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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,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Sections 132, 132.3, 143.15, and 143.17 and by adding
6
Article 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
11
to 2 or more regulated companies or persons seeking existing
12
data or other existing information to be provided within a
13
reasonable time period for a narrow and targeted regulatory
14
oversight purpose for market analysis. "Data call" does not
15
include an information request in a market conduct action or
16
any data or information that the Director shall or may
17
specifically require under any other law, except as provided
18
by the other law.
19

"Desk examination" means an examination that is conducted
20
by market conduct surveillance personnel at a location other
21
than the regulated company's or person's premises. "Desk
22
examination" includes an examination performed at the
23
Department's offices with the company or person providing

HB3799 Engrossed
- 2 -
LRB104 11270 BAB 21355 b
1
requested documents by hard copy, microfiche, or discs or
2
other electronic media for review without an on-site
3
examination.
4

"Market analysis" means a process whereby market conduct
5
surveillance personnel collect and analyze information from
6
filed schedules, surveys, required reports, data calls, and
7
other sources to develop a baseline understanding of the
8
marketplace and to identify patterns or practices of regulated
9
persons that deviate significantly from the norm or that may
10
pose a potential risk to insurance consumers.
11

"Market conduct action" means any activity, other than
12
market analysis, that the Director may initiate to assess and
13
address the market and nonfinancial practices of regulated
14
persons, including market conduct examinations. The
15
Department's consumer complaint process outlined in 50 Ill.
16
Adm. Code 926 is not a market conduct action for purposes of
17
this Section; however, the Department may initiate market
18
conduct actions based on information gathered during that
19
process. "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
4
type of examination, other than a financial examination, that
5
assesses a regulated person's compliance with the laws, rules,
6
and regulations applicable to the examinee. "Market conduct
7
examination" includes comprehensive examinations, targeted
8
examinations, and follow-up examinations, which may be
9
conducted as desk examinations, on-site examinations, or a
10
combination of those 2 methods.
11

"Market conduct surveillance" means market analysis or a
12
market conduct action.
13

"Market conduct surveillance personnel" means those
14
individuals employed or retained by the Department and
15
designated by the Director to collect, analyze, review, or act
16
on information in the insurance marketplace that identifies
17
patterns or practices of persons subject to the Director's
18
jurisdiction. "Market conduct surveillance personnel" includes
19
all persons identified as an examiner in the insurance laws or
20
rules of this State if the Director has designated them to
21
assist her or him in ascertaining the nonfinancial business
22
practices, performance, and operations of a company or person
23
subject to the Director's jurisdiction.
24

"On-site examination" means an examination conducted at
25
the company's or person's home office or the location where
26
the records under review are stored.

HB3799 Engrossed
- 4 -
LRB104 11270 BAB 21355 b
1

"SOFR rate" means the Secured Overnight Financing Rate
2
published by the Federal Reserve Bank of New York every
3
business day.
4

(b) Companies and persons subject to surveillance. The
5
Director, for the purposes of ascertaining the nonfinancial
6
business practices, performance, and operations of any person
7
subject to the Director's jurisdiction or within the
8
marketplace, may engage in market conduct actions or market
9
analysis 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
19
officers, directors, and agents must provide to the Director
20
convenient and free access
at all reasonable hours at its
21
office or location
to all books, records, and documents and
22
any or all papers relating to the business, performance,
23
operations, and affairs of the examinee
or its affiliates
. The
24
officers, directors, and agents of the examinee must
25
facilitate the market conduct action and aid in the action so
26
far as it is in their power to do so. The Director and any

HB3799 Engrossed
- 8 -
LRB104 11270 BAB 21355 b
1
authorized market conduct surveillance personnel have the
2
power to administer oaths and examine under oath any person
3
relevant to the business of the examinee. A failure to produce
4
requested books, records, or documents by the deadline shall
5
not 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
11
personnel designated by the Director under Section 402 must
12
make a full and true report of every examination made by them
13
that contains only facts ascertained from the books, papers,
14
records, documents, and other evidence obtained by
15
investigation and examined by them or ascertained from the
16
testimony of officers, agents, or other persons examined under
17
oath concerning the business, affairs, conduct, and
18
performance of the examinee. The report of examination must be
19
verified by the oath of the examiner in charge thereof, and
20
when so verified is prima facie evidence in any action or
21
proceeding in the name of the State against the examinee, its
22
officers, directors, or agents upon the facts stated therein.
23

