures, and certification and notices.
A copy of the complete bulletin can be obtained by sending a written request to: Becky Turner, Illinois Department of Insurance, 320 W. Washington, Springfield, IL 62701.
Questions on Department policies relating to HIPAA should be referred to Assistant Director, Madelynne Brown at (217) 785-1258. Additional question and answer bulletins will be issued as necessary.
Back to the topDirector Mark Boozell is one of forty emerging state leaders from across the nation who recently participated in the prestigious Toll Fellowship Program sponsored by The Council of State Governments. The annual week-long seminar is aimed at developing the next generation of leaders from all three branches of state government.
The focus of this year's program, held in Lexington, KY, on September 13-18, was trends analysis, policy development and institutional changes. The experience offers insights that participants would not ordinarily obtain during the course of their regular governmental service.
Boozell was nominated by Governor Jim Edgar, and was selected from many outstanding applicants by a committee of state elected and appointed officials as one of the most promising leaders of state government.
The Council of State Governments is a national nonpartisan nonprofit public service organization serving 50 states and six U.S. territories and commonwealths. In addition to the Toll Fellows Program, CSG provides legislative conferences and executive workshops, research information and multistate problem-solving opportunities for state governments.
Back to the topFinancial Assurance Incorporated, MO, was suspended from writing new business in Illinois for two years beginning July 30, 1997, because its surplus is below the required minimum.
Back to the topThe following information was provided by the Illinois Department of Public Aid. Questions on the new law should be referred to Jerry Donovan, Division of Child Support Enforcement, at (217) 524-1206.
Recent federal welfare reform requires all states to do data matches with financial institutions to locate non-custodial parents and their assets and to impose liens on those assets to collect unpaid child support. The law defines a financial institution as a federal or state bank or other depository institution, federal or state credit union, benefit association, insurance company, safe deposit company, money-market mutual fund or a similar entity authorized to do business in the state.
Governor Edgar recently signed legislation (PA 90-18) bringing Illinois into compliance with the federal law. The Illinois law requires the Division of Child Support Enforcement to negotiate agreements with financial institutions to perform the data matches.
Back to the topGovernor Jim Edgar has signed a number of insurance bills that passed in the Spring 1997 Session of the Illinois General Assembly. Following are summaries.
House Bill 8 (PA 90-25, effective 01/01/98) - Creates the Genetic Information Privacy Act and amends the Insurance Code, Health Maintenance Organization (HMO) Act, Limited Health Services Organization (LHSO) Act and Voluntary Health Service Plans (VHSP) Act to prohibit accident and health writers from obtaining genetic testing information for underwriting purposes. The legislation provides that if an individual voluntarily submits such test results to an insurer, the insurer may only use the results if they are favorable to the individual.
The bill also specifies requirements for confidentiality and disclosure of genetic testing information, addresses employers' concerns about conflicts with federal law, and provides for due process and recovery of damages if an individual's right to privacy under the Act has been violated.
House Bill 23 (PA 90-507, effective 08/22/97) - Amends the Illinois Pension Code by adopting provisions relating to fiduciaries and investment advisers. The bill expands the investment authority of downstate police and fire pension funds from 10% to 35% of assets and allows more diversified investments if certain asset thresholds are met. It creates a new Article 1A relating to the powers of the Public Pension Division of the Department of Insurance, substantially incorporating the provisions of current Article 22, Division 5 (with numerous substantive and technical changes); and repeals Article 22, Division 5 of the Code.
The bill imposes a regulation fee on downstate police and fire pension funds of .7 basis points (a basis point is equal to 1/100th of 1%) of assets (capped at $6,000) and significantly increases the annual report filing fees for other pension funds to $6,000. It also amends: the State Finance Act to create the Public Pension Regulation Fund; the Public Funds Investment Act to exclude downstate police and fire pension funds. Amends the Illinois Securities Law of 1953 to specify that dealers, salespersons, and investment advisers may be disciplined for causing or advising a public pension fund to make an investment or engage in a transaction not authorized under the Illinois Pension Code.
