Sen. William R. Haine

Filed: 3/13/2013

09800SB1412sam001LRB098 06643 RPM 41704 a
1
AMENDMENT TO SENATE BILL 1412
2 AMENDMENT NO. ______. Amend Senate Bill 1412 by replacing
3everything after the enacting clause with the following:
4 "Section 5. If and only if House Bill 2290 becomes law, the
5Freedom of Information Act is amended by changing Section 7.5
6as follows:
7 (5 ILCS 140/7.5)
8 Sec. 7.5. Statutory Exemptions. To the extent provided for
9by the statutes referenced below, the following shall be exempt
10from inspection and copying:
11 (a) All information determined to be confidential under
12Section 4002 of the Technology Advancement and Development Act.
13 (b) Library circulation and order records identifying
14library users with specific materials under the Library Records
15Confidentiality Act.
16 (c) Applications, related documents, and medical records

09800SB1412sam001- 2 -LRB098 06643 RPM 41704 a
1received by the Experimental Organ Transplantation Procedures
2Board and any and all documents or other records prepared by
3the Experimental Organ Transplantation Procedures Board or its
4staff relating to applications it has received.
5 (d) Information and records held by the Department of
6Public Health and its authorized representatives relating to
7known or suspected cases of sexually transmissible disease or
8any information the disclosure of which is restricted under the
9Illinois Sexually Transmissible Disease Control Act.
10 (e) Information the disclosure of which is exempted under
11Section 30 of the Radon Industry Licensing Act.
12 (f) Firm performance evaluations under Section 55 of the
13Architectural, Engineering, and Land Surveying Qualifications
14Based Selection Act.
15 (g) Information the disclosure of which is restricted and
16exempted under Section 50 of the Illinois Prepaid Tuition Act.
17 (h) Information the disclosure of which is exempted under
18the State Officials and Employees Ethics Act, and records of
19any lawfully created State or local inspector general's office
20that would be exempt if created or obtained by an Executive
21Inspector General's office under that Act.
22 (i) Information contained in a local emergency energy plan
23submitted to a municipality in accordance with a local
24emergency energy plan ordinance that is adopted under Section
2511-21.5-5 of the Illinois Municipal Code.
26 (j) Information and data concerning the distribution of

09800SB1412sam001- 3 -LRB098 06643 RPM 41704 a
1surcharge moneys collected and remitted by wireless carriers
2under the Wireless Emergency Telephone Safety Act.
3 (k) Law enforcement officer identification information or
4driver identification information compiled by a law
5enforcement agency or the Department of Transportation under
6Section 11-212 of the Illinois Vehicle Code.
7 (l) Records and information provided to a residential
8health care facility resident sexual assault and death review
9team or the Executive Council under the Abuse Prevention Review
10Team Act.
11 (m) Information provided to the predatory lending database
12created pursuant to Article 3 of the Residential Real Property
13Disclosure Act, except to the extent authorized under that
14Article.
15 (n) Defense budgets and petitions for certification of
16compensation and expenses for court appointed trial counsel as
17provided under Sections 10 and 15 of the Capital Crimes
18Litigation Act. This subsection (n) shall apply until the
19conclusion of the trial of the case, even if the prosecution
20chooses not to pursue the death penalty prior to trial or
21sentencing.
22 (o) Information that is prohibited from being disclosed
23under Section 4 of the Illinois Health and Hazardous Substances
24Registry Act.
25 (p) Security portions of system safety program plans,
26investigation reports, surveys, schedules, lists, data, or

09800SB1412sam001- 4 -LRB098 06643 RPM 41704 a
1information compiled, collected, or prepared by or for the
2Regional Transportation Authority under Section 2.11 of the
3Regional Transportation Authority Act or the St. Clair County
4Transit District under the Bi-State Transit Safety Act.
5 (q) Information prohibited from being disclosed by the
6Personnel Records Review Act.
7 (r) Information prohibited from being disclosed by the
8Illinois School Student Records Act.
9 (s) Information the disclosure of which is restricted under
10Section 5-108 of the Public Utilities Act.
11 (t) All identified or deidentified health information in
12the form of health data or medical records contained in, stored
13in, submitted to, transferred by, or released from the Illinois
14Health Information Exchange, and identified or deidentified
15health information in the form of health data and medical
16records of the Illinois Health Information Exchange in the
17possession of the Illinois Health Information Exchange
18Authority due to its administration of the Illinois Health
19Information Exchange. The terms "identified" and
20"deidentified" shall be given the same meaning as in the Health
21Insurance Accountability and Portability Act of 1996, Public
22Law 104-191, or any subsequent amendments thereto, and any
23regulations promulgated thereunder.
24 (u) Records and information provided to an independent team
25of experts under Brian's Law.
26 (v) Names and information of people who have applied for or

