HB 3799

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Full Text of HB3799
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	HB3799 - 104th General Assembly
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		HB3799 Engrossed		LRB104 11270 BAB 21355 b
1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 132, 132.3, 143.15, and 143.17 and by adding
6Article XLVIII as follows:
7    (215 ILCS 5/132)  (from Ch. 73, par. 744)
8    Sec. 132. Market conduct actions and market analysis.
9    (a) Definitions. As used in this Section:
10    "Data call" means a written solicitation by the Director
11to 2 or more regulated companies or persons seeking existing
12data or other existing information to be provided within a
13reasonable time period for a narrow and targeted regulatory
14oversight purpose for market analysis. "Data call" does not
15include an information request in a market conduct action or
16any data or information that the Director shall or may
17specifically require under any other law, except as provided
18by the other law.
19    "Desk examination" means an examination that is conducted
20by market conduct surveillance personnel at a location other
21than the regulated company's or person's premises. "Desk
22examination" includes an examination performed at the
23Department's offices with the company or person providing
		HB3799 Engrossed	- 2 -	LRB104 11270 BAB 21355 b
1requested documents by hard copy, microfiche, or discs or
2other electronic media for review without an on-site
3examination.
4    "Market analysis" means a process whereby market conduct
5surveillance personnel collect and analyze information from
6filed schedules, surveys, required reports, data calls, and
7other sources to develop a baseline understanding of the
8marketplace and to identify patterns or practices of regulated
9persons that deviate significantly from the norm or that may
10pose a potential risk to insurance consumers.
11    "Market conduct action" means any activity, other than
12market analysis, that the Director may initiate to assess and
13address the market and nonfinancial practices of regulated
14persons, including market conduct examinations. The
15Department's consumer complaint process outlined in 50 Ill.
16Adm. Code 926 is not a market conduct action for purposes of
17this Section; however, the Department may initiate market
18conduct actions based on information gathered during that
19process. "Market conduct action" includes:
20        (1) correspondence with the company or person;
21        (2) interviews with the company or person;
22        (3) information gathering;
23        (4) policy and procedure reviews;
24        (5) interrogatories;
25        (6) review of company or person self-evaluations and
26    voluntary compliance programs;
		HB3799 Engrossed	- 3 -	LRB104 11270 BAB 21355 b
1        (7) self-audits; and
2        (8) market conduct examinations.
3    "Market conduct examination" or "examination" means any
4type of examination, other than a financial examination, that
5assesses a regulated person's compliance with the laws, rules,
6and regulations applicable to the examinee. "Market conduct
7examination" includes comprehensive examinations, targeted
8examinations, and follow-up examinations, which may be
9conducted as desk examinations, on-site examinations, or a
10combination of those 2 methods.
11    "Market conduct surveillance" means market analysis or a
12market conduct action.
13    "Market conduct surveillance personnel" means those
14individuals employed or retained by the Department and
15designated by the Director to collect, analyze, review, or act
16on information in the insurance marketplace that identifies
17patterns or practices of persons subject to the Director's
18jurisdiction. "Market conduct surveillance personnel" includes
19all persons identified as an examiner in the insurance laws or
20rules of this State if the Director has designated them to
21assist her or him in ascertaining the nonfinancial business
22practices, performance, and operations of a company or person
23subject to the Director's jurisdiction.
24    "On-site examination" means an examination conducted at
25the company's or person's home office or the location where
26the records under review are stored.
		HB3799 Engrossed	- 4 -	LRB104 11270 BAB 21355 b
1    "SOFR rate" means the Secured Overnight Financing Rate
2published by the Federal Reserve Bank of New York every
3business day.
4    (b) Companies and persons subject to surveillance. The
5Director, for the purposes of ascertaining the nonfinancial
6business practices, performance, and operations of any person
7subject to the Director's jurisdiction or within the
8marketplace, may engage in market conduct actions or market
9analysis relating to:
10        (1) any company transacting or being organized to
11    transact business in this State;
12        (2) any person engaged in or proposing to be engaged
13    in the organization, promotion, or solicitation of shares
14    or capital contributions to or aiding in the formation of
15    a company;
16        (3) any person having a written or oral contract
17    pertaining to the management or control of a company as
18    general agent, managing agent, or attorney-in-fact;
19        (4) any licensed or registered producer, firm,
20    pharmacy benefit manager, administrator, or any person
21    making application for any license, certificate, or
22    registration;
23        (5) any person engaged in the business of adjusting
24    losses or financing premiums; or
25        (6) any person, organization, trust, or corporation
26    having custody or control of information reasonably
		HB3799 Engrossed	- 5 -	LRB104 11270 BAB 21355 b
1    related to the operation, performance, or conduct of a
2    company or person subject to the Director's jurisdiction,
3    but only as to the operation, performance, or conduct of a
4    company or person subject to the Director's jurisdiction.
