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| Public Act 102-0929
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| HB4313 Enrolled | LRB102 21390 BMS 30506 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by |
changing Sections 131.22, 132.5, and 547 as follows:
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(215 ILCS 5/131.22)
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(Text of Section before amendment by P.A. 102-578) |
Sec. 131.22. Confidential treatment. |
(a) Documents, materials, or other information in the |
possession or control of the Department that are obtained by |
or disclosed to the Director or any other person in the course |
of an examination or investigation made pursuant to this |
Article and all information reported or provided to the |
Department pursuant to paragraphs (12) and (13) of Section |
131.5 and Sections 131.13 through 131.21 shall be confidential |
by law and privileged, shall not be subject to the Illinois |
Freedom of Information Act, shall not be subject to subpoena, |
and shall not be subject to discovery or admissible in |
evidence in any private civil action. However, the Director is |
authorized to use the documents, materials, or other |
information in the furtherance of any regulatory or legal |
action brought as a part of the Director's official duties. |
The Director shall not otherwise make the documents, |
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materials, or other information public without the prior |
written consent of the company to which it pertains unless the |
Director, after giving the company and its affiliates who |
would be affected thereby prior written notice and an |
opportunity to be heard, determines that the interest of |
policyholders, shareholders, or the public shall be served by |
the publication thereof, in which event the Director may |
publish all or any part in such manner as may be deemed |
appropriate. |
(b) Neither the Director nor any person who received |
documents, materials, or other information while acting under |
the authority of the Director or with whom such documents, |
materials, or other information are shared pursuant to this |
Article shall be permitted or required to testify in any |
private civil action concerning any confidential documents, |
materials, or information subject to subsection (a) of this |
Section. |
(c) In order to assist in the performance of the |
Director's duties, the Director: |
(1) may share documents, materials, or other |
information, including the confidential and privileged |
documents, materials, or information subject to subsection |
(a) of this Section, with other state, federal, and |
international regulatory agencies, with the NAIC and its |
affiliates and subsidiaries, and with third-party
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consultants, and with state, federal, and international |
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law enforcement authorities and regulatory agencies, |
including members of any supervisory college allowed by |
this Article, provided that the recipient agrees in |
writing to maintain the confidentiality and privileged |
status of the document, material, or other information, |
and has verified in writing the legal authority to |
maintain confidentiality; |
(1.5) notwithstanding paragraph (1) of this subsection |
(c), may only share confidential and privileged documents, |
material, or information reported pursuant to Section |
131.14b with commissioners of states having statutes or |
regulations substantially similar to subsection (a) of |
this Section and who have agreed in writing not to |
disclose such information; and |
(1.7) notwithstanding paragraph (1) of this subsection |
(c), may only share confidential and privileged documents, |
material, or information reported pursuant to Section |
131.14b with 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 |
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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; and |
(2) may receive documents, materials, or information, |
including otherwise confidential and privileged documents, |
materials, or information from the NAIC and its affiliates |
and subsidiaries and from regulatory and law enforcement |
officials of other foreign or domestic jurisdictions, and |
shall maintain as confidential or privileged any document, |
material, 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, or information; any such documents,
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materials, or information, while in the Director's |
possession, shall not be subject to the
Illinois Freedom |
of Information Act and shall not be subject to subpoena. |
(c-5) Written agreements with the NAIC or third-party |
consultants governing sharing and use of information provided |
pursuant to this Article consistent with this subsection (c) |
shall:
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(1)
specify procedures and protocols regarding the |
confidentiality and security of information shared with |
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the NAIC and its affiliates and subsidiaries or |
third-party consultants pursuant to this Article, |
including procedures and protocols for sharing by the NAIC |
with other state, federal, or international regulators;
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(2)
specify that ownership of information shared with |
the NAIC and its affiliates and subsidiaries or |
third-party consultants pursuant to this Article remains |
with the Director and the NAIC's or third-party |
consultant's use of the information is subject to the |
direction of the Director;
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(3)
require prompt notice to be given to a company |
whose confidential information in the possession of the |
NAIC or third-party consultant pursuant to this Article is |
subject to a request or subpoena for disclosure or |
production; and
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(4)
require the NAIC and its affiliates and |
subsidiaries or third-party consultants to consent to |
intervention by a company in any judicial or |
administrative action in which the NAIC and its affiliates |
and subsidiaries or third-party consultants may be |
required to disclose confidential information about the |
company shared with the NAIC and its affiliates and |
subsidiaries or third-party consultants pursuant to this |
Article. |
(d) The sharing of documents, materials, or information by |
the Director pursuant to this Article shall not constitute a |
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delegation of regulatory authority or rulemaking, and the |
Director is solely responsible for the administration, |
execution, and enforcement of the provisions of this Article. |
(e) No waiver of any applicable privilege or claim of |
confidentiality in the documents, materials, or information |
shall occur as a result of disclosure to the Director under |
this Section or as a result of sharing as authorized in |
subsection (c) of this Section. |
(f) Documents, materials, or other information in the |
possession or control of the NAIC or a third-party consultant |
pursuant to this Article shall be confidential by law and |
privileged, shall not be subject to the Illinois Freedom of |
Information Act, shall not be subject to subpoena, and shall |
not be subject to discovery or admissible in evidence in any |
private civil action.
