(215 ILCS 5/511.101) (from Ch. 73, par. 1065.58‑101)
(Section scheduled to be repealed on January 1, 2017)
Sec. 511.101. Definitions. For the purpose of this Article:
(a) "Administrator" means any person who on behalf of a plan sponsor or insurer receives or collects charges, contributions or premiums for, or adjusts or settles claims on residents of this State in connection with any type of life or accident or health benefit provided through or as an alternative to insurance within the scope of Class 1(a), 1(b) or 2(a) of Section 4 of the Illinois Insurance Code, other than any of the following:
(1) A corporation, association, trust or partnership
| which is administering a plan (i) on behalf of the employees of such corporation, association, trust or partnership or (ii) for the employees of one or more subsidiaries or affiliated corporations or affiliated associations, trusts or partnerships; | |
(2) A union administering a plan for its members;
(3) A plan sponsor administering its own plan;
(4) An insurer to the extent regulated by the |
| |
(5) A producer licensed in this State whose insurance |
| activities are limited to the scope of such license; | |
(6) A trust and its trustees and employees acting |
| pursuant to its trust agreement established in conformity with 29 U.S.C. 186; | |
(7) A person who adjusts or settles claims in the |
| normal course of such person's practice or employment as an attorney‑at‑law, and who does not collect contributions or premiums in connection with life or accident or health coverage; | |
(8) A person who administers only self‑insured |
| workers' compensation plans, or single employer self insured life or accident or health benefit plans; | |
(9) A credit card issuing company which advances for |
| and collects premiums or charges from its credit card holders who have authorized such collection, if such company does not adjust or settle claims; | |
(10) A creditor on behalf of its debtors with respect |
| to insurance covering a debt between the creditor and its debtors. | |
(b) "Covered Individual" means any individual eligible for life or accident or health benefits under a plan.
(c) "Contributions" means any money charged a covered individual, plan sponsor or other entity to fund the self‑insured portion of any plan in accordance with written provisions of the plan or contracts of insurance. Contributions shall include administrative fees charged to a covered individual. Administrative fee means any compensation paid by a covered individual for services performed by the administrator.
(d) "Premiums" means any money charged a covered individual, plan sponsor or other entity to provide life or accident or health insurance under a plan. The term premium shall include amounts paid by or charged to a covered individual plan sponsor or other entity for stop loss or excess insurance.
(e) "Charges" means any compensation paid by a plan sponsor or insurer for services performed by the administrator.
(f) "Administrator Trust Fund", hereinafter referred to as "ATF", means a special fiduciary account established and maintained by an administrator pursuant to Section 511.112 in which contributions and premiums are deposited.
(g) "Claims Administration Services Account", hereinafter referred to as "CASA", means a special fiduciary account established and maintained by an administrator pursuant to Section 511.112 of this Code from which claims and claims adjustment expenses are disbursed.
(h) "Plan Sponsor" means any person other than an insurer, who establishes or maintains a plan covering residents of this State, including but not limited to plans established or maintained by 2 or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.
Provided, however, that "Plan Sponsor" shall not include:
(1) The employer in the case of a plan established or |
| maintained by a single employer; or | |
(2) The employee organization in the case of a plan |
| established or maintained by an employee organization. | |
No plan sponsor covered in whole by provisions of the Employee Retirement Income Security Act of 1974 (ERISA) shall be covered by any of the provisions of this Act to the extent that such provisions are inconsistent with or in conflict with any provisions of ERISA as now or hereafter amended.
(i) "Financial Institution" means any federal or state chartered bank or savings and loan institution which is insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC).
(j) "Plan" means any plan, fund or program established or maintained by a plan sponsor or insurer to the extent that such plan, fund or program was established or is maintained to provide through insurance or alternatives to insurance any type of life or accident or health benefit within the scope of Class 1(a), 1(b) or 2(a) of Section 4 of the Illinois Insurance Code.
