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2005 Illinois Code - 215 ILCS 125/      Health Maintenance Organization Act. Article VI - Health Maintenance Organization Guaranty Association


      (215 ILCS 125/Art. VI heading)
ARTICLE VI. HEALTH MAINTENANCE
ORGANIZATION GUARANTY ASSOCIATION

    (215 ILCS 125/6‑1) (from Ch. 111 1/2, par. 1418.1)
    Sec. 6‑1. This Article shall be known and may be cited as the "Illinois Health Maintenance Organization Guaranty Association Law".
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑2) (from Ch. 111 1/2, par. 1418.2)
    Sec. 6‑2. Purpose. The purpose of this Article is to protect enrollees of health care plans who reside in this State, and their beneficiaries, payees and assignees, subject to certain limitations, against failure in the performance of contractual obligations due to the impairment or insolvency of the organization operating such health care plans. Nonresident enrollees of such health care plans shall be protected by this Association if: (1) they reside in states which have associations similar to the Association created by this Article; (2) they are not eligible for coverage by such associations; (3) the organization which operates such health care plan never held a license or certificate of authority in such states; and (4) such organization was domiciled in this State. To provide this protection, (1) an association of health maintenance organizations is created to enable the guaranty of payment of benefits and of continuation of coverages, either on a prepaid or indemnity basis, (2) members of the Association are subject to assessment to provide funds to carry out the purpose of this Article, and (3) the Association is authorized to assist the Director, in the prescribed manner, in the detection and prevention of health care plan impairments or insolvencies.
(Source: P.A. 86‑620.)

    (215 ILCS 125/6‑3) (from Ch. 111 1/2, par. 1418.3)
    Sec. 6‑3. Scope. This Article applies to direct individual contracts, group contracts and certificates issued thereunder, or any other evidence of coverage, each of which provides for coverage under a health care plan, and has been issued by organizations licensed to transact health maintenance organization business in this State under the Health Maintenance Organization Act, but not to any business of such organization not transacted under its health maintenance organization certificate of authority.
(Source: P.A. 92‑370, eff. 8‑15‑01.)

    (215 ILCS 125/6‑4) (from Ch. 111 1/2, par. 1418.4)
    Sec. 6‑4. Construction. This Article is to be liberally construed to be for the benefit of the member organizations' enrollees and to effect the purpose under Section 6‑2 which constitutes an aid and guide to interpretation.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑5) (from Ch. 111 1/2, par. 1418.5)
    Sec. 6‑5. Definitions. As used in this Act:
    (1) "Association" means the Illinois Health Maintenance Organization Guaranty Association created under Section 6‑6.
    (2) "Director" means the Director of Insurance of this State.
    (3) "Contractual obligation" means any obligation of the member organization under covered health care plan certificates.
    (4) "Covered person" means any enrollee who is entitled to the protection of the Association as described in Section 6‑2.
    (5) "Covered health care plan certificate" means any health care plan certificate, contract or other evidence of coverage within the scope of this Article under Section 6‑3.
    (6) "Fund" means the fund created under Section 6‑6.
    (7) "Impaired organization" means a member organization deemed by the Director after the effective date of this Article to be potentially unable to fulfill its contractual obligations and not an insolvent organization.
    (8) "Insolvent organization" means a member organization which becomes insolvent and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction.
    (9) "Member organization" means any person licensed or who holds a certificate of authority to transact in this State any kind of business to which this Article applies under Section 6‑3. For purposes of this Article "member organization" includes any person whose certificate of authority may have been suspended pursuant to Section 5‑5 of this Act.
    (10) "Premiums" means direct gross premiums or subscriptions received on covered health care plan certificates.
    (11) "Person" means any individual, corporation, partnership, association or voluntary organization.
    (12) "Resident" means any person who resides in this State at the time the organization is issued a Notice of Impairment by the Director or at the time a complaint for liquidation or rehabilitation is filed and to whom contractual obligations are owed. A person may be a resident of only one state which, in the case of a person other than a natural person, shall be its principal place of business.
(Source: P.A. 88‑297.)

