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SB3508 - 104th General Assembly

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Senate Amendment 001

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SB3508 Enrolled
LRB104 18372 BAB 31814 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 Regulatory Sunset Act is amended by
5
changing Section 4.37 and by adding Section 4.47 as follows:

6

(5 ILCS 80/4.37)
7

Sec. 4.37.
Acts
and Articles
repealed on January 1, 2027.
8
The following are repealed on January 1, 2027:
9

The Clinical Psychologist Licensing Act.
10

The Illinois Optometric Practice Act of 1987.
11

Articles II, III, IV, V, VI, VIIA, VIIC, XVII, XXXI, and
12
XXXI 1/4 of the Illinois Insurance Code.

13

The Boiler and Pressure Vessel Repairer Regulation Act.
14

The Marriage and Family Therapy Licensing Act.
15

The Boxing and Full-contact Martial Arts Act.
16

The Cemetery Oversight Act.
17

The Community Association Manager Licensing and
18
Disciplinary Act.
19

The Detection of Deception Examiners Act.
20

The Home Inspector License Act.
21

The Massage Licensing Act.
22

The Medical Practice Act of 1987.
23

The Petroleum Equipment Contractors Licensing Act.

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

The Radiation Protection Act of 1990.
2

The Real Estate Appraiser Licensing Act of 2002.
3

The Registered Interior Designers Act.
4

The Landscape Architecture Registration Act.
5

The Water Well and Pump Installation Contractor's License
6
Act.
7

The Licensed Certified Professional Midwife Practice Act.
8
(Source: P.A. 102-20, eff. 6-25-21; 102-284, eff. 8-6-21;
9
102-437, eff. 8-20-21; 102-656, eff. 8-27-21; 102-683, eff.
10
10-1-22; 102-813, eff. 5-13-22; 103-371, eff. 1-1-24; 103-823,
11
eff. 8-9-24.)

12

(5 ILCS 80/4.47 new)
13

Sec. 4.47.
Articles repealed on January 1, 2037.
The
14
following Articles are repealed on January 1, 2037:

15

Articles II, III, IV, V, VI, VIIA, VIIC, XVII, XXXI, and
16
XXXI 1/4 of the Illinois Insurance Code.

17

Section 10.
The Illinois Administrative Procedure Act is
18
amended by changing Section 5-75 as follows:

19

(5 ILCS 100/5-75)

(from Ch. 127, par. 1005-75)
20

Sec. 5-75.
Incorporation by reference.
21

(a) An agency may incorporate by reference, in its rules
22
adopted under Section 5-35, rules, regulations, standards, and
23
guidelines of an agency of the United States or a nationally or

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
state recognized organization or association without
2
publishing the incorporated material in full. The reference in
3
the agency rules must fully identify the incorporated matter
4
by publisher address and date in order to specify how a copy of
5
the material may be obtained and must state that the rule,
6
regulation, standard, or guideline does not include any later
7
amendments or editions. An agency may incorporate by reference
8
these matters in its rules only if the agency, organization,
9
or association originally issuing the matter makes copies
10
readily available to the public. This Section does not apply
11
to any agency internal manual.
12

For any law imposing taxes on or measured by income, the
13
Department of Revenue may promulgate rules that include
14
incorporations by reference of federal rules or regulations
15
without identifying the incorporated matter by date and
16
without including a statement that the incorporation does not
17
include later amendments.
18

For any law implementing the federal Patient Protection
19
and Affordable Care Act (Pub. L. 111-148), the Department of
20
Insurance may adopt rules that include incorporations by
21
reference of federal rules and regulations without identifying
22
the incorporated matter by date and without including a
23
statement that the incorporation does not include later
24
amendments.