(k) "Insurer" means any person who transacts insurance or health care service business authorized under the laws of this State.
(l) "Quasi‑resident" means a nonresident licensee who produces 50% or more of his contributions and premium volume during a calendar year from residents of this State.
(Source: P.A. 84‑1431.) |
(215 ILCS 5/511.104) (from Ch. 73, par. 1065.58‑104)
(Section scheduled to be repealed on January 1, 2017)
Sec. 511.104. Bond Requirements for Administrators.
(a) Every applicant for an administrator's license shall file with the application and shall thereafter maintain in force while so licensed, a fidelity bond in favor of the people of the State of Illinois executed by a surety company and payable to any party injured under the terms of the bond. The bond shall be continuous in form and in one of the following amounts:
(1) For an administrator which maintains an ATF but
| does not maintain a CASA, the greater of $50,000 or 5% of contributions and premiums projected to be received or collected in the ATF for the forthcoming plan year from Illinois residents, but not to exceed $1,000,000; | |
(2) For an administrator which maintains a CASA but |
| does not maintain an ATF, the greater of $50,000 or 5% of the claims and claim expenses projected to be held in the CASA for the forthcoming year to pay claims and claim expenses for Illinois residents, but not to exceed $1,000,000; | |
(3) For an administrator which maintains both an ATF |
| and a CASA, the greater of the amounts in subparagraphs (1) or (2) above, but not to exceed $1,000,000. | |
Such bond is required of an administrator who maintains or should maintain funds in a fiduciary capacity as set forth in Section 511.112 of this Code unless the administrator is contracted with the insurer as an administrator and if the plan is fully insured by the insurer on whose behalf the funds are held.
(b) Such bond shall remain in force and effect until the surety is released from liability by the Director or until the bond is cancelled by the surety. The surety may cancel the bond and be released from further liability thereunder upon 30 days' written notice in advance to the Director. Such cancellation shall not affect any liability incurred or accrued thereunder before the termination of the 30‑day period. Upon receipt of any notice of cancellation, the Director shall immediately notify the licensee.
(c) The license required by Section 511.102 shall automatically terminate if the bond required by this Section is not in force. Within 30 days thereafter, the administrator shall return the license to the Director for cancellation.
(Source: P.A. 84‑1431.) |
(215 ILCS 5/511.107) (from Ch. 73, par. 1065.58‑107)
(Section scheduled to be repealed on January 1, 2017)
Sec. 511.107. License Suspension, Revocation or Denial.
(a) Any license issued under this Article may be suspended or revoked, after notice to the licensee and an opportunity for hearing, and any application for a license may be denied, after notice and an opportunity for hearing, if the Director finds that the licensee or applicant:
(1) Has wilfully violated any applicable provisions
| of the Illinois Insurance Code or applicable Part of Title 50 of the Illinois Administrative Code; or | |
(2) Has intentionally made a material misstatement in |
| its application for a license; or | |
(3) Has obtained or attempted to obtain a license |
| through misrepresentation or fraud; or | |
(4) Has misappropriated or converted to its own use, |
| or improperly withheld, money required to be held in a fiduciary capacity; or | |
(5) Has, in the transaction of business under its |
| license, used fraudulent, coercive or dishonest practices, or has demonstrated incompetence, untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; or | |
(6) Has been, within the past 3 years, convicted of a |
| felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; or | |
(7) Has failed to appear without reasonable cause or |
| excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Director; or | |
(8) Is using such methods or practices in the conduct |
| of its business so as to render its further transaction of business in this State hazardous or injurious to covered individuals or the public; or | |
(9) Is affiliated with and is under the same general |
| management as another administrator which transacts business in this State without being licensed under this Article; or | |
(10) Has had its license suspended or revoked or its |
| application denied in any other state, district, territory or province on grounds similar to those stated in this Section; or | |
(11) Has failed to report under Section 511.108 a |
| |
(b) Denial of an application or suspension or revocation of a license, pursuant to this Section shall be by written order sent to the applicant or licensee by certified or registered mail at the address specified in the records of the Department. The written order shall state the grounds, charges or conduct on which denial, suspension or revocation is based. The applicant or licensee may in writing request a hearing within 30 days from the date of mailing. Upon receipt of a written request, the Director shall issue an order setting (i) a specific time for the hearing, which may not be less than 20 nor more than 30 days after receipt of the request and (ii) a specific place for the hearing, which may be in either the City of Springfield or in the county in Illinois where the applicant's or licensee's principal place of business is located. If no written request is received by the Director, such order shall be final upon the expiration of said 30 days.