5    (c) Market analysis and market conduct actions.
6        (1) The Director may perform market analysis by
7    gathering and analyzing information from data currently
8    available to the Director, information from surveys, data
9    call responses, or reports that are submitted to the
10    Director, information collected by the NAIC, and
11    information from a variety of other sources to develop a
12    baseline understanding of the marketplace and to identify
13    for further review companies or practices that deviate
14    from the norm or that may pose a potential risk to
15    insurance consumers. The Director shall use the most
16    recent NAIC Market Regulation Handbook as a guide in
17    performing market analysis. The Director may also employ
18    other guidelines or procedures as the Director may deem
19    appropriate.
20        (2) The Director may initiate a market conduct action
21    subject to the following:
22            (A) If the Director determines that further
23        inquiry into a particular person or practice is
24        needed, then the Director may consider undertaking a
25        market conduct action. The Director shall inform the
26        examinee of the initiation of the market conduct
		HB3799 Engrossed	- 6 -	LRB104 11270 BAB 21355 b
1        action and shall use the most recent NAIC Market
2        Regulation Handbook as a guide in performing the
3        market conduct action. The Director may also employ
4        other guidelines or procedures as the Director may
5        deem appropriate.
6            (B) For an examination, the Director shall conduct
7        a pre-examination conference with the examinee to
8        clarify expectations before commencement of the
9        examination. At the pre-examination conference, the
10        Director or the market conduct surveillance personnel
11        shall disclose the basis of the examination, including
12        the statutes, regulations, or business practices at
13        issue. The Director shall provide at least 30 days'
14        advance notice of the date of the pre-examination
15        conference unless circumstances warrant that the
16        examination proceed more quickly.
17            (C) The Director may coordinate a market conduct
18        action and findings of this State with market conduct
19        actions and findings of other states.
20        (3) Nothing in this Section requires the Director to
21    undertake market analysis before initiating any market
22    conduct action.
23        (4) Nothing in this Section restricts the Director to
24    the type of market conduct action he or she initially
25    selected.
26        (5) A regulated person is required to respond to a
		HB3799 Engrossed	- 7 -	LRB104 11270 BAB 21355 b
1    market analysis data call or to an information request in
2    a market conduct action on the terms and conditions
3    established by the Director. The Department shall
4    establish reasonable timelines that are commensurate with
5    the volume and nature of the data required to be collected
6    in the information request.
7        (6) Without limiting the contents of any examination
8    report, market conduct actions taken as a result of a
9    market analysis shall focus primarily on the general
10    business practices and compliance activities of companies
11    or persons rather than identifying infrequent or
12    unintentional random errors that do not cause significant
13    consumer harm. The Director may give a company or person
14    an opportunity to resolve matters that are identified as a
15    result of a market analysis to the Director's satisfaction
16    before undertaking a market conduct action against the
17    company or person.
18    (d) Access to books and records. Every examinee and its
19officers, directors, and agents must provide to the Director
20convenient and free access [at all reasonable hours at its ]
21[office or location] to all books, records, and documents and
22any or all papers relating to the business, performance,
23operations, and affairs of the examinee or its affiliates. The
24officers, directors, and agents of the examinee must
25facilitate the market conduct action and aid in the action so
26far as it is in their power to do so. The Director and any
		HB3799 Engrossed	- 8 -	LRB104 11270 BAB 21355 b
1authorized market conduct surveillance personnel have the
2power to administer oaths and examine under oath any person
3relevant to the business of the examinee. A failure to produce
4requested books, records, or documents by the deadline shall
5not be a violation until after the later of:
6        (1) 5 business days after the initial response
7    deadline set by the Director or authorized personnel; or
8        (2) an extended deadline granted by the Director or
9    authorized personnel.