House Bill 223 (PA 90-499; Sections 1 through 55, 93 and 95 of the bill (including the Employee Leasing Company Act and some changes to the Insurance Exchange Article) are effective 01/01/98; Sections 91 and 97 (including some changes to the Insurance Exchange Article, the self-evaluative audit privilege, changes allowing limited liability companies to become registered firms, changes to the Guaranty Fund Article, and changes to the Mine Subsidence Article and the repeal of single case appointment of agents by insurers) are effective 08/19/97.) - This bill:
1) Creates the Employee Leasing Company Act to ensure that an employer who leases out its workers, obtains workers compensation insurance coverage for all its employees and that a premium is paid commensurate with exposure and anticipated claim experience. It also requires that an individual premium be charged to a client company in the event that the client company's experience modification exceeds the leasing company's experience modification by 50% for a period of two years. It provides that each employee leasing company register with the Department of Insurance and that any violation of the Act is grounds for cancellation or non-renewal of a work comp insurance policy. It provides that insurers shall audit policies under this Act.
2) Amends the various sections of the Insurance Exchange Article (Article V 1/2) and adds new sections to the Article. It also repeals Section 215 ILCS 5/107.14 of the Insurance Code which establishes examination fees for syndicates. It provides that syndicates established under the Exchange are subject to the same provisions as other types of companies including the filing of annual statements with the Department, financial examinations, and capitalization requirements. Syndicates will now be assessed a fee that goes into the Insurance Financial Regulatory Fund.
3) Amends Article IX of the Insurance Code to establish an Insurance Compliance Self-Evaluative Privilege which allows confidentiality of certain documents generated in the course of an insurance company's self-evaluative audit.
4) Amends Sections 215 ILCS 5/491.1 and 5/499.1 to allow limited liability companies to become registered firms.
5) Amends the Insurance Code to provide that the Illinois Insurance Guaranty Fund's net worth test for insureds will be reduced from $50 to $25 million. Provides that the treatment of third party claims against large net worth insureds who go into bankruptcy will not affect those claimants' ability to get reimbursed by the fund. Provides that the final order of liquidation triggers the fund's coverage. Clarifies that the fund's settlement is binding on the liquidation only to the extent of the fund's payment.
6) Amends the Mine Subsidence Insurance Article of the Illinois Insurance Code to permit participation by intergovernmental cooperatives organized under the Illinois Constitution and the Intergovernmental Cooperation Act. The bill amends the definition of "insurer" to include intergovernmental cooperatives and the definition of "policy" to include coverage that is provided by an intergovernmental cooperative.
7) Repeals Section 215 ILCS 5/493.1 which allowed for single case appointments of agents by insurers.
House Bill 297 (PA 90-111, effective 07/14/97) - Amends the Liquor Control Act to increase liability limits from $30,000 to $45,000 for bodily injury and property damage and from $40,000 to $55,000 for loss of means of support. The bill also creates and defines loss of society as a new recoverable damage under the $55,000 limit for means of support, but specifies that recovery could not be made under both of these losses. Further, the limits are tied to the Consumer Price Index and the limits may increase or decrease based on the previous 12 month period as determined by the Comptroller.
HB 297 also amends the Code of Civil Procedure. That provision does not pertain to the Department of Insurance.
House Bill 586 (PA 90-41, effective 10/01/97) - Amends the Illinois Banking Act, the Illinois Savings and Loan Act, the Savings Bank Act, the Illinois Credit Union Act, the Corporate Fiduciary Act and the Insurance Code and adds a new article to the Insurance Code entitled the Financial Institutions Insurance Sales Law.
The purpose of these changes is to empower financial institutions, including both state and federally chartered banks, to sell insurance in Illinois. To participate, a financial institution would be required to register with the Department of Insurance and ensure all employees selling insurance products were licensed insurance producers.
Institutions selling any line of insurance would be required to register under this legislation. The only exceptions would be the sale of those lines specifically excluded by the bill including credit insurance, extended service and warranty contracts, collateral protection, title and private mortgage insurance.
The bill establishes requirements and parameters relating to the establishment of subsidiaries for insurance sales and the separation of documents between a subsidiary and parent, prohibiting coercion in the sale of a loan based on insurance or vice-versa, prohibiting rebating and discounting, requiring disclosure in signage and advertising, establishing written freedom of choice disclosures and establishing confidentiality provisions for the use of customer names and databases.
House Bill 593 (PA 90-460, effective 08/17/97) - Amends the Illinois Pension Code (40 ILCS 5/3-109, 3-109.1, 3-110, 3-111, 7-109 and 9-179.3) and adds new sections to the Code (40 ILCS 5/3-110.7 and 7-139.9). This bill allows active members to transfer credits between downstate police pension funds. It requires a payment from the fund from which credit is being transferred of an amount equal to the member's contributions, including any interest that the member paid in reestablishing credit, plus interest of 6% per annum from the date of contribution to the date of transfer. The methodology for this calculation shall be established by rule by the Department of Insurance based on appropriate actuarial assumptions and other pertinent factors.