25

(b) Use of the incorporation by reference procedure under
26
this Section shall be reviewed by the Joint Committee on

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
Administrative Rules during the rulemaking process as set
2
forth in this Act.
3

(c) The agency adopting a rule, regulation, standard, or
4
guideline under this Section shall maintain a copy of the
5
referenced rule, regulation, standard, or guideline in at
6
least one of its principal offices and shall make it available
7
to the public upon request for inspection and copying at no
8
more than cost. Requests for copies of materials incorporated
9
by reference shall not be deemed Freedom of Information Act
10
requests unless so labeled by the requestor. The agency shall
11
designate by rule the agency location at which incorporated
12
materials are maintained and made available to the public for
13
inspection and copying. These rules may be adopted under the
14
procedures in Section 5-15. In addition, the agency may
15
include the designation of the agency location of incorporated
16
materials in a rulemaking under Section 5-35, but emergency
17
and peremptory rulemaking procedures may not be used solely
18
for this purpose.
19
(Source: P.A. 90-155, eff. 7-23-97.)

20

Section 15.
The Illinois Insurance Code is amended by
21
changing Sections 155.49, 356z.73, 404, 500-35, and 513b1.1 as
22
follows:

23

(215 ILCS 5/155.49)
24

Sec. 155.49.
Insurance company supplier diversity report.

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

(a) Every company authorized to do business in this State
2
or accredited by this State with assets of at least
3
$50,000,000 shall submit a
2-page
report on its voluntary
4
supplier diversity program, or the company's procurement
5
program if there is no supplier diversity program, to the
6
Department. The report shall set forth all of the following:
7

(1) The name, address, phone number, and email address
8

of the point of contact for the supplier diversity program
9

for vendors to register with the program.
10

(2) Local and State certifications the company accepts
11

or recognizes for minority-owned, women-owned, LGBT-owned,
12

or veteran-owned business status.
13

(3) On the second page, a narrative explaining the
14

results of the program and the tactics to be employed to
15

achieve the goals of its voluntary supplier diversity
16

program.
17

(4) The voluntary goals for the calendar year for
18

which the report is made in each category for the entire
19

budget of the company and the commodity codes or a
20

description of particular goods and services for the area
21

of procurement in which the company expects most of those
22

goals to focus on in that year.
23

Each company is required to submit a searchable report, in
24
Portable Document Format (PDF), to the Department on or before
25
April 1, 2024 and on or before April 1 every year thereafter.
26
For reports due on or after April 1, 2027, the company shall

SB3508 Enrolled
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1
submit the report in the format designated by the Department.

2

(b) For each report submitted under subsection (a), the
3
Department shall publish the results on its Internet website
4
for 5 years after submission. The Department is not
5
responsible for collecting the reports or for the content of
6
the reports.
7

(c) The Department shall hold an annual insurance company
8
supplier diversity workshop in July of 2024 and every July
9
thereafter to discuss the reports with representatives of the
10
companies and vendors.
11

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

12
including the narrative section, for the voluntary supplier
13
diversity reports.
14

(e) The Department may adopt such rules as it deems
15
necessary to implement this Section.
16
(Source: P.A. 103-426, eff. 8-4-23.)

17

(215 ILCS 5/356z.73)
18

Sec. 356z.73.
Insurance coverage for dependent parents.
19

(a) A group or individual policy of accident and health
20
insurance issued, amended, delivered, or renewed on or after
21
January 1, 2026 that provides dependent coverage shall make
22
that dependent coverage available to the parent or stepparent
23
of the insured if the parent or stepparent meets the
24
definition of a qualifying relative under 26 U.S.C. 152(d) and
25
lives or resides within the accident and health insurance

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
policy's service area.
2

(b) This Section does not apply to
specialized health care
3
service plans, including
student health insurance coverage
,
4
excepted benefits, or coverage under Article V of the Illinois
5
Public Aid Code or under the Children's Health Insurance
6
Program Act. However, this Section applies to stand-alone
7
dental plans available through the Illinois Health Benefits
8
Exchange, including when the same policy form is offered
9
outside the Exchange.