10    (e) Examination report. The market conduct surveillance
11personnel designated by the Director under Section 402 must
12make a full and true report of every examination made by them
13that contains only facts ascertained from the books, papers,
14records, documents, and other evidence obtained by
15investigation and examined by them or ascertained from the
16testimony of officers, agents, or other persons examined under
17oath concerning the business, affairs, conduct, and
18performance of the examinee. The report of examination must be
19verified by the oath of the examiner in charge thereof, and
20when so verified is prima facie evidence in any action or
21proceeding in the name of the State against the examinee, its
22officers, directors, or agents upon the facts stated therein.
23    (f) Examinee response to examination report. The
24Department and the examinee shall comply with the following
25timeline, unless a mutual agreement is reached to modify the
26timeline:
		HB3799 Engrossed	- 9 -	LRB104 11270 BAB 21355 b
1        (1) The Department shall deliver a draft report to the
2    examinee as soon as reasonably practicable. Nothing in
3    this Section prevents the Department from sharing an
4    earlier draft of the report with the examinee before
5    confirming that the examination is completed.
6        (2) If the examinee chooses to respond with written
7    submissions or rebuttals, then the examinee must do so
8    within 30 days after receipt of any draft report delivered
9    after the completion of the examination.
10        (3) As soon as reasonably practicable after receipt of
11    any written submissions or rebuttals, the Department shall
12    issue a final report. Whenever the Department has made
13    substantive changes to a previously shared draft report,
14    unless those changes remove part or all of an alleged
15    violation or were proposed by the examinee, the Department
16    shall deliver the revised version to the examinee as a new
17    draft and shall allow the examinee 30 days to respond
18    before the Department issues a final report.
19        (4) The examinee shall, within 10 days after the
20    issuance of the final report, accept the final report or
21    request a hearing in writing, unless granted an extension
22    by mutual agreement. Failure to take either action within
23    10 days or the mutually agreed extension shall be deemed
24    an acceptance of the final report. If the examinee accepts
25    the examination report, the Director shall continue to
26    hold the content of the examination report as private and
		HB3799 Engrossed	- 10 -	LRB104 11270 BAB 21355 b
1    confidential for a period of 30 days. Thereafter, the
2    Director shall open the final report for public
3    inspection.
4    (g) Hearing; final examination report. Notwithstanding
5anything to the contrary in this Code or Department rules, if
6the examinee requests a hearing, then the following procedures
7apply:
8        (1) The examinee must request the hearing in writing
9    and must specify the issues in the final report that the
10    examinee is challenging. The examinee is limited to
11    challenging the issues that were previously challenged in
12    the examinee's written submission and rebuttal or
13    supplemental submission and rebuttal pursuant to
14    paragraphs (2) and (3) of subsection (f).
15        (2) Except as permitted in paragraphs (3) and (8) of
16    this subsection, the hearing shall be limited to the
17    written arguments submitted by the parties to the
18    designated hearing officer. The designated hearing officer
19    may, however, grant a live hearing upon the request of
20    either party.
21        (3) Discovery is limited to the market conduct
22    surveillance personnel's work papers that are relevant to
23    the issues the examinee is challenging. The relevant
24    market conduct surveillance personnel's work papers shall
25    be admitted into the record. No other forms of discovery,
26    including depositions and interrogatories, are allowed,
		HB3799 Engrossed	- 11 -	LRB104 11270 BAB 21355 b
1    except upon written agreement of the examinee and the
2    Department when necessary to conduct a fair hearing or as
3    otherwise provided in this subsection.
4        (4) Only the examinee and the Department may submit
5    written arguments.
6        (5) The examinee must submit its written argument and
7    any supporting evidence within 30 days after the
8    Department serves a formal notice of hearing.
9        (6) The Department must submit its written response
10    and any supporting evidence within 30 days after the
11    examinee submits its written argument.
12        (7) The designated hearing officer may allow
13    additional written submissions if necessary or useful to
14    the fair resolution of the hearing.
15        (8) If either the examinee or the Department submit
16    written testimony or affidavits, then the opposing party
17    shall be given the opportunity to cross-examine the
18    witness and to submit the cross-examination to the hearing
19    officer before a decision.