The bill establishes the number of years (2) that a police officer must serve before being eligible to purchase creditable service from a fund and waives the two year requirement if the officer is laid off or otherwise involuntarily terminated due to no fault of the officer. It allows for optional additional contributions to purchase additional benefits for members of Cook County Annuity and Benefit Fund.
The bill further provides for a person with less than 8 years of creditable service to receive a retirement pension from a police pension fund, if the person has at least 8 years of credit in another police pension fund and is receiving a retirement pension from that fund. Allows reinstatement of service terminated by refund.
The bill also provides for chiefs who have elected participation in IMRF to rescind that election and to transfer certain credits back to the police pension fund.
House Bill 725 (PA 90-246, effective 01/01/98) - Amends the Right of Conscience Act by changing name to Health Care Right of Conscience Act and by providing the following under said Act:
For purposes of the health care payer sections of this Act, the "conscience" of the health care payer must be documented in its ethical guidelines, mission statement, constitution, by-laws, articles of incorporation, regulations, or other governing documents.
This bill also amends the Health Care Surrogate Act. That provision does not affect the Department of Insurance.
House Bill 821 (PA 90-372, effective 07/01/98 ) - Deletes portions of or repeals various acts. Deletes sections (215 ILCS 5/132.2, 5/355a, 5/512-3, 5/1003, 125/1-2, 125/5-3, 125/5-6, 135) of the Insurance Code by striking references to the Pharmaceutical Service Plan Act. It also repeals Article XXX ½, Property and Casualty Rates Other Than Workers', and 215 ILCS 135 et seq., Pharmaceutical Service Plan Act.
House Bill 844 (PA 90-113, effective 07/14/97) - Creates the Renter's Financial Responsibility and Protection Act which allows the purchase of collision damage waivers (CDW) and provides that any company offering a CDW provide a disclosure notice. The bill also amends the Vehicle Code by:
The bill also provides other consumer protection and insurance coverage requirements as requested by the Department of Insurance and the Attorney General's Office.
The new act establishes renter approval of the sale of a CDW; provides for circumstances under which a CDW could be voided (based on purposeful abuse or misuse by the renter); establishes fees of $9.00/day for a rental under $30,000 manufacturer's suggested retail price (MSRP) or $12.00/day for a rental over $30,000 MSRP; and provides for a graduated increase of those rates of $.50/year to a maximum of $10.50/$13.50 in 2002.
The Act also establishes disclosure and advertising requirements specifying that the purchase of a CDW is optional, recommending consideration of other insurance options and the daily cost of a CDW when the base cost of the rental is listed.
House Bill 1266 (PA 90-53, effective 07/03/97) - This bill amends the Insurance Code (215 ILCS 5/123) to include reinsurers among those covered by provisions of the Unauthorized Companies Article that allow for service of process and bond-posting requirements in Illinois courts.
House Bill 1311 (PA 90-337, effective 01/01/98) - Creates the Health Care Purchasing Group Act to allow employers to pool employees for the purpose of purchasing health insurance. Requires registration of all such groups with the Department and establishes a registration fee of $100. Establishes guidelines for the formation of such groups and the purchase of insurance products by such groups.
House Bill 1410 (PA 90-303, effective 01/01/98) - Adds a new Section (215 ILCS 5/155.31) to the Insurance Code to provide that payment or assignment of a structured settlement is to be made only to the beneficiary unless otherwise approved by the courts.
House Bill 1428 (PA 90-340, effective 08/08/97) - Amends the Illinois Insurance Code (215 ILCS 5/154.6) to provide that establishing unreasonable caps or limits on paint, materials, or labor when estimating vehicle repairs constitutes improper claims practice.
House Bill 1492 (PA 90-155, effective 07/23/97) - Amends the Illinois Administrative Procedures Act to provide that requests for copies of agency rules shall not be deemed Freedom of Information Act requests unless so labeled by the requester.
House Bill 1565 (PA 90-376, effective 08/14/97) - Amends the HMO Act to establish limited coverage HMO policies designed to provide for the health needs of Illinois children who do not otherwise qualify for health care coverage either through their parents' employer or through medical assistance.