    (215 ILCS 125/6‑6) (from Ch. 111 1/2, par. 1418.6)
    Sec. 6‑6. Creation of the Association. There is created a non‑profit legal entity to be known as the Illinois Health Maintenance Organization Guaranty Association. All member organizations are and must remain members of the Association as a condition of their authority to transact business in this State. The Association must perform its functions under the plan of operation established and approved under Section 6‑10 and must exercise its powers through a board of directors established under Section 6‑7. For purposes of administration and assessment, the Association must maintain the Health Maintenance Organization Fund. The Association shall be supervised by the Director and is subject to this Act and the applicable provisions of the Illinois Insurance Code.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑7) (from Ch. 111 1/2, par. 1418.7)
    Sec. 6‑7. Board of Directors. The board of directors of the Association consists of not less than 7 nor more than 11 members serving terms as established in the plan of operation. The members of the board are to be selected by member organizations subject to the approval of the Director, except the Director shall name 2 members who are current enrollees, one of whom is over 50 years of age. Vacancies on the board must be filled for the remaining period of the term in the manner described in the plan of operation. To select the initial board of directors, and initially organize the Association, the Director must give notice to all member organizations of the time and place of the organizational meeting. In determining voting rights at the organizational meeting each member organization is entitled to one vote in person or by proxy. If the board of directors is not selected at the organizational meeting, the Director may appoint the initial members.
    In approving selections or in appointing members to the board, the Director must consider, whether all member organizations are fairly represented.
    Members of the board may be reimbursed from the assets of the Association for expenses incurred by them as members of the board of directors but members of the board may not otherwise be compensated by the Association for their services.
(Source: P.A. 91‑617, eff. 1‑1‑00.)

    (215 ILCS 125/6‑8) (from Ch. 111 1/2, par. 1418.8)
    Sec. 6‑8. Powers and duties of the Association. In addition to the powers and duties enumerated in other Sections of this Article, the Association shall have the powers set forth in this Section.
    (1) If a domestic organization is an impaired organization, the Association may, subject to any conditions imposed by the Association other than those which impair the contractual obligations of the impaired organization, and approved by the impaired organization and the Director:
        (a) guarantee or reinsure, or cause to be
    
guaranteed, assumed or reinsured, any or all of the covered health care plan certificates of covered persons of the impaired organization;
        (b) provide such monies, pledges, notes, guarantees,
    
or other means as are proper to effectuate paragraph (a), and assure payment of the contractual obligations of the impaired organization pending action under paragraph (a); and
        (c) loan money to the impaired organization.
    (2) If a domestic, foreign, or alien organization is an insolvent organization, the Association shall, subject to the approval of the Director:
        (a) guarantee, assume, indemnify or reinsure or
    
cause to be guaranteed, assumed, indemnified or reinsured the covered health care plan benefits of covered persons of the insolvent organization; however, in the event that the Director of the Department of Public Aid assigns individuals that are recipients of public aid from an insolvent organization to another organization, the Director of the Department of Public Aid shall, before fixing the rates to be paid by the Department of Public Aid to the transferee organization on account of such individuals, consult with the Director of the Department of Insurance as to the reasonableness of such rates in light of the health care needs of such individuals and the costs of providing health care services to such individuals;
        (b) assure payment of the contractual obligations of
    
the insolvent organization to covered persons;
        (c) make payments to providers of health care, or
    
indemnity payments to covered persons, so as to assure the continued payment of benefits substantially similar to those provided for under covered health care plan certificate issued by the insolvent organization to covered persons; and
        (d) provide such monies, pledges, notes, guaranties,
    
