Public Act 097-0705
 
HB3443 EnrolledLRB097 05656 RPM 45718 b


  
    AN ACT concerning insurance.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Illinois Insurance Code is amended  by 
changing Section 4 as follows:
 



    (215 ILCS 5/4)  (from Ch. 73, par. 616)



    Sec. 4. Classes of insurance. Insurance and insurance 
business shall
be classified as follows:

    Class 1. Life, Accident and Health.

    (a) Life. Insurance on the lives of persons and every 
insurance
appertaining thereto or connected therewith and 
granting, purchasing or
disposing of annuities. Policies of 
life or endowment insurance or
annuity contracts or contracts 
supplemental thereto which contain
provisions for additional 
benefits in case of death by accidental means
and provisions 
operating to safeguard such policies or contracts against

lapse, to give a special surrender value, or special benefit, 
or an
annuity, in the event, that the insured or annuitant 
shall become
totally and permanently disabled as defined by the 
policy or contract,
or which contain benefits providing 
acceleration of life or endowment or
annuity benefits in 
advance of the time they would otherwise be
payable, as an 
indemnity for long term care which is certified or
ordered by a 
physician, including but not limited to, professional nursing

care, medical care expenses, custodial nursing care, 
non-nursing custodial
care provided in a nursing home or at a 
residence of the insured, or
which contain benefits providing 
acceleration of life or endowment or
annuity benefits in 
advance of the time they would otherwise be payable, at
any 
time during the insured's
lifetime, as an indemnity for a 
terminal illness shall be deemed to be
policies of life or 
endowment insurance or annuity contracts within the
intent of 
this clause.

    Also to be deemed as policies of life or endowment 
insurance or annuity
contracts within the intent of this clause 
shall be those policies or
riders that provide for the payment 
of up to 75% of the face amount
of
benefits in advance of the 
time they would otherwise be payable upon a
diagnosis by a 
physician licensed to practice medicine in all of its
branches 
that the insured has incurred a covered
condition listed
in the 
policy or rider.

    "Covered condition", as used in this clause, means:
heart 
attack, stroke, coronary artery surgery,
life threatening 
cancer, renal failure,
alzheimer's disease,
paraplegia, major 
organ transplantation, total and permanent
disability, and any 
other medical condition that the Department may approve for
any 
particular filing.

    The Director may issue rules that specify prohibited policy 
provisions,
not otherwise specifically prohibited by law, 
which in the opinion of the
Director are unjust, unfair, or 
unfairly discriminatory to the
policyholder,
any person 
insured under the policy, or beneficiary.

    (b) Accident and health. Insurance against bodily injury,

disablement or death by accident and against disablement 
resulting from
sickness or old age and every insurance 
appertaining thereto, including
stop-loss insurance.  Stop-loss 
insurance is insurance against the risk of
economic loss issued 
to a single employer self-funded employee disability
benefit 
plan or an employee welfare benefit plan as described in 29 
U.S.C. 100
et seq. The insurance laws of this State, including

this Code, do not apply to arrangements between a religious 
organization and the organization's members
or participants 
when the arrangement and organization meet all of the
following 
criteria: 

