Illinois Senate Bill SB1479 Chaptered / Bill

                    Public Act 103-0897
SB1479 EnrolledLRB103 05817 BMS 50837 b SB1479 Enrolled LRB103 05817 BMS 50837 b
SB1479 Enrolled LRB103 05817 BMS 50837 b
AN ACT concerning regulation.
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 Sections 132, 132.5, 155.35, 402, 408, 511.109,
512-3, 512-5, and 513b3 and by adding Section 512-11 as
follows:
(215 ILCS 5/132) (from Ch. 73, par. 744)
Sec. 132. Market conduct actions and market analysis and
non-financial examinations.
(a) Definitions. As used in this Section:
"Data call" means a written solicitation by the Director
to 2 or more regulated companies or persons seeking existing
data or other existing information to be provided within a
reasonable time period for a narrow and targeted regulatory
oversight purpose for market analysis. "Data call" does not
include an information request in a market conduct action or
any data or information that the Director shall or may
specifically require under any other law, except as provided
by the other law.
"Desk examination" means an examination that is conducted
by market conduct surveillance personnel at a location other
than the regulated company's or person's premises. "Desk

 

SB1479 Enrolled LRB103 05817 BMS 50837 b


examination" includes an examination performed at the
Department's offices with the company or person providing
requested documents by hard copy, microfiche, or discs or
other electronic media for review without an on-site
examination.
"Market analysis" means a process whereby market conduct
surveillance personnel collect and analyze information from
filed schedules, surveys, required reports, data calls, and
other sources to develop a baseline understanding of the
marketplace and to identify patterns or practices of regulated
persons that deviate significantly from the norm or that may
pose a potential risk to insurance consumers.
"Market conduct action" means any activity, other than
market analysis, that the Director may initiate to assess and
address the market and nonfinancial practices of regulated
persons, including market conduct examinations. The
Department's consumer complaint process outlined in 50 Ill.
Adm. Code 926 is not a market conduct action for purposes of
this Section; however, the Department may initiate market
conduct actions based on information gathered during that
process. "Market conduct action" includes:
(1) correspondence with the company or person;
(2) interviews with the company or person;
(3) information gathering;
(4) policy and procedure reviews;
(5) interrogatories;


(6) review of company or person self-evaluations and
voluntary compliance programs;
(7) self-audits; and
(8) market conduct examinations.
"Market conduct examination" or "examination" means any
type of examination, other than a financial examination, that
assesses a regulated person's compliance with the laws, rules,
and regulations applicable to the examinee. "Market conduct
examination" includes comprehensive examinations, targeted
examinations, and follow-up examinations, which may be
conducted as desk examinations, on-site examinations, or a
combination of those 2 methods.
"Market conduct surveillance" means market analysis or a
market conduct action.
"Market conduct surveillance personnel" means those
individuals employed or retained by the Department and
designated by the Director to collect, analyze, review, or act
on information in the insurance marketplace that identifies
patterns or practices of persons subject to the Director's
jurisdiction. "Market conduct surveillance personnel" includes
all persons identified as an examiner in the insurance laws or
rules of this State if the Director has designated them to
assist her or him in ascertaining the nonfinancial business
practices, performance, and operations of a company or person
subject to the Director's jurisdiction.
"On-site examination" means an examination conducted at


the company's or person's home office or the location where
the records under review are stored.
"SOFR rate" means the Secured Overnight Financing Rate
published by the Federal Reserve Bank of New York every
business day.
(b) Companies and persons subject to surveillance. The
Director, for the purposes of ascertaining the nonfinancial
business practices, performance, and operations of any person
subject to the Director's jurisdiction or within the
marketplace, may engage in market conduct actions or market
analysis relating to:
(1) any company transacting or being organized to
transact business in this State;
(2) any person engaged in or proposing to be engaged
in the organization, promotion, or solicitation of shares
or capital contributions to or aiding in the formation of
a company;
(3) any person having a written or oral contract
pertaining to the management or control of a company as
general agent, managing agent, or attorney-in-fact;
(4) any licensed or registered producer, firm,
pharmacy benefit manager, administrator, or any person
making application for any license, certificate, or
registration;
(5) any person engaged in the business of adjusting
losses or financing premiums; or


(6) any person, organization, trust, or corporation
having custody or control of information reasonably
related to the operation, performance, or conduct of a
company or person subject to the Director's jurisdiction,
but only as to the operation, performance, or conduct of a
company or person subject to the Director's jurisdiction.
(c) Market analysis and market conduct actions.
(1) The Director may perform market analysis by
gathering and analyzing information from data currently
available to the Director, information from surveys, data
call responses, or reports that are submitted to the
Director, information collected by the NAIC, and
information from a variety of other sources to develop a
baseline understanding of the marketplace and to identify
for further review companies or practices that deviate
from the norm or that may pose a potential risk to
insurance consumers. The Director shall use the most
recent NAIC Market Regulation Handbook as a guide in
performing market analysis. The Director may also employ
other guidelines or procedures as the Director may deem
appropriate.
(2) The Director may initiate a market conduct action
subject to the following:
(A) If the Director determines that further
inquiry into a particular person or practice is
needed, then the Director may consider undertaking a


market conduct action. The Director shall inform the
examinee of the initiation of the market conduct
action and shall use the most recent NAIC Market
Regulation Handbook as a guide in performing the
market conduct action. The Director may also employ
other guidelines or procedures as the Director may
deem appropriate.
(B) For an examination, the Director shall conduct
a pre-examination conference with the examinee to
clarify expectations before commencement of the
examination. At the pre-examination conference, the
Director or the market conduct surveillance personnel
shall disclose the basis of the examination, including
the statutes, regulations, or business practices at
issue. The Director shall provide at least 30 days'
advance notice of the date of the pre-examination
conference unless circumstances warrant that the
examination proceed more quickly.
(C) The Director may coordinate a market conduct
action and findings of this State with market conduct
actions and findings of other states.
(3) Nothing in this Section requires the Director to
undertake market analysis before initiating any market
conduct action.
(4) Nothing in this Section restricts the Director to
the type of market conduct action he or she initially


selected.
(5) A regulated person is required to respond to a
market analysis data call or to an information request in
a market conduct action on the terms and conditions
established by the Director. The Department shall
establish reasonable timelines that are commensurate with
the volume and nature of the data required to be collected
in the information request.
(6) Without limiting the contents of any examination
report, market conduct actions taken as a result of a
market analysis shall focus primarily on the general
business practices and compliance activities of companies
or persons rather than identifying infrequent or
unintentional random errors that do not cause significant
consumer harm. The Director may give a company or person
an opportunity to resolve matters that are identified as a
result of a market analysis to the Director's satisfaction
before undertaking a market conduct action against the
company or person.
(d) Access to books and records. Every examinee and its
officers, directors, and agents must provide to the Director
convenient and free access at all reasonable hours at its
office or location to all books, records, and documents and
any or all papers relating to the business, performance,
operations, and affairs of the examinee. The officers,
directors, and agents of the examinee must facilitate the


market conduct action and aid in the action so far as it is in
their power to do so. The Director and any authorized market
conduct surveillance personnel have the power to administer
oaths and examine under oath any person relevant to the
business of the examinee. A failure to produce requested
books, records, or documents by the deadline shall not be a
violation until after the later of:
(1) 5 business days after the initial response
deadline set by the Director or authorized personnel; or
(2) an extended deadline granted by the Director or
authorized personnel.
(e) Examination report. The market conduct surveillance
personnel designated by the Director under Section 402 must
make a full and true report of every examination made by them
that contains only facts ascertained from the books, papers,
records, documents, and other evidence obtained by
investigation and examined by them or ascertained from the
testimony of officers, agents, or other persons examined under
oath concerning the business, affairs, conduct, and
performance of the examinee. The report of examination must be
verified by the oath of the examiner in charge thereof, and
when so verified is prima facie evidence in any action or
proceeding in the name of the State against the examinee, its
officers, directors, or agents upon the facts stated therein.
(f) Examinee response to examination report. The
Department and the examinee shall comply with the following


timeline, unless a mutual agreement is reached to modify the
timeline:
(1) The Department shall deliver a draft report to the
examinee as soon as reasonably practicable. Nothing in
this Section prevents the Department from sharing an
earlier draft of the report with the examinee before
confirming that the examination is completed.
(2) If the examinee chooses to respond with written
submissions or rebuttals, then the examinee must do so
within 30 days after receipt of any draft report delivered
after the completion of the examination.
(3) As soon as reasonably practicable after receipt of
any written submissions or rebuttals, the Department shall
issue a final report. Whenever the Department has made
substantive changes to a previously shared draft report,
unless those changes remove part or all of an alleged
violation or were proposed by the examinee, the Department
shall deliver the revised version to the examinee as a new
draft and shall allow the examinee 30 days to respond
before the Department issues a final report.
(4) The examinee shall, within 10 days after the
issuance of the final report, accept the final report or
request a hearing in writing, unless granted an extension
by mutual agreement. Failure to take either action within
10 days or the mutually agreed extension shall be deemed
an acceptance of the final report. If the examinee accepts


the examination report, the Director shall continue to
hold the content of the examination report as private and
confidential for a period of 30 days. Thereafter, the
Director shall open the final report for public
inspection.
(g) Hearing; final examination report. Notwithstanding
anything to the contrary in this Code or Department rules, if
the examinee requests a hearing, then the following procedures
apply:
(1) The examinee must request the hearing in writing
and must specify the issues in the final report that the
examinee is challenging. The examinee is limited to
challenging the issues that were previously challenged in
the examinee's written submission and rebuttal or
supplemental submission and rebuttal pursuant to
paragraphs (2) and (3) of subsection (f).
(2) Except as permitted in paragraphs (3) and (8) of
this subsection, the hearing shall be limited to the
written arguments submitted by the parties to the
designated hearing officer. The designated hearing officer
may, however, grant a live hearing upon the request of
either party.
(3) Discovery is limited to the market conduct
surveillance personnel's work papers that are relevant to
the issues the examinee is challenging. The relevant
market conduct surveillance personnel's work papers shall


be admitted into the record. No other forms of discovery,
including depositions and interrogatories, are allowed,
except upon written agreement of the examinee and the
Department when necessary to conduct a fair hearing or as
otherwise provided in this subsection.
(4) Only the examinee and the Department may submit
written arguments.
(5) The examinee must submit its written argument and
any supporting evidence within 30 days after the
Department serves a formal notice of hearing.
(6) The Department must submit its written response
and any supporting evidence within 30 days after the
examinee submits its written argument.
(7) The designated hearing officer may allow
additional written submissions if necessary or useful to
the fair resolution of the hearing.
(8) If either the examinee or the Department submit
written testimony or affidavits, then the opposing party
shall be given the opportunity to cross-examine the
witness and to submit the cross-examination to the hearing
officer before a decision.
(9) The Director shall issue a decision accompanied by
findings and conclusions. The Director's order is a final
administrative decision and shall be served upon the
examinee together with a copy of the final report within
90 days after the conclusion of the hearing. The hearing


is deemed concluded on the later of the last date of any
live hearing or the final deadline date for written
submissions to the hearing officer, including any
continuances or supplemental briefings permitted by the
hearing officer.
(10) Any portion of the final examination report that
was not challenged by the examinee is incorporated into
the decision of the Director.
(11) Findings of fact and conclusions of law in the
Director's final administrative decision are prima facie
evidence in any legal or regulatory action.
(12) If an examinee has requested a hearing, then the
Director shall continue to hold the final report and any
related decision as private and confidential for a period
of 49 days after the final administrative decision. After
the 49-day period expires, the Director shall open the
final report and any related decision for public
inspection if a court of competent jurisdiction has not
stayed its publication.
(h) Disclosure. So long as the recipient agrees to and
verifies in writing its legal authority to hold the
information confidential in a manner consistent with this
Section, nothing in this Section prevents the Director from
disclosing at any time the content of an examination report,
preliminary examination report, or results, or any matter
relating to a report or results, to:


(1) the insurance regulatory authorities of any other
state; or
(2) any agency or office of the federal government.
(i) Confidentiality.
(1) The Director and any other person in the course of
market conduct surveillance shall keep confidential all
documents, including working papers, third-party models,
or products; complaint logs; copies of any documents
created, produced, obtained by, or disclosed to the
Director, market conduct surveillance personnel, or any
other person in the course of market conduct surveillance
conducted pursuant to this Section; and all documents
obtained by the NAIC pursuant to this Section. The
documents shall remain confidential after the termination
of the market conduct surveillance, are not subject to
subpoena, are not subject to discovery or admissible as
evidence in private civil litigation, are not subject to
disclosure under the Freedom of Information Act, and must
not be made public at any time or used by the Director or
any other person, except as provided in paragraphs (3),
(4), and (6) of this subsection (i) and in subsection (k).
(2) The Director and any other person in the course of
market conduct surveillance shall keep confidential any
self-evaluation or voluntary compliance program documents
disclosed to the Director or other person by an examinee
and the data collected via the NAIC market conduct annual


statement. The documents are not subject to subpoena, are
not subject to discovery or admissible as evidence in
private civil litigation, are not subject to disclosure
under the Freedom of Information Act, and they shall not
be made public or used by the Director or any other person,
except as provided in paragraphs (3) and (4) of this
subsection (i), in subsection (k), or in Section 155.35.
Nothing in this Section shall supersede the restrictions
on disclosure under Section 155.35.
(3) Notwithstanding paragraphs (1) and (2) of this
subsection (i), and consistent with paragraph (5) of this
subsection (i), in order to assist in the performance of
the Director's duties, the Director may:
(A) share documents, materials, communications, or
other information, including the confidential and
privileged documents, materials, or information
described in this subsection (i), with other State,
federal, alien, and international regulatory agencies
and law enforcement authorities and the NAIC, its
affiliates, and subsidiaries, if the recipient agrees
to and verifies in writing its legal authority to
maintain the confidentiality and privileged status of
the document, material, communication, or other
information;
(B) receive documents, materials, communications,
or information, including otherwise confidential and


privileged documents, materials, or information, from
the NAIC and its affiliates or subsidiaries, and from
regulatory and law enforcement officials of other
State, federal, alien, or international jurisdictions,
authorities, and agencies, and shall maintain as
confidential or privileged any document, material,
communication, or information received with notice or
the understanding that it is confidential or
privileged under the laws of the jurisdiction that is
the source of the document, material, communication,
or information; and
(C) enter into agreements governing the sharing
and use of information consistent with this Section.
(4) Nothing in this Section limits:
(A) the Director's authority to use, if consistent
with subsection (5) of Section 188.1, as applicable,
any final or preliminary examination report, any
market conduct surveillance or examinee work papers or
other documents, or any other information discovered
or developed during the course of any market conduct
surveillance in the furtherance of any legal or
regulatory action initiated by the Director that the
Director may, in the Director's sole discretion, deem
appropriate; however, confidential or privileged
information about a company or person that is used in
the legal or regulatory action shall not be made


public except by order of a court of competent
jurisdiction or with the written consent of the
company or person; or
(B) the ability of an examinee to conduct
discovery in accordance with paragraph (3) of
subsection (g).
(5) Disclosure to or by the Director of documents,
materials, communications, or information required as part
of any type of market conduct surveillance does not waive
any applicable privilege or claim of confidentiality in
the documents, materials, communications, or information.
(6) Notwithstanding the confidentiality requirements
of this Section or otherwise imposed by State law, if the
Director performs a data call, other than the collection
of data for the NAIC market conduct annual statement, the
Director may make the results of the data call available
for public inspection in an aggregated format that does
not disclose information or data attributed to any
specific company or person, including the name of any
company or person who responded to the data call, so long
as the Director provides all companies or persons that
responded to the data call 15 days' notice identifying the
information to be publicly released. Nothing in this
Section requires the Director to publish results from any
data call.
(j) Corrective actions.


(1) As a result of any market conduct action, the
Director may take any action the Director considers
necessary or appropriate in accordance with the report of
examination or any hearing thereon for acts in violation
of any law, rule, or prior lawful order of the Director. No
corrective action, including a penalty, shall be ordered
with respect to violations in transactions with consumers
or other entities that are isolated occurrences or that
occur with such low frequency as to fall below a
reasonable margin of error. Such actions include, but are
not limited to:
(A) requiring the regulated person to undertake
corrective actions to cease and desist an identified
violation or institute processes and practices to
comply with applicable standards;
(B) requiring reimbursement or restitution of any
actual losses or damages to persons harmed by the
regulated person's violation with interest from the
date that the actual loss or damage was incurred,
which shall be calculated at the SOFR rate applicable
on the date that the actual loss or damage was incurred
plus 2%; and
(C) imposing civil penalties as provided in this
subsection (j).
(2) The Director may order a penalty of up to $2,000
for each violation of any law, rule, or prior lawful order


of the Director. Any failure to respond to an information
request in a market conduct action or violation of
subsection (d) may carry a fine of up to $1,000 per day up
to a maximum of $50,000. Fines and penalties shall be
consistent, reasonable, and justifiable, and the Director
may consider reasonable criteria in ordering the fines and
penalties, including, but not limited to, consumer harm,
the intentionality of any violations, or remedial actions
already undertaken by the examinee. The Director shall
communicate to the examinee the basis for any assessed
fine or penalty.
(3) If any other provision of this Code or any other
law or rule under the Director's jurisdiction prescribes
an amount or range of monetary penalty for a violation of a
particular statute or rule or a maximum penalty in the
aggregate for repeated violations, the Director shall
assess penalties pursuant to the terms of the statute or
rule allowing the largest penalty.
(4) If any other provision of this Code or any other
law or rule under the Director's jurisdiction prescribes
or specifies a method by which the Director is to
determine a violation, then compliance with the process
set forth herein shall be deemed to comply with the method
prescribed or specified in the other provision.
(5) If the Director imposes any sanctions or
corrective actions described in subparagraphs (A) through


(C) of paragraph (1) of this subsection (j) based on the
final report, the Director shall include those actions in
a proposed stipulation and consent order enclosed with the
final report issued to the examinee under subsection (f).
The examinee shall have 10 days to sign the order or
request a hearing in writing on the actions proposed in
the order regardless of whether the examinee requests a
hearing on the contents of the report under subsection
(f). If the examinee does not sign the order or request a
hearing on the proposed actions or the final report within
10 days, the Director may issue a final order imposing the
sanctions or corrective actions. Nothing in this Section
prevents the Department from sharing an earlier draft of
the proposed order with the examinee before issuing the
final report.
(6) If the examinee accepts the order and the final
report, the Director shall hold the content of the order
and report as private and confidential for a period of 30
days. Thereafter, the Director shall open the order and
report for public inspection.
(7) If the examinee makes a timely request for a
hearing on the order, the request must specify the
sanctions or corrective actions in the order that the
examinee is challenging. Any hearing shall follow the
procedures set forth in paragraphs (2) through (7) of
subsection (g).


(8) If the examinee has also requested a hearing on
the contents of the report, then that hearing shall be
consolidated with the hearing on the order. The Director
shall not impose sanctions or corrective actions under
this Section until the conclusion of the hearing.
(9) The Director shall issue a decision accompanied by
findings and conclusions along with any corrective actions
or sanctions. Any sanctions or corrective actions shall be
based on the final report accepted by the examinee or
adopted by the Director under paragraph (9) of subsection
(g). The Director's order is a final administrative
decision and shall be served upon the examinee together
with a copy of the final report within 90 days after the
conclusion of the hearing or within 10 days after the
examinee's acceptance of the proposed order and final
report, as applicable. The hearing is deemed concluded on
the later of the last date of any live hearing or the final
deadline date for written submissions to the hearing
officer, including any continuances or supplemental
briefings permitted by the hearing officer.
(10) If an examinee has requested a hearing under this
subsection (i), the Director shall continue to hold the
final order and examination report as private and
confidential for a period of 49 days after the final
administrative decision. After the 49-day period expires,
the Director shall open the final order and examination


report if a court of competent jurisdiction has not stayed
their publication.
(k) National market conduct databases. The Director shall
collect and report market data to the NAIC's market
information systems, including, but not limited to, the
Complaint Database System, the Examination Tracking System,
and the Regulatory Information Retrieval System, or other
successor NAIC products as determined by the Director.
Information collected and maintained by the Department for
inclusion in these NAIC market information systems shall be
compiled in a manner that meets the requirements of the NAIC.
Confidential or privileged information collected, reported, or
maintained under this subsection (k) shall be subject to the
protections and restrictions on disclosure in subsection (i).
(l) Immunity of market conduct surveillance personnel.
(1) No cause of action shall arise nor shall any
liability be imposed against the Director, the Director's
authorized representatives, market conduct surveillance
personnel, or an examiner appointed by the Director for
any statements made or conduct performed in good faith
while carrying out the provisions of this Section.
(2) No cause of action shall arise nor shall any
liability be imposed against any person for the act of
communicating or delivering information or data to the
Director, the Director's authorized representative, market
conduct surveillance personnel, or examiner pursuant to an


examination made under this Section, if the act of
communication or delivery was performed in good faith and
without fraudulent intent or the intent to deceive.
(3) A person identified in paragraph (1) of this
subsection (l) shall be entitled to an award of attorney's
fees and costs if he or she is the prevailing party in a
civil cause of action for libel, slander, or any other
relevant tort arising out of activities in carrying out
the provisions of this Section and the party bringing the
action was not substantially justified in doing so. As
used in this paragraph, a proceeding is substantially
justified if it had a reasonable basis in law or fact at
the time it was initiated.
(4) This subsection (l) does not abrogate or modify in
any way any common law or statutory privilege or immunity
heretofore enjoyed by any person identified in paragraph
(1) of this subsection (l).
(1) The Director, for the purposes of ascertaining the
non-financial business practices, performance, and operations
of any company, may make examinations of:
(a) any company transacting or being organized to
transact business in this State;
(b) any person engaged in or proposing to be engaged
in the organization, promotion, or solicitation of shares
or capital contributions to or aiding in the formation of
a company;