or other means as are reasonably necessary to discharge such duties.
    This subsection (2) shall not apply when the Director has determined that the foreign or alien organization's domiciliary jurisdiction or state of entry provides, by statute, protection substantially similar to that provided by this Article for residents of this State and such protection will be provided in a timely manner.
    (3) There shall be no liability on the part of and no cause of action shall arise against the Association or against any transferee from the Association in connection with the transfer by reinsurance or otherwise of all or any part of an impaired or insolvent organization's business by reason of any action taken or any failure to take any action by the impaired or insolvent organization at any time.
    (4) If the Association fails to act within a reasonable period of time as provided in subsection (2) of this Section with respect to an insolvent organization, the Director shall have the powers and duties of the Association under this Article with regard to such insolvent organization.
    (5) The Association or its designated representatives may render assistance and advice to the Director, upon his request, concerning rehabilitation, payment of claims, continuations of coverage, or the performance of other contractual obligations of any impaired or insolvent organization.
    (6) The Association has standing to appear before any court concerning all matters germane to the powers and duties of the Association, including, but not limited to, proposals for reinsuring or guaranteeing the covered health care plan certificates of the impaired or insolvent organization and the determination of the covered health care plan certificates and contractual obligations.
    (7) (a) Any person receiving benefits under this Article is deemed to have assigned the rights under the covered health care plan certificates to the Association to the extent of the benefits received because of this Article whether the benefits are payments of contractual obligations or continuation of coverage. The Association may require an assignment to it of such rights by any payee, enrollee or beneficiary as a condition precedent to the receipt of any rights or benefits conferred by this Article upon such person. The Association is subrogated to these rights against the assets of any insolvent organization and against any other party who may be liable to such payee, enrollee or beneficiary.
    (b) The subrogation rights of the Association under this subsection have the same priority against the assets of the insolvent organization as that possessed by the person entitled to receive benefits under this Article.
    (8) (a) The contractual obligations of the insolvent organization for which the Association becomes or may become liable are as great as but no greater than the contractual obligations of the insolvent organization would have been in the absence of an insolvency unless such obligations are reduced as permitted by subsection (3), but the aggregate liability of the Association shall not exceed $300,000 with respect to any one natural person.
    (b) Furthermore, the Association shall not be required to pay, and shall have no liability to, any provider of health care services to an enrollee:
        (i) if such provider, or his or its affiliates or
    
members of his immediate family, at any time within the one year prior to the date of the issuance of the first order, by a court of competent jurisdiction, of conservation, rehabilitation or liquidation pertaining to the health maintenance organization:
            (A) was a securityholder of such organization
        
(but excluding any securityholder holding an equity interest of 5% or less);
            (B) exercised control over the organization by
        
means such as serving as an officer or director, through a management agreement or as a principal member of a not‑for‑profit organization;
            (C) had a representative serving by virtue or
        
his or her official position as a representative of such provider on the board of any entity which exercised control over the organization;
            (D) received provider payments made by such
        
organization pursuant to a contract which was not a product of arms‑length bargaining; or
            (E) received distributions other than for
        
physician services from a not‑for‑profit organization on account of such provider's status as a member of such organization.
        For purposes of this subparagraph (i), the terms
    
"affiliate," "person," "control" and "securityholder" shall have the meanings ascribed to such terms in Section 131.1 of the Illinois Insurance Code; or
        (ii) if and to the extent such a provider has agreed
    
by contract not to seek payment from the enrollee for services provided to such enrollee or if, and to the extent, as a matter of law such provider may not seek payment from the enrollee for services provided to such enrollee.
    (c) In no event shall the Association be required to pay any provider participating in the insolvent organization any amount for in‑plan services rendered by such provider prior to the insolvency of the organization in excess of (1) the amount provided by a capitation contract between a physician provider and the insolvent organization for such services; or (2) the amounts provided by contract between a hospital provider and the Department of Public Aid for similar services to recipients of public aid; or (3) in the event neither (1) nor (2) above is applicable, then the amounts paid under the Medicare area prevailing rate for the area where the services were provided, or if no such rate exists with respect to such services, then 80% of the usual and customary rates established by the Health Insurance Association of America. The payments required to be made by the Association under this Section shall constitute full and complete payment for such provider services to the enrollee.
    (d) The Association shall not be required to pay more than an aggregate of $300,000 for any organization which is declared to be insolvent prior to July 1, 1987, and such funds shall be distributed first to enrollees who are not public aid recipients pursuant to a plan recommended by the Association and approved by the Director and the court having jurisdiction over the liquidation.
    (9) The Association may:
        (a) Enter into such contracts as are necessary or
    