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(Source: P.A. 102-394, eff. 8-16-21.)
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(Text of Section after amendment by P.A. 102-578)
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Sec. 131.22. Confidential treatment. |
(a) Documents, materials, or other information in the |
possession or control of the Department that are obtained by |
or disclosed to the Director or any other person in the course |
of an examination or investigation made pursuant to this |
Article and all information reported or provided to the |
Department pursuant to paragraphs (12) and (13) of Section |
131.5 and Sections 131.13 through 131.21 are recognized by |
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this State as being proprietary and to contain trade secrets, |
and shall be confidential by law and privileged, shall not be |
subject to the Illinois Freedom of Information Act, shall not |
be subject to subpoena, and shall not be subject to discovery |
or admissible in evidence in any private civil action. |
However, the Director is authorized to use the documents, |
materials, or other information in the furtherance of any |
regulatory or legal action brought as a part of the Director's |
official duties. The Director shall not otherwise make the |
documents, materials, or other information public without the |
prior written consent of the company to which it pertains |
unless the Director, after giving the company and its |
affiliates who would be affected thereby prior written notice |
and an opportunity to be heard, determines that the interest |
of policyholders, shareholders, or the public shall be served |
by the publication thereof, in which event the Director may |
publish all or any part in such manner as may be deemed |
appropriate. |
(b) Neither the Director nor any person who received |
documents, materials, or other information while acting under |
the authority of the Director or with whom such documents, |
materials, or other information are shared pursuant to this |
Article shall be permitted or required to testify in any |
private civil action concerning any confidential documents, |
materials, or information subject to subsection (a) of this |
Section. |
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(c) In order to assist in the performance of the |
Director's duties, the Director: |
(1) may share documents, materials, or other |
information, including the confidential and privileged |
documents, materials, or information subject to subsection |
(a) of this Section, including proprietary and trade |
secret documents and materials, with other state, federal, |
and international regulatory agencies, with the NAIC and |
its affiliates and subsidiaries, and with third-party
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consultants, and with state, federal, and international |
law enforcement authorities and regulatory agencies, |
including members of any supervisory college allowed by |
this Article, provided that the recipient agrees in |
writing to maintain the confidentiality and privileged |
status of the document, material, or other information, |
and has verified in writing the legal authority to |
maintain confidentiality; |
(1.5) notwithstanding paragraph (1) of this subsection |
(c), may only share confidential and privileged documents, |
material, or information reported pursuant to subsection |
(a) of Section 131.14b with commissioners of states having |
statutes or regulations substantially similar to |
subsection (a) of this Section and who have agreed in |
writing not to disclose such information; and |
(1.7) notwithstanding paragraph (1) of this subsection |
(c), may only share confidential and privileged documents, |
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material, or information reported pursuant to Section |
131.14b with 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; and |
(2) may receive documents, materials, or information, |
including otherwise confidential and privileged documents, |
materials, or information, including proprietary and trade |
secret information, from the NAIC and its affiliates and |
subsidiaries and from regulatory and law enforcement |
officials of other foreign or domestic jurisdictions, and |
shall maintain as confidential or privileged any document, |
material, or information received with notice or the |
understanding that it is confidential or privileged under |
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the laws of the jurisdiction that is the source of the |
document, material, or information; any such documents,
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materials, or information, while in the Director's |
possession, shall not be subject to the
Illinois Freedom |
of Information Act and shall not be subject to subpoena. |
(blank). |
(c-5) Written agreements with the NAIC or third-party |
consultants governing sharing and use of information provided |
pursuant to this Article consistent with subsection (c) shall:
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(1)
specify procedures and protocols regarding the |
confidentiality and security of information shared with |
the NAIC and its affiliates and subsidiaries or |
third-party consultants pursuant to this Article, |
including procedures and protocols for sharing by the NAIC |
with other state, federal, or international regulators; |
the agreement shall provide that the recipient agrees in |
writing to maintain the confidentiality and privileged |
status of the documents, materials, or other information |
and has verified in writing the legal authority to |
maintain such confidentiality;
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(2)
specify that ownership of information shared with |
the NAIC and its affiliates and subsidiaries or |
third-party consultants pursuant to this Article remains |
with the Director and the NAIC's or third-party |
consultant's use of the information is subject to the |
direction of the Director;
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(3)
require prompt notice to be given to a company |
whose confidential information in the possession of the |
NAIC or third-party consultant pursuant to this Article is |
subject to a request or subpoena for disclosure or |
production;
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(4)
require the NAIC and its affiliates and |
subsidiaries or third-party consultants to consent to |