The policies would limit HMO benefits to basic outpatient services and primary health care services including routine physical exams, immunizations, sick visits, diagnostic x-rays and laboratory services and emergency outpatient services. Preventive dental services, vision screening and eyeglasses, prescription drugs and mental health services may also be included in the policy.
The bill further provides that no HMO in Chicago may provide such coverage until one HMO under contract with the Department of Public Aid pursuant to Section 5-11 of the Public Aid Code has been approved.
House Bill 1707 (PA 90-18, effective 07/01/97) - Amends various acts to implement the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Requires financial institutions, including insurance companies to report information to the Department of Public Aid relating to the nonpayment of child support.
House Bill 1881 (PA 90-7, effective 06/10/97) - Amends the State Employee Group Insurance Act, the Counties Code, the Municipal Code, the School Code, the Insurance Code, the Health Maintenance Organization (HMO) Act, the Voluntary Health Services (VHS) Act and the Public Aid Code to require post-mastectomy care, the duration of which is to be determined by the attending physician based on various guidelines and with appropriate follow-up visits no later than 48 hours after discharge; and to require coverage for annual cervical or pap smear tests for female insureds and annual digital rectal exams and prostate-specific antigen tests for male insureds upon recommendation by a physician.
Amends the Counties Code, the Municipal Code, the Insurance Code, the HMO Act and the Public Aid Code by reducing the age requirement for annual mammograms for women from age 50 to age 40.
Amends the Comprehensive Health Insurance Plan (CHIP) Act to include naprapathic services and expenses as covered treatments and amends the Insurance Code to stipulate that entities which provide coverage for naprapathic services fall under the regulatory jurisdiction of the Department of Insurance.
Amends the State Mandate Act to exempt the state from any reimbursement for the implementation of any mandate created by this legislation.
House Bill 2226 (PA 90-381, effective 08/14/97) - This financial regulatory bill amends various sections of the Insurance Code, including those dealing with:
Senate Bill 124 (PA 90-401, effective 01/01/98 ) - Adds Sections 155.31 and 155.32 to the Illinois Insurance Code (215 ILCS 5/155) to provide that a company may not cancel or refuse to issue or renew a policy of homeowners or renters insurance because the insured premises are operated as a day care home or group day care home. Stipulates that losses arising out of or in connection with day care provided in a day care home or group day care home may not be covered under a homeowners or renters insurance policy. Requires a separate policy or endorsement for which premiums are assessed and coverage for such losses paid.
The bill also provides that insurers may provide insurance policies, endorsements, riders and any explanatory or advertising material in a language other than English. This provision is unrelated to the changes noted above.
Senate Bill 193 (PA 90-177, effective 07/23/97) Repeals the Vision Service Plan Act (215 ILCS 160/et seq.) and deletes all statutory cross-references contained within the following sections of the Insurance Code: 215 ILCS 5/355a, 5/408, 5/531.03, 5/1003, 125/1-2, 125/5-3, 125/5-6.
Senate Bill 196 (PA 90-196, effective 01/01/98) - Amends the Insurance Code (215 ILCS 5/143.10b) to extend from three years to five years the history of loss information which insurers must furnish upon written request of the insured.
Senate Bill 457 (PA 90-408, effective 01/01/98) - Amends the HMO Act to require that, when an HMO enrollee is a resident of a retirement facility with an associated long term care facility, a primary care physician refer the resident enrollee of the retirement facility to the long term care facility if it is in the best interest of the member. The long term care facility, in turn, would be required to negotiate rates as are applicable to other providers and would have to meet any applicable utilization review, quality assurance, risk assumption or other network requirements of the HMO.
Senate Bill 490 (PA 90-245, effective 01/01/98) - Amends the Insurance Code to prohibit licensed insurance companies from denying life, health, or disability income insurance coverage based solely on the history or evidence of abuse, but permits companies to underwrite based on health conditions. In essence, a company may deny coverage to a victim of abuse who has a health condition that would not be covered even if there was no abuse as long as that decision is based on the underlying health problem and not on the discovery of abuse by the insurer.
Senate Bill 710 (PA 90-451, effective 01/01/98) - Amends the uninsured motorist section of the Insurance Code to provide that a medical decision made by arbitration shall be binding up to the policy limits. This provision replaces the present requirement that such decisions be binding up to the statutory financial responsibility limit of not less than $20,000 for bodily injury or death of one person or $40,000 for 2 or more persons. The bill also establishes procedural rules for the conduct of arbitration procedures.