proper to carry out the provisions and purposes of this Article.
        (b) Sue or be sued, including taking any legal
    
actions necessary or proper for recovery of any unpaid assessments under Section 6‑9. The Association shall not be liable for punitive or exemplary damages.
        (c) Borrow money to effect the purposes of this
    
Article. Any notes or other evidence of indebtedness of the Association not in default are legal investments for domestic organizations and may be carried as admitted assets.
        (d) Employ or retain such persons as are necessary
    
to handle the financial transactions of the Association, and to perform such other functions as become necessary or proper under this Article.
        (e) Negotiate and contract with any liquidator,
    
rehabilitator, conservator, or ancillary receiver to carry out the powers and duties of the Association.
        (f) Take such legal action as may be necessary to
    
avoid payment of improper claims.
        (g) Exercise, for the purposes of this Article and
    
to the extent approved by the Director, the powers of a domestic organization, but in no case may the Association issue evidence of coverage other than that issued to perform the contractual obligations of the impaired or insolvent organization.
        (h) Exercise all the rights of the Director under
    
Section 193(4) of the Illinois Insurance Code with respect to covered health care plan certificates after the association becomes obligated by statute.
    (10) The obligations of the Association under this Article shall not relieve any reinsurer, insurer or other person of its obligations to the insolvent organization (or its conservator, rehabilitator, liquidator or similar official) or its enrollees, including without limitation any reinsurer, insurer or other person liable to the insolvent insurer (or its conservator, rehabilitator, liquidator or similar official) or its enrollees under any contract of reinsurance, any contract providing stop loss coverage or similar coverage or any health care contract. With respect to covered health care plan certificates for which the Association becomes obligated after an entry of an order of liquidation or rehabilitation, the Association may elect to succeed to the rights of the insolvent organization arising after the date of the order of liquidation or rehabilitation under any contract of reinsurance, any contract providing stop loss coverage or similar coverages or any health care service contract to which the insolvent organization was a party, on the terms set forth under such contract, to the extent that such contract provides coverage for health care services provided after the date of the order of liquidation or rehabilitation. As a condition to making this election, the Association must pay premiums for coverage relating to periods after the date of the order of liquidation or rehabilitation.
    (11) The Association shall be entitled to collect premiums due under or with respect to covered health care certificates for a period from the date on which the domestic, foreign, or alien organization became an insolvent organization until the Association no longer has obligations under subsection (2) of this Section with respect to such certificates. The Association's obligations under subsection (2) of this Section with respect to any covered health care plan certificates shall terminate in the event that all such premiums due under or with respect to such covered health care plan certificates are not paid to the Association (i) within 30 days of the Association's demand therefor, or (ii) in the event that such certificates provide for a longer grace period for payment of premiums after notice of non‑payment or demand therefor, within the lesser of (A) the period provided for in such certificates or (B) 60 days.
(Source: P.A. 90‑655, eff. 7‑30‑98.)