20        (9) The Director shall issue a decision accompanied by
21    findings and conclusions. The Director's order is a final
22    administrative decision and shall be served upon the
23    examinee together with a copy of the final report within
24    90 days after the conclusion of the hearing. The hearing
25    is deemed concluded on the later of the last date of any
26    live hearing or the final deadline date for written
		HB3799 Engrossed	- 12 -	LRB104 11270 BAB 21355 b
1    submissions to the hearing officer, including any
2    continuances or supplemental briefings permitted by the
3    hearing officer.
4        (10) Any portion of the final examination report that
5    was not challenged by the examinee is incorporated into
6    the decision of the Director.
7        (11) Findings of fact and conclusions of law in the
8    Director's final administrative decision are prima facie
9    evidence in any legal or regulatory action.
10        (12) If an examinee has requested a hearing, then the
11    Director shall continue to hold the final report and any
12    related decision as private and confidential for a period
13    of 49 days after the final administrative decision. After
14    the 49-day period expires, the Director shall open the
15    final report and any related decision for public
16    inspection if a court of competent jurisdiction has not
17    stayed its publication.
18    (h) Disclosure. So long as the recipient agrees to and
19verifies in writing its legal authority to hold the
20information confidential in a manner consistent with this
21Section, nothing in this Section prevents the Director from
22disclosing at any time the content of an examination report,
23preliminary examination report, or results, or any matter
24relating to a report or results, to:
25        (1) the insurance regulatory authorities of any other
26    state; or
		HB3799 Engrossed	- 13 -	LRB104 11270 BAB 21355 b
1        (2) any agency or office of the federal government.
2    (i) Confidentiality.
3        (1) The Director and any other person in the course of
4    market conduct surveillance shall keep confidential all
5    documents, including working papers, third-party models,
6    or products; complaint logs; copies of any documents
7    created, produced, obtained by, or disclosed to the
8    Director, market conduct surveillance personnel, or any
9    other person in the course of market conduct surveillance
10    conducted pursuant to this Section; and all documents
11    obtained by the NAIC pursuant to this Section. The
12    documents shall remain confidential after the termination
13    of the market conduct surveillance, are not subject to
14    subpoena, are not subject to discovery or admissible as
15    evidence in private civil litigation, are not subject to
16    disclosure under the Freedom of Information Act, and must
17    not be made public at any time or used by the Director or
18    any other person, except as provided in paragraphs (3),
19    (4), and (6) of this subsection (i) and in subsection (k).
20        (2) The Director and any other person in the course of
21    market conduct surveillance shall keep confidential any
22    self-evaluation or voluntary compliance program documents
23    disclosed to the Director or other person by an examinee
24    and the data collected via the NAIC market conduct annual
25    statement. The documents are not subject to subpoena, are
26    not subject to discovery or admissible as evidence in
		HB3799 Engrossed	- 14 -	LRB104 11270 BAB 21355 b
1    private civil litigation, are not subject to disclosure
2    under the Freedom of Information Act, and they shall not
3    be made public or used by the Director or any other person,
4    except as provided in paragraphs (3) and (4) of this
5    subsection (i), in subsection (k), or in Section 155.35.
6    Nothing in this Section shall supersede the restrictions
7    on disclosure under Section 155.35.
8        (3) Notwithstanding paragraphs (1) and (2) of this
9    subsection (i), and consistent with paragraph (5) of this
10    subsection (i), in order to assist in the performance of
11    the Director's duties, the Director may:
12            (A) share documents, materials, communications, or
13        other information, including the confidential and
14        privileged documents, materials, or information
15        described in this subsection (i), with other State,
16        federal, alien, and international regulatory agencies
17        and law enforcement authorities and the NAIC, its
18        affiliates, and subsidiaries, if the recipient agrees
19        to and verifies in writing its legal authority to
20        maintain the confidentiality and privileged status of
21        the document, material, communication, or other
22        information;
23            (B) receive documents, materials, communications,
24        or information, including otherwise confidential and
25        privileged documents, materials, or information, from
26        the NAIC and its affiliates or subsidiaries, and from
		HB3799 Engrossed	- 15 -	LRB104 11270 BAB 21355 b
1        regulatory and law enforcement officials of other
2        State, federal, alien, or international jurisdictions,
3        authorities, and agencies, and shall maintain as
4        confidential or privileged any document, material,
5        communication, or information received with notice or
6        the understanding that it is confidential or
7        privileged under the laws of the jurisdiction that is
8        the source of the document, material, communication,
9        or information; and
10            (C) enter into agreements governing the sharing
11        and use of information consistent with this Section.
