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Legislative Reports NAIFA Illinois Legislative Update End of Session Report The budget deficit facing the Governor and the legislature is dire, to say the least, after years of overspending and borrowing. And to date, no one is willing to make the difficult votes to enact a plan to put Illinois on the path to fiscal solvency. Insurance Issues For the property & casualty side of the business, the only notable issue to reach the Governor’s desk was a rewrite of the Public Adjusters Act, although bills dealing with insurance coverage for off-road vehicles, and a requirement that lenders notify insurers when a home has been foreclosed, are poised for final passage when the General Assembly returns. Perhaps the most positive changes passed this year are on the life side of the business with the Interstate Compact legislation and a rewrite of the Life-Health Guaranty Fund statute including an increase in coverage limits reaching the Governor’s desk. Listed below are significant bills broken down by business line that passed, failed or are pending in the General Assembly. Producer Licensing/Continuing Education 1. State Based Systems / Electronic Applications
2. Electronic Applications 3. Fingerprinting 4. Continuing Education Realizing they do not have any regulatory guidelines, the DOI is currently not approving any interactive webinars for CE until there are appropriate guidelines in place for their use. We will be working with the DOI to develop appropriate guidelines for webinars. NAIC Model Act changes recently enacted:
5. CE for Viatical Brokers
Merely responding to client questions regarding life policy settlements does not require a Viatical Settlement Brokers License. Producers HB 6840: Creates the Employment Noncompete Agreement Act. Contains a finding that all employers have vested, protectable interests in their customers, clients, and identified prospects which are legitimately protectable through the use of noncompete agreements. Provides that a noncompete agreement between an employer and an employee that is specifically designed to impede the ability of an employee from competing with an employer upon the termination of the employment relationship is valid if it meets all of the following criteria: it must be in writing and be signed by both the employee and employer; it may prohibit any solicitation of an employer's existing customers, clients, identified prospective customers, and other employees during the period of any post-employment restriction period; and the duration of a post-employment restriction period must have a reasonable relationship to an employer's position and salary at the time of termination and may not exceed specified maximum periods based on annualized compensation. Provides that no specific or additional consideration is required to be paid by an employer to an employee to enforce a noncompete agreement. Contains provisions regarding remedies and applicability. Sponsoring Representative Rosemary Mulligan (R-Park Ridge) introduced the bills after receiving several complaints from constituents. While affecting dozens of occupations, but not aimed at any particular one, the bills would affect most insurance producers. Rep. Mulligan stated she was interested in pursuing the subject in 2011. Life NAIFA IL, ISAHU, IIA of Illinois & FPA of IL all support Illinois’ participation in the compact because:
HB 5217 – Illinois Life & Health Guaranty Funds: HB 5217 would amend numerous provisions in the Illinois Insurance Code and Illinois Health Maintenance Organization Guaranty Law dealing with rehabilitation, liquidation, conservation, and dissolution of insurance companies. The bill is intended to enact NAIC model language addressing several consumer-oriented receivership issues including recent increases to guaranty fund coverage caps, and to provide more uniformity in our guaranty laws. Specifically, the bill would:
SB 2819 – Life Policies – Proof of Death: SB 2819 amends the Illinois Insurance Code to make changes to the standard provisions for life policies. Provides that proof of death shall be in writing and establish (1) the fact and date of the insured’s death, (2) the claimant’s identity, and (3) the claimant’s interest and the extent thereof. Provides that such proof includes information and documents necessary for the insurer to determine its liability, pay the claim in compliance with all laws and regulations, and be discharged from liability. Health & Benefits Fortunately, a large coalition of employers, insurers, agents and brokers and even labor were able to convince legislative leaders and rank and file members to wait until the federal agencies provide implementation regulations before the state proceeds on its own. The PPACA presents many challenges to agents and brokers and the clients they serve and we will be working with the General Assembly and administration to make sure that they are implemented with the least possible cost and market disruption. Fortunately, Governor Quinn was unable to pass the immediate implementation package he sought and, in fact, very few of the mandates introduced this year have reached the Governor’s desk. The following is the status of health insurance related bills: Pending HB 4817 Sente: Requires Medicare supplement policy to comply with requirements concerning mammograms and mastectomies contained in Insurance Code