HB5260 INSURANCE-VARIOUS | Illinois Bill

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5260

Introduced 2/10/2026, by Rep. Bob Morgan

SYNOPSIS AS INTRODUCED:

5 ILCS 100/5-75

from Ch. 127, par. 1005-75
215 ILCS 5/143.11b
215 ILCS 5/155.49
215 ILCS 5/356z.73
215 ILCS 5/404

from Ch. 73, par. 1016
215 ILCS 5/500-35
215 ILCS 123/Act rep.
215 ILCS 124/3

Amends the Illinois Administrative Procedure Act. Provides that, for
any law implementing the federal Patient Protection and Affordable Care
Act, the Department of Insurance may adopt rules that include
incorporations by reference of federal rules and regulations without
identifying the incorporated matter by date and without including a
statement that the incorporation does not include later amendments. Amends
the Illinois Insurance Code. Makes changes concerning the assignment or
transfer of property and casualty policies; formatting requirements for
the insurance company supplier diversity report; and insurance coverage
for dependent parents. Provides that the Director of Insurance shall
maintain as confidential any records or information received from the
National Association of Insurance Commissioners or other state, federal,
and international regulatory agencies (instead of insurance regulatory
officials of other states) that are confidential in that other
jurisdiction. Provides that the Department may waive registration and
course certification fees if the pre-licensing or continuing education
course is provided by a government entity free of charge. Amends the
Network Adequacy and Transparency Act. In applicability provisions,
removes language concerning exemptions for short-term, limited-duration
health insurance coverage with a network plan. Repeals the Health Care
Purchasing Group Act. Effective immediately.
LRB104 18373 BAB 31815 b

A BILL FOR

HB5260
LRB104 18373 BAB 31815 b
1

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

Section 5.
The Illinois Administrative Procedure Act is
5
amended by changing Section 5-75 as follows:

(5 ILCS 100/5-75)

(from Ch. 127, par. 1005-75)
7

Sec. 5-75.
Incorporation by reference.
8

(a) An agency may incorporate by reference, in its rules
9
adopted under Section 5-35, rules, regulations, standards, and
10
guidelines of an agency of the United States or a nationally or
11
state recognized organization or association without
12
publishing the incorporated material in full. The reference in
13
the agency rules must fully identify the incorporated matter
14
by publisher address and date in order to specify how a copy of
15
the material may be obtained and must state that the rule,
16
regulation, standard, or guideline does not include any later
17
amendments or editions. An agency may incorporate by reference
18
these matters in its rules only if the agency, organization,
19
or association originally issuing the matter makes copies
20
readily available to the public. This Section does not apply
21
to any agency internal manual.
22

For any law imposing taxes on or measured by income, the
23
Department of Revenue may promulgate rules that include

HB5260
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LRB104 18373 BAB 31815 b
1
incorporations by reference of federal rules or regulations
2
without identifying the incorporated matter by date and
3
without including a statement that the incorporation does not
4
include later amendments.
5

For any law implementing the federal Patient Protection
6
and Affordable Care Act (Pub. L. 111-148), the Department of
7
Insurance may adopt rules that include incorporations by
8
reference of federal rules and regulations without identifying
9
the incorporated matter by date and without including a
10
statement that the incorporation does not include later
11
amendments.

(b) Use of the incorporation by reference procedure under
13
this Section shall be reviewed by the Joint Committee on
14
Administrative Rules during the rulemaking process as set
15
forth in this Act.
16

(c) The agency adopting a rule, regulation, standard, or
17
guideline under this Section shall maintain a copy of the
18
referenced rule, regulation, standard, or guideline in at
19
least one of its principal offices and shall make it available
20
to the public upon request for inspection and copying at no
21
more than cost. Requests for copies of materials incorporated
22
by reference shall not be deemed Freedom of Information Act
23
requests unless so labeled by the requestor. The agency shall
24
designate by rule the agency location at which incorporated
25
materials are maintained and made available to the public for
26
inspection and copying. These rules may be adopted under the

HB5260
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LRB104 18373 BAB 31815 b
1
procedures in Section 5-15. In addition, the agency may
2
include the designation of the agency location of incorporated
3
materials in a rulemaking under Section 5-35, but emergency
4
and peremptory rulemaking procedures may not be used solely
5
for this purpose.
6
(Source: P.A. 90-155, eff. 7-23-97.)