    (215 ILCS 125/6‑9) (from Ch. 111 1/2, par. 1418.9)
    Sec. 6‑9. Assessments. (1) For the purpose of providing the funds necessary to carry out the powers and duties of the Association, the board of directors shall assess the member organizations, at such times and for such amounts as the board finds necessary. Assessments shall be due not less than 30 days after written notice to the member organizations and shall accrue interest from the due date at such adjusted rate as is established under Section 531.09 of the Illinois Insurance Code and such interest shall be compounded daily.
    (2) There shall be 2 classes of assessments, as follows:
    (a) Class A assessments shall be made for the purpose of meeting administrative costs and other general expenses and examinations conducted under the authority of the Director under subsection (5) of Section 6‑12.
    (b) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the Association under Section 6‑8 with regard to an impaired or insolvent domestic organization or insolvent foreign or alien organizations.
    (3) (a) The amount of any Class A assessment shall be determined by the Board and may be made on a non‑pro rata basis.
    (b) Class B assessments against member organizations shall be in the proportion that the premiums received on health maintenance organization business in this State by each assessed member organization on covered health care plan certificates for the calendar year preceding the assessment bears to such premiums received on health maintenance organization business in this State for the calendar year preceding the assessment by all assessed member organizations.
    (c) Assessments to meet the requirements of the Association with respect to an impaired or insolvent organization shall not be made until necessary to implement the purposes of this Article. Classification of assessments under subsection (2) and computations of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible.
    (4) (a) The Association may abate or defer, in whole or in part, the assessment of a member organization if, in the opinion of the board, payment of the assessment would endanger the ability of the member organization to fulfill its contractual obligations.
    (b) The total of all assessments upon a member organization may not in any one calendar year exceed 2% of such organization's premiums in this State during the calendar year preceding the assessment on the covered health care plan certificates.
    (5) In the event an assessment against a member organization is abated, or deferred, in whole or in part, because of the limitations set forth in subsection (4) of this Section, the amount by which such assessment is abated or deferred, may be assessed against the other member organizations in a manner consistent with the basis for assessments set forth in this Section. If the maximum assessment, together with the other assets of the Association, does not provide in any one year an amount sufficient to carry out the responsibilities of the Association, the necessary additional funds may be assessed as soon thereafter as permitted by this Article.
    (6) The board may, by an equitable method as established in the plan of operation, refund to member organizations, in proportion to the contribution of each organization, the amount by which the assets of the fund exceed the amount the board finds is necessary to carry out during the coming year the obligations of the Association, including assets accruing from net realized gains and income from investments. A reasonable amount may be retained in the fund to provide moneys for the continuing expenses of the Association and for future losses if refunds are impractical.
    (7) An assessment is deemed to occur on the date upon which the board votes such assessment. The board may defer calling the payment of the assessment or may call for payment in one or more installments.
    (8) It is proper for any member organization, in determining its rates to consider the amount reasonably necessary to meet its assessment obligations under this Article.
    (9) The Association must issue to each organization paying a Class B assessment under this Article a certificate of contribution, in a form prescribed by the Director, for the amount of the assessment so paid. All outstanding certificates are of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the organization in its financial statement as an admitted asset in such form and for such amount, if any, and period of time as the Director may approve, provided the organization shall in any event at its option have the right to show a certificate of contribution as an asset at percentages of the original face amount for calendar years as follows:
    100% for the calendar year after the year of issuance;
    80% for the second calendar year after the year of issuance;
    60% for the third calendar year after the year of issuance;
    40% for the fourth calendar year after the year of issuance;
    20% for the fifth calendar year after the year of issuance.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑10) (from Ch. 111 1/2, par. 1418.10)
    Sec. 6‑10. Plan of Operation. (1) (a) The Association must submit to the Director a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the Association. The plan of operation and any amendments thereto become effective upon approval in writing by the Director.
    (b) If the Association fails to submit a suitable plan of operation within 90 days following the effective date of this Article or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Director may, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this Article. Such rules are in force until modified by the Director or superseded by a plan submitted by the Association and approved by the Director.
    (2) All member organizations must comply with the plan of operation.
    (3) The plan of operation must, in addition to requirements enumerated elsewhere in this Article:
    (a) Establish procedures for handling the assets of the Association;
    (b) Establish the amount and method of reimbursing members of the board of directors under Section 6‑7;
    (c) Establish regular places and times for meetings of the board of directors;
    (d) Establish procedures for records to be kept of all financial transactions of the Association, its agents, and the board of directors;
    (e) Establish the procedures whereby selections for the board of directors will be made and submitted to the Director;
    (f) Establish any additional procedures for assessments under Section 6‑9; and
    (g) Contain additional provisions necessary or proper for the execution of the powers and duties of the Association.
    (4) The plan of operation shall establish a procedure for protest by any member organization of assessments made by the Association pursuant to Section 6‑9. Such procedures shall require that:
    (a) Any member organization that wishes to protest all or any part of an assessment for any year shall first pay the full amount of the assessment as set forth in the notice provided by the Association. Such payments shall be accompanied by a statement in writing that the payment is made under protest, setting forth a brief statement of the ground for the protest. The Association shall hold such payments in a separate interest bearing account.
    (b) Within 30 days following the payment of an assessment under protest by any protesting member organization, the Association must notify the member organization in writing of its determination with respect to the protest unless the Association notifies the member that additional time is required to resolve the issues raised by the protest.
    (c) In the event the Association determines that the protesting member organization is entitled to a refund, such refund shall be made within 30 days following the date upon which the Association makes its determination.
    (d) The decision of the Association with respect to a protest may be appealed to the Director pursuant to subsection (3) of Section 6‑11.
    (e) In the alternative to rendering a decision with respect to any protest based on a question regarding the assessment base, the Association may refer such protests to the Director for final decision, with or without a recommendation from the Association.
    (f) Interest on any refund due a protesting member organization shall be paid at the rate actually earned by the Association on the separate account.
    (5) The plan of operation may provide that any or all powers and duties of the Association, except those under paragraph (c) of subsection (10) of Section 6‑8 and Section 6‑9 are delegated to a corporation, association or other organization which performs or will perform functions similar to those of this Association, or its equivalent, in 2 or more states. Such a corporation, association or organization shall be reimbursed for any payments made on behalf of the Association and shall be paid for its performance of any function of the Association. A delegation under this subsection shall take effect only with the approval of both the Board of Directors and the Director, and may be made only to a corporation, association or organization which extends protection not substantially less favorable and effective than that provided by this Article.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑11) (from Ch. 111 1/2, par. 1418.11)
    Sec. 6‑11. Duties and Powers of the Director. In addition to the duties and powers enumerated elsewhere in this Article, the Director shall have the powers set forth in this Section.
    (1) The Director must:
        (a) Upon request of the board of directors, provide
    