12        (4) Nothing in this Section limits:
13            (A) the Director's authority to use, if consistent
14        with subsection (5) of Section 188.1, as applicable,
15        any final or preliminary examination report, any
16        market conduct surveillance or examinee work papers or
17        other documents, or any other information discovered
18        or developed during the course of any market conduct
19        surveillance in the furtherance of any legal or
20        regulatory action initiated by the Director that the
21        Director may, in the Director's sole discretion, deem
22        appropriate; however, confidential or privileged
23        information about a company or person that is used in
24        the legal or regulatory action shall not be made
25        public except by order of a court of competent
26        jurisdiction or with the written consent of the
		HB3799 Engrossed	- 16 -	LRB104 11270 BAB 21355 b
1        company or person; or
2            (B) the ability of an examinee to conduct
3        discovery in accordance with paragraph (3) of
4        subsection (g).
5        (5) Disclosure to or by the Director of documents,
6    materials, communications, or information required as part
7    of any type of market conduct surveillance does not waive
8    any applicable privilege or claim of confidentiality in
9    the documents, materials, communications, or information.
10        (6) Notwithstanding the confidentiality requirements
11    of this Section or otherwise imposed by State law, if the
12    Director performs a data call, other than the collection
13    of data for the NAIC market conduct annual statement, the
14    Director may make the results of the data call available
15    for public inspection in an aggregated format that does
16    not disclose information or data attributed to any
17    specific company or person, including the name of any
18    company or person who responded to the data call, so long
19    as the Director provides all companies or persons that
20    responded to the data call 15 days' notice identifying the
21    information to be publicly released. Nothing in this
22    Section requires the Director to publish results from any
23    data call. A data call does not need a warrant or a final 
24    report. Failure to comply with a data call may result in a 
25    fine up to $10,000 per day per offense.
26    (j) Corrective actions.
		HB3799 Engrossed	- 17 -	LRB104 11270 BAB 21355 b
1        (1) As a result of any market conduct action, the
2    Director may take any action the Director considers
3    necessary or appropriate in accordance with the report of
4    examination or any hearing thereon for acts in violation
5    of any law, rule, or prior lawful order of the Director. No
6    corrective action, including a penalty, shall be ordered
7    with respect to violations in transactions with consumers
8    or other entities that are isolated occurrences or that
9    occur with such low frequency as to fall below a
10    reasonable margin of error. Such actions include, but are
11    not limited to:
12            (A) requiring the regulated person to undertake
13        corrective actions to cease and desist an identified
14        violation or institute processes and practices to
15        comply with applicable standards;
16            (B) requiring reimbursement or restitution of any
17        actual losses or damages to persons harmed by the
18        regulated person's violation with interest from the
19        date that the actual loss or damage was incurred,
20        which shall be calculated at the SOFR rate applicable
21        on the date that the actual loss or damage was incurred
22        plus 2%; and
23            (C) imposing civil penalties as provided in this
24        subsection (j).
25        (2) The Director may order a penalty of up to $2,000
26    for each violation of any law, rule, or prior lawful order
		HB3799 Engrossed	- 18 -	LRB104 11270 BAB 21355 b
1    of the Director. Any failure to respond to an information
2    request in a market conduct action or violation of
3    subsection (d) may carry a fine of up to $10,000 per day 
4    per offense [$1,000 per day up to a maximum of $50,000]. The 
5    penalty shall be paid into the Insurance Producer 
6    Administration Fund. Fines and penalties shall be
7    consistent, reasonable, and justifiable, and the Director
8    may consider reasonable criteria in ordering the fines and
9    penalties, including, but not limited to, consumer harm,
10    the intentionality of any violations, or remedial actions
11    already undertaken by the examinee. The Director shall
12    communicate to the examinee the basis for any assessed
13    fine or penalty.
14        (3) If any other provision of this Code or any other
15    law or rule under the Director's jurisdiction prescribes
16    an amount or range of monetary penalty for a violation of a
17    particular statute or rule or a maximum penalty in the
18    aggregate for repeated violations, the Director shall
19    assess penalties pursuant to the terms of the statute or
20    rule allowing the largest penalty.