Section 10.
The Illinois Insurance Code is amended by
8
changing Sections 143.11b, 155.49, 356z.73, 404, and 500-35 as
9
follows:

(215 ILCS 5/143.11b)
11

Sec. 143.11b.
Assignment or transfer of property and
12
casualty policies.
An assignment or transfer of a policy of
13
insurance to which Section 143.11 applies among or between
14
insurers within an insurance holding company system or
15
insurers under common management or control, or as a result of
16
a merger, acquisition, or restructuring of an insurance
17
company, is
considered

not
a
renewal

nonrenewal
for purposes
18
of the notification requirements under Sections 143.12 through
19
143.24. However,
a

in the event of an increase in the renewal
20
premium of 30% or more, change in deductibles or change in
21
coverage that materially alters any policy to which subsection
22
b of Section 143.17a applies, the company shall adhere to the
23
provisions set forth in subsection b of Section 143.17a. A

24
company making an assignment or transfer of a policy among or

HB5260
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LRB104 18373 BAB 31815 b
1
between insurers within an insurance holding company system or
2
insurers under common management or control, or as a result of
3
a merger, acquisition, or restructuring of an insurance
4
company, shall have delivered to the named insured notice of
5
such assignment or transfer at least 60 days prior to the
6
renewal date. An exact and unaltered copy of the notice shall
7
also be sent to the insured's producer, if known, and agent of
8
record. The assignment or transfer of a policy or policies of
9
insurance among or between insurers shall not occur without
10
the producer or agent of record, or both, having a signed
11
agency contract with the entity to which the policy or
12
policies are to be assigned or transferred. If there is not a
13
signed agency contract, all of the notice requirements of
14
Sections 143.17 and 143.17a shall apply. Nothing in this
15
Section shall contravene any existing producer and company
16
contract rights. For purposes of this Section, the insured's
17
producer, if known, and agent of record may opt to accept
18
notification of assignment or transfer of policies
19
electronically.
20
(Source: P.A. 93-713, eff. 1-1-05.)

(215 ILCS 5/155.49)
22

Sec. 155.49.
Insurance company supplier diversity report.
23

(a) Every company authorized to do business in this State
24
or accredited by this State with assets of at least
25
$50,000,000 shall submit a
2-page
report on its voluntary

HB5260
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1
supplier diversity program, or the company's procurement
2
program if there is no supplier diversity program, to the
3
Department. The report shall set forth all of the following:
4

(1) The name, address, phone number, and email address
5

of the point of contact for the supplier diversity program
6

for vendors to register with the program.
7

(2) Local and State certifications the company accepts
8

or recognizes for minority-owned, women-owned, LGBT-owned,
9

or veteran-owned business status.
10

(3) On the second page, a narrative explaining the
11

results of the program and the tactics to be employed to
12

achieve the goals of its voluntary supplier diversity
13

program.
14

(4) The voluntary goals for the calendar year for
15

which the report is made in each category for the entire
16

budget of the company and the commodity codes or a
17

description of particular goods and services for the area
18

of procurement in which the company expects most of those
19

goals to focus on in that year.
20

Each company is required to submit
the

a searchable

21
report, in
the format designated by the Department

Portable
22
Document Format (PDF)
, to the Department on or before April 1,
23
2024 and on or before April 1 every year thereafter.
24

(b) For each report submitted under subsection (a), the
25
Department shall publish the results on its Internet website
26
for 5 years after submission. The Department is not

HB5260
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LRB104 18373 BAB 31815 b
1
responsible for collecting the reports or for the content of
2
the reports.
3

(c) The Department shall hold an annual insurance company
4
supplier diversity workshop in July of 2024 and every July
5
thereafter to discuss the reports with representatives of the
6
companies and vendors.
7

(d) The Department shall prepare a
one-page
template,
not

8
including the narrative section, for the voluntary supplier
9
diversity reports.
10

(e) The Department may adopt such rules as it deems
11
necessary to implement this Section.
12
(Source: P.A. 103-426, eff. 8-4-23.)