        (i) the organization is described in Section 501(c)(3) 
    of the Internal Revenue Code and is exempt from taxation 
    under Section 501(a) of the Internal Revenue Code;
        (ii) members of the organization share a common set of 
    ethical or religious beliefs and share medical expenses 
    among members in accordance with those beliefs and without 
    regard to the state in which a member resides or is 
    employed;
        (iii) members of the organization retain membership 
    even after they develop a medical condition;
        (iv) the organization or a predecessor organization 
    has been in existence at all times since December 31, 1999, 
    and medical expenses of its members have been shared 
    continuously and without interruption since at least 
    December 31, 1999;
        (v) the organization conducts an annual audit that is 
    performed by an independent certified public accounting 
    firm in accordance with generally accepted accounting 
    principles and is made available to the public upon 
    request;
        (vi) the organization includes the following 
    statement, in writing, on or accompanying all applications 
    and guideline materials:
        "Notice: The organization facilitating the sharing of 
        medical expenses is not an insurance company, and 
        neither its guidelines nor plan of operation 
        constitute or create an insurance policy.  Any 
        assistance you receive with your medical bills will be 
        totally voluntary.  Neither the organization nor any 
        other participant can be compelled by law to contribute 
        toward your medical bills.  As such, participation in 
        the organization or a subscription to any of its 
        documents should never be considered to be insurance.  
        Whether or not you receive any payments for medical 
        expenses and whether or not this organization 
        continues to operate, you are always personally 
        responsible for the payment of your own medical 
        bills."; and 
        (vii) any membership card or similar document issued by 
    the organization and any written communication sent by the 
    organization to a hospital, physician, or other health care 
    provider shall include a statement that the organization 
    does not issue health insurance and that the member or 
    participant is personally liable for payment of his or her 
    medical bills. 
    (c) Legal Expense Insurance.  Insurance which involves
the 
assumption of a contractual obligation to reimburse the 
beneficiary
against or pay on behalf of the beneficiary, all or 
a portion of his fees,
costs, or expenses related to or arising 
out of services performed by or
under the supervision of an 
attorney licensed to practice in the jurisdiction
wherein the 
services are performed, regardless of whether the payment is 
made
by the beneficiaries individually or by a third person for 
them, but does
not include the provision of or reimbursement 
for legal services incidental
to other insurance coverages.  The 
insurance laws of this State, including
this Act do not apply 
to:


        (i) Retainer contracts made by attorneys at law with 
    individual clients
with fees based on estimates of the 
    nature and amount of services to be
provided to the 
    specific client, and similar contracts made with a group
of 
    clients involved in the same or closely related legal 
    matters;


        (ii) Plans owned or operated by attorneys who are the 
    providers of legal
services to the plan;


        (iii) Plans providing legal service benefits to groups 
    where such plans
are owned or operated by authority of a 
    state, county, local or other bar
association;


        (iv) Any lawyer referral service authorized or 
    operated by a state,
county, local or other bar 
    association;


        (v) The furnishing of legal assistance by labor unions 
    and other employee
organizations to their members in 
    matters relating to employment or occupation;


        (vi) The furnishing of legal assistance to members or 
    dependents, by
churches, consumer organizations, 
    cooperatives, educational institutions,
credit unions, or 
    organizations of employees, where such organizations 
    contract
directly with lawyers or law firms for the 
    provision of legal services,
and the administration and 
    marketing of such legal services is wholly conducted
by the 
    organization or its subsidiary;


        (vii) Legal services provided by an employee welfare 
    benefit plan defined
by the Employee Retirement Income 
    Security Act of 1974;


        (viii) Any collectively bargained plan for legal 
    services between a labor
union and an employer negotiated 
    pursuant to Section 302 of the Labor
Management Relations 
    Act as now or hereafter amended, under which plan
legal 
    services will be provided for employees of the employer 
    whether or
not payments for such services are funded to or 
    through an insurance company.

    Class 2. Casualty, Fidelity and Surety.

    (a) Accident and health. Insurance against bodily injury,

disablement or death by accident and against disablement 
resulting from
sickness or old age and every insurance 
appertaining thereto, including
stop-loss insurance.  Stop-loss 
insurance is insurance against the risk of
economic loss issued 
to a single employer self-funded employee disability
benefit 
plan or
an employee welfare benefit plan as described in 29 
U.S.C. 1001 et seq.

    (b) Vehicle. Insurance against any loss or liability 
resulting from
or incident to the ownership, maintenance or use 
of any vehicle (motor
or otherwise), draft animal or aircraft. 
Any policy insuring against any
loss or liability on account of 
the bodily injury or death of any person
may contain a 
provision for payment of disability benefits to injured
persons 
and death benefits to dependents, beneficiaries or personal

representatives of persons who are killed, including the named 
insured,
irrespective of legal liability of the insured, if the 
injury or death
for which benefits are provided is caused by 
accident and sustained
while in or upon or while entering into 
or alighting from or through
being struck by a vehicle (motor 
or otherwise), draft animal or
aircraft, and such provision 
shall not be deemed to be accident
insurance.