09800SB1412sam001- 5 -LRB098 06643 RPM 41704 a
1received Firearm Owner's Identification Cards under the
2Firearm Owners Identification Card Act.
3 (w) Personally identifiable information which is exempted
4from disclosure under subsection (g) of Section 19.1 of the
5Toll Highway Act.
6 (x) Information which is exempted from disclosure under
7Section 5-1014.3 of the Counties Code or Section 8-11-21 of the
8Illinois Municipal Code.
9 (y) Information that is exempted from disclosure under
10Section 129.8 of the Illinois Insurance Code.
11(Source: P.A. 96-542, eff. 1-1-10; 96-1235, eff. 1-1-11;
1296-1331, eff. 7-27-10; 97-80, eff. 7-5-11; 97-333, eff.
138-12-11; 97-342, eff. 8-12-11; 97-813, eff. 7-13-12; 97-976,
14eff. 1-1-13.)
15 Section 10. If and only if House Bill 2290 becomes law, the
16Illinois Insurance Code is amended by adding Article VIII 1/4
17as follows:
18 (215 ILCS 5/Art. VIII 1/4 heading new)
19
ARTICLE VIII 1/4. RISK MANAGEMENT AND
20
OWN RISK AND SOLVENCY ASSESSMENT
21 (215 ILCS 5/129 new)
22 Sec. 129. Short title. This Article may be cited as the
23Risk Management and Own Risk and Solvency Assessment Law.

09800SB1412sam001- 6 -LRB098 06643 RPM 41704 a
1 (215 ILCS 5/129.1 new)
2 Sec. 129.1. Purpose and scope. The purpose of this Article
3is to provide the requirements for maintaining a risk
4management framework and completing an own risk and solvency
5assessment (ORSA) and provide guidance and instructions for
6filing an ORSA summary report with the Director.
7 The requirements of this Article shall apply to all
8insurers domiciled in this State unless exempt pursuant to
9Section 129.7.
10 The General Assembly finds and declares that an ORSA
11summary report will contain confidential and sensitive
12information related to an insurer or insurance group's
13identification of risks material and relevant to the insurer or
14insurance group filing the report. This information will
15include proprietary and trade secret information that has the
16potential for harm and competitive disadvantage to the insurer
17or insurance group if the information is made public. It is the
18intent of this General Assembly that the ORSA summary report
19shall be a confidential document filed with the Director, that
20the ORSA summary report shall be shared only as stated herein
21and to assist the Director in the performance of his or her
22duties, and that in no event shall an ORSA summary report be
23subject to public disclosure.
24 (215 ILCS 5/129.2 new)

09800SB1412sam001- 7 -LRB098 06643 RPM 41704 a
1 Sec. 129.2. Definitions. In this Article:
2 "Insurance group", for the purpose of conducting an ORSA,
3means those insurers and affiliates included within an
4insurance holding company system as defined in Section 131.1 of
5this Code.
6 "Insurer" has the same meaning as set forth in Section 2 of
7this Code, except that it shall not include agencies,
8authorities, or instrumentalities of the United States or its
9possessions or territories, the Commonwealth of Puerto Rico,
10the District of Columbia, or a state or political subdivision
11of a state.
12 "Own risk and solvency assessment" or "ORSA" means a
13confidential internal assessment, appropriate to the nature,
14scale, and complexity of an insurer or insurance group,
15conducted by that insurer or insurance group of the material
16and relevant risks associated with the insurer or insurance
17group's current business plan, and the sufficiency of capital
18resources to support those risks.
19 "ORSA Guidance Manual" means the current version of the Own
20Risk and Solvency Assessment Guidance Manual developed and
21adopted by the National Association of Insurance Commissioners
22(NAIC) and as amended from time to time. A change in the ORSA
23Guidance Manual shall be effective on the January 1 following
24the calendar year in which the changes have been adopted by the
25NAIC.
26 "ORSA summary report" means a confidential high-level