(215 ILCS 5/356z.73)
14

Sec. 356z.73.
Insurance coverage for dependent parents.
15

(a) A group or individual policy of accident and health
16
insurance issued, amended, delivered, or renewed on or after
17
January 1, 2026 that provides dependent coverage shall make
18
that dependent coverage available to the parent or stepparent
19
of the insured if the parent or stepparent meets the
20
definition of a qualifying relative under 26 U.S.C. 152(d) and
21
lives or resides within the accident and health insurance
22
policy's service area.
23

(b) This Section does not apply to
specialized health care
24
service plans, including
student health insurance coverage
,
25
excepted benefits, or coverage under Article V of the Illinois

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LRB104 18373 BAB 31815 b
1
Public Aid Code or under the Children's Health Insurance
2
Program Act. However, this Section applies to stand-alone
3
dental plans available through the Illinois Health Benefits
4
Exchange, including when the same policy form is offered
5
outside the Exchange.

; Medicare supplement insurance;
6
hospital-only policies; accident-only policies; or specified
7
disease insurance policies that reimburse for hospital,
8
medical, or surgical expenses.
9
(Source: P.A. 103-700, eff. 1-1-25; 104-189, eff. 8-15-25;
10
104-334, eff. 8-15-25; 104-417, eff. 8-15-25; revised
11
9-12-25.)

(215 ILCS 5/404)

(from Ch. 73, par. 1016)
13

Sec. 404.
Office of Director; a public office; destruction
14
or disposal of records, papers, documents, and memoranda.
15

(1)(a) The office of the Director shall be a public office
16
and the records, books, and papers thereof on file therein,
17
except those records or documents containing or disclosing any
18
analysis, opinion, calculation, ratio, recommendation, advice,
19
viewpoint, or estimation by any Department staff regarding the
20
financial or market condition of an insurer not otherwise made
21
part of the public record by the Director, shall be accessible
22
to the inspection of the public, except as the Director, for
23
good reason, may decide otherwise, or except as may be
24
otherwise provided in this Code or as otherwise provided in
25
Section 7 of the Freedom of Information Act.

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LRB104 18373 BAB 31815 b
1

(b) Except where another provision of this Code expressly
2
prohibits a disclosure of confidential information to the
3
specific officials or organizations described in this
4
subsection, the Director may disclose or share any
5
confidential records or information in his custody and control
6
with any insurance regulatory officials of any state or
7
country, with the law enforcement officials of this State, any
8
other state, or the federal government, or with the National
9
Association of Insurance Commissioners, upon the written
10
agreement of the official or organization receiving the
11
information to hold the information or records confidential
12
and in a manner consistent with this Code.
13

(c) The Director shall maintain as confidential any
14
records or information received from the National Association
15
of Insurance Commissioners or
other state, federal, or
16
international regulatory agencies

insurance regulatory
17
officials of other states which

that are

is
confidential in
18
that other jurisdiction.

(2) Upon the filing of the examination to which they
20
relate, the Director is authorized to destroy or otherwise
21
dispose of all working papers relative to any company which
22
has been examined at any time prior to that last examination by
23
the Department, so that in such circumstances only current
24
working papers of that last examination may be retained by the
25
Department.

(3) Five years after the conclusion of the transactions to

HB5260
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LRB104 18373 BAB 31815 b
1
which they relate, the Director is authorized to destroy or
2
otherwise dispose of all books, records, papers, memoranda and
3
correspondence directly related to consumer complaints or
4
inquiries.

(4) Two years after the conclusion of the transactions to
6
which they relate, the Director is authorized to destroy or
7
otherwise dispose of all books, records, papers, memoranda,
8
and correspondence directly related to all void, obsolete, or
9
superseded rate filings and schedules required to be filed by
10
statute; and all individual company rating experience data and
11
all records, papers, documents and memoranda in the possession
12
of the Director relating thereto.