In addition, the bill amends the Metropolitan Transit Authority Act, the Code of Civil Procedure and the Uniform Commercial Code, none of which fall under the Department's jurisdiction. Changes to the Metropolitan Transit Authority Act are effective 07/01/98.
Senate Bill 801 (PA 90-418, effective 08/15/97) - Amends the Insurance Code by rewriting the Investment Article of the Code. In general, this rewrite:
Senate Bill 802 (PA 90-30, effective 07/01/97) - The federal Health Insurance Portability and Accountability Act (HIPAA) requires extensive amendments to the Comprehensive Health Insurance Plan (CHIP) to conform to the requirements of HIPAA with respect to individual health insurance. The aim of these amendments is to create an additional coverage within the structure of CHIP to accommodate enrollment of eligible individuals, as defined by the federal law, who are leaving group health coverage and may not have access to standard individual insurance products.
The new coverage would not be capped, would eliminate preexisting condition requirements and would have a premium, to be set by the board, of between 125% to 150% of rates established as applicable for individual standard risks. Any deficit incurred on behalf of federally eligible individuals under the plan would be recouped by an assessment of all insurers based on their proportion of total direct Illinois premiums.
The bill includes a new Act, the Illinois Health Insurance Portability and Accountability Act, to address group insurance requirements in the federal act. These requirements place limitations on the imposition of preexisting condition exclusions, prohibit discrimination against individual participants, provide guaranteed renewability of coverage for employers in the small and large group markets, provide guaranteed availability of coverage for employers in the small group market, restrict the use of genetic information, make certain provisions for coverage of adopted children and pregnancy.
In addition, the bill deletes provisions of the Small Employer Rating Renewability and Portability Act (SB 830) which are inconsistent with the federal law.
Senate Bill 1129 (PA 90-10, effective 07/01/97) - State government appropriations bill. The Department's ordinary and contingent expenses are included in Article 75 of the bill.
Other Action
House Bill 1332 (Total Veto) - Identical to SB 490.
House Bill 2179 (Amendatory Veto) - Amends the Vehicle Code to provide that a person convicted of a second or subsequent violation for operating a vehicle when registration is suspended for not having insurance is guilty of a Class B misdemeanor. Provides that a person driving without a license or permit and without insurance shall have the vehicle impounded.
The Governor has recommended raising the penalties in such cases from $500 for a Class B misdemeanor to a fine not less than $1,000 or more than $2,000. In order for the bill to become effective, the General Assembly must reapprove it in its entirety with these changes.
Financial
Lincoln Logan Mutual Insurance Company 6-05-97 Alpine Insurance Company 7-15-97 Albion District Mutual Windstorm & Cyclone Insurance Company 8-07-97 American Life Insurance Company 8-27-97 Bituminous Casualty Corporation 8-27-97 Bituminous Fire & Marine Insurance Company 8-27-97 American Health Care Providers, Inc. 8-29-97 Health Care Service Corporation 8-29-97 Aaoms National Insurance Company, Risk Retention Group 9-15-97 Associated Physicians Insurance Company 9-15-97 Cass County Mutual Fire Insurance Company 9-15-97 Harvel Mutual Insurance Company 9-15-97 Royal Insurance Company of America 9-15-97
Market Conduct
Mercury Life Insurance Company 7-14-97 Allianz Life Insurance Company of North America 7-22-97 AMCO Insurance Company 7-31-97 Minnesota Mutual Life Insurance Company 8-01-97 Businessmen's Assurance Company 8-19-97 Universal Casualty Company 8-19-97 Great-West Life & Annuity 8-21-97 Great American Insurance Company 9-02-97 American Family Life Assurance 9-05-97Back to the top