09800SB1412sam001- 8 -LRB098 06643 RPM 41704 a
1summary of an insurer or insurance group's ORSA.
2 (215 ILCS 5/129.3 new)
3 Sec. 129.3. Risk management framework. An insurer shall
4maintain a risk management framework to assist the insurer with
5identifying, assessing, monitoring, managing, and reporting on
6its material and relevant risks. The requirement of this
7Section may be satisfied if the insurance group of which the
8insurer is a member maintains a risk management framework
9applicable to the operations of the insurer.
10 (215 ILCS 5/129.4 new)
11 Sec. 129.4. ORSA requirement. Subject to Section 129.7 of
12this Code, an insurer, or the insurance group of which the
13insurer is a member, shall regularly conduct an ORSA consistent
14with a process comparable to the ORSA Guidance Manual. The ORSA
15shall be conducted no less than annually but also at any time
16when there are significant changes to the risk profile of the
17insurer or the insurance group of which the insurer is a
18member.
19 (215 ILCS 5/129.5 new)
20 Sec. 129.5. ORSA summary report.
21 (a) Upon the Director's request, and no more than once each
22year, an insurer shall submit to the Director an ORSA summary
23report or any combination of reports that together contain the

09800SB1412sam001- 9 -LRB098 06643 RPM 41704 a
1information described in the ORSA Guidance Manual, applicable
2to the insurer and the insurance group of which it is a member.
3Notwithstanding any request from the Director, if the insurer
4is a member of an insurance group, the insurer shall submit the
5report or reports required by this subsection (a) if the
6Director is the lead state commissioner of the insurance group
7as determined by the procedures within the Financial Analysis
8Handbook adopted by the National Association of Insurance
9Commissioners.
10 (b) The report or reports shall include a signature of the
11insurer or insurance group's chief risk officer or other
12executive having responsibility for the oversight of the
13insurer's enterprise risk management process attesting to the
14best of his or her belief and knowledge that the insurer
15applies the enterprise risk management process described in the
16ORSA summary report and that a copy of the report has been
17provided to the insurer's board of directors or the appropriate
18committee thereof.
19 (c) An insurer may comply with subsection (a) of this
20Section by providing the most recent and substantially similar
21report or reports provided by the insurer or another member of
22an insurance group of which the insurer is a member to the
23commissioner of another state or to a supervisor or regulator
24of a foreign jurisdiction, if that report provides information
25that is comparable to the information described in the ORSA
26Guidance Manual. Any such report in a language other than

09800SB1412sam001- 10 -LRB098 06643 RPM 41704 a
1English must be accompanied by a translation of that report
2into the English language.
3 (d) The first filing of the ORSA summary report shall be in
42015.
5 (215 ILCS 5/129.6 new)
6 Sec. 129.6. Contents of ORSA summary report.
7 (a) The ORSA summary report shall be prepared consistent
8with the ORSA Guidance Manual, subject to the requirements of
9subsection (b) of this Section. Documentation and supporting
10information shall be maintained and made available upon
11examination or upon the request of the Director.
12 (b) The review of the ORSA summary report, and any
13additional requests for information, shall be made using
14similar procedures currently used in the analysis and
15examination of multi-state or global insurers and insurance
16groups.
17 (215 ILCS 5/129.7 new)
18 Sec. 129.7. Exemption.
19 (a) An insurer shall be exempt from the requirements of
20this Article if:
21 (1) the insurer has annual direct written and
22 unaffiliated assumed premium, including international
23 direct and assumed premium, but excluding premiums
24 reinsured with the Federal Crop Insurance Corporation and