; Medicare supplement insurance;
10
hospital-only policies; accident-only policies; or specified
11
disease insurance policies that reimburse for hospital,
12
medical, or surgical expenses.
13
(Source: P.A. 103-700, eff. 1-1-25; 104-189, eff. 8-15-25;
14
104-334, eff. 8-15-25; 104-417, eff. 8-15-25; revised
15
9-12-25.)

16

(215 ILCS 5/404)

(from Ch. 73, par. 1016)
17

Sec. 404.
Office of Director; a public office; destruction
18
or disposal of records, papers, documents, and memoranda.
19

(1)(a) The office of the Director shall be a public office
20
and the records, books, and papers thereof on file therein,
21
except those records or documents containing or disclosing any
22
analysis, opinion, calculation, ratio, recommendation, advice,
23
viewpoint, or estimation by any Department staff regarding the
24
financial or market condition of an insurer not otherwise made
25
part of the public record by the Director, shall be accessible

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
to the inspection of the public, except as the Director, for
2
good reason, may decide otherwise, or except as may be
3
otherwise provided in this Code or as otherwise provided in
4
Section 7 of the Freedom of Information Act.
5

(b) Except where another provision of this Code expressly
6
prohibits a disclosure of confidential information to the
7
specific officials or organizations described in this
8
subsection, the Director may disclose or share any
9
confidential records or information in his custody and control
10
with any insurance regulatory officials of any state or
11
country, with the law enforcement officials of this State, any
12
other state, or the federal government, or with the National
13
Association of Insurance Commissioners, upon the written
14
agreement of the official or organization receiving the
15
information to hold the information or records confidential
16
and in a manner consistent with this Code.
17

(c) The Director shall maintain as confidential any
18
records or information received from the National Association
19
of Insurance Commissioners or
other state, federal, or
20
international regulatory agencies

insurance regulatory
21
officials of other states which

that are

is
confidential in
22
that other jurisdiction.

23

(2) Upon the filing of the examination to which they
24
relate, the Director is authorized to destroy or otherwise
25
dispose of all working papers relative to any company which
26
has been examined at any time prior to that last examination by

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
the Department, so that in such circumstances only current
2
working papers of that last examination may be retained by the
3
Department.

4

(3) Five years after the conclusion of the transactions to
5
which they relate, the Director is authorized to destroy or
6
otherwise dispose of all books, records, papers, memoranda and
7
correspondence directly related to consumer complaints or
8
inquiries.

9

(4) Two years after the conclusion of the transactions to
10
which they relate, the Director is authorized to destroy or
11
otherwise dispose of all books, records, papers, memoranda,
12
and correspondence directly related to all void, obsolete, or
13
superseded rate filings and schedules required to be filed by
14
statute; and all individual company rating experience data and
15
all records, papers, documents and memoranda in the possession
16
of the Director relating thereto.

17

(5) Five years after the conclusion of the transactions to
18
which they relate, the Director is authorized to destroy or
19
otherwise dispose of all examination reports of companies made
20
by the insurance supervisory officials of states other than
21
Illinois; applications, requisitions, and requests for
22
licenses; all records of hearings; and all similar records,
23
papers, documents, and memoranda in the possession of the
24
Director.

25

(6) Ten years after the conclusion of the transactions to
26
which they relate, the Director is authorized to destroy or

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
otherwise dispose of all official correspondence of foreign
2
and alien companies, all foreign companies' and alien
3
companies' annual statements, valuation reports, tax reports,
4
and all similar records, papers, documents and memoranda in
5
the possession of the Director.

6

(7) Whenever any records, papers, documents or memoranda
7
are destroyed or otherwise disposed of pursuant to the
8
provisions of this section, the Director shall execute and
9
file in a separate, permanent office file a certificate
10
listing and setting forth by summary description the records,
11
papers, documents or memoranda so destroyed or otherwise
12
disposed of, and the Director may, in his discretion, preserve
13
copies of any such records, papers, documents or memoranda by
14
means of microfilming or photographing the same.

15

(8) This Section shall apply to records, papers,
16
documents, and memoranda presently in the possession of the
17
Director as well as to records, papers, documents, and
18
memoranda hereafter coming into his possession.
19
(Source: P.A. 97-1004, eff. 8-17-12.)