(c) any person having a contract, written or oral,
pertaining to the management or control of a company as
general agent, managing agent, or attorney-in-fact;
(d) any licensed or registered producer, firm, or
administrator, or any person, organization, or corporation
making application for any licenses or registration;
(e) any person engaged in the business of adjusting
losses or financing premiums; or
(f) any person, organization, trust, or corporation
having custody or control of information reasonably
related to the operation, performance, or conduct of a
company or person subject to the jurisdiction of the
Director.
(2) Every company or person being examined and its
officers, directors, and agents must provide to the Director
convenient and free access at all reasonable hours at its
office or location to all books, records, documents, and any
or all papers relating to the business, performance,
operations, and affairs of the company. The officers,
directors, and agents of the company or person must facilitate
the examination and aid in the examination so far as it is in
their power to do so.
The Director and any authorized examiner have the power to
administer oaths and examine under oath any person relative to
the business of the company being examined.
(3) The examiners designated by the Director under Section


402 must make a full and true report of every examination made
by them, which contains only facts ascertained from the books,
papers, records, or documents, and other evidence obtained by
investigation and examined by them or ascertained from the
testimony of officers or agents or other persons examined
under oath concerning the business, affairs, conduct, and
performance of the company or person. The report of
examination must be verified by the oath of the examiner in
charge thereof, and when so verified is prima facie evidence
in any action or proceeding in the name of the State against
the company, its officers, or agents upon the facts stated
therein.
(4) The Director must notify the company or person made
the subject of any examination hereunder of the contents of
the verified examination report before filing it and making
the report public of any matters relating thereto, and must
afford the company or person an opportunity to demand a
hearing with reference to the facts and other evidence therein
contained.
The company or person may request a hearing within 10 days
after receipt of the examination report by giving the Director
written notice of that request, together with a statement of
its objections. The Director must then conduct a hearing in
accordance with Sections 402 and 403. He must issue a written
order based upon the examination report and upon the hearing
within 90 days after the report is filed or within 90 days


after the hearing.
If the examination reveals that the company is operating
in violation of any law, regulation, or prior order, the
Director in the written order may require the company or
person to take any action he considers necessary or
appropriate in accordance with the report of examination or
any hearing thereon. The order is subject to judicial review
under the Administrative Review Law. The Director may withhold
any report from public inspection for such time as he may deem
proper and may, after filing the same, publish any part or all
of the report as he considers to be in the interest of the
public, in one or more newspapers in this State, without
expense to the company.
(5) Any company which or person who violates or aids and
abets any violation of a written order issued under this
Section shall be guilty of a business offense and may be fined
not more than $5,000. The penalty shall be paid into the
General Revenue fund of the State of Illinois.
(Source: P.A. 87-108.)
(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)
Sec. 132.5. Examination reports.
(a) General description. All examination reports shall be
comprised of only facts appearing upon the books, records, or
other documents of the company, its agents, or other persons
examined or as ascertained from the testimony of its officers,


agents, or other persons examined concerning its affairs and
the conclusions and recommendations as the examiners find
reasonably warranted from those facts.
(b) Filing of examination report. No later than 60 days
following completion of the examination, the examiner in
charge shall file with the Department a verified written
report of examination under oath. Upon receipt of the verified
report, the Department shall transmit the report to the
company examined, together with a notice that affords the
company examined a reasonable opportunity of not more than 30
days to make a written submission or rebuttal with respect to
any matters contained in the examination report.
(c) Adoption of the report on examination. Within 30 days
of the end of the period allowed for the receipt of written
submissions or rebuttals, the Director shall fully consider
and review the report, together with any written submissions
or rebuttals and any relevant portions of the examiners work
papers and enter an order:
(1) Adopting the examination report as filed or with
modification or corrections. If the examination report
reveals that the company is operating in violation of any
law, regulation, or prior order of the Director, the
Director may order the company to take any action the
Director considers necessary and appropriate to cure the
violation.
(2) Rejecting the examination report with directions


to the examiners to reopen the examination for purposes of
obtaining additional data, documentation, or information
and refiling under subsection (b).
(3) Calling for an investigatory hearing with no less
than 20 days notice to the company for purposes of
obtaining additional documentation, data, information, and
testimony.
(d) Order and procedures. All orders entered under
paragraph (1) of subsection (c) shall be accompanied by
findings and conclusions resulting from the Director's
consideration and review of the examination report, relevant
examiner work papers, and any written submissions or
rebuttals. The order shall be considered a final
administrative decision and may be appealed in accordance with
the Administrative Review Law. The order shall be served upon
the company by certified mail, together with a copy of the
adopted examination report. Within 30 days of the issuance of
the adopted report, the company shall file affidavits executed
by each of its directors stating under oath that they have
received a copy of the adopted report and related orders.
Any hearing conducted under paragraph (3) of subsection
(c) by the Director or an authorized representative shall be
conducted as a nonadversarial confidential investigatory
proceeding as necessary for the resolution of any
inconsistencies, discrepancies, or disputed issues apparent
upon the face of the filed examination report or raised by or


as a result of the Director's review of relevant work papers or
by the written submission or rebuttal of the company. Within
20 days of the conclusion of any hearing, the Director shall
enter an order under paragraph (1) of subsection (c).
The Director shall not appoint an examiner as an
authorized representative to conduct the hearing. The hearing
shall proceed expeditiously with discovery by the company
limited to the examiner's work papers that tend to
substantiate any assertions set forth in any written
submission or rebuttal. The Director or his representative may
issue subpoenas for the attendance of any witnesses or the
production of any documents deemed relevant to the
investigation, whether under the control of the Department,
the company, or other persons. The documents produced shall be
included in the record, and testimony taken by the Director or
his representative shall be under oath and preserved for the
record. Nothing contained in this Section shall require the
Department to disclose any information or records that would
indicate or show the existence or content of any investigation
or activity of a criminal justice agency.
The hearing shall proceed with the Director or his
representative posing questions to the persons subpoenaed.
Thereafter, the company and the Department may present
testimony relevant to the investigation. Cross-examination
shall be conducted only by the Director or his representative.
The company and the Department shall be permitted to make


closing statements and may be represented by counsel of their
choice.
(e) Publication and use. Upon the adoption of the
examination report under paragraph (1) of subsection (c), the
Director shall continue to hold the content of the examination
report as private and confidential information for a period of
35 days, except to the extent provided in subsection (b).
Thereafter, the Director may open the report for public
inspection so long as no court of competent jurisdiction has
stayed its publication.
Nothing contained in this Code shall prevent or be
construed as prohibiting the Director from disclosing the
content of an examination report, preliminary examination
report or results, or any matter relating thereto, to the
insurance department of any other state or country or to law
enforcement officials of this or any other state or agency of
the federal government at any time, so long as the agency or
office receiving the report or matters relating thereto agrees
in writing to hold it confidential and in a manner consistent
with this Code.
In the event the Director determines that regulatory
action is appropriate as a result of any examination, he may
initiate any proceedings or actions as provided by law.
(f) Confidentiality of ancillary information. All working
papers, recorded information, documents, and copies thereof
produced by, obtained by, or disclosed to the Director or any


other person in the course of any examination must be given
confidential treatment, are not subject to subpoena, and may
not be made public by the Director or any other persons, except
to the extent provided in subsection (e). Access may also be
granted to the National Association of Insurance
Commissioners. Those parties must agree in writing before
receiving the information to provide to it the same
confidential treatment as required by this Section, unless the
prior written consent of the company to which it pertains has
been obtained.
This subsection (f) applies to market conduct examinations
described in Section 132 of this Code.
(g) Disclosure. Nothing contained in this Code shall
prevent or be construed as prohibiting the Director from
disclosing the information described in subsections (e) and
(f) to the Illinois Insurance Guaranty Fund regarding any
member company defined in Section 534.5 if the member company
has an authorized control level event as defined in Section
35A-25. The Director may disclose the information described in
this subsection so long as the Fund agrees in writing to hold
that information confidential, in a manner consistent with
this Code, and uses that information to prepare for the
possible liquidation of the member company. Access to the
information disclosed by the Director to the Fund shall be
limited to the Fund's staff and its counsel. The Board of
Directors of the Fund may have access to the information


disclosed by the Director to the Fund once the member company
is subject to a delinquency proceeding under Article XIII
subject to any terms and conditions established by the
Director.
(Source: P.A. 102-929, eff. 5-27-22.)
(215 ILCS 5/155.35)
Sec. 155.35. Insurance compliance self-evaluative
privilege.
(a) To encourage insurance companies and persons
conducting activities regulated under this Code, both to
conduct voluntary internal audits of their compliance programs
and management systems and to assess and improve compliance
with State and federal statutes, rules, and orders, an
insurance compliance self-evaluative privilege is recognized
to protect the confidentiality of communications relating to
voluntary internal compliance audits. The General Assembly
hereby finds and declares that protection of insurance
consumers is enhanced by companies' voluntary compliance with
this State's insurance and other laws and that the public will
benefit from incentives to identify and remedy insurance and
other compliance issues. It is further declared that limited
expansion of the protection against disclosure will encourage
voluntary compliance and improve insurance market conduct
quality and that the voluntary provisions of this Section will
not inhibit the exercise of the regulatory authority by those


entrusted with protecting insurance consumers.
(b)(1) An insurance compliance self-evaluative audit
document is privileged information and is not admissible as
evidence in any legal action in any civil, criminal, or
administrative proceeding, except as provided in subsections
(c) and (d) of this Section. Documents, communications, data,
reports, or other information created as a result of a claim
involving personal injury or workers' compensation made
against an insurance policy are not insurance compliance
self-evaluative audit documents and are admissible as evidence
in civil proceedings as otherwise provided by applicable rules
of evidence or civil procedure, subject to any applicable
statutory or common law privilege, including, but not limited
to, the work product doctrine, the attorney-client privilege,
or the subsequent remedial measures exclusion.
(2) If any company, person, or entity performs or directs
the performance of an insurance compliance audit, an officer
or employee involved with the insurance compliance audit, or
any consultant who is hired for the purpose of performing the
insurance compliance audit, may not be examined in any civil,
criminal, or administrative proceeding as to the insurance
compliance audit or any insurance compliance self-evaluative
audit document, as defined in this Section. This subsection
(b)(2) does not apply if the privilege set forth in subsection
(b)(1) of this Section is determined under subsection (c) or
(d) not to apply.