09800SB1412sam001- 11 -LRB098 06643 RPM 41704 a
1 Federal Flood Program, less than $500,000,000; and
2 (2) the insurance group of which the insurer is a
3 member has annual direct written and unaffiliated assumed
4 premium, including international direct and assumed
5 premium, but excluding premiums reinsured with the Federal
6 Crop Insurance Corporation and Federal Flood Program, less
7 than $1,000,000,000.
8 (b) If an insurer qualifies for exemption pursuant to item
9(1) of subsection (a) of this Section, but the insurance group
10of which the insurer is a member does not qualify for exemption
11pursuant to item (2) of subsection (a) of this Section, then
12the ORSA summary report that may be required pursuant to
13Section 129.5 of this Code shall include every insurer within
14the insurance group. This requirement may be satisfied by the
15submission of more than one ORSA summary report for any
16combination of insurers, provided any combination of reports
17includes every insurer within the insurance group.
18 (c) If an insurer does not qualify for exemption pursuant
19to item (1) of subsection (a) of this Section, but the
20insurance group of which it is a member qualifies for exemption
21pursuant to item (2) of subsection (a) of this Section, then
22the only ORSA summary report that may be required pursuant to
23Section 129.5 shall be the report applicable to that insurer.
24 (d) An insurer that does not qualify for exemption pursuant
25to subsection (a) of this Section may apply to the Director for
26a waiver from the requirements of this Article based upon

09800SB1412sam001- 12 -LRB098 06643 RPM 41704 a
1unique circumstances. In deciding whether to grant the
2insurer's request for waiver, the Director may consider the
3type and volume of business written, ownership and
4organizational structure, and any other factor the Director
5considers relevant to the insurer or insurance group of which
6the insurer is a member. If the insurer is part of an insurance
7group with insurers domiciled in more than one state, the
8Director shall coordinate with the lead state commissioner and
9with the other domiciliary commissioners in considering
10whether to grant the insurer's request for a waiver.
11 (e) Notwithstanding the exemptions stated in this Section,
12the following provisions shall apply:
13 (1) The Director may require that an insurer maintain a
14 risk management framework, conduct an ORSA, and file an
15 ORSA summary report based on unique circumstances,
16 including, but not limited to, the type and volume of
17 business written, ownership and organizational structure,
18 federal agency requests, and international supervisor
19 requests.
20 (2) The Director may require that an insurer maintain a
21 risk management framework, conduct an ORSA, and file an
22 ORSA summary report if the insurer has risk-based capital
23 for a company action level event as set forth in Section
24 35A-15 of this Code, meets one or more of the standards of
25 an insurer deemed to be in hazardous financial condition as
26 defined in Section 186.1 of this Code, or otherwise

09800SB1412sam001- 13 -LRB098 06643 RPM 41704 a
1 exhibits qualities of a troubled insurer as determined by
2 the Director.
3 (f) If an insurer that qualifies for an exemption pursuant
4to subsection (a) of this Section subsequently no longer
5qualifies for that exemption due to changes in premium as
6reflected in the insurer's most recent annual statement or in
7the most recent annual statements of the insurers within the
8insurance group of which the insurer is a member, the insurer
9shall have one year following the year the threshold is
10exceeded to comply with the requirements of this Article.
11 (215 ILCS 5/129.8 new)
12 Sec. 129.8. Confidentiality.
13 (a) Documents, materials, or other information, including
14the ORSA summary report, in the possession or control of the
15Department that are obtained by, created by, or disclosed to
16the Director or any other person under this Article, is
17recognized by this State as being proprietary and to contain
18trade secrets. All such documents, materials, or other
19information shall be confidential by law and privileged, shall
20not be subject to the Freedom of Information Act, shall not be
21subject to subpoena, and shall not be subject to discovery or
22admissible in evidence in any private civil action. However,
23the Director is authorized to use the documents, materials, or
24other information in the furtherance of any regulatory or legal
25action brought as a part of the Director's official duties. The

09800SB1412sam001- 14 -LRB098 06643 RPM 41704 a
1Director shall not otherwise make the documents, materials, or
2other information public without the prior written consent of
3the insurer.
4 (b) Neither the Director nor any person who received
5documents, materials, or other ORSA-related information,
6through examination or otherwise, while acting under the
7authority of the Director or with whom such documents,
8materials, or other information are shared pursuant to this
9Article shall be permitted or required to testify in any
10private civil action concerning any confidential documents,
11materials, or information subject to subsection (a) of this
12Section.
13 (c) In order to assist in the performance of regulatory
14duties, the Director may:
15 (1) upon request, share documents, materials, or other
16 ORSA-related information, including the confidential and
17 privileged documents, materials, or information subject to
18 subsection (a) of this Section, including proprietary and
19 trade secret documents and materials with other state,
20 federal, and international financial regulatory agencies,
21 including members of any supervisory college as defined in
22 the Section 131.20c of this Code, with the NAIC, and with
23 any third-party consultants designated by the Director,
24 provided that the recipient agrees in writing to maintain
25 the confidentiality and privileged status of the
26 ORSA-related documents, materials, or other information