intervention by a company in any judicial or |
administrative action in which the NAIC and its affiliates |
and subsidiaries or third-party consultants may be |
required to disclose confidential information about the |
company shared with the NAIC and its affiliates and |
subsidiaries or third-party consultants pursuant to this |
Article; and |
(5) excluding documents, material, or information |
reported pursuant to subsection (c) of Section 131.14b, |
prohibit the NAIC or third-party consultant from storing |
the information shared pursuant to this Code in a |
permanent database after the underlying analysis is |
completed. |
(d) The sharing of documents, materials, or information by |
the Director pursuant to this Article shall not constitute a |
delegation of regulatory authority or rulemaking, and the |
Director is solely responsible for the administration, |
execution, and enforcement of the provisions of this Article. |
(e) No waiver of any applicable privilege or claim of |
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confidentiality in the documents, materials, or information |
shall occur as a result of disclosure to the Director under |
this Section or as a result of sharing as authorized in |
subsection (c) of this Section. |
(f) Documents, materials, or other information in the |
possession or control of the NAIC or third-party consultant |
pursuant to this Article shall be confidential by law and |
privileged, shall not be subject to the Illinois Freedom of |
Information Act, shall not be subject to subpoena, and shall |
not be subject to discovery or admissible in evidence in any |
private civil action.
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(Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 12-31-22; |
revised 9-22-21.)
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(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)
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Sec. 132.5. Examination reports.
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(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
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reasonably warranted from those facts.
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(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 |
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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.
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(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:
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(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
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Director considers necessary and appropriate to cure the |
violation.
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(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).
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(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 |
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testimony.
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(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
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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.
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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).
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The Director shall not appoint an examiner as an |
authorized
representative to conduct the hearing. The hearing |
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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
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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.
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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.
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The company and the Department shall be permitted to make |
closing
statements and may be represented by counsel of their |
choice.
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(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 |
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35 days, except to the extent provided in
subsection (b). |
Thereafter, the Director may open the report for public
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inspection so long as no court of competent jurisdiction has |
stayed its publication.
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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
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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.
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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.
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(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 |
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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.
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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. 100-475, eff. 1-1-18.)
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(215 ILCS 5/547) (from Ch. 73, par. 1065.97)
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Sec. 547. Prevention of insolvencies. To aid in the |
detection and prevention of company insolvencies:
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(a) The board of directors may, upon majority vote, make |
recommendations
to the Director on matters pertaining to |
regulation for solvency.
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(b) The board of directors may prepare a report on the |
history and causes
of any company
insolvency in which the Fund |
was obligated to pay covered claims, based on the
information |
available to the Fund, and submit such report to the Director.
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(c) The Director may disclose to the Fund the information |
described in subsection (g) of Section 132.5 as well as the |
information described in subsection (c) of Section 131.22, and |
the Fund may use that information to prepare for the possible |
liquidation of a member company subject to the requirements |
and restrictions set forth in Section 132.5. |
(Source: P.A. 85-576.)
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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.
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Section 99. Effective date. This Act takes effect upon |