20

(215 ILCS 5/500-35)
21

(Section scheduled to be repealed on January 1, 2027)
22

Sec. 500-35.
License.
23

(a) Unless denied a license pursuant to Section 500-70,
24
persons who have met the requirements of Sections 500-25 and
25
500-30 shall be issued a 2-year insurance producer license. An

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
insurance producer may receive qualification for a license in
2
one or more of the following lines of authority:
3

(1) Life: insurance coverage on human lives including
4

benefits of endowment and annuities, and may include
5

benefits in the event of death or dismemberment by
6

accident and benefits for disability income.
7

(2) Variable life and variable annuity products:
8

insurance coverage provided under variable life insurance
9

contracts and variable annuities.
10

(3) Accident and health or sickness: insurance
11

coverage for sickness, bodily injury, or accidental death
12

and may include benefits for disability income.
13

(4) Property: insurance coverage for the direct or
14

consequential loss or damage to property of every kind.
15

(5) Casualty: insurance coverage against legal
16

liability, including that for death, injury, or disability
17

or damage to real or personal property.
18

(6) Personal lines: property and casualty insurance
19

coverage sold to individuals and families for primarily
20

noncommercial purposes.
21

(7) Any other line of insurance permitted under State
22

laws or rules.
23

(b) An insurance producer license shall remain in effect
24
unless revoked or suspended as long as the fee set forth in
25
Section 500-135 is paid and education requirements for
26
resident individual producers are met by the due date.

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

(1) Before each license renewal, an insurance producer
2

must satisfactorily complete at least 24 hours of course
3

study or participation in a professional insurance
4

association under paragraph (3) of this subsection in
5

accordance with rules prescribed by the Director. Three of
6

the 24 hours of course study must consist of classroom or
7

webinar ethics instruction. The Director may not approve a
8

course of study unless the course provides for classroom,
9

seminar, webinar, or self-study instruction methods. A
10

course given in a combination instruction method of
11

classroom, seminar, webinar, or self-study shall be deemed
12

to be a self-study course unless the number of classroom,
13

seminar, or webinar certified hours meets or exceeds
14

two-thirds of total hours certified for the course. The
15

self-study material used in the combination course must be
16

directly related to and complement the classroom portion
17

of the course in order to be considered for credit. An
18

instruction method other than classroom or seminar shall
19

be considered as self-study methodology. Self-study credit
20

hours require the successful completion of an examination
21

covering the self-study material. The examination may not
22

be self-evaluated. However, if the self-study material is
23

completed through the use of an approved computerized
24

interactive format whereby the computer validates the
25

successful completion of the self-study material, no
26

additional examination is required. The self-study credit

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

hours contained in a certified course shall be considered
2

classroom hours when at least two-thirds of the hours are
3

given as classroom or seminar instruction.
4

(2) An insurance producer license automatically
5

terminates when an insurance producer fails to
6

successfully meet the requirements of paragraph (1) of
7

this subsection. The producer must complete the course in
8

advance of the renewal date to allow the education
9

provider time to report the credit to the Department.
10

(3) An insurance producer's active participation in a
11

State or national professional insurance association may
12

be approved by the Director for up to 4 hours of continuing
13

education credit per biennial reporting period. Credit
14

shall be provided on an hour-for-hour basis. These hours
15

shall be verified and submitted by the association on
16

behalf of the insurance producer and credited upon timely
17

filing with the Director or his or her designee on a
18

biennial basis. Any association submitting continuing
19

education credit hours on behalf of insurance producers
20

must be registered as an education provider under Section
21

500-135. Credit granted under these provisions shall not
22

be used to satisfy ethics education requirements. Active
23

participation in a State or national professional
24

insurance association is defined by one of the following
25

methods:
26

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

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

national chapter of the association;
2

(B) service on a formal committee of a State or
3

national chapter of the association; or
4

(C) service on a formal subcommittee or task force
5

of a State or national chapter of the association.
6

(c) A provider of a pre-licensing or continuing education
7
course required by Section 500-30 and this Section must pay a
8
registration fee and a course certification fee for each
9
course being certified as provided by Section 500-135.
The
10
Department may waive these fees if the pre-licensing or
11
continuing education course is provided by a government entity
12
free of charge.

