DOI Pat Quinn Governor Andrew Boron, Director

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BACKGROUND

The Department of Insurance (Department) is charged with protecting the rights of Illinois citizens in their insurance transactions and monitoring the financial solvency of all regulated entities through effective administration and enforcement of the Illinois Insurance Code [215 ILCS 5/1 through 5/1312], the Illinois Pension Code [40 ILCS 5/1-101 through 5/21-109] and related laws and regulations [Title 50, Illinois Administrative Code].

The Department's Mission Statement is as follows:

Our mission is to protect consumers by providing assistance and information, by efficiently regulating the insurance industry’s market behavior and financial solvency, and by fostering a competitive insurance marketplace.


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The Executive Staff

The Executive Staff oversees all Department operations to ensure that agency programs and activities consistently reflect Department policy and our commitment to professionalism. Specialized activities that require a high degree of inter-Departmental cooperation, such as communications, human resources, legislative initiatives, internal audit programs, federal issues, and participation in the National Association of Insurance Commissioners are also administered through the Executive Staff.

  • Legislative Office - develops the Department of Insurance's legislative agenda; coordinates Department of Insurance comments on insurance legislation and develops issue papers, fact sheets and bill reviews; monitors legislation effecting the Department of Insurance and the insurance industry; negotiates controversial legislation with legislators, Governor's staff and special interest groups; handles constituent inquiries referred by legislator's, legislative staff and the Governor's offices.


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Legal Department

The Legal Department provides a variety of legal services to the regulatory units of the Department of Insurance. The Department arranges and conducts formal hearings, conducts the rulemaking process, drafts contracts, and advises other areas of the Department of Insurance on legal issues which arise in the course of their work.

The Legal Department staff normally does not represent the agency in matters before the courts, but act as liaison with the Attorney Generals' staff and outside counsel on litigation in which the Department of Insurance has an interest. The Legal Department responds to external inquiries from the Office of the Special Deputy Receiver, other agencies of government and the general public as needed.


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Consumer Market Department

The Consumer Market Department is responsible for consumer protection and education programs and non-financial regulatory functions. The Department oversees the activities of insurance producers and monitors the marketplace operations of insurance companies through policy analysis, complaint investigation and periodic on-site examinations.

  • Consumer Services Section - investigates complaints made by the public. Complaint analysts investigate thousands of consumer grievances against insurance companies and respond to many more written and telephone inquiries each year. The Section also deploys staff members to disaster sites to assist victims in expediting their insurance claims. The Consumer Outreach staff regularly speak to community groups throughout the year.

  • Producer Section - licenses and regulates all individuals who sell insurance in Illinois and determines their compliance with continuing education requirements. Licenses are issued to producers, limited insurance representatives, public adjusters, premium finance companies, third party administrators and viatical settlement providers. All producers and public adjusters must first pass a qualifying examination administered by an independent testing service. All licensees are subject to investigations and examinations which may lead to regulatory action when violations are discovered.

  • Life, Accident & Health Compliance Section and Property and Casualty Compliance Section - review all policy forms filed by insurance companies to determine the legality of contract language and its compliance with applicable insurance laws and regulations. The Life, Accident & Health Compliance Section reviews company advertising and sales materials and oversees contract compliance and complaint investigations of health maintenance organizations. In addition, the Section registers and oversees preferred provider administrators and utilization review organizations. The Property and Casualty Compliance Section reviews the manuals of rules and rates filed for those lines of insurance required by statute and oversees the operations of the Illinois Mine Subsidence Fund and the state's involuntary insurance markets: the Illinois Automobile Insurance Plan, the Illinois FAIR Plan Association and the Illinois Workers Compensation Assigned Risk Plan.

  • Market Conduct Section - monitors the treatment citizens receive from their insurance companies for fairness and compliance with rules and regulations. Market conduct examinations evaluate insurers' underwriting, advertising, marketing and claims practice to determine whether they are performing according to the conditions and provisions stated in their policy contracts.

  • Cost Containment Section - collects and compiles financial data and annually reports to the General Assembly on the financial condition of the property/casualty industry. The Section also publishes annual studies on private passenger automobile and homeowners insurance premiums. These reports provide Illinois consumers with information on rates, explanations of coverage and factors that influence rates.

  • Office of Consumer Health Insurance/Uninsured Ombudsman - provides consumer assistance with health insurance problems and questions. The office was established by the Illinois Department of Insurance on January 1, 2000, as part of the new Managed Care Reform and Patient Rights Act. The Office of Consumer Health Insurance assist consumers by explaining patient’s rights, answers questions about health insurance and coverage provisions; and assists with consumer problems or complaints.