the Association with a statement of the premiums in the appropriate states for each member organization.
        (b) Notify the board of directors of the existence
    
of an impaired or insolvent organization not later than 3 days after a determination of impairment or insolvency is made or when the Director receives notice of impairment or insolvency.
        (c) Give notice to an impaired organization as
    
required by Section 2‑4 of this Act. Notice to the impaired organization shall constitute notice to its shareholders, if any.
        (d) In any liquidation or rehabilitation proceeding
    
involving a domestic organization, be appointed as the liquidator or rehabilitator. If a foreign or alien member organization is subject to a liquidation proceeding in its domiciliary jurisdiction or state of entry, the Director may be appointed conservator.
    (2) The Director may suspend or revoke, after notice and hearing, the certificate of authority to transact business in this State of any member organization which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative the Director may levy a forfeiture on any member organization which fails to pay an assessment when due. Such forfeiture may not exceed 5% of the unpaid assessment per month, but no forfeiture may be less than $100 per month.
    (3) Any action of the board of directors or the Association may be appealed to the Director by any member organization or any other person adversely affected by such action if such appeal is taken within 30 days of the action being appealed. Any final action or order of the Director is subject to judicial review in a court of competent jurisdiction.
    (4) The liquidator, rehabilitator, or conservator of any impaired organization may notify all interested persons of the effect of this Article.
(Source: P.A. 86‑620.)