Revocation of Licensing Authority Martha V. Allen 301 East 2nd Street O'Fallon, IL Effective 7/30/97 Frederick A. Amos 6033 North Sheridan Road, Apt. 19L Chicago, IL Effective 8/18/97 Daniel Arguello 14031 South Shonshoni Drive Lockport, IL Effective 7/28/97 Derek A. Barnard 112 West 3rd Ste. 200 Alton, IL Effective 7/28/97 John Boland 1050 Des Plaines Ave. Forest Park, IL Effective 7/28/97 Nancy M. Bonfield-Prombaum 1468 Ambleside Circle Naperville, IL Effective 7/28/97 Larry W. Broadhurst 3504 North Marbleway Peoria, IL Effective 8/8/97 Gregory E. Burkes 7009 South Perry Chicago, IL Effective 7/28/97 Claude Czekaj 15 Emerson Drive Schaumburg, IL Effective 7/28/97 Lee H. Feldstein 539 Truman Street Bolingbrook, IL Effective 8/11/97 Eura L. Ferguson 1001 East Oak St. Taylorville, IL Effective 7/30/97 John C. Frambes 9024 Orland Court Orland Park, IL Effective 7/28/97 Brian J. Hauser 918 Krpan Drive Sycamore, IL Effective 7/28/97 Kurt A. Heckert 1496 Old St. Louis Road Venedy, IL Effective 7/28/97 Colin Jude Hicks 1 S. 268 Holyoke Lane Villa Park, IL Effective 8/11/97 Michael L. Holman 11-A West Pheasant Woods Court Belleville, IL Effective 8/18/97 Dwayne E. Hunter 5300 North Sheridan, Apt. 506 Chicago, IL Effective 8/13/97 Dexter G. Jackson 8425 South Marquette Chicago, IL Effective 8/11/97 Lisa A. Kimme 531 South Main Street Waterloo, IL Effective 7/28/97 Daniel J. Lieberman 418 River Glen Elmhurst, IL Effective 7/28/97 Robert M. Milani 2032 Edinburgh Lane Aurora, IL Effective 7/28/97 Mauricio D. Monta 5221 North Elston, Apt. 1E Chicago, IL Effective 7/28/97 Ronald J. Moreland 2312 Eve's Circle East Drive Dekalb, IL Effective 7/28/97 Rodney Mullins 2 S 680 Harvard Drive Warrenville, IL Effective 7/28/97 Joshua Pickens 3424 Chadwick Drive Rockford, IL Effective 7/28/97 Joseph Reddington 10111 South Kildare Oak Lawn, IL Effective 7/28/97 Tamayo Luis G. Romero 1265 Inverrary Lane Palatine, IL Effective 7/28/97 Jose L. Sanchez 2222 South Goebbert Arlington Heights, IL Effective 7/28/97 Larry E. Smith 1540 North Wildwood Mt. Zion, IL Effective 7/21/97 Bruce E. Tolbert 1940 North Hudson Avenue Chicago, IL Effective 8/18/97 Dawn M. Ufferfilge 8 South Spring Street Cary, IL Effective 8/11/97 Charles Washington 8510 South Marquette Street Chicago, IL Effective 8/11/97 Voluntary Revocation All Pro Insurance Agency, Inc. 7300 L N Western Avenue Chicago, IL Effective 7/2/97 James R. Brewer 312 152nd Place Calumet City, IL Effective 8/21/97 Louis T. Daddano 226 Court LaGrove Barrington, IL Effective 7/2/97 Lynda L. Doherty 9115 South Roberts Road, Apt. 2B Hickory Hill, IL Effective 8/15/97 Bruce W. Dorsey 7547 Bivens Road, PO Box 96 Moro, IL Effective 8/4/97 Joseph J. Dudek 9132 Del Prado Drive 1N Palos Hills, IL Effective 8/21/97 Joseph D. Filicicchia 14439 131st Street Lemont, IL Effective 6/30/97 Andy S. Gerakaris 3143 North Nashville Street, Apt. 1C Chicago, IL Effective 7/10/97 David W. Hawkshaw 2101 East Sangamon Ave. Springfield, IL Effective 8/27/97 Thomas Cyril Huelsmann 13501 Russland Drive Trenton, IL Effective 8/26/97 William Edgar Keeper 2057 Millpond Lane Hanover Park, IL Effective 7/2/97 W. Gregory Kleeman 901 West 5th Centralia, IL Effective 8/12/97 Beverly June Laramore 7610 South Euclid Chicago, IL Effective 8/8/97 Darrell L. Larsen 3541 North Oriole Ave. Chicago, IL Effective 8/26/97 Willis Cecil Laskey 1690 East 22nd Street, Apt. G Wheaton, IL Effective 8/8/97 Regina M. Lattuca 8609 Carriage Green Drive Darian, IL Effective 8/11/97 Marvin H. Levin 9101 Sleeping Bear Skokie, IL Effective 8/12/97 Herbert M. Lewin 932 Rollingwood Road Highland Park, IL Effective 8/26/97 Raymond H. Lewis 9273 Fairway Drive, Apt. 317 Des Plaines, IL Effective 8/11/97 George C. Lyon, Jr. 