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Financial-Corporate Regulatory Department

The Financial-Corporate Regulatory Department is responsible for analyzing and monitoring the financial strength of insurance companies and all other regulated insurance risk bearing entities. This task is accomplished via on-site financial examinations and intervening when developing problems are identified. The Department licenses authorized insurers in the state, and investigates and takes action against unauthorized companies illegally conducting the business of insurance. The Department is intricately involved in oversight of the management operations of Illinois insurers because by law many corporate transactions, such as entering reinsurance agreements, paying dividends, and transacting business with affiliates, require the prior approval of the Department of Insurance.

  • Financial Regulation Section - conducts financial analysis of annual statement data. The Section's primary responsibility is to identify companies developing financial difficulties so that the Department of Insurance can step in to minimize potential losses to Illinois policyholders. Staff members also analyze requests for new licenses and mergers and review the financial implications of proposed corporate transactions. The Section works closely with insurance companies with identified financial difficulties. Together with company management, staff members design a plan to minimize potential risk to policyholders while attempting to resolve manageable problems or determining the need for rehabilitation or liquidation. This Section is responsible for developing the evidence necessary for obtaining orders of conservation, rehabilitation or liquidation.

  • Life, Accident & Health and Property & Casualty Financial Examination Sections - employ field examiners for on-site evaluation of financial operations and compliance issues. Examiners conduct comprehensive examinations of companies on a scheduled basis, as well as targeted or special examinations of known or suspected problems. Examiners also verify whether financial information reported to the Department of Insurance is accurate and complete.

  • Life, Accident & Health and Property & Casualty Actuarial Sections - monitor companies' financial strength. These Sections use statistical analyses to determine the adequacy of loss reserves, cash flow testing, and proper valuation of assets. The actuaries provide technical advice regarding transactions requiring prior approval and a wide variety of corporate and legislative proposals.

  • Public Employee Pension Section - regulates the suburban and downstate police and fire fighter pension systems and collects vital information from those funds, as well as from large state, Cook County and Chicago pension systems, including the Illinois Municipal Retirement System. The Department's field examinations of pension fund documents and desk audits of annual statements are the principal processes under which the state is able to protect the accrued pension benefits of active and retired public employees. The Department must also ensure the investments of Illinois public pension systems are in compliance with law.

  • Corporate Regulation Section - is responsible for incorporation, formation, licensing and registration of insurers, self insurers, and risk sharing pools authorized by the Illinois Insurance Code and related Acts. The Section also licenses surplus lines producers and monitors insurance companies operating in the surplus lines market in Illinois. The staff maintains files of statutorily required information and approves or disapproves corporate transactions which require the Director's consent. The Section also investigates unauthorized organizations or individuals thought to be conducting illegal insurance operations and takes regulatory action to remove them from the market to protect consumers from fraudulent activities. The Section is also responsible for monitoring warranty business and taking enforcement action against warranty programs not in compliance with insurance laws.


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ASSOCIATED ORGANIZATIONS

Office of the Special Deputy (OSD)

The Office of the Special Deputy (OSD) assists the Director in carrying out his responsibilities as the statutory conservator, rehabilitator or liquidator of insurance companies that are declared insolvent or are otherwise impaired from managing their own affairs. When a company domiciled or licensed in Illinois is placed into receivership, the claims of Illinois residents are covered by one of the State's three insurance guaranty funds up to the limits allowed by statute. Coverage under the Life and Health Insurance Guaranty Association is triggered when an impaired or insolvent Life or health company is placed under a final order of rehabilitation or liquidation. Coverage under the Illinois health maintenance Organization Guaranty Association law is triggered when an impaired or insolvent HMO company is placed under a final order of rehabilitation or liquidation. Coverage under the Illinois Insurance Guaranty Fund is triggered by the entry of a final order of liquidation with a finding of insolvency against a Property and Casualty company. Policyholders with claims against unauthorized, illegal, or unlicensed insurers are not generally afforded this protection.

Comprehensive Health Insurance Plan (CHIP)

The Comprehensive Health Insurance Plan (CHIP) is a state program which offers health insurance to a limited number of Illinois residents who can afford, but are unable to find adequate health insurance coverage in the private market because of their medical or physical condition. The plan also serves as the State's alternative mechanism for HIPAA portability requirements. CHIP is subject to its own enabling law and is governed by a Board of Directors which is chaired by the Director of Insurance or his designee. CHIP has a small staff which works for the Board of Directors. Claims are administered for CHIP by a private insurer.

National Association of Insurance Commissioners (NAIC)

The National Association of Insurance Commissioners (NAIC) is a central organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and four U.S. territories. The primary objective of this body is to strengthen and improve state regulation through the formulation of common goals and uniform policies.

The Illinois Department of Insurance maintains an active presence in the NAIC and was one of the first four states to become formally accredited as meeting the financial regulatory standards established by the NAIC.