(3) A company may voluntarily submit, in connection with
examinations conducted under this Article, an insurance
compliance self-evaluative audit document to the Director, or
his or her designee, as a confidential document under
subsection (i) of Section 132 or subsection (f) of Section
132.5 of this Code without waiving the privilege set forth in
this Section to which the company would otherwise be entitled;
provided, however, that the provisions in Sections 132 and
subsection (f) of Section 132.5 permitting the Director to
make confidential documents public pursuant to subsection (e)
of Section 132.5 and grant access to the National Association
of Insurance Commissioners shall not apply to the insurance
compliance self-evaluative audit document so voluntarily
submitted. Nothing contained in this subsection shall give the
Director any authority to compel a company to disclose
involuntarily or otherwise provide an insurance compliance
self-evaluative audit document.
(c)(1) The privilege set forth in subsection (b) of this
Section does not apply to the extent that it is expressly
waived by the company that prepared or caused to be prepared
the insurance compliance self-evaluative audit document.
(2) In a civil or administrative proceeding, a court of
record may, after an in camera review, require disclosure of
material for which the privilege set forth in subsection (b)
of this Section is asserted, if the court determines one of the
following:


(A) the privilege is asserted for a fraudulent
purpose;
(B) the material is not subject to the privilege; or
(C) even if subject to the privilege, the material
shows evidence of noncompliance with State and federal
statutes, rules and orders and the company failed to
undertake reasonable corrective action or eliminate the
noncompliance within a reasonable time.
(3) In a criminal proceeding, a court of record may, after
an in camera review, require disclosure of material for which
the privilege described in subsection (b) of this Section is
asserted, if the court determines one of the following:
(A) the privilege is asserted for a fraudulent
purpose;
(B) the material is not subject to the privilege;
(C) even if subject to the privilege, the material
shows evidence of noncompliance with State and federal
statutes, rules and orders and the company failed to
undertake reasonable corrective action or eliminate such
noncompliance within a reasonable time; or
(D) the material contains evidence relevant to
commission of a criminal offense under this Code, and all
of the following factors are present:
(i) the Director, State's Attorney, or Attorney
General has a compelling need for the information;
(ii) the information is not otherwise available;


and
(iii) the Director, State's Attorney, or Attorney
General is unable to obtain the substantial equivalent
of the information by any means without incurring
unreasonable cost and delay.
(d)(1) Within 30 days after the Director, State's
Attorney, or Attorney General makes a written request by
certified mail for disclosure of an insurance compliance
self-evaluative audit document under this subsection, the
company that prepared or caused the document to be prepared
may file with the appropriate court a petition requesting an
in camera hearing on whether the insurance compliance
self-evaluative audit document or portions of the document are
privileged under this Section or subject to disclosure. The
court has jurisdiction over a petition filed by a company
under this subsection requesting an in camera hearing on
whether the insurance compliance self-evaluative audit
document or portions of the document are privileged or subject
to disclosure. Failure by the company to file a petition
waives the privilege.
(2) A company asserting the insurance compliance
self-evaluative privilege in response to a request for
disclosure under this subsection shall include in its request
for an in camera hearing all of the information set forth in
subsection (d)(5) of this Section.
(3) Upon the filing of a petition under this subsection,


the court shall issue an order scheduling, within 45 days
after the filing of the petition, an in camera hearing to
determine whether the insurance compliance self-evaluative
audit document or portions of the document are privileged
under this Section or subject to disclosure.
(4) The court, after an in camera review, may require
disclosure of material for which the privilege in subsection
(b) of this Section is asserted if the court determines, based
upon its in camera review, that any one of the conditions set
forth in subsection (c)(2)(A) through (C) is applicable as to
a civil or administrative proceeding or that any one of the
conditions set forth in subsection (c)(3)(A) through (D) is
applicable as to a criminal proceeding. Upon making such a
determination, the court may only compel the disclosure of
those portions of an insurance compliance self-evaluative
audit document relevant to issues in dispute in the underlying
proceeding. Any compelled disclosure will not be considered to
be a public document or be deemed to be a waiver of the
privilege for any other civil, criminal, or administrative
proceeding. A party unsuccessfully opposing disclosure may
apply to the court for an appropriate order protecting the
document from further disclosure.
(5) A company asserting the insurance compliance
self-evaluative privilege in response to a request for
disclosure under this subsection (d) shall provide to the
Director, State's Attorney, or Attorney General, as the case


may be, at the time of filing any objection to the disclosure,
all of the following information:
(A) The date of the insurance compliance
self-evaluative audit document.
(B) The identity of the entity conducting the audit.
(C) The general nature of the activities covered by
the insurance compliance audit.
(D) An identification of the portions of the insurance
compliance self-evaluative audit document for which the
privilege is being asserted.
(e) (1) A company asserting the insurance compliance
self-evaluative privilege set forth in subsection (b) of this
Section has the burden of demonstrating the applicability of
the privilege. Once a company has established the
applicability of the privilege, a party seeking disclosure
under subsections (c)(2)(A) or (C) of this Section has the
burden of proving that the privilege is asserted for a
fraudulent purpose or that the company failed to undertake
reasonable corrective action or eliminate the noncompliance
with a reasonable time. The Director, State's Attorney, or
Attorney General seeking disclosure under subsection (c)(3) of
this Section has the burden of proving the elements set forth
in subsection (c)(3) of this Section.
(2) The parties may at any time stipulate in proceedings
under subsections (c) or (d) of this Section to entry of an
order directing that specific information contained in an


insurance compliance self-evaluative audit document is or is
not subject to the privilege provided under subsection (b) of
this Section.
(f) The privilege set forth in subsection (b) of this
Section shall not extend to any of the following:
(1) documents, communications, data, reports, or other
information required to be collected, developed,
maintained, reported, or otherwise made available to a
regulatory agency pursuant to this Code, or other federal
or State law, rule, or order;
(2) information obtained by observation or monitoring
by any regulatory agency; or
(3) information obtained from a source independent of
the insurance compliance audit.
(g) As used in this Section:
(1) "Insurance compliance audit" means a voluntary,
internal evaluation, review, assessment, or audit not
otherwise expressly required by law of a company or an
activity regulated under this Code, or other State or
federal law applicable to a company, or of management
systems related to the company or activity, that is
designed to identify and prevent noncompliance and to
improve compliance with those statutes, rules, or orders.
An insurance compliance audit may be conducted by the
company, its employees, or by independent contractors.
(2) "Insurance compliance self-evaluative audit


document" means documents prepared as a result of or in
connection with and not prior to an insurance compliance
audit. An insurance compliance self-evaluation audit
document may include a written response to the findings of
an insurance compliance audit. An insurance compliance
self-evaluative audit document may include, but is not
limited to, as applicable, field notes and records of
observations, findings, opinions, suggestions,
conclusions, drafts, memoranda, drawings, photographs,
computer-generated or electronically recorded
information, phone records, maps, charts, graphs, and
surveys, provided this supporting information is collected
or developed for the primary purpose and in the course of
an insurance compliance audit. An insurance compliance
self-evaluative audit document may also include any of the
following:
(A) an insurance compliance audit report prepared
by an auditor, who may be an employee of the company or
an independent contractor, which may include the scope
of the audit, the information gained in the audit, and
conclusions and recommendations, with exhibits and
appendices;
(B) memoranda and documents analyzing portions or
all of the insurance compliance audit report and
discussing potential implementation issues;
(C) an implementation plan that addresses


correcting past noncompliance, improving current
compliance, and preventing future noncompliance; or
(D) analytic data generated in the course of
conducting the insurance compliance audit.
(3) "Company" has the same meaning as provided in
Section 2 of this Code.
(h) Nothing in this Section shall limit, waive, or
abrogate the scope or nature of any statutory or common law
privilege including, but not limited to, the work product
doctrine, the attorney-client privilege, or the subsequent
remedial measures exclusion.
(Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)
(215 ILCS 5/402) (from Ch. 73, par. 1014)
Sec. 402. Examinations, investigations and hearings. (1)
All examinations, investigations and hearings provided for by
this Code may be conducted either by the Director personally,
or by one or more of the actuaries, technical advisors,
deputies, supervisors or examiners employed or retained by the
Department and designated by the Director for such purpose.
When necessary to supplement its examination procedures, the
Department may retain independent actuaries deemed competent
by the Director, independent certified public accountants, or
qualified examiners of insurance companies, or other qualified
outside professional assistance deemed competent by the
Director, or any combination of the foregoing, the cost of


which shall be borne by the company or person being examined.
The Director may compensate independent actuaries, certified
public accountants, and qualified examiners, and other
qualified outside professional assistance retained for
supplementing examination procedures in amounts not to exceed
the reasonable and customary charges for such services. The
Director may also accept as a part of the Department's
examination of any company or person (a) a report by an
independent actuary deemed competent by the Director or (b) a
report of an audit made by an independent certified public
accountant. Neither those persons so designated nor any
members of their immediate families shall be officers of,
connected with, or financially interested in any company other
than as policyholders, nor shall they be financially
interested in any other corporation or person affected by the
examination, investigation or hearing.
(2) All hearings provided for in this Code shall, unless
otherwise specially provided, be held at such time and place
as shall be designated in a notice which shall be given by the
Director in writing to the person or company whose interests
are affected, at least 10 days before the date designated
therein. The notice shall state the subject of inquiry and the
specific charges, if any. The hearings shall be held in the
City of Springfield, the City of Chicago, or in the county
where the principal business address of the person or company
affected is located.