(f) Examinee response to examination report. The
24
Department and the examinee shall comply with the following
25
timeline, unless a mutual agreement is reached to modify the
26
timeline:

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
5
anything to the contrary in this Code or Department rules, if
6
the examinee requests a hearing, then the following procedures
7
apply:
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
19
verifies in writing its legal authority to hold the
20
information confidential in a manner consistent with this
21
Section, nothing in this Section prevents the Director from
22
disclosing at any time the content of an examination report,
23
preliminary examination report, or results, or any matter
24
relating 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.

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(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

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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
6
collect and report market data to the NAIC's market
7
information systems, including, but not limited to, the
8
Complaint Database System, the Examination Tracking System,
9
and the Regulatory Information Retrieval System, or other
10
successor NAIC products as determined by the Director.
11
Information collected and maintained by the Department for
12
inclusion in these NAIC market information systems shall be
13
compiled in a manner that meets the requirements of the NAIC.
14
Confidential or privileged information collected, reported, or
15
maintained under this subsection (k) shall be subject to the
16
protections 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
23
examinations.
24

(a) The Director or any of his examiners may conduct an
25
examination of any company as often as the Director, in his

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1
sole discretion, deems appropriate, but shall, at a minimum,
2
conduct an examination of every insurer authorized or licensed
3
in this State not less frequently than once every 5 years. In
4
scheduling and determining the nature, scope, and frequency of
5
the examinations, the Director shall consider the results of
6
financial statement analyses and ratios, changes in management
7
or ownership, actuarial opinions, reports of independent
8
certified public accountants and other criteria set forth in
9
the Examiners' Handbook adopted by the National Association of
10
Insurance Commissioners and in effect when the Director
11
exercises discretion under this subsection.
12

(b) For purposes of completing an examination of any
13
company, the Director may examine or investigate any person,
14
or the business of any person, insofar as the examination or
15
investigation is, in the sole discretion of the Director,
16
necessary or material to the examination of the company.
17

(b-5) The Director may issue a data call to any company to
18
collect any information within that company or its affiliate's
19
control. If an insurer fails to comply with the data call, the
20
Director may assess a fine up to $10,000 per day per offense. A
21
data call does not require an examination warrant or a final
22
report. Any information provided through a data call shall be
23
treated as confidential and privileged. The information shall
24
not be subject to subpoena or discovery and shall not be
25
admissible into evidence in any private civil action. No
26
waiver of privilege or confidentiality shall occur as a result

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1
of responding to such data call.

2

(c) In lieu of an examination of any foreign or alien
3
insurer authorized or licensed in this State, the Director may
4
accept an examination report on the company as prepared by the
5
insurance department for the company's state of domicile or
6
port-of-entry state until January 1, 1994. Thereafter, those
7
reports may only be accepted if (1) the insurance department
8
was at the time of the examination accredited under the
9
National Association of Insurance Commissioners' Financial
10
Regulation Standards and Accreditation Program, (2) the
11
examination is performed under the supervision of an
12
accredited insurance department or with the participation of
13
one or more examiners who are employed by an accredited state
14
insurance department, and who, after a review of the
15
examination work papers and report, state under oath that the
16
examination was performed in a manner consistent with the
17
standards and procedures required by their insurance
18
department, or (3) the Director otherwise determines that the
19
examination was performed in a manner substantially similar to
20
the standards and procedures required by Sections 132.1
21
through 132.6 of this Code.
22

(d) Any company that or person who violates or aids and
23
abets any violation of a written order issued under this
24
Section 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
26
Insurance 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
4
of cancellation of insurance as defined in subsections (a),
5
(b) and (c) of Section 143.13 must be mailed at least 30 days
6
prior to the effective date of cancellation to the named
7
insured
if the effective date of cancellation is within the
8
first 60 days of coverage. After the coverage has been
9
effective for 61 days or more, all notices must be mailed at
10
least 60 days prior to the effective date of cancellation.
11
However