21        (4) If any other provision of this Code or any other
22    law or rule under the Director's jurisdiction prescribes
23    or specifies a method by which the Director is to
24    determine a violation, then compliance with the process
25    set forth herein shall be deemed to comply with the method
26    prescribed or specified in the other provision.
		HB3799 Engrossed	- 19 -	LRB104 11270 BAB 21355 b
1        (5) If the Director imposes any sanctions or
2    corrective actions described in subparagraphs (A) through
3    (C) of paragraph (1) of this subsection (j) based on the
4    final report, the Director shall include those actions in
5    a proposed stipulation and consent order enclosed with the
6    final report issued to the examinee under subsection (f).
7    The examinee shall have 10 days to sign the order or
8    request a hearing in writing on the actions proposed in
9    the order regardless of whether the examinee requests a
10    hearing on the contents of the report under subsection
11    (f). If the examinee does not sign the order or request a
12    hearing on the proposed actions or the final report within
13    10 days, the Director may issue a final order imposing the
14    sanctions or corrective actions. Nothing in this Section
15    prevents the Department from sharing an earlier draft of
16    the proposed order with the examinee before issuing the
17    final report.
18        (6) If the examinee accepts the order and the final
19    report, the Director shall hold the content of the order
20    and report as private and confidential for a period of 30
21    days. Thereafter, the Director shall open the order and
22    report for public inspection.
23        (7) If the examinee makes a timely request for a
24    hearing on the order, the request must specify the
25    sanctions or corrective actions in the order that the
26    examinee is challenging. Any hearing shall follow the
		HB3799 Engrossed	- 20 -	LRB104 11270 BAB 21355 b
1    procedures set forth in paragraphs (2) through (7) of
2    subsection (g).
3        (8) If the examinee has also requested a hearing on
4    the contents of the report, then that hearing shall be
5    consolidated with the hearing on the order. The Director
6    shall not impose sanctions or corrective actions under
7    this Section until the conclusion of the hearing.
8        (9) The Director shall issue a decision accompanied by
9    findings and conclusions along with any corrective actions
10    or sanctions. Any sanctions or corrective actions shall be
11    based on the final report accepted by the examinee or
12    adopted by the Director under paragraph (9) of subsection
13    (g). The Director's order is a final administrative
14    decision and shall be served upon the examinee together
15    with a copy of the final report within 90 days after the
16    conclusion of the hearing or within 10 days after the
17    examinee's acceptance of the proposed order and final
18    report, as applicable. The hearing is deemed concluded on
19    the later of the last date of any live hearing or the final
20    deadline date for written submissions to the hearing
21    officer, including any continuances or supplemental
22    briefings permitted by the hearing officer.
23        (10) If an examinee has requested a hearing under this
24    subsection (i), the Director shall continue to hold the
25    final order and examination report as private and
26    confidential for a period of 49 days after the final
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1    administrative decision. After the 49-day period expires,
2    the Director shall open the final order and examination
3    report if a court of competent jurisdiction has not stayed
4    their publication.
5    (k) National market conduct databases. The Director shall
6collect and report market data to the NAIC's market
7information systems, including, but not limited to, the
8Complaint Database System, the Examination Tracking System,
9and the Regulatory Information Retrieval System, or other
10successor NAIC products as determined by the Director.
11Information collected and maintained by the Department for
12inclusion in these NAIC market information systems shall be
13compiled in a manner that meets the requirements of the NAIC.
14Confidential or privileged information collected, reported, or
15maintained under this subsection (k) shall be subject to the
16protections and restrictions on disclosure in subsection (i).
17    (l) Immunity of market conduct surveillance personnel.
18        (1) No cause of action shall arise nor shall any
19    liability be imposed against the Director, the Director's
20    authorized representatives, market conduct surveillance
21    personnel, or an examiner appointed by the Director for
22    any statements made or conduct performed in good faith
23    while carrying out the provisions of this Section.
24        (2) No cause of action shall arise nor shall any
25    liability be imposed against any person for the act of
26    communicating or delivering information or data to the
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1    Director, the Director's authorized representative, market
2    conduct surveillance personnel, or examiner pursuant to an
3    examination made under this Section, if the act of
4    communication or delivery was performed in good faith and
5    without fraudulent intent or the intent to deceive.