(Source: P.A. 87-757.)
(215 ILCS 5/408) (from Ch. 73, par. 1020)
(Text of Section before amendment by P.A. 103-75)
Sec. 408. Fees and charges.
(1) The Director shall charge, collect and give proper
acquittances for the payment of the following fees and
charges:
(a) For filing all documents submitted for the
incorporation or organization or certification of a
domestic company, except for a fraternal benefit society,
$2,000.
(b) For filing all documents submitted for the
incorporation or organization of a fraternal benefit
society, $500.
(c) For filing amendments to articles of incorporation
and amendments to declaration of organization, except for
a fraternal benefit society, a mutual benefit association,
a burial society or a farm mutual, $200.
(d) For filing amendments to articles of incorporation
of a fraternal benefit society, a mutual benefit
association or a burial society, $100.
(e) For filing amendments to articles of incorporation
of a farm mutual, $50.
(f) For filing bylaws or amendments thereto, $50.
(g) For filing agreement of merger or consolidation:


(i) for a domestic company, except for a fraternal
benefit society, a mutual benefit association, a
burial society, or a farm mutual, $2,000.
(ii) for a foreign or alien company, except for a
fraternal benefit society, $600.
(iii) for a fraternal benefit society, a mutual
benefit association, a burial society, or a farm
mutual, $200.
(h) For filing agreements of reinsurance by a domestic
company, $200.
(i) For filing all documents submitted by a foreign or
alien company to be admitted to transact business or
accredited as a reinsurer in this State, except for a
fraternal benefit society, $5,000.
(j) For filing all documents submitted by a foreign or
alien fraternal benefit society to be admitted to transact
business in this State, $500.
(k) For filing declaration of withdrawal of a foreign
or alien company, $50.
(l) For filing annual statement by a domestic company,
except a fraternal benefit society, a mutual benefit
association, a burial society, or a farm mutual, $200.
(m) For filing annual statement by a domestic
fraternal benefit society, $100.
(n) For filing annual statement by a farm mutual, a
mutual benefit association, or a burial society, $50.


(o) For issuing a certificate of authority or renewal
thereof except to a foreign fraternal benefit society,
$400.
(p) For issuing a certificate of authority or renewal
thereof to a foreign fraternal benefit society, $200.
(q) For issuing an amended certificate of authority,
$50.
(r) For each certified copy of certificate of
authority, $20.
(s) For each certificate of deposit, or valuation, or
compliance or surety certificate, $20.
(t) For copies of papers or records per page, $1.
(u) For each certification to copies of papers or
records, $10.
(v) For multiple copies of documents or certificates
listed in subparagraphs (r), (s), and (u) of paragraph (1)
of this Section, $10 for the first copy of a certificate of
any type and $5 for each additional copy of the same
certificate requested at the same time, unless, pursuant
to paragraph (2) of this Section, the Director finds these
additional fees excessive.
(w) For issuing a permit to sell shares or increase
paid-up capital:
(i) in connection with a public stock offering,
$300;
(ii) in any other case, $100.


(x) For issuing any other certificate required or
permissible under the law, $50.
(y) For filing a plan of exchange of the stock of a
domestic stock insurance company, a plan of
demutualization of a domestic mutual company, or a plan of
reorganization under Article XII, $2,000.
(z) For filing a statement of acquisition of a
domestic company as defined in Section 131.4 of this Code,
$2,000.
(aa) For filing an agreement to purchase the business
of an organization authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act or of a
health maintenance organization or a limited health
service organization, $2,000.
(bb) For filing a statement of acquisition of a
foreign or alien insurance company as defined in Section
131.12a of this Code, $1,000.
(cc) For filing a registration statement as required
in Sections 131.13 and 131.14, the notification as
required by Sections 131.16, 131.20a, or 141.4, or an
agreement or transaction required by Sections 124.2(2),
141, 141a, or 141.1, $200.
(dd) For filing an application for licensing of:
(i) a religious or charitable risk pooling trust
or a workers' compensation pool, $1,000;
(ii) a workers' compensation service company,


$500;
(iii) a self-insured automobile fleet, $200; or
(iv) a renewal of or amendment of any license
issued pursuant to (i), (ii), or (iii) above, $100.
(ee) For filing articles of incorporation for a
syndicate to engage in the business of insurance through
the Illinois Insurance Exchange, $2,000.
(ff) For filing amended articles of incorporation for
a syndicate engaged in the business of insurance through
the Illinois Insurance Exchange, $100.
(gg) For filing articles of incorporation for a
limited syndicate to join with other subscribers or
limited syndicates to do business through the Illinois
Insurance Exchange, $1,000.
(hh) For filing amended articles of incorporation for
a limited syndicate to do business through the Illinois
Insurance Exchange, $100.
(ii) For a permit to solicit subscriptions to a
syndicate or limited syndicate, $100.
(jj) For the filing of each form as required in
Section 143 of this Code, $50 per form. Informational and
advertising filings shall be $25 per filing. The fee for
advisory and rating organizations shall be $200 per form.
(i) For the purposes of the form filing fee,
filings made on insert page basis will be considered
one form at the time of its original submission.


Changes made to a form subsequent to its approval
shall be considered a new filing.
(ii) Only one fee shall be charged for a form,
regardless of the number of other forms or policies
with which it will be used.
(iii) Fees charged for a policy filed as it will be
issued regardless of the number of forms comprising
that policy shall not exceed $1,500. For advisory or
rating organizations, fees charged for a policy filed
as it will be issued regardless of the number of forms
comprising that policy shall not exceed $2,500.
(iv) The Director may by rule exempt forms from
such fees.
(kk) For filing an application for licensing of a
reinsurance intermediary, $500.
(ll) For filing an application for renewal of a
license of a reinsurance intermediary, $200.
(mm) For filing a plan of division of a domestic stock
company under Article IIB, $10,000.
(nn) For filing all documents submitted by a foreign
or alien company to be a certified reinsurer in this
State, except for a fraternal benefit society, $1,000.
(oo) For filing a renewal by a foreign or alien
company to be a certified reinsurer in this State, except
for a fraternal benefit society, $400.
(pp) For filing all documents submitted by a reinsurer


domiciled in a reciprocal jurisdiction, $1,000.
(qq) For filing a renewal by a reinsurer domiciled in
a reciprocal jurisdiction, $400.
(rr) For registering a captive management company or
renewal thereof, $50.
(2) When printed copies or numerous copies of the same
paper or records are furnished or certified, the Director may
reduce such fees for copies if he finds them excessive. He may,
when he considers it in the public interest, furnish without
charge to state insurance departments and persons other than
companies, copies or certified copies of reports of
examinations and of other papers and records.
(3)(a) The expenses incurred in any performance
examination authorized by law shall be paid by the company or
person being examined. The charge shall be consistent with
that otherwise authorized by law and shall be reasonably
related to the cost of the examination including but not
limited to compensation of examiners, electronic data
processing costs, supervision and preparation of an
examination report and lodging and travel expenses. All
lodging and travel expenses shall be in accord with the
applicable travel regulations as published by the Department
of Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under
Section 132 shall be in accordance with travel rates


prescribed under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
authorization of the Director. With the exception of the
direct reimbursements authorized by the Director, all
performance examination charges collected by the Department
shall be paid to the Insurance Producer Administration Fund,
however, the electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company being examined for payment to
the Technology Management Revolving Fund.
(b) The costs and fees incurred in a market conduct
examination shall be itemized and bills shall be provided to
the examinee on a monthly basis for review prior to submission
for payment. The Director shall review and affirmatively
endorse detailed billings from any contracted, qualified
outside professional assistance retained under Section 402 for
market conduct examinations before the detailed billings are
sent to the examinee. Before any qualified outside
professional assistance conducts billable work on an
examination, the Department shall disclose to the examinee the
terms of the contracts with the qualified outside professional
assistance that will be used, including the fees and hourly
rates that can be charged.
(4) At the time of any service of process on the Director


as attorney for such service, the Director shall charge and
collect the sum of $40, which may be recovered as taxable costs
by the party to the suit or action causing such service to be
made if he prevails in such suit or action.
(5) (a) The costs incurred by the Department of Insurance
in conducting any hearing authorized by law shall be assessed
against the parties to the hearing in such proportion as the
Director of Insurance may determine upon consideration of all
relevant circumstances including: (1) the nature of the
hearing; (2) whether the hearing was instigated by, or for the
benefit of a particular party or parties; (3) whether there is
a successful party on the merits of the proceeding; and (4) the
relative levels of participation by the parties.
(b) For purposes of this subsection (5) costs incurred
shall mean the hearing officer fees, court reporter fees, and
travel expenses of Department of Insurance officers and
employees; provided however, that costs incurred shall not
include hearing officer fees or court reporter fees unless the
Department has retained the services of independent
contractors or outside experts to perform such functions.
(c) The Director shall make the assessment of costs
incurred as part of the final order or decision arising out of
the proceeding; provided, however, that such order or decision
shall include findings and conclusions in support of the
assessment of costs. This subsection (5) shall not be
construed as permitting the payment of travel expenses unless


calculated in accordance with the applicable travel
regulations of the Department of Central Management Services,
as approved by the Governor's Travel Control Board. The
Director as part of such order or decision shall require all
assessments for hearing officer fees and court reporter fees,
if any, to be paid directly to the hearing officer or court
reporter by the party(s) assessed for such costs. The
assessments for travel expenses of Department officers and
employees shall be reimbursable to the Director of Insurance
for deposit to the fund out of which those expenses had been
paid.
(d) The provisions of this subsection (5) shall apply in
the case of any hearing conducted by the Director of Insurance
not otherwise specifically provided for by law.
(6) The Director shall charge and collect an annual
financial regulation fee from every domestic company for
examination and analysis of its financial condition and to
fund the internal costs and expenses of the Interstate
Insurance Receivership Commission as may be allocated to the
State of Illinois and companies doing an insurance business in
this State pursuant to Article X of the Interstate Insurance
Receivership Compact. The fee shall be the greater fixed
amount based upon the combination of nationwide direct premium
income and nationwide reinsurance assumed premium income or
upon admitted assets calculated under this subsection as
follows:


(a) Combination of nationwide direct premium income
and nationwide reinsurance assumed premium.
(i) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(ii) $750, if the premium is $500,000 or more, but
less than $5,000,000 and there is no reinsurance
assumed premium; or if the premium is less than
$5,000,000 and the reinsurance assumed premium is less
than $10,000,000;
(iii) $3,750, if the premium is less than
$5,000,000 and the reinsurance assumed premium is
$10,000,000 or more;
(iv) $7,500, if the premium is $5,000,000 or more,
but less than $10,000,000;
(v) $18,000, if the premium is $10,000,000 or
more, but less than $25,000,000;
(vi) $22,500, if the premium is $25,000,000 or
more, but less than $50,000,000;
(vii) $30,000, if the premium is $50,000,000 or
more, but less than $100,000,000;
(viii) $37,500, if the premium is $100,000,000 or
more.
(b) Admitted assets.
(i) $150, if admitted assets are less than
$1,000,000;
(ii) $750, if admitted assets are $1,000,000 or


more, but less than $5,000,000;
(iii) $3,750, if admitted assets are $5,000,000 or
more, but less than $25,000,000;
(iv) $7,500, if admitted assets are $25,000,000 or
more, but less than $50,000,000;
(v) $18,000, if admitted assets are $50,000,000 or
more, but less than $100,000,000;
(vi) $22,500, if admitted assets are $100,000,000
or more, but less than $500,000,000;
(vii) $30,000, if admitted assets are $500,000,000
or more, but less than $1,000,000,000;
(viii) $37,500, if admitted assets are
$1,000,000,000 or more.
(c) The sum of financial regulation fees charged to
the domestic companies of the same affiliated group shall
not exceed $250,000 in the aggregate in any single year
and shall be billed by the Director to the member company
designated by the group.
(7) The Director shall charge and collect an annual
financial regulation fee from every foreign or alien company,
except fraternal benefit societies, for the examination and
analysis of its financial condition and to fund the internal
costs and expenses of the Interstate Insurance Receivership
Commission as may be allocated to the State of Illinois and
companies doing an insurance business in this State pursuant
to Article X of the Interstate Insurance Receivership Compact.


The fee shall be a fixed amount based upon Illinois direct
premium income and nationwide reinsurance assumed premium
income in accordance with the following schedule:
(a) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(b) $750, if the premium is $500,000 or more, but less
than $5,000,000 and there is no reinsurance assumed
premium; or if the premium is less than $5,000,000 and the
reinsurance assumed premium is less than $10,000,000;
(c) $3,750, if the premium is less than $5,000,000 and
the reinsurance assumed premium is $10,000,000 or more;
(d) $7,500, if the premium is $5,000,000 or more, but
less than $10,000,000;
(e) $18,000, if the premium is $10,000,000 or more,
but less than $25,000,000;
(f) $22,500, if the premium is $25,000,000 or more,
but less than $50,000,000;
(g) $30,000, if the premium is $50,000,000 or more,
but less than $100,000,000;
(h) $37,500, if the premium is $100,000,000 or more.
The sum of financial regulation fees under this subsection
(7) charged to the foreign or alien companies within the same
affiliated group shall not exceed $250,000 in the aggregate in
any single year and shall be billed by the Director to the
member company designated by the group.
(8) Beginning January 1, 1992, the financial regulation


fees imposed under subsections (6) and (7) of this Section
shall be paid by each company or domestic affiliated group
annually. After January 1, 1994, the fee shall be billed by
Department invoice based upon the company's premium income or
admitted assets as shown in its annual statement for the
preceding calendar year. The invoice is due upon receipt and
must be paid no later than June 30 of each calendar year. All
financial regulation fees collected by the Department shall be
paid to the Insurance Financial Regulation Fund. The
Department may not collect financial examiner per diem charges
from companies subject to subsections (6) and (7) of this
Section undergoing financial examination after June 30, 1992.
(9) In addition to the financial regulation fee required
by this Section, a company undergoing any financial
examination authorized by law shall pay the following costs
and expenses incurred by the Department: electronic data
processing costs, the expenses authorized under Section 131.21
and subsection (d) of Section 132.4 of this Code, and lodging
and travel expenses.
Electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company undergoing examination for
payment to the Technology Management Revolving Fund. Except
for direct reimbursements authorized by the Director or direct
payments made under Section 131.21 or subsection (d) of
Section 132.4 of this Code, all financial regulation fees and


all financial examination charges collected by the Department
shall be paid to the Insurance Financial Regulation Fund.
All lodging and travel expenses shall be in accordance
with applicable travel regulations published by the Department
of Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under
Sections 132.1 through 132.7 shall be in accordance with
travel rates prescribed under paragraph 301-7.2 of the Federal
Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
the authorization of the Director.
In the case of an organization or person not subject to the
financial regulation fee, the expenses incurred in any
financial examination authorized by law shall be paid by the
organization or person being examined. The charge shall be
reasonably related to the cost of the examination including,
but not limited to, compensation of examiners and other costs
described in this subsection.
(10) Any company, person, or entity failing to make any
payment of $150 or more as required under this Section shall be
subject to the penalty and interest provisions provided for in
subsections (4) and (7) of Section 412.
(11) Unless otherwise specified, all of the fees collected
under this Section shall be paid into the Insurance Financial


Regulation Fund.
(12) For purposes of this Section:
(a) "Domestic company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of this State, and in addition includes a
not-for-profit corporation authorized under the Dental
Service Plan Act or the Voluntary Health Services Plans
Act, a health maintenance organization, and a limited
health service organization.
(b) "Foreign company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any state of the United States other than
this State and in addition includes a health maintenance
organization and a limited health service organization
which is incorporated or organized under the laws of any
state of the United States other than this State.
(c) "Alien company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any country other than the United
States.
(d) "Fraternal benefit society" means a corporation,
society, order, lodge or voluntary association as defined
in Section 282.1 of this Code.
(e) "Mutual benefit association" means a company,
association or corporation authorized by the Director to
do business in this State under the provisions of Article


XVIII of this Code.
(f) "Burial society" means a person, firm,
corporation, society or association of individuals
authorized by the Director to do business in this State
under the provisions of Article XIX of this Code.
(g) "Farm mutual" means a district, county and
township mutual insurance company authorized by the
Director to do business in this State under the provisions
of the Farm Mutual Insurance Company Act of 1986.
(Source: P.A. 102-775, eff. 5-13-22.)
(Text of Section after amendment by P.A. 103-75)
Sec. 408. Fees and charges.
(1) The Director shall charge, collect and give proper
acquittances for the payment of the following fees and
charges:
(a) For filing all documents submitted for the
incorporation or organization or certification of a
domestic company, except for a fraternal benefit society,
$2,000.
(b) For filing all documents submitted for the
incorporation or organization of a fraternal benefit
society, $500.
(c) For filing amendments to articles of incorporation
and amendments to declaration of organization, except for
a fraternal benefit society, a mutual benefit association,


a burial society or a farm mutual, $200.
(d) For filing amendments to articles of incorporation
of a fraternal benefit society, a mutual benefit
association or a burial society, $100.
(e) For filing amendments to articles of incorporation
of a farm mutual, $50.
(f) For filing bylaws or amendments thereto, $50.
(g) For filing agreement of merger or consolidation:
(i) for a domestic company, except for a fraternal
benefit society, a mutual benefit association, a
burial society, or a farm mutual, $2,000.
(ii) for a foreign or alien company, except for a
fraternal benefit society, $600.
(iii) for a fraternal benefit society, a mutual
benefit association, a burial society, or a farm
mutual, $200.
(h) For filing agreements of reinsurance by a domestic
company, $200.
(i) For filing all documents submitted by a foreign or
alien company to be admitted to transact business or
accredited as a reinsurer in this State, except for a
fraternal benefit society, $5,000.
(j) For filing all documents submitted by a foreign or
alien fraternal benefit society to be admitted to transact
business in this State, $500.
(k) For filing declaration of withdrawal of a foreign


or alien company, $50.
(l) For filing annual statement by a domestic company,
except a fraternal benefit society, a mutual benefit
association, a burial society, or a farm mutual, $200.
(m) For filing annual statement by a domestic
fraternal benefit society, $100.
(n) For filing annual statement by a farm mutual, a
mutual benefit association, or a burial society, $50.
(o) For issuing a certificate of authority or renewal
thereof except to a foreign fraternal benefit society,
$400.
(p) For issuing a certificate of authority or renewal
thereof to a foreign fraternal benefit society, $200.
(q) For issuing an amended certificate of authority,
$50.
(r) For each certified copy of certificate of
authority, $20.
(s) For each certificate of deposit, or valuation, or
compliance or surety certificate, $20.
(t) For copies of papers or records per page, $1.
(u) For each certification to copies of papers or
records, $10.
(v) For multiple copies of documents or certificates
listed in subparagraphs (r), (s), and (u) of paragraph (1)
of this Section, $10 for the first copy of a certificate of
any type and $5 for each additional copy of the same


certificate requested at the same time, unless, pursuant
to paragraph (2) of this Section, the Director finds these
additional fees excessive.
(w) For issuing a permit to sell shares or increase
paid-up capital:
(i) in connection with a public stock offering,
$300;
(ii) in any other case, $100.
(x) For issuing any other certificate required or
permissible under the law, $50.
(y) For filing a plan of exchange of the stock of a
domestic stock insurance company, a plan of
demutualization of a domestic mutual company, or a plan of
reorganization under Article XII, $2,000.
(z) For filing a statement of acquisition of a
domestic company as defined in Section 131.4 of this Code,
$2,000.
(aa) For filing an agreement to purchase the business
of an organization authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act or of a
health maintenance organization or a limited health
service organization, $2,000.
(bb) For filing a statement of acquisition of a
foreign or alien insurance company as defined in Section
131.12a of this Code, $1,000.
(cc) For filing a registration statement as required


in Sections 131.13 and 131.14, the notification as
required by Sections 131.16, 131.20a, or 141.4, or an
agreement or transaction required by Sections 124.2(2),
141, 141a, or 141.1, $200.
(dd) For filing an application for licensing of:
(i) a religious or charitable risk pooling trust
or a workers' compensation pool, $1,000;
(ii) a workers' compensation service company,
$500;
(iii) a self-insured automobile fleet, $200; or
(iv) a renewal of or amendment of any license
issued pursuant to (i), (ii), or (iii) above, $100.
(ee) For filing articles of incorporation for a
syndicate to engage in the business of insurance through
the Illinois Insurance Exchange, $2,000.
(ff) For filing amended articles of incorporation for
a syndicate engaged in the business of insurance through
the Illinois Insurance Exchange, $100.
(gg) For filing articles of incorporation for a
limited syndicate to join with other subscribers or
limited syndicates to do business through the Illinois
Insurance Exchange, $1,000.
(hh) For filing amended articles of incorporation for
a limited syndicate to do business through the Illinois
Insurance Exchange, $100.
(ii) For a permit to solicit subscriptions to a