(c) Upon revocation of a license, the licensee or other person having possession or custody of such license shall deliver it to the Director in person or by mail within 30 days of such revocation.
(d) Any administrator whose license is revoked or whose application is denied pursuant to this Section shall be ineligible to reapply for any license for 2 years. A suspension pursuant to this Section may be for a period of up to 2 years.
(Source: P.A. 84‑887.) |
(215 ILCS 5/511.112) (from Ch. 73, par. 1065.58‑112)
(Section scheduled to be repealed on January 1, 2017)
Sec. 511.112. Fiduciary Accounts and Duties.
(a) Administrators shall hold in a fiduciary capacity all contributions and premiums received or collected on behalf of a plan sponsor or insurer. Such funds shall not be used as general operating funds of the administrator. All contributions and premiums received or collected by the administrator from residents of this State, which the Administrator holds more than 15 days or deposits into an account which is not under the control of the plan sponsor or insurer, shall be placed in a special fiduciary account, which account shall be designated an "Administrator Trust Fund Account" ("ATF"). All resident and quasi‑resident licensees required to maintain an ATF pursuant to this Section shall maintain such ATF with one or more financial institutions located within the State of Illinois and subject to jurisdiction of the Illinois courts. Funds belonging to 2 or more plans may be held in the same ATF, provided the administrator's records clearly indicate the funds belonging to each plan. Checks drawn on the ATF shall indicate on their face that they are drawn on the ATF of the administrator.
(b) The administrator may make the following disbursements from the ATF:
(1) Contributions and premiums due insurers or other
| persons providing life, accident and health coverage for a plan; | |
(2) Return contributions and premiums to a plan or |
| |
(3) Commissions or administrative fees due to the |
| administrator when earned pursuant to written agreement; and | |
(4) Transfers into the CASA of the administrator.
(c) For each plan where an ATF is required, the balance in the ATF shall at all times be the amount deposited plus accrued interest, if any, less authorized disbursements. If the balance at the financial institution with respect to the ATF is less than the amount deposited plus accrued interest, if any, less authorized disbursements, the administrator shall be deemed to have misappropriated fiduciary funds and to have acted in a financially irresponsible manner.
(d) If the ATF is interest bearing or income producing, the full nature of the account must first be disclosed to the plan sponsors or insurers on whose behalf the funds are or will be held. The administrator must secure written consent and authorization from the plan sponsors or insurers for the investment of the money and disposition of the interest or earnings. No investment shall be made which assumes any risk other than the risk that the obligor shall not pay the principal when due. The use of specialized techniques or strategies which incur additional risks to generate higher returns or to extend maturities is not permitted. Such techniques would include, but not be limited to, the following: Use of financial futures or options, buying on margins and pledging of ATF balances.
(e) Administrators may place ATF funds in interest bearing or income producing investments and retain the interest or income thereon, providing the administrator obtains the prior written authorization of the plan sponsors or insurers on whose behalf the funds are to be held. In addition to savings and checking accounts, an administrator may invest in the following:
(1) Direct obligations of the United States of |
| America or U.S. Government agency securities with maturities of not more than one year; | |
(2) Certificates of deposit, with a maturity of not |