6        (3) A person identified in paragraph (1) of this
7    subsection (l) shall be entitled to an award of attorney's
8    fees and costs if he or she is the prevailing party in a
9    civil cause of action for libel, slander, or any other
10    relevant tort arising out of activities in carrying out
11    the provisions of this Section and the party bringing the
12    action was not substantially justified in doing so. As
13    used in this paragraph, a proceeding is substantially
14    justified if it had a reasonable basis in law or fact at
15    the time it was initiated.
16        (4) This subsection (l) does not abrogate or modify in
17    any way any common law or statutory privilege or immunity
18    heretofore enjoyed by any person identified in paragraph
19    (1) of this subsection (l).
20(Source: P.A. 103-897, eff. 1-1-25.)
21    (215 ILCS 5/132.3)  (from Ch. 73, par. 744.3)
22    Sec. 132.3. Authority, scope, and scheduling of
23examinations.
24    (a) The Director or any of his examiners may conduct an
25examination of any company as often as the Director, in his
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1sole discretion, deems appropriate, but shall, at a minimum,
2conduct an examination of every insurer authorized or licensed
3in this State not less frequently than once every 5 years. In
4scheduling and determining the nature, scope, and frequency of
5the examinations, the Director shall consider the results of
6financial statement analyses and ratios, changes in management
7or ownership, actuarial opinions, reports of independent
8certified public accountants and other criteria set forth in
9the Examiners' Handbook adopted by the National Association of
10Insurance Commissioners and in effect when the Director
11exercises discretion under this subsection.
12    (b) For purposes of completing an examination of any
13company, the Director may examine or investigate any person,
14or the business of any person, insofar as the examination or
15investigation is, in the sole discretion of the Director,
16necessary or material to the examination of the company.
17    (b-5) The Director may issue a data call to any company to 
18collect any information within that company or its affiliate's 
19control. If an insurer fails to comply with the data call, the 
20Director may assess a fine up to $10,000 per day per offense. A 
21data call does not require an examination warrant or a final 
22report. Any information provided through a data call shall be 
23treated as confidential and privileged. The information shall 
24not be subject to subpoena or discovery and shall not be 
25admissible into evidence in any private civil action. No 
26waiver of privilege or confidentiality shall occur as a result 
		HB3799 Engrossed	- 24 -	LRB104 11270 BAB 21355 b
1of responding to such data call.
2    (c) In lieu of an examination of any foreign or alien
3insurer authorized or licensed in this State, the Director may
4accept an examination report on the company as prepared by the
5insurance department for the company's state of domicile or
6port-of-entry state until January 1, 1994. Thereafter, those
7reports may only be accepted if (1) the insurance department
8was at the time of the examination accredited under the
9National Association of Insurance Commissioners' Financial
10Regulation Standards and Accreditation Program, (2) the
11examination is performed under the supervision of an
12accredited insurance department or with the participation of
13one or more examiners who are employed by an accredited state
14insurance department, and who, after a review of the
15examination work papers and report, state under oath that the
16examination was performed in a manner consistent with the
17standards and procedures required by their insurance
18department, or (3) the Director otherwise determines that the
19examination was performed in a manner substantially similar to
20the standards and procedures required by Sections 132.1
21through 132.6 of this Code.
22    (d) Any company that or person who violates or aids and 
23abets any violation of a written order issued under this 
24Section is guilty of a business offense and may be fined up to 
25$10,000 per day per offense. The penalty shall be paid into the 
26Insurance Producer Administration Fund.
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1(Source: P.A. 89-97, eff. 7-7-95.)
2    (215 ILCS 5/143.15)  (from Ch. 73, par. 755.15)
3    Sec. 143.15. Mailing of cancellation notice. All notices
4of cancellation of insurance as defined in subsections (a),
5(b) and (c) of Section 143.13 must be mailed at least 30 days
6prior to the effective date of cancellation to the named
7insured if the effective date of cancellation is within the 
8first 60 days of coverage. After the coverage has been 
9effective for 61 days or more, all notices must be mailed at 
10least 60 days prior to the effective date of cancellation. 