    (215 ILCS 125/6‑12) (from Ch. 111 1/2, par. 1418.12)
    Sec. 6‑12. Prevention of Insolvencies. To aid in the detection and prevention of organization insolvencies or impairments:
    (1) It shall be the duty of the Director:
    (a) To notify the appropriate regulatory authority of all other states, territories of the United States, and the District of Columbia when he takes any of the following actions against a member organization:
    (i) revocation of license;
    (ii) suspension of license;
    (iii) makes any formal order, except for an order issued pursuant to Article XII 1/2 of the Illinois Insurance Code, that such company restrict its subscriptions, obtain additional contributions to surplus, withdraw from the State, reinsure all or any part of its business, or increase capital, surplus or any other account for the security of enrollees or creditors.
    Such notice shall be transmitted to all regulatory authorities within 30 days following the action taken or the date on which the action occurs.
    (b) To report to the board of directors when he has taken any of the actions set forth in subparagraph (a) of this paragraph or has received a report from any other regulatory authority indicating that any such action has been taken in another state. Such report to the board of directors shall contain all significant details of the action taken or the report received from another regulatory authority.
    (2) The Director may seek the advice and recommendations of the board of directors concerning any matter affecting his duties and responsibilities regarding the financial condition of member organizations and organizations seeking admission to transact business in this State.
    (3) The board of directors may, upon majority vote, make reports and recommendations to the Director upon any matter germane to the liquidation, rehabilitation or conservation of any member organization. Such reports and recommendations shall not be considered public documents.
    (4) The board of directors may, upon majority vote, make recommendations to the Director for the detection and prevention of health maintenance organization insolvencies.
    (5) The board of directors shall, at the conclusion of any health maintenance organization insolvency in which the Association was obligated to make payments, prepare a report to the Director containing such information as it may have in its possession bearing on the history and causes of such insolvency. The board shall cooperate with the boards of directors of guaranty associations in other states in preparing a report on the history and causes for insolvency of a particular organization, and may adopt by reference any report prepared by such other associations.
(Source: P.A. 86‑620.)

    (215 ILCS 125/6‑13) (from Ch. 111 1/2, par. 1418.13)
    Sec. 6‑13. Tax offset. In the event the aggregate Class A and B assessments for all member organizations do not exceed $3,000,000 in any one calendar year, no member organization shall receive a tax offset. However, in any one calendar year in which the total of such assessments exceeds $3,000,000, the amount in excess of $3,000,000 shall be subject to a tax offset to the extent of 20% of the amount of such assessment for each of the five calendar years following the year in which such assessment was paid, and ending prior to January 1, 2003, and each member organization may offset the proportionate amount of such excess paid by the organization against its liabilities for the tax imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act. The provisions of this Section shall expire and be given no effect on and after January 1, 2004.
(Source: P.A. 93‑29, eff. 6‑20‑03.)