1964 Brentwood Lane East Wheaton, IL Effective 8/8/97 Larry C. Mettler 1702 Biscay Drive Godfrey, IL Effective 8/11/97 Hal L. Meyer 1012 Austin Evanston, IL Effective 8/12/97 Richard W. Michal 6814 West Devon Ave. Chicago, IL Effective 8/26/97 Gayle L. Miller 1306 Jonathan Olney, IL Effective 7/22/97 Mary L. Minarich 609 West Palladium Joliet, IL Effective 8/21/97 James D. Morris 710 North Bridge Street Yorkville, IL Effective 8/11/97 James B. Murphy PO Box 75 Cary, IL Effective 8/26/97 Anne M. Nelson 1426 Burnham Calumet City, IL Effective 8/21/97 Patricia Parsons 2650 North Lakeview #2310 Chicago, IL Effective 8/11/97 Charles L. Pritchett 1922 Plum Street Jacksonville, IL Effective 8/21/97 Roxanne S. Pullos 333 New Mills Court Schaumburg, IL Effective 8/11/97 Beth Rosencrans 1565 West Charlemagne Drive Hoffman Estates, IL Effective 8/26/97 Angel L. Salazar, Jr. 10 Truman Lane Streamwood, IL Effective 8/26/97 Pamela M. Schweda 3600 Falcon Court South Rolling Meadows, IL Effective 7/7/97 Paul Starck-King 811 Glenwood Lane Glenview, IL Effective 8/27/97 Melody A. Stewart 4201 North Thompsonville Thompsonville, IL Effective 8/21/97 William F. Sullivan 1420 Keystone Ave. River Forest, IL Effective 8/21/97 Carol Wagner 918 North 22nd Ave. Melrose Park, IL Effective 7/23/97 Order of Suspension Sherman Burrus 109 East Washington Street East Peoria, IL Effective 7/30/97 Michael T. Gedzun 2830 East Chayes Park Drive Homewood, IL Effective 7/28/97 Joseph F. Ghiotto 1696 Thornton-Lansing Road Lansing, Illinois Effective 8/11/97 Gary Ryherd 8 Golf Springfield, IL Effective 7/28/97 Brenda S. Strickland 429 Maple Lane Hillside, IL Effective 8/11/97 Stipulation and Consent Order - Civil Forfeiture Paid Alliance Insurance Agency, Inc. 715 West Lake Street Addison, IL Effective 7/16/97 Marian N. Ayala 2212 South Ridgeland Berwyn, IL Effective 5/30/97 Vincent J. Campisano 815 Michigan Evanston, IL Effective 6/26/97 George F. Mann III 2600 Newport Drive Naperville, IL Effective 7/11/97 George Francis Mann 1716 Wild Rose Court Naperville, IL Effective 7/11/97 G.F. Mann Agency, Ltd. 300 East Fifth Ave., Ste. 430 Naperville, IL Effective 7/11/97 Greg A. Mueller 1319 West Prospect Kewanee, IL Effective 7/17/97 NIS, Inc. 6246 North Pulaski Road Chicago, IL Effective 6/26/97 Northwest Commercial Insurance 6246 North Pulaski Road Chicago, IL Effective 6/26/97 Dennis A. Ruckoldt 7610 Hancock Drive, PO Box 209 Wonder Lake, IL Effective 7/23/97 Peter Joseph Vicicondi 5N340 Fairway Lane Itasca, IL Effective 7/29/97 Kandi L. Keys-Winford 9605 South Halsted Street, Apt. 2 Chicago, IL Effective 7/2/97 Wonder Lake Insurance 7610 Hancock Drive, PO Box 209 Wonder Lake, IL Effective 7/23/97 Stipulation and Consent Order - Civil Forfeiture Not Paid Fred L. Burton, Jr. 152 East 114th Place Chicago, IL Effective 6/18/97 North-Star Financial Services 24 Centre, Suite 13 Park Forest, IL Effective 6/18/97 Denial of Request for License Jerome R. Johnson 6516 Mount St. Louis, MO Effective 7/21/97 Toby C. Jones 100 Park Avenue Calumet City, IL Effective 7/3/97 Richard A. Klein 698 North Kenilworth Elmhurst, IL Effective 8/11/97 Larry Lane 701 West Muirfield Road Garlan, TX Effective 7/28/97 Michael B. Risper, Jr. 6124 South Kenbark #1A Chicago, IL Effective 7/28/97 Other Director's Order Ross A. Knisley RR #2, Box 155 Lexington, IL Effective 6/26/97 Order of Revocation vacatedBack to the top
Director Mark Boozell has issued a Stipulation and Consent Order and fine to Universal Casualty Company, Niles, IL. The Chicago area auto insurer received a $125,000 fine for improper claims practices identified in a market conduct examination. Most of the insurance code violations cited involved total loss claims, including: failure to settle claims in a timely manner; underpaying on total loss vehicles; and failure to document reimbursement for sales taxes and transfer fees.