HB 4924 Mulligan: Requires coverage for cochlear implants HB 5085 Harris: Requires coverage to a qualified individual for participation in a qualified clinical cancer trial. Includes health insurers changes to current DOI regulation on non-participating provider reimbursements. HB 5107 Harris: Provides that no recoupment or offset may be requested or withheld from future payments 366 or more days after original payment is made. Provides exceptions. HB 5142 Lang: Provides that coverage for autism spectrum disorders be subject to the parity requirements of the Ins. Code provision concerning mental health parity. Requires minimum (instead of maximum) benefit of $36,000. HB 5250 Chapa LaVia: Provides that a contracting entity, insurer or TPA may not grant access to a provider’s health care services and contractual discounts pursuant to a provider network contract or reimburse a physician or other provider on a discounted fee basis for covered services that are provided to an insured unless certain conditions are met HB 5407 Davis: Requires coverage for the treatment of pain associated with complications of diabetes HB 5471 Flowers: Provides that every health carrier expend, in the form of health benefits, no less than 85% of the aggregate dues, fees, and premiums received by the health carrier HB 5473 Flowers: Sets forth guidelines in the Ins. Code for maintaining an appeals procedure HB 5766 Lyons (Steans): Mandate coverage for tobacco cessation programs up to $500 per year HB 5954 Flowers: Creates the Consumer Health Insurance Counsel Act HB 6061 Feigenholtz: Provides that accident and health ins. policies shall provide coverage for maternity care. HB 6064 Feigenholtz: Provides that accident and health ins. policies and managed care plans must provide coverage for medically necessary foods, low protein foods, and pharmacological doses of vitamins and amino acids and the medical equipment and supplies necessary to administer the foods for the treatment of inborn errors of metabolism. HB 6066 Lang: Provides that in providing coverage for phototherapy treatment for psoriasis, when medically necessary and prescribed by a physician licensed to practice medicine in all of its branches, the coverage may be subject to deductible, copayment, and coinsurance provisions as provided for under the policy. Provides that the deductible, copayment, and coinsurance provisions for phototherapy treatment prescribed for psoriasis shall not exceed a total maximum out-of-pocket cost to the patient of more than $15 for phototherapy treatments provided over a 30-day period, with a maximum out-of-pocket limit to the patient of no more than $120 annually. Status: House Re-Referred to Rules HB 6156 Nekritz: Provides that no insurer shall rescind or cancel and accident and health insurance policy on the basis of written information submitted on, with, or omitted from an insurance application SB 2493 Link: Prohibits group health plans or health insurance issuer offering group or individual health from imposing any preexisting condition exclusion SB 2516 Silverstein: Requires coverage for up to $2,500 per hearing aid per insured’s hearing impaired ear subject to restrictions SB 2584 Delgado: A1C Testing SB 2965 Noland: Sets forth provisions concerning restrictions on payment and reimbursement SB 2967 Pankau: Provides that no group policy may be issued or delivered without a provision that the employee may decline coverage by opting out of the group coverage and that any amount that would have been charged to the employee for participating be deducted from the premium for group coverage. SB 3378 Haine: Reimbursement for out of network health providers. Includes insurers changes to current DOI regulation on non-participating provider reimbursements. SB 3419 Kotowski: Amends IL Health Insurance Portability & Accountability Act to include large group markets in the provision concerning guaranteed availability of coverage for employers in the group market SB 3480 Steans: Creates Tobacco Dependence Coverage Law SB 3545 Crotty: Provides that no insurance carrier may charge a copayment or deductible for a prescription or device prescribed for the treatment of psoriasis SB 3565 Delgado: Requires coverage for the treatment of pain associated with complications of diabetes Lost or Tabled HB 4679 Flowers: Mandates Health insurers guarantee issue policies. HB 5038 Flowers: Requires coverage for all services ordered by a physician and provided in a hospital that are considered medically necessary HB 5887 Reboletti: Provides that if the federal government enacts or implements a public or state-run health insurance exchange, at the state or national level, that includes a mechanism states to opt out of the public option, then the State shall exercise the right to opt out of such a public plan HB 5952 Flowers: Requires plans that provide coverage for prescription drugs to also provide coverage for dietary supplements including homeopathic, holistic and micronutrient naturopathic supplements. HB 5955 Flowers: Creates the Health Insurance Rate Review Act HB 6166 Currie: Amends the State Employees Group Insurance Act of 1971, Counties Code, Illinois Municipal Code, School Code, Illinois Insurance Code, Health Maintenance Organization Act, Limited Health Service Organization Act, and Voluntary Health Services Plans Act to provide that if an insured is owed any amount of money by an insurer, then the