syndicate or limited syndicate, $100.
(jj) For the filing of each form as required in
Section 143 of this Code, $50 per form. Informational and
advertising filings shall be $25 per filing. The fee for
advisory and rating organizations shall be $200 per form.
(i) For the purposes of the form filing fee,
filings made on insert page basis will be considered
one form at the time of its original submission.
Changes made to a form subsequent to its approval
shall be considered a new filing.
(ii) Only one fee shall be charged for a form,
regardless of the number of other forms or policies
with which it will be used.
(iii) Fees charged for a policy filed as it will be
issued regardless of the number of forms comprising
that policy shall not exceed $1,500. For advisory or
rating organizations, fees charged for a policy filed
as it will be issued regardless of the number of forms
comprising that policy shall not exceed $2,500.
(iv) The Director may by rule exempt forms from
such fees.
(kk) For filing an application for licensing of a
reinsurance intermediary, $500.
(ll) For filing an application for renewal of a
license of a reinsurance intermediary, $200.
(mm) For filing a plan of division of a domestic stock


company under Article IIB, $10,000.
(nn) For filing all documents submitted by a foreign
or alien company to be a certified reinsurer in this
State, except for a fraternal benefit society, $1,000.
(oo) For filing a renewal by a foreign or alien
company to be a certified reinsurer in this State, except
for a fraternal benefit society, $400.
(pp) For filing all documents submitted by a reinsurer
domiciled in a reciprocal jurisdiction, $1,000.
(qq) For filing a renewal by a reinsurer domiciled in
a reciprocal jurisdiction, $400.
(rr) For registering a captive management company or
renewal thereof, $50.
(ss) For filing an insurance business transfer plan
under Article XLVII, $25,000.
(2) When printed copies or numerous copies of the same
paper or records are furnished or certified, the Director may
reduce such fees for copies if he finds them excessive. He may,
when he considers it in the public interest, furnish without
charge to state insurance departments and persons other than
companies, copies or certified copies of reports of
examinations and of other papers and records.
(3)(a) The expenses incurred in any performance
examination authorized by law shall be paid by the company or
person being examined. The charge shall be consistent with
that otherwise authorized by law and shall be reasonably


related to the cost of the examination including but not
limited to compensation of examiners, electronic data
processing costs, supervision and preparation of an
examination report and lodging and travel expenses. All
lodging and travel expenses shall be in accord with the
applicable travel regulations as published by the Department
of Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under
Section 132 shall be in accordance with travel rates
prescribed under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
authorization of the Director. With the exception of the
direct reimbursements authorized by the Director, all
performance examination charges collected by the Department
shall be paid to the Insurance Producer Administration Fund,
however, the electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company being examined for payment to
the Technology Management Revolving Fund.
(b) The costs and fees incurred in a market conduct
examination shall be itemized and bills shall be provided to
the examinee on a monthly basis for review prior to submission
for payment. The Director shall review and affirmatively


endorse detailed billings from any contracted, qualified
outside professional assistance retained under Section 402 for
market conduct examinations before the detailed billings are
sent to the examinee. Before any qualified outside
professional assistance conducts billable work on an
examination, the Department shall disclose to the examinee the
terms of the contracts with the qualified outside professional
assistance that will be used, including the fees and hourly
rates that can be charged.
(4) At the time of any service of process on the Director
as attorney for such service, the Director shall charge and
collect the sum of $40, which may be recovered as taxable costs
by the party to the suit or action causing such service to be
made if he prevails in such suit or action.
(5) (a) The costs incurred by the Department of Insurance
in conducting any hearing authorized by law shall be assessed
against the parties to the hearing in such proportion as the
Director of Insurance may determine upon consideration of all
relevant circumstances including: (1) the nature of the
hearing; (2) whether the hearing was instigated by, or for the
benefit of a particular party or parties; (3) whether there is
a successful party on the merits of the proceeding; and (4) the
relative levels of participation by the parties.
(b) For purposes of this subsection (5) costs incurred
shall mean the hearing officer fees, court reporter fees, and
travel expenses of Department of Insurance officers and


employees; provided however, that costs incurred shall not
include hearing officer fees or court reporter fees unless the
Department has retained the services of independent
contractors or outside experts to perform such functions.
(c) The Director shall make the assessment of costs
incurred as part of the final order or decision arising out of
the proceeding; provided, however, that such order or decision
shall include findings and conclusions in support of the
assessment of costs. This subsection (5) shall not be
construed as permitting the payment of travel expenses unless
calculated in accordance with the applicable travel
regulations of the Department of Central Management Services,
as approved by the Governor's Travel Control Board. The
Director as part of such order or decision shall require all
assessments for hearing officer fees and court reporter fees,
if any, to be paid directly to the hearing officer or court
reporter by the party(s) assessed for such costs. The
assessments for travel expenses of Department officers and
employees shall be reimbursable to the Director of Insurance
for deposit to the fund out of which those expenses had been
paid.
(d) The provisions of this subsection (5) shall apply in
the case of any hearing conducted by the Director of Insurance
not otherwise specifically provided for by law.
(6) The Director shall charge and collect an annual
financial regulation fee from every domestic company for


examination and analysis of its financial condition and to
fund the internal costs and expenses of the Interstate
Insurance Receivership Commission as may be allocated to the
State of Illinois and companies doing an insurance business in
this State pursuant to Article X of the Interstate Insurance
Receivership Compact. The fee shall be the greater fixed
amount based upon the combination of nationwide direct premium
income and nationwide reinsurance assumed premium income or
upon admitted assets calculated under this subsection as
follows:
(a) Combination of nationwide direct premium income
and nationwide reinsurance assumed premium.
(i) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(ii) $750, if the premium is $500,000 or more, but
less than $5,000,000 and there is no reinsurance
assumed premium; or if the premium is less than
$5,000,000 and the reinsurance assumed premium is less
than $10,000,000;
(iii) $3,750, if the premium is less than
$5,000,000 and the reinsurance assumed premium is
$10,000,000 or more;
(iv) $7,500, if the premium is $5,000,000 or more,
but less than $10,000,000;
(v) $18,000, if the premium is $10,000,000 or
more, but less than $25,000,000;


(vi) $22,500, if the premium is $25,000,000 or
more, but less than $50,000,000;
(vii) $30,000, if the premium is $50,000,000 or
more, but less than $100,000,000;
(viii) $37,500, if the premium is $100,000,000 or
more.
(b) Admitted assets.
(i) $150, if admitted assets are less than
$1,000,000;
(ii) $750, if admitted assets are $1,000,000 or
more, but less than $5,000,000;
(iii) $3,750, if admitted assets are $5,000,000 or
more, but less than $25,000,000;
(iv) $7,500, if admitted assets are $25,000,000 or
more, but less than $50,000,000;
(v) $18,000, if admitted assets are $50,000,000 or
more, but less than $100,000,000;
(vi) $22,500, if admitted assets are $100,000,000
or more, but less than $500,000,000;
(vii) $30,000, if admitted assets are $500,000,000
or more, but less than $1,000,000,000;
(viii) $37,500, if admitted assets are
$1,000,000,000 or more.
(c) The sum of financial regulation fees charged to
the domestic companies of the same affiliated group shall
not exceed $250,000 in the aggregate in any single year


and shall be billed by the Director to the member company
designated by the group.
(7) The Director shall charge and collect an annual
financial regulation fee from every foreign or alien company,
except fraternal benefit societies, for the examination and
analysis of its financial condition and to fund the internal
costs and expenses of the Interstate Insurance Receivership
Commission as may be allocated to the State of Illinois and
companies doing an insurance business in this State pursuant
to Article X of the Interstate Insurance Receivership Compact.
The fee shall be a fixed amount based upon Illinois direct
premium income and nationwide reinsurance assumed premium
income in accordance with the following schedule:
(a) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(b) $750, if the premium is $500,000 or more, but less
than $5,000,000 and there is no reinsurance assumed
premium; or if the premium is less than $5,000,000 and the
reinsurance assumed premium is less than $10,000,000;
(c) $3,750, if the premium is less than $5,000,000 and
the reinsurance assumed premium is $10,000,000 or more;
(d) $7,500, if the premium is $5,000,000 or more, but
less than $10,000,000;
(e) $18,000, if the premium is $10,000,000 or more,
but less than $25,000,000;
(f) $22,500, if the premium is $25,000,000 or more,


but less than $50,000,000;
(g) $30,000, if the premium is $50,000,000 or more,
but less than $100,000,000;
(h) $37,500, if the premium is $100,000,000 or more.
The sum of financial regulation fees under this subsection
(7) charged to the foreign or alien companies within the same
affiliated group shall not exceed $250,000 in the aggregate in
any single year and shall be billed by the Director to the
member company designated by the group.
(8) Beginning January 1, 1992, the financial regulation
fees imposed under subsections (6) and (7) of this Section
shall be paid by each company or domestic affiliated group
annually. After January 1, 1994, the fee shall be billed by
Department invoice based upon the company's premium income or
admitted assets as shown in its annual statement for the
preceding calendar year. The invoice is due upon receipt and
must be paid no later than June 30 of each calendar year. All
financial regulation fees collected by the Department shall be
paid to the Insurance Financial Regulation Fund. The
Department may not collect financial examiner per diem charges
from companies subject to subsections (6) and (7) of this
Section undergoing financial examination after June 30, 1992.
(9) In addition to the financial regulation fee required
by this Section, a company undergoing any financial
examination authorized by law shall pay the following costs
and expenses incurred by the Department: electronic data


processing costs, the expenses authorized under Section 131.21
and subsection (d) of Section 132.4 of this Code, and lodging
and travel expenses.
Electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company undergoing examination for
payment to the Technology Management Revolving Fund. Except
for direct reimbursements authorized by the Director or direct
payments made under Section 131.21 or subsection (d) of
Section 132.4 of this Code, all financial regulation fees and
all financial examination charges collected by the Department
shall be paid to the Insurance Financial Regulation Fund.
All lodging and travel expenses shall be in accordance
with applicable travel regulations published by the Department
of Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under
Sections 132.1 through 132.7 shall be in accordance with
travel rates prescribed under paragraph 301-7.2 of the Federal
Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
the authorization of the Director.
In the case of an organization or person not subject to the
financial regulation fee, the expenses incurred in any
financial examination authorized by law shall be paid by the


organization or person being examined. The charge shall be
reasonably related to the cost of the examination including,
but not limited to, compensation of examiners and other costs
described in this subsection.
(10) Any company, person, or entity failing to make any
payment of $150 or more as required under this Section shall be
subject to the penalty and interest provisions provided for in
subsections (4) and (7) of Section 412.
(11) Unless otherwise specified, all of the fees collected
under this Section shall be paid into the Insurance Financial
Regulation Fund.
(12) For purposes of this Section:
(a) "Domestic company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of this State, and in addition includes a
not-for-profit corporation authorized under the Dental
Service Plan Act or the Voluntary Health Services Plans
Act, a health maintenance organization, and a limited
health service organization.
(b) "Foreign company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any state of the United States other than
this State and in addition includes a health maintenance
organization and a limited health service organization
which is incorporated or organized under the laws of any
state of the United States other than this State.