; however
, if cancellation is for nonpayment of
12
premium, the notice of cancellation must be mailed at least 10
13
days before the effective date of the cancellation to the last
14
mailing address known to the company. All notices of
15
cancellation to the named insured shall include a specific
16
explanation of the reason or reasons for cancellation. For
17
purposes of this Section, the mortgagee or lien holder, if
18
known, 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,
23
as defined in subsections (a), (b), (c), and (h) of Section
24
143.13, to which Section 143.11 applies, unless it shall send

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1
by mail to the named insured at least
60

30
days advance notice
2
of its intention not to renew. The company shall maintain
3
proof of mailing of such notice on a recognized U.S. Post
4
Office form or a form acceptable to the U. S. Post Office or
5
other commercial mail delivery service. The nonrenewal shall
6
not become effective until at least
60

30
days from the proof
7
of mailing date of the notice to the name insured.
8
Notification shall also be sent to the insured's broker, if
9
known, or the agent of record, if known, and to the last known
10
mortgagee or lien holder. For purposes of this Section, the
11
mortgagee or lien holder, insured's broker, or the agent of
12
record may opt to accept notification electronically. However,
13
where cancellation is for nonpayment of premium, the notice of
14
cancellation must be mailed at least 10 days before the
15
effective date of the cancellation.
16

b. This Section does not apply if the company has
17
manifested its willingness to renew directly to the named
18
insured. Such written notice shall specify the premium amount
19
payable, including any premium payment plan available, and the
20
name of any person or persons, if any, authorized to receive
21
payment on behalf of the company. If no person is so
22
authorized, the premium notice shall so state.
23

b-5. This Section does not apply if the company manifested
24
its willingness to renew directly to the named insured.
25
However, no company may impose changes in deductibles or
26
coverage for any policy forms applicable to an entire line of

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1
business enumerated in subsections (a), (b), (c), and (h) of
2
Section 143.13 to which Section 143.11 applies unless the
3
company mails to the named insured written notice of the
4
change in deductible or coverage at least 60 days prior to the
5
renewal or anniversary date. Notice shall also be sent to the
6
insured's broker, if known, or the agent of record.
7

c. Should a company fail to comply with (a) or (b) of this
8
Section, the policy shall terminate only on the effective date
9
of any similar insurance procured by the insured with respect
10
to the same subject or location designated in both policies.
11

d. Renewal of a policy does not constitute a waiver or
12
estoppel with respect to grounds for cancellation which
13
existed before the effective date of such renewal.
14

e. In all notices of intention not to renew any policy of
15
insurance, as defined in Section 143.11 the company shall
16
provide the named insured a specific explanation of the
17
reasons for nonrenewal.
18

f. For purposes of this Section, the insured's broker, if
19
known, or the agent of record and the mortgagee or lien holder
20
may opt to accept notification electronically.
21
(Source: P.A. 100-475, eff. 1-1-18
.)

22

(215 ILCS 5/Art. XLVIII heading new)
23
ARTICLE 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
2
Climate Risk Disclosure Law.

3

(215 ILCS 5/1805 new)
4

Sec. 1805.
Purpose.
The purpose of this Article is to
5
enhance transparency about how insurers manage climate-related
6
risks and to clarify the Department's authority to require
7
companies to participate in climate surveys issued by entities
8
including but not limited to the Department and the National
9
Association of Insurance Commissioners. This Article shall be
10
liberally interpreted to carry into effect the intent of this
11
Section.

12

(215 ILCS 5/1810 new)
13

Sec. 1810.
Applicability.
This Article applies to all
14
companies licensed in Illinois under Classes 2 and 3 of
15
Section 4 of this Code that write $100,000,000 or more
16
annually in premiums. This threshold may be altered by rule.

17

(215 ILCS 5/1815 new)
18

Sec. 1815.
Climate disclosure survey participation.
All
19
insurers subject to this Article shall, upon direction from
20
the Department, participate in National Association of
21
Insurance Commissioners issued climate surveys.

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