insurer shall provide the insured with the option of having the amount owed paid to the insured or applied to the insured's future premiums. Contains a nonacceleration clause. Property & Casualty SB 3091 – Snowmobile Insurance Requirements: Provides that no person shall operate, register or maintain registration of, and no owner shall permit another person to operate, register or maintain registration of, a snowmobile in this state unless the snowmobile is covered by liability insurance in amounts no less than Illinois’ current minimum liability limits. HB 5026 – Workers Compensation Pools: Amends the Illinois Insurance Code. Provides that, in evaluating the financial strength of a qualified group workers' compensation pool, the Department of Insurance shall consider the gross annual payroll of members, which must be at least $10,000,000 for active pools not in runoff (instead of which must be at least $10,000,000). Effective immediately. SB 3682 – Bonds for Qualified Driver Exam Training Schools: Amends the Illinois Vehicle Code. Changes the amount of the continuous surety company bond that a qualified driver exam training school must hold to $10,000 for a non-accredited school, $40,000 for a CDL or teenage accredited school, $60,000 for a CDL accredited and teenage accredited school, $50,000 for a CDL or teenage accredited school with three or more licensed branches, $70,000 for a CDL accredited and teenage accredited school with three or more licensed branches (rather than a $20,000 requirement that applied to all driver exam training schools). Effective January 1, 2011. Pending HB 6094 – Insurance Requirements for Off-Road and Non-Highway Vehicles: Amends the Illinois Vehicle Code. Provides that it shall not be unlawful for any person to drive or operate certain non-highway vehicles on a county roadway or township roadway for the purpose of conducting farming operations to and from the home, farm, farm buildings, and any adjacent or nearby farm land. Provides that the mechanical equipment and mandatory insurance requirements that generally apply to non-highway vehicles when operated on a roadway do not apply to certain non-highway vehicles used for farming operations on a roadway. Provides that if non-highway vehicles used for farming operations on a roadway are not covered under a motor vehicle insurance policy, the vehicles must be covered under a farm, home, or non-highway vehicle insurance policy. Provides that the non-highway or recreational off-highway vehicles used for farming operations on a county or township roadway at any time between one-half hour before sunset and one-half hour after sunrise must be equipped with head lamps and tail lamps, and the head lamps and tail lamps must be lighted. Provides that certain non-highway vehicles used for farming operations may not cross a tollroad, interstate highway, or controlled access highway but may cross a State highway, municipal street, county highway, or road district highway if specified conditions are followed by the operator. Did Not Pass HB 5685 – Mine Subsidence Claims / Notify Court Recorder: Provides that every County Recorder must record information received concerning payment of a claim for mine subsidence insurance and that the insurer must record notice of the claim with the recorder of the county where the insured’s property is located. Provides that the notice document shall include a legal description of the property and the property owner’s name. SB 2637 – Emergency Response Fees: The issue of municipalities and other units of local governments charging response fees has been widely reported in the media in 2010 and this spring, the city of Rockford sought passage of SB 2637 which would authorize Rockford, which is a non-home rule municipality, to charge non-residents for fire and paramedic costs. The issue impacts insurers when insureds seek coverage from their auto policies for those fees. Most insurers don’t cover accident response fees as they are not covered under the policy and it has long been considered the obligation of local governments, through taxpayers, to cover these basic public services. Currently, nine states prohibit the collection of accident response fees. In 2007, legislation banning accident response fees was signed into law in Missouri and Pennsylvania. In 2008, legislation to ban the practice was adopted in Indiana, Georgia and Tennessee. In 2009, legislation was adopted in Arkansas, Florida, and Oklahoma the Louisiana legislature adopted a resolution banning these fees. As local governments continue to experience declining revenues, they undoubtedly will seek to balance their budgets by charging non-residents various fees. The issue will certainly be revisited in the future. SB 2818 - Amends the Illinois Insurance Code. Provides that insurers shall arbitrate and settle all disputed claims made for automobile physical damage between them in accordance with the terms of and rules adopted pursuant to the Nationwide Inter-Company Arbitration Agreement unless the parties agree to use another forum. Provides that mandatory arbitration shall be limited solely to the issues of liability and damages. Provides that every insurer licensed to issue a policy of automobile insurance shall be a signatory of the Nationwide Inter-Company Arbitration Agreement or any successor thereto. Effective immediately.
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