The regulatory order also requires the company to institute procedures to reduce its complaint ratio to 9.0 or less per million dollars of premium written in Illinois. Universal Casualty's 1996 complaint ratio was 11.97, the worst among companies writing auto insurance.
Universal must pay $50,000 of its fine by September 28, 1997. The remaining $75,000 will be due if a follow-up examination reveals that the company has failed to comply with the Order. The re-examination will commence on or after August 1, 1998.
Back to the topGiuliani Frank Guzi Suspension of Licensing Authority 9/16/97 Hearing No. 3571 Apollo Casualty Company Disapproval of Agreement 9/16/97 Hearing No. 3560 D2 Trucking, Inc. Canal Insurance Company Cancellation 9/19/97 Hearing No. 3572 American Community Mutual Insurance Company Unfair Business Practices 9/22/97 Hearing No. 3576 Raymel G. Speed Revocation of Licensing Authority 9/23/97 Hearing No. 3575 Ronald E. Smith Revocation of Licensing Authority 9/24/97 Hearing No. 3577 Jerome E. Brand Revocation of Licensing Authority 9/25/97 Hearing No. 3574 Charles L. Shulkin Revocation of Licensing Authority 9/29/97 Hearing No. 3580 Ben Kiddy Revocation of Licensing Authority 9/30/97 Hearing No. 3573 Judy P. Guillartes Revocation of Licensing Authority 10/1/97 Hearing No. 3581 Mary V. Clemons Revocation of Licensing Authority 10/1/97 Hearing No. 3582 Glen D. Bone Glenn D. Bone III Revocation of Licensing Authority 10/7/97 Hearing No. 3585 Anthony Warren Illinois National Insurance Company Notice of Apparent Liability 10/7/97 Hearing No. 3570 Imogene Plate Regent Insurance company Cancellation 10/8/97 Hearing No. 3578 Debbie A. Mazur Revocation of Licensing Authority 10/8/97 Hearing No. 3586 Monumental Life Insurance company Cease and Desist 10/8/97 Hearing No. 3559 Jerome Eddins Revocation of Licensing Authority 10/9/97 Hearing No. 3587 Gary R. Swearingen State Farm General Insurance company Nonrenewal 10/9/97 Hearing No. 3584 Thomas and Diane Murphy State Farm Mutual Auto. Insurance company Nonrenewal 10/14/97 Hearing No. 3579 John P. Lambert Revocation of Licensing Authority 10/14/97 Hearing No. 3589 Albert Harold Nathan Revocation of Licensing Authority 10/15/97 Hearing No. 3588 Jeffrey Scott Zalay Revocation of Licensing Authority 10/31/97 Hearing No. 3531 Matters Settled without Hearing: Vincent J. Campisano Northwest Commercial Insurance NIS, Inc. Dismissed 9/3/97 Hearing No. 3508 Ella Lee State Farm Mutual Automobile Insurance company Dismissed 9/2/97 Hearing No. 3565 Christopher T. Hardy State Farm Mutual Automobile Insurance Company Dismissed 7/30/97 Hearing No. 3549 Discount Development Services Best Benefits Stipulation and Consent 8/21/97 Hearing No. 3535 Factory Service Administrators Stipulation and Consent 8/29/97 Hearing No. 3548 Completed Hearings: Jerome A. Maher Allstate Insurance company Nonrenewal effective 8/12/97 Hearing No. 3554 Faustino and Sylvia Ovalle State Farm Fire & Casualty Company Nonrenewal effective 8/12/97 Hearing No. 3555 Lee H. Feldstein Licensing Authority Revoked 8/11/97 Hearing No. 3504 Rhea Mc Mannis Madison Mutual Insurance Company Nonrenewal effective 7/31/97 Hearing No. 3545 John B. Hyde, President Thorndyke International, Inc. et al. Cease and Desist Permanent 7/31/97 Hearing No. 3448
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