(c) "Alien company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any country other than the United
States.
(d) "Fraternal benefit society" means a corporation,
society, order, lodge or voluntary association as defined
in Section 282.1 of this Code.
(e) "Mutual benefit association" means a company,
association or corporation authorized by the Director to
do business in this State under the provisions of Article
XVIII of this Code.
(f) "Burial society" means a person, firm,
corporation, society or association of individuals
authorized by the Director to do business in this State
under the provisions of Article XIX of this Code.
(g) "Farm mutual" means a district, county and
township mutual insurance company authorized by the
Director to do business in this State under the provisions
of the Farm Mutual Insurance Company Act of 1986.
(Source: P.A. 102-775, eff. 5-13-22; 103-75, eff. 1-1-25.)
(215 ILCS 5/511.109) (from Ch. 73, par. 1065.58-109)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.109. Examination.
(a) The Director or the Director's his designee may
examine any applicant for or holder of an administrator's


license in accordance with Sections 132 through 132.7. If the
Director or the examiners find that the administrator has
violated this Article or any other insurance-related laws,
rules, or regulations under the Director's jurisdiction
because of the manner in which the administrator has conducted
business on behalf of an insurer or plan sponsor, then, unless
the insurer or plan sponsor is included in the examination and
has been afforded the same opportunity to request or
participate in a hearing on the examination report, the
examination report shall not allege a violation by the insurer
or plan sponsor and the Director's order based on the report
shall not impose any requirements, prohibitions, or penalties
on the insurer or plan sponsor. Nothing in this Section shall
prevent the Director from using any information obtained
during the examination of an administrator to examine,
investigate, or take other appropriate regulatory or legal
action with respect to an insurer or plan sponsor.
(b) Any administrator being examined shall provide to the
Director or his designee convenient and free access, at all
reasonable hours at their offices, to all books, records,
documents and other papers relating to such administrator's
business affairs.
(c) The Director or his designee may administer oaths and
thereafter examine any individual about the business of the
administrator.
(d) The examiners designated by the Director pursuant to


this Section may make reports to the Director. Any report
alleging substantive violations of this Article, any
applicable provisions of the Illinois Insurance Code, or any
applicable Part of Title 50 of the Illinois Administrative
Code shall be in writing and be based upon facts obtained by
the examiners. The report shall be verified by the examiners.
(e) If a report is made, the Director shall either deliver
a duplicate thereof to the administrator being examined or
send such duplicate by certified or registered mail to the
administrator's address specified in the records of the
Department. The Director shall afford the administrator an
opportunity to request a hearing to object to the report. The
administrator may request a hearing within 30 days after
receipt of the duplicate of the examination report by giving
the Director written notice of such request together with
written objections to the report. Any hearing shall be
conducted in accordance with Sections 402 and 403 of this
Code. The right to hearing is waived if the delivery of the
report is refused or the report is otherwise undeliverable or
the administrator does not timely request a hearing. After the
hearing or upon expiration of the time period during which an
administrator may request a hearing, if the examination
reveals that the administrator is operating in violation of
any applicable provision of the Illinois Insurance Code, any
applicable Part of Title 50 of the Illinois Administrative
Code or prior order, the Director, in the written order, may


require the administrator to take any action the Director
considers necessary or appropriate in accordance with the
report or examination hearing. If the Director issues an
order, it shall be issued within 90 days after the report is
filed, or if there is a hearing, within 90 days after the
conclusion of the hearing. The order is subject to review
under the Administrative Review Law.
(Source: P.A. 84-887.)
(215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
Sec. 512-3. Definitions. For the purposes of this Article,
unless the context otherwise requires, the terms defined in
this Article have the meanings ascribed to them herein:
"Health care payer" means an insurance company, health
maintenance organization, limited health service organization,
health services plan corporation, or dental service plan
corporation authorized to do business in this State.
(a) "Third party prescription program" or "program" means
any system of providing for the reimbursement of
pharmaceutical services and prescription drug products offered
or operated in this State under a contractual arrangement or
agreement between a provider of such services and another
party who is not the consumer of those services and products.
Such programs may include, but need not be limited to,
employee benefit plans whereby a consumer receives
prescription drugs or other pharmaceutical services and those


services are paid for by an agent of the employer or others.
(b) "Third party program administrator" or "administrator"
means any person, partnership or corporation who issues or
causes to be issued any payment or reimbursement to a provider
for services rendered pursuant to a third party prescription
program, but does not include the Director of Healthcare and
Family Services or any agent authorized by the Director to
reimburse a provider of services rendered pursuant to a
program of which the Department of Healthcare and Family
Services is the third party.
(Source: P.A. 95-331, eff. 8-21-07.)
(215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
Sec. 512-5. Fiduciary and Bonding Requirements.  A third
party prescription program administrator shall (1) establish
and maintain a fiduciary account, separate and apart from any
and all other accounts, for the receipt and disbursement of
funds for reimbursement of providers of services under the
program, or (2) post, or cause to be posted, a bond of
indemnity in an amount equal to not less than 10% of the total
estimated annual reimbursements under the program.
The establishment of such fiduciary accounts and bonds
shall be consistent with applicable State law. If a bond of
indemnity is posted, it shall be held by the Director of
Insurance for the benefit and indemnification of the providers
of services under the third party prescription program.


An administrator who operates more than one third party
prescription program may establish and maintain a separate
fiduciary account or bond of indemnity for each such program,
or may operate and maintain a consolidated fiduciary account
or bond of indemnity for all such programs.
The requirements of this Section do not apply to any third
party prescription program administered by or on behalf of any
health care payer insurance company, Health Care Service Plan
Corporation or Pharmaceutical Service Plan Corporation
authorized to do business in the State of Illinois.
(Source: P.A. 82-1005.)
(215 ILCS 5/512-11 new)
Sec. 512-11. Examination. The Director or the Director's
designee may examine any applicant for or holder of an
administrator's registration in accordance with Sections 132
through 132.7 of this Code. If the Director or the examiners
find that the administrator has violated this Article or any
other insurance-related laws or regulations under the
Director's jurisdiction because of the manner in which the
administrator has conducted business on behalf of a separately
incorporated health care payer, then, unless the health care
payer is included in the examination and has been afforded the
same opportunity to request or participate in a hearing on the
examination report, the examination report shall not allege a
violation by the health care payer and the Director's order


based on the report shall not impose any requirements,
prohibitions, or penalties on the health care payer. Nothing
in this Section shall prevent the Director from using any
information obtained during the examination of an
administrator to examine, investigate, or take other
appropriate regulatory or legal action with respect to a
health care payer.
(215 ILCS 5/513b3)
Sec. 513b3. Examination. (a) The Director, or his or her
designee, may examine a registered pharmacy benefit manager in
accordance with Sections 132-132.7. If the Director or the
examiners find that the pharmacy benefit manager has violated
this Article or any other insurance-related laws, rules, or
regulations under the Director's jurisdiction because of the
manner in which the pharmacy benefit manager has conducted
business on behalf of a health insurer or plan sponsor, then,
unless the health insurer or plan sponsor is included in the
examination and has been afforded the same opportunity to
request or participate in a hearing on the examination report,
the examination report shall not allege a violation by the
health insurer or plan sponsor and the Director's order based
on the report shall not impose any requirements, prohibitions,
or penalties on the health insurer or plan sponsor. Nothing in
this Section shall prevent the Director from using any
information obtained during the examination of an


administrator to examine, investigate, or take other
appropriate regulatory or legal action with respect to a
health insurer or plan sponsor.
(b) Any pharmacy benefit manager being examined shall
provide to the Director, or his or her designee, convenient
and free access to all books, records, documents, and other
papers relating to such pharmacy benefit manager's business
affairs at all reasonable hours at its offices.
(c) The Director, or his or her designee, may administer
oaths and thereafter examine the pharmacy benefit manager's
designee, representative, or any officer or senior manager as
listed on the license or registration certificate about the
business of the pharmacy benefit manager.
(d) The examiners designated by the Director under this
Section may make reports to the Director. Any report alleging
substantive violations of this Article, any applicable
provisions of this Code, or any applicable Part of Title 50 of
the Illinois Administrative Code shall be in writing and be
based upon facts obtained by the examiners. The report shall
be verified by the examiners.
(e) If a report is made, the Director shall either deliver
a duplicate report to the pharmacy benefit manager being
examined or send such duplicate by certified or registered
mail to the pharmacy benefit manager's address specified in
the records of the Department. The Director shall afford the
pharmacy benefit manager an opportunity to request a hearing


to object to the report. The pharmacy benefit manager may
request a hearing within 30 days after receipt of the
duplicate report by giving the Director written notice of such
request together with written objections to the report. Any
hearing shall be conducted in accordance with Sections 402 and
403 of this Code. The right to a hearing is waived if the
delivery of the report is refused or the report is otherwise
undeliverable or the pharmacy benefit manager does not timely
request a hearing. After the hearing or upon expiration of the
time period during which a pharmacy benefit manager may
request a hearing, if the examination reveals that the
pharmacy benefit manager is operating in violation of any
applicable provision of this Code, any applicable Part of
Title 50 of the Illinois Administrative Code, a provision of
this Article, or prior order, the Director, in the written
order, may require the pharmacy benefit manager to take any
action the Director considers necessary or appropriate in
accordance with the report or examination hearing. If the
Director issues an order, it shall be issued within 90 days
after the report is filed, or if there is a hearing, within 90
days after the conclusion of the hearing. The order is subject
to review under the Administrative Review Law.
(Source: P.A. 101-452, eff. 1-1-20.)
Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text


that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.