(5) Five years after the conclusion of the transactions to
14
which they relate, the Director is authorized to destroy or
15
otherwise dispose of all examination reports of companies made
16
by the insurance supervisory officials of states other than
17
Illinois; applications, requisitions, and requests for
18
licenses; all records of hearings; and all similar records,
19
papers, documents, and memoranda in the possession of the
20
Director.

(6) Ten years after the conclusion of the transactions to
22
which they relate, the Director is authorized to destroy or
23
otherwise dispose of all official correspondence of foreign
24
and alien companies, all foreign companies' and alien
25
companies' annual statements, valuation reports, tax reports,
26
and all similar records, papers, documents and memoranda in

HB5260
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LRB104 18373 BAB 31815 b
1
the possession of the Director.

(7) Whenever any records, papers, documents or memoranda
3
are destroyed or otherwise disposed of pursuant to the
4
provisions of this section, the Director shall execute and
5
file in a separate, permanent office file a certificate
6
listing and setting forth by summary description the records,
7
papers, documents or memoranda so destroyed or otherwise
8
disposed of, and the Director may, in his discretion, preserve
9
copies of any such records, papers, documents or memoranda by
10
means of microfilming or photographing the same.

(8) This Section shall apply to records, papers,
12
documents, and memoranda presently in the possession of the
13
Director as well as to records, papers, documents, and
14
memoranda hereafter coming into his possession.
15
(Source: P.A. 97-1004, eff. 8-17-12.)

(215 ILCS 5/500-35)
17

(Section scheduled to be repealed on January 1, 2027)
18

Sec. 500-35.
License.
19

(a) Unless denied a license pursuant to Section 500-70,
20
persons who have met the requirements of Sections 500-25 and
21
500-30 shall be issued a 2-year insurance producer license. An
22
insurance producer may receive qualification for a license in
23
one or more of the following lines of authority:
24

(1) Life: insurance coverage on human lives including
25

benefits of endowment and annuities, and may include

HB5260
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LRB104 18373 BAB 31815 b
1

benefits in the event of death or dismemberment by
2

accident and benefits for disability income.
3

(2) Variable life and variable annuity products:
4

insurance coverage provided under variable life insurance
5

contracts and variable annuities.
6

(3) Accident and health or sickness: insurance
7

coverage for sickness, bodily injury, or accidental death
8

and may include benefits for disability income.
9

(4) Property: insurance coverage for the direct or
10

consequential loss or damage to property of every kind.
11

(5) Casualty: insurance coverage against legal
12

liability, including that for death, injury, or disability
13

or damage to real or personal property.
14

(6) Personal lines: property and casualty insurance
15

coverage sold to individuals and families for primarily
16

noncommercial purposes.
17

(7) Any other line of insurance permitted under State
18

laws or rules.
19

(b) An insurance producer license shall remain in effect
20
unless revoked or suspended as long as the fee set forth in
21
Section 500-135 is paid and education requirements for
22
resident individual producers are met by the due date.
23

(1) Before each license renewal, an insurance producer
24

must satisfactorily complete at least 24 hours of course
25

study or participation in a professional insurance
26

association under paragraph (3) of this subsection in

HB5260
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LRB104 18373 BAB 31815 b
1

accordance with rules prescribed by the Director. Three of
2

the 24 hours of course study must consist of classroom or
3

webinar ethics instruction. The Director may not approve a
4

course of study unless the course provides for classroom,
5

seminar, webinar, or self-study instruction methods. A
6

course given in a combination instruction method of
7

classroom, seminar, webinar, or self-study shall be deemed
8

to be a self-study course unless the number of classroom,
9

seminar, or webinar certified hours meets or exceeds
10

two-thirds of total hours certified for the course. The
11

self-study material used in the combination course must be
12

directly related to and complement the classroom portion
13

of the course in order to be considered for credit. An
14

instruction method other than classroom or seminar shall
15

be considered as self-study methodology. Self-study credit
16

hours require the successful completion of an examination
17

covering the self-study material. The examination may not
18

be self-evaluated. However, if the self-study material is
19

completed through the use of an approved computerized
20

interactive format whereby the computer validates the
21

successful completion of the self-study material, no
22

additional examination is required. The self-study credit
23

hours contained in a certified course shall be considered
24

classroom hours when at least two-thirds of the hours are
25

given as classroom or seminar instruction.
26

(2) An insurance producer license automatically

HB5260
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LRB104 18373 BAB 31815 b
1