    (215 ILCS 125/6‑14) (from Ch. 111 1/2, par. 1418.14)
    Sec. 6‑14. Miscellaneous Provisions. (1) Records must be kept of all negotiations and meetings in which the Association or its representatives are involved to discuss the activities of the Association in carrying out its powers and duties under Section 6‑8. Records of such negotiations or meetings may be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent organization, upon the termination of the impairment or insolvency of the organization, or upon the order of a court of competent jurisdiction. Nothing in this subsection (1) limits the duty of the Association to submit a report of its activities under Section 6‑15.
    (2) For the purpose of carrying out its obligations under this Article, the Association is deemed to be a creditor of the impaired or insolvent organization to the extent of assets attributable to covered health care plan certificates reduced by any amounts to which the Association is entitled as subrogee (under subsection (7) of Section 6‑8). All assets of the impaired or insolvent organization attributable to covered health care plan certificates must be used to continue all covered health care plan certificates and pay all contractual obligations of the impaired organization as required by this Article. "Assets attributable to covered health care plan certificates", as used in this subsection (2), is that proportion of the assets which the reserves that should have been established for such health care plan certificates bear to the reserve that should have been established for all health care plan certificates of the impaired or insolvent organization.
    (3) (a) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the Association, the shareholders of the impaired or insolvent organization, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such impaired or insolvent organization. In such a determination, consideration must be given to the welfare of the enrollees of the continuing or successor organization.
    (b) No distribution to stockholders, if any, of an impaired or insolvent organization may be made until and unless the total amount of valid claims of the Association for funds expended in carrying out its powers and duties under Section 6‑8, with respect to such organization have been fully recovered by the Association.
    (4) (a) If an order for liquidation or rehabilitation of an organization domiciled in this State has been entered, the receiver appointed under such order has a right to recover on behalf of the organization, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the organization on its capital stock, made at any time during the 5 years preceding the petition for liquidation or rehabilitation subject to the limitations of paragraphs (b) to (d).
    (b) No such distribution is recoverable if the organization shows that when paid the distribution was lawful and reasonable, and that the organization did not know and could not reasonably have known that the distribution might adversely affect the ability of the organization to fulfill its contractual obligations.
    (c) Any person who was an affiliate that controlled the organization at the time the distributions were paid is liable up to the amount of distributions he received. Any person who was an affiliate that controlled the organization at the time the distributions were declared, is liable up to the amount of distributions he would have received if they had been paid immediately. If 2 persons are liable with respect to the same distributions, they are jointly and severally liable.
    (d) The maximum amount recoverable under subsection (4) of this Section is the amount needed in excess of all other available assets of the insolvent organization to pay the contractual obligations of the insolvent organization.
    (e) If any person liable under paragraph (c) of subsection (4) of this Section is insolvent, all its affiliates that controlled it at the time the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
(Source: P.A. 86‑620.)

    (215 ILCS 125/6‑15) (from Ch. 111 1/2, par. 1418.15)
    Sec. 6‑15. Examination of the Association ‑ Annual Report. The Association shall be subject to examination and regulation by the Director. The board of directors must submit to the Director, not later than the first day of the fifth month following the end of the Association's fiscal year, a financial report for such fiscal year in a form acceptable to the Director and a report of its activities during such fiscal year.
(Source: P.A. 86‑620.)

    (215 ILCS 125/6‑16) (from Ch. 111 1/2, par. 1418.16)
    Sec. 6‑16. Tax Exemptions. The Association is exempt from payment of all fees and all taxes levied by this State or any of its subdivisions, except taxes levied on real property.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑17) (from Ch. 111 1/2, par. 1418.17)
    Sec. 6‑17. Immunity. There is no liability on the part of and no cause of action of any nature may arise against any member organization or its agents or employees, the Association or its agents or employees, members of the board of directors, or the Director or his representatives, for any action taken by them in the performance of their powers and duties under this Article.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑18) (from Ch. 111 1/2, par. 1418.18)
    Sec. 6‑18. Stay of Proceedings ‑ Reopening Default Judgments. All proceedings in which the insolvent organization is a party in any court in this State shall be stayed 60 days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the Association on any matters germane to its powers or duties. As to a judgment under any decision, order, verdict, or finding based on default the Association may apply to have such judgment set aside by the same court that made such judgment and must be permitted to defend against such suit on the merits.
(Source: P.A. 85‑20.)

    (215 ILCS 125/6‑19) (from Ch. 111 1/2, par. 1418.19)
    Sec. 6‑19. Prohibited Advertisement of Action of the Health Maintenance Organization Guaranty Association in solicitation of enrollees. No person, including an organization, agent or affiliate of an organization shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement which uses the existence of the Health Maintenance Organization Guaranty Association of this State for the purpose of solicitation of enrollees in health care plans covered by this Article; provided, however, that this Section shall not apply to the Illinois Health Maintenance Organization Guaranty Association or any other entity which does not operate health care plans.
(Source: P.A. 85‑20.)

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