13

(d) An individual insurance producer who allows his or her
14
license to lapse may, within 12 months after the due date of
15
the renewal fee, be issued a license without the necessity of
16
passing a written examination. However, a penalty in the
17
amount of double the unpaid renewal fee shall be required
18
after the due date.
19

(e) A licensed insurance producer who is unable to comply
20
with license renewal procedures due to military service may
21
request a waiver of those procedures.
22

(f) The license must contain the licensee's name, address,
23
and personal identification number, the date of issuance, the
24
lines of authority, the expiration date, and any other
25
information the Director deems necessary.
26

(g) Licensees must inform the Director by any means

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1
acceptable to the Director of a change of address within 30
2
days after the change.
3

(h) In order to assist in the performance of the
4
Director's duties, the Director may contract with a
5
non-governmental entity including the National Association of
6
Insurance Commissioners (NAIC), or any affiliates or
7
subsidiaries that the NAIC oversees, to perform any
8
ministerial functions, including collection of fees, related
9
to producer licensing that the Director and the
10
non-governmental entity may deem appropriate.
11
(Source: P.A. 104-417, eff. 8-15-25.)

12

(215 ILCS 5/513b1.1)
13

Sec. 513b1.1.
Pharmacy benefit manager reporting
14
requirements.
15

(a) A pharmacy benefit manager that provides services for
16
a health benefit plan must submit an annual report no later
17
than September 1, to the Department, each health benefit plan
18
sponsor, and each insurer that includes the following:
19

(1) data on the health benefit plan including:
20

(A) a list of drugs including corresponding
21

information on therapeutic class, brand name, generic
22

name, or specialty drug name;
23

(B) the total number of covered individuals and
24

number of Illinois residents who are covered
25

individuals;

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

(C) number of drug-related claims;
2

(D) dosage units;
3

(E) dispensing channel used;
4

(F) average wholesale acquisition cost per drug;
5

and
6

(G) total out-of-pocket spending by deidentified
7

covered individual per drug, per transaction;
8

(2) amount received by the health benefit plan in
9

rebates, fees, or discounts related to drug utilization or
10

spending;
11

(3) total gross spending on drugs by the health
12

benefit plan;
13

(4) total net spending, gross spending less
14

administrative portion of the medical loss ratio, on drugs
15

by the health benefit plan;
16

(5) the amount paid by the health benefit plan to the
17

pharmacy benefit manager for reimbursement cost of a drug
18

and service per transaction;
19

(6) the amount a pharmacy benefit manager paid for
20

pharmacists' services and drugs rendered related to the
21

health benefit plan per transaction, including, but not
22

limited to, any dispensing fee;
23

(7) the specific rebate amount received by the
24

pharmacy benefit manager per transaction, the amount of
25

the rebates passed through to the health benefit plan per
26

transaction, and the amount of the rebates passed on to

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

covered individuals at the point of sale that reduced the
2

covered individuals' applicable deductible, copayment,
3

coinsurance, or other cost-sharing amount per transaction;
4

(8) any information collected from drug manufacturers
5

pertaining to copayment assistance to the extent such
6

information is collected;
7

(9) any compensation paid to brokers, consultants,
8

advisors, or any other individual or firm for referrals,
9

consideration, or retention by the health benefit plan;
10

(10) explanation of benefit design parameters
11

encouraging or requiring covered individuals to use
12

affiliated pharmacies, percentage of drugs charged by
13

these pharmacies, and a list of drugs dispensed by
14

affiliated pharmacies with their associated costs; and
15

(11) a complete copy of each unredacted contract the
16

pharmacy benefit manager has with the health benefit plan
17

sponsor or insurer.
18

(b) Annual reports pursuant to subsection (a):
19

(1) must be written in plain language to ensure ease
20

of reading and accessibility;
21

(2) must only contain summary health information to
22

ensure plan, coverage, or covered individual information
23

remains private and confidential;
24

(3) upon request by a covered individual, must be
25

available in summary format and provide aggregated
26

information to help covered individuals understand their

SB3508 Enrolled
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LRB104 18372 BAB 31814 b
1