terminates when an insurance producer fails to
2

successfully meet the requirements of paragraph (1) of
3

this subsection. The producer must complete the course in
4

advance of the renewal date to allow the education
5

provider time to report the credit to the Department.
6

(3) An insurance producer's active participation in a
7

State or national professional insurance association may
8

be approved by the Director for up to 4 hours of continuing
9

education credit per biennial reporting period. Credit
10

shall be provided on an hour-for-hour basis. These hours
11

shall be verified and submitted by the association on
12

behalf of the insurance producer and credited upon timely
13

filing with the Director or his or her designee on a
14

biennial basis. Any association submitting continuing
15

education credit hours on behalf of insurance producers
16

must be registered as an education provider under Section
17

500-135. Credit granted under these provisions shall not
18

be used to satisfy ethics education requirements. Active
19

participation in a State or national professional
20

insurance association is defined by one of the following
21

methods:
22

(A) service on a board of directors of a State or
23

national chapter of the association;
24

(B) service on a formal committee of a State or
25

national chapter of the association; or
26

HB5260
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LRB104 18373 BAB 31815 b
1

of a State or national chapter of the association.
2

(c) A provider of a pre-licensing or continuing education
3
course required by Section 500-30 and this Section must pay a
4
registration fee and a course certification fee for each
5
course being certified as provided by Section 500-135.
The
6
Department may waive these fees if the pre-licensing or
7
continuing education course is provided by a government entity
8
free of charge.

(d) An individual insurance producer who allows his or her
10
license to lapse may, within 12 months after the due date of
11
the renewal fee, be issued a license without the necessity of
12
passing a written examination. However, a penalty in the
13
amount of double the unpaid renewal fee shall be required
14
after the due date.
15

(e) A licensed insurance producer who is unable to comply
16
with license renewal procedures due to military service may
17
request a waiver of those procedures.
18

(f) The license must contain the licensee's name, address,
19
and personal identification number, the date of issuance, the
20
lines of authority, the expiration date, and any other
21
information the Director deems necessary.
22

(g) Licensees must inform the Director by any means
23
acceptable to the Director of a change of address within 30
24
days after the change.
25

(h) In order to assist in the performance of the
26
Director's duties, the Director may contract with a

HB5260
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LRB104 18373 BAB 31815 b
1
non-governmental entity including the National Association of
2
Insurance Commissioners (NAIC), or any affiliates or
3
subsidiaries that the NAIC oversees, to perform any
4
ministerial functions, including collection of fees, related
5
to producer licensing that the Director and the
6
non-governmental entity may deem appropriate.
7
(Source: P.A. 104-417, eff. 8-15-25.)

(215 ILCS 123/Act rep.)
9

Section 15.
The Health Care Purchasing Group Act is
10
repealed.

Section 20.
The Network Adequacy and Transparency Act is
12
amended by changing Section 3 as follows:

(215 ILCS 124/3)
14

Sec. 3.
Applicability of Act.
This Act applies to an
15
individual or group policy of health insurance coverage with a
16
network plan amended, delivered, issued, or renewed in this
17
State on or after January 1, 2019. This Act does not apply to
18
an individual or group policy for excepted benefits
or
19
short-term, limited-duration health insurance coverage with a
20
network plan
. This Act does not apply to stand-alone dental
21
plans. If federal law establishes network adequacy and
22
transparency standards for stand-alone dental plans, the
23
Department shall enforce those applicable federal

HB5260
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LRB104 18373 BAB 31815 b
1
requirements.
2
(Source: P.A. 103-650, eff. 1-1-25; 103-777, eff. 1-1-25;
3
104-334, eff. 8-15-25; 104-417, eff. 8-15-25.)

Section 99.
Effective date.
This Act takes effect upon
5
becoming law.

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INSURANCE-VARIOUS

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INSURANCE-VARIOUS

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