    (c) Liability. Insurance against the liability of the 
insured for
the death, injury or disability of an employee or 
other person, and
insurance against the liability of the 
insured for damage to or
destruction of another person's 
property.

    (d) Workers' compensation. Insurance of the obligations 
accepted by
or imposed upon employers under laws for workers' 
compensation.

    (e) Burglary and forgery. Insurance against loss or damage 
by
burglary, theft, larceny, robbery, forgery, fraud or 
otherwise;
including all householders' personal property 
floater risks.

    (f) Glass. Insurance against loss or damage to glass 
including
lettering, ornamentation and fittings from any 
cause.

    (g) Fidelity and surety. Become surety or guarantor for any 
person,
copartnership or corporation in any position or place 
of trust or as
custodian of money or property, public or 
private; or, becoming a surety
or guarantor for the performance 
of any person, copartnership or
corporation of any lawful 
obligation, undertaking, agreement or contract
of any kind, 
except contracts or policies of insurance; and underwriting

blanket bonds. Such obligations shall be known and treated as 
suretyship
obligations and such business shall be known as 
surety business.

    (h) Miscellaneous. Insurance against loss or damage to 
property and
any liability of the insured caused by accidents 
to boilers, pipes,
pressure containers, machinery and 
apparatus of any kind and any
apparatus connected thereto, or 
used for creating, transmitting or
applying power, light, heat, 
steam or refrigeration, making inspection
of and issuing 
certificates of inspection upon elevators, boilers,
machinery 
and apparatus of any kind and all mechanical apparatus and

appliances appertaining thereto; insurance against loss or 
damage by
water entering through leaks or openings in 
buildings, or from the
breakage or leakage of a sprinkler, 
pumps, water pipes, plumbing and all
tanks, apparatus, conduits 
and containers designed to bring water into
buildings or for 
its storage or utilization therein, or caused by the
falling of 
a tank, tank platform or supports, or against loss or damage

from any cause (other than causes specifically enumerated under 
Class 3
of this Section) to such sprinkler, pumps, water pipes, 
plumbing, tanks,
apparatus, conduits or containers; insurance 
against loss or damage
which may result from the failure of 
debtors to pay their obligations to
the insured; and insurance 
of the payment of money for personal services
under contracts 
of hiring.

    (i) Other casualty risks. Insurance against any other 
casualty risk
not otherwise specified under Classes 1 or 3, 
which may lawfully be the
subject of insurance and may properly 
be classified under Class 2.

    (j) Contingent losses. Contingent, consequential and 
indirect
coverages wherein the proximate cause of the loss is 
attributable to any
one of the causes enumerated under Class 2. 
Such coverages shall, for
the purpose of classification, be 
included in the specific grouping of
the kinds of insurance 
wherein such cause is specified.

    (k) Livestock and domestic animals. Insurance against 
mortality,
accident and health of livestock and domestic 
animals.

    (l) Legal expense insurance.  Insurance against risk 
resulting from the
cost of legal services as defined under 
Class 1(c).

    Class 3. Fire and Marine, etc.

    (a) Fire. Insurance against loss or damage by fire, smoke 
and
smudge, lightning or other electrical disturbances.

    (b) Elements. Insurance against loss or damage by 
earthquake,
windstorms, cyclone, tornado, tempests, hail, 
frost, snow, ice, sleet,
flood, rain, drought or other weather 
or climatic conditions including
excess or deficiency of 
moisture, rising of the waters of the ocean or
its tributaries.

    (c) War, riot and explosion. Insurance against loss or 
damage by
bombardment, invasion, insurrection, riot, strikes, 
civil war or
commotion, military or usurped power, or explosion 
(other than explosion
of steam boilers and the breaking of fly 
wheels on premises owned,
controlled, managed, or maintained by 
the insured.)