11However [; however], if cancellation is for nonpayment of
12premium, the notice of cancellation must be mailed at least 10
13days before the effective date of the cancellation to the last
14mailing address known to the company. All notices of
15cancellation to the named insured shall include a specific
16explanation of the reason or reasons for cancellation. For
17purposes of this Section, the mortgagee or lien holder, if
18known, may opt to accept notification electronically.
19(Source: P.A. 100-475, eff. 1-1-18.)
20    (215 ILCS 5/143.17)  (from Ch. 73, par. 755.17)
21    Sec. 143.17. Notice of intention not to renew.
22    a. No company shall fail to renew any policy of insurance,
23as defined in subsections (a), (b), (c), and (h) of Section
24143.13, to which Section 143.11 applies, unless it shall send
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1by mail to the named insured at least 60 [30] days advance notice
2of its intention not to renew. The company shall maintain
3proof of mailing of such notice on a recognized U.S. Post
4Office form or a form acceptable to the U. S. Post Office or
5other commercial mail delivery service. The nonrenewal shall
6not become effective until at least 60 [30] days from the proof
7of mailing date of the notice to the name insured.
8Notification shall also be sent to the insured's broker, if
9known, or the agent of record, if known, and to the last known
10mortgagee or lien holder. For purposes of this Section, the
11mortgagee or lien holder, insured's broker, or the agent of
12record may opt to accept notification electronically. However,
13where cancellation is for nonpayment of premium, the notice of
14cancellation must be mailed at least 10 days before the
15effective date of the cancellation.
16    b. This Section does not apply if the company has
17manifested its willingness to renew directly to the named
18insured. Such written notice shall specify the premium amount
19payable, including any premium payment plan available, and the
20name of any person or persons, if any, authorized to receive
21payment on behalf of the company. If no person is so
22authorized, the premium notice shall so state.
23    b-5. This Section does not apply if the company manifested
24its willingness to renew directly to the named insured.
25However, no company may impose changes in deductibles or
26coverage for any policy forms applicable to an entire line of
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1business enumerated in subsections (a), (b), (c), and (h) of
2Section 143.13 to which Section 143.11 applies unless the
3company mails to the named insured written notice of the
4change in deductible or coverage at least 60 days prior to the
5renewal or anniversary date. Notice shall also be sent to the
6insured's broker, if known, or the agent of record.
7    c. Should a company fail to comply with (a) or (b) of this
8Section, the policy shall terminate only on the effective date
9of any similar insurance procured by the insured with respect
10to the same subject or location designated in both policies.
11    d. Renewal of a policy does not constitute a waiver or
12estoppel with respect to grounds for cancellation which
13existed before the effective date of such renewal.
14    e. In all notices of intention not to renew any policy of
15insurance, as defined in Section 143.11 the company shall
16provide the named insured a specific explanation of the
17reasons for nonrenewal.
18    f. For purposes of this Section, the insured's broker, if
19known, or the agent of record and the mortgagee or lien holder
20may opt to accept notification electronically.
21(Source: P.A. 100-475, eff. 1-1-18.)
22    (215 ILCS 5/Art. XLVIII heading new)
23ARTICLE XLVIII.  CLIMATE RISK DISCLOSURE
24    (215 ILCS 5/1801 new)
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1    Sec. 1801. Short title. This Article may be cited as the 
2Climate Risk Disclosure Law.
3    (215 ILCS 5/1805 new)
4    Sec. 1805. Purpose. The purpose of this Article is to 
5enhance transparency about how insurers manage climate-related 
6risks and to clarify the Department's authority to require 
7companies to participate in climate surveys issued by entities 
8including but not limited to the Department and the National 
9Association of Insurance Commissioners. This Article shall be 
10liberally interpreted to carry into effect the intent of this 
11Section.
12    (215 ILCS 5/1810 new)
13    Sec. 1810. Applicability. This Article applies to all 
14companies licensed in Illinois under Classes 2 and 3 of 
15Section 4 of this Code that write $100,000,000 or more 
16annually in premiums. This threshold may be altered by rule.
17    (215 ILCS 5/1815 new)
18    Sec. 1815. Climate disclosure survey participation. All 
19insurers subject to this Article shall, upon direction from 
20the Department, participate in National Association of 
21Insurance Commissioners issued climate surveys.