09800SB1412sam001- 15 -LRB098 06643 RPM 41704 a
1 and has verified in writing the legal authority to maintain
2 confidentiality; and
3 (2) receive documents, materials, or other
4 ORSA-related information, including otherwise confidential
5 and privileged documents, materials, or information,
6 including proprietary and trade-secret information or
7 documents, from regulatory officials of other foreign or
8 domestic jurisdictions, including members of any
9 supervisory college as defined in the Section 131.20c of
10 this Code, and from the NAIC, and shall maintain as
11 confidential or privileged any documents, materials, or
12 information received with notice or the understanding that
13 it is confidential or privileged under the laws of the
14 jurisdiction that is the source of the document, material,
15 or information.
16 (d) The Director shall enter into a written agreement with
17the NAIC or a third-party consultant governing sharing and use
18of information provided pursuant to this Article, consistent
19with this Section that shall:
20 (1) specify procedures and protocols regarding the
21 confidentiality and security of information shared with
22 the NAIC or a third-party consultant pursuant to this
23 Article, including procedures and protocols for sharing by
24 the NAIC with other state regulators from states in which
25 the insurance group has domiciled insurers; the agreement
26 shall provide that the recipient agrees in writing to

09800SB1412sam001- 16 -LRB098 06643 RPM 41704 a
1 maintain the confidentiality and privileged status of the
2 ORSA-related documents, materials, or other information
3 and has verified in writing the legal authority to maintain
4 confidentiality;
5 (2) specify that ownership of information shared with
6 the NAIC or a third-party consultant pursuant to this
7 Article remains with the Director and the NAIC's or a
8 third-party consultant's use of the information is subject
9 to the direction of the Director;
10 (3) prohibit the NAIC or third-party consultant from
11 storing the information shared pursuant to this Article in
12 a permanent database after the underlying analysis is
13 completed;
14 (4) require prompt notice to be given to an insurer
15 whose confidential information in the possession of the
16 NAIC or a third-party consultant pursuant to this Article
17 is subject to a request or subpoena to the NAIC or a
18 third-party consultant for disclosure or production;
19 (5) require the NAIC or a third-party consultant to
20 consent to intervention by an insurer in any judicial or
21 administrative action in which the NAIC or a third-party
22 consultant may be required to disclose confidential
23 information about the insurer shared with the NAIC or a
24 third-party consultant pursuant to this Article; and
25 (6) in the case of an agreement involving a third-party
26 consultant, provide for the insurer's written consent.

09800SB1412sam001- 17 -LRB098 06643 RPM 41704 a
1 (e) The sharing of information and documents by the
2Director pursuant to this Article shall not constitute a
3delegation of regulatory authority or rulemaking, and the
4Director is solely responsible for the administration,
5execution, and enforcement of the provisions of this Article.
6 (f) No waiver of any applicable privilege or claim of
7confidentiality in the documents, proprietary and trade-secret
8materials, or other ORSA-related information shall occur as a
9result of disclosure of such ORSA-related information or
10documents to the Director under this Section or as a result of
11sharing as authorized in this Article.
12 (g) Documents, materials, or other information in the
13possession or control of the NAIC or any third-party
14consultants pursuant to this Article shall be confidential by
15law and privileged, shall not be subject to the Freedom of
16Information Act, shall not be subject to subpoena, and shall
17not be subject to discovery or admissible in evidence in any
18private civil action.
19 (215 ILCS 5/129.9 new)
20 Sec. 129.9. Sanctions. Any insurer failing, without just
21cause, to timely file the ORSA summary report as required in
22this Article shall be required, after notice and hearing, to
23pay a penalty of $200 for each day's delay, to be recovered by
24the Director, and the penalty so recovered shall be paid into
25the General Revenue Fund of this State. The Director may reduce

09800SB1412sam001- 18 -LRB098 06643 RPM 41704 a
1the penalty if the insurer demonstrates to the Director that
2the imposition of the penalty would constitute a financial
3hardship to the insurer.
4 Section 97. Severability. The provisions of this Act are
5severable under Section 1.31 of the Statute on Statutes.
6 Section 99. Effective date. This Act takes effect January
71, 2015.".