    (d) Marine and transportation. Insurance against loss or 
damage to
vessels, craft, aircraft, vehicles of every kind, 
(excluding vehicles
operating under their own power or while in 
storage not incidental to
transportation) as well as all goods, 
freights, cargoes, merchandise,
effects, disbursements, 
profits, moneys, bullion, precious stones,
securities, chooses 
in action, evidences of debt, valuable papers,
bottomry and 
respondentia interests and all other kinds of property and

interests therein, in respect to, appertaining to or in 
connection with
any or all risks or perils of navigation, 
transit, or transportation,
including war risks, on or under 
any seas or other waters, on land or in
the air, or while being 
assembled, packed, crated, baled, compressed or
similarly 
prepared for shipment or while awaiting the same or during any

delays, storage, transshipment, or reshipment incident 
thereto,
including marine builder's risks and all personal 
property floater
risks; and for loss or damage to persons or 
property in connection with
or appertaining to marine, inland 
marine, transit or transportation
insurance, including 
liability for loss of or damage to either arising
out of or in 
connection with the construction, repair, operation,

maintenance, or use of the subject matter of such insurance, 
(but not
including life insurance or surety bonds); but, except 
as herein
specified, shall not mean insurances against loss by 
reason of bodily
injury to the person; and insurance against 
loss or damage to precious
stones, jewels, jewelry, gold, 
silver and other precious metals whether
used in business or 
trade or otherwise and whether the same be in course
of 
transportation or otherwise, which shall include jewelers' 
block
insurance; and insurance against loss or damage to 
bridges, tunnels and
other instrumentalities of transportation 
and communication (excluding
buildings, their furniture and 
furnishings, fixed contents and supplies
held in storage) 
unless fire, tornado, sprinkler leakage, hail,
explosion, 
earthquake, riot and civil commotion are the only hazards to
be 
covered; and to piers, wharves, docks and slips, excluding the 
risks
of fire, tornado, sprinkler leakage, hail, explosion, 
earthquake, riot
and civil commotion; and to other aids to 
navigation and transportation,
including dry docks and marine 
railways, against all risk.

    (e) Vehicle. Insurance against loss or liability resulting 
from or
incident to the ownership, maintenance or use of any 
vehicle (motor or
otherwise), draft animal or aircraft, 
excluding the liability of the
insured for the death, injury or 
disability of another person.

    (f) Property damage, sprinkler leakage and crop. Insurance 
against
the liability of the insured for loss or damage to 
another person's
property or property interests from any cause 
enumerated in this class;
insurance against loss or damage by 
water entering through leaks or
openings in buildings, or from 
the breakage or leakage of a sprinkler,
pumps, water pipes, 
plumbing and all tanks, apparatus, conduits and
containers 
designed to bring water into buildings or for its storage or

utilization therein, or caused by the falling of a tank, tank 
platform
or supports or against loss or damage from any cause 
to such sprinklers,
pumps, water pipes, plumbing, tanks, 
apparatus, conduits or containers;
insurance against loss or 
damage from insects, diseases or other causes to
trees, crops 
or other products of the soil.

    (g) Other fire and marine risks. Insurance against any 
other
property risk not otherwise specified under Classes 1 or 
2, which may
lawfully be the subject of insurance and may 
properly be classified
under Class 3.

    (h) Contingent losses. Contingent, consequential and 
indirect
coverages wherein the proximate cause of the loss is 
attributable to any
of the causes enumerated under Class 3. 
Such coverages shall, for the
purpose of classification, be 
included in the specific grouping of the
kinds of insurance 
wherein such cause is specified.

    (i) Legal expense insurance.  Insurance against risk 
resulting from the
cost of legal services as defined under 
Class 1(c).

(Source: P.A. 90-741, eff. 8-13-98; 90-810, eff. 1-6-99.)