health benefit plan's drug coverage; and
2

(4) must be filed with the Department no later than
3

September 1 of each year
in the format designated by the
4

Department

via the Systems for Electronic Rates & Forms
5

Filing (SERFF)
. The filing shall include the summary
6

version of the report described in paragraph (3) of this
7

subsection, which
the Department
shall
make available to
8

members of the public

be marked for public access
.
9

The Department may share all reports with an established
10
institution of higher education in this State for the creation
11
of a pharmacist dispensing cost report to be produced
12
annually. This annual pharmacist dispensing cost report shall
13
provide a survey of the average cost of dispensing a
14
prescription for pharmacists in Illinois. The institution of
15
higher education shall have the ability to request additional
16
information from pharmacists for its analysis. The institution
17
of higher education shall issue the report to the General
18
Assembly no later than December 31, 2026 and annually
19
thereafter.
20

(c) A pharmacy benefit manager may petition the Department
21
for a filing submission extension. The Director may grant or
22
deny the extension within 5 business days.
23

(d) Failure by a pharmacy benefit manager to submit all
24
required elements in an annual report to the Department may
25
result in a fine levied by the Director not to exceed $10,000
26
per day, per offense. Funds derived from fines levied shall be

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1
deposited into the Insurance Producer Administration Fund.
2
Fine information shall be posted on the Department's website.
3

(e) A pharmacy benefit manager found in violation of
4
subsection (a) or paragraph (4) of subsection (b) may request
5
a hearing from the Director within 10 days of receipt of the
6
Director's order, or, if the violation is found in a market
7
conduct examination, as provided in Section 132 of this Code.
8

(f) Except for the summary version, the annual reports
9
submitted by pharmacy benefit managers shall be considered
10
confidential and privileged for all purposes, including for
11
purposes of the Freedom of Information Act, shall not be
12
subject to subpoena from any private party, and shall not be
13
admissible as evidence in a civil action.
14

(g) A copy of an adverse decision against a pharmacy
15
benefit manager for failing to submit an annual report to the
16
Department must be posted to the Department's website.
17

(h) Nothing in this Section shall be construed as
18
permitting a pharmacy benefit manager to avoid or otherwise
19
fail to comply with the reporting requirements set forth in
20
Section 5-36 of the Illinois Public Aid Code.
21
(Source: P.A. 104-27, eff. 1-1-26; 104-439, eff. 12-2-25.)

22

(215 ILCS 123/Act rep.)
23

Section 20.
The Health Care Purchasing Group Act is
24
repealed.

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LRB104 18372 BAB 31814 b
1

Section 25.
The Network Adequacy and Transparency Act is
2
amended by changing Section 3 as follows:

3

(215 ILCS 124/3)
4

Sec. 3.
Applicability of Act.
This Act applies to an
5
individual or group policy of health insurance coverage with a
6
network plan amended, delivered, issued, or renewed in this
7
State on or after January 1, 2019. This Act does not apply to
8
an individual or group policy for excepted benefits
or
9
short-term, limited-duration health insurance coverage with a
10
network plan
. This Act does not apply to stand-alone dental
11
plans. If federal law establishes network adequacy and
12
transparency standards for stand-alone dental plans, the
13
Department shall enforce those applicable federal
14
requirements.
15
(Source: P.A. 103-650, eff. 1-1-25; 103-777, eff. 1-1-25;
16
104-334, eff. 8-15-25; 104-417, eff. 8-15-25.)

17

Section 99.
Effective date.
This Act takes effect upon
18
becoming law.

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