(215 ILCS 125/Art. III heading)
(215 ILCS 125/3-1) (from Ch. 111 1/2, par. 1407.3)
Sec. 3-1.
Investment Regulations.
(a) Any health maintenance
organization may invest its funds as provided in this Section and not
otherwise. A health maintenance organization that is organized as an
insurance company may also acquire the investment assets authorized for an
insurance company pursuant to the laws applicable to an insurance company
in the organization's state of domicile. Notwithstanding the provisions of
this Section, the Director may, after notice and hearing, order an
organization to limit or withdraw from certain investments, or discontinue
certain investment practices, to the extent the Director finds that such
investments or investment practices are hazardous to the financial
condition of the organization.
(b) No investment or loan shall be made or engaged in by any health
maintenance organization unless the same have been authorized or ratified
by the board of directors or by a committee thereof charged with the duty
of supervising investments and loans. Nothing contained in this subsection
shall prevent the board of directors of any such organization from
depositing any of its securities with a committee appointed for the purpose
of protecting the interest of security holders or with the authorities of
any state where it is necessary to do so in order to secure permission to
transact its appropriate business therein, and nothing contained in this
subsection shall prevent the board of directors of such organization from
depositing any securities as collateral for the securing of any bond
required for the business of the organization.
(c) No health maintenance organization shall pay any commission or
brokerage for the purchase or sale of property whether real or personal, in
excess of that usual and customary at the time and in the locality where
such purchases or sales are made, and information regarding payments of
commissions and brokerage shall be maintained.
(d) A health maintenance organization may not directly or indirectly,
unless it
has notified the Director in writing of its intention to enter into the
transaction at least 30 days prior thereto, or any shorter period as the
Director may permit, and the Director has not disapproved it within that
period:
For the purposes of this Section, an officer or director shall not be deemed
to have a financial interest by reason of an interest that is held directly or
indirectly through the ownership of equity interests representing less than 2%
of all outstanding equity interests issued by a person that is a party to the
transaction, or solely by reason of that individual's position as a director or
officer of a person that is a party to the transaction.
This subsection does not apply to a transaction between an organization and
any of its subsidiaries or affiliates that is entered into in compliance with
Section 131.20a of the Illinois Insurance Code, other than a transaction
between an insurer and its officer or director.
(e) In applying the percentage limitations imposed by this Section there
shall be used as a base the total of all assets which would be admitted by
this Section without regard to percentage limitations. All legal
measurements used as a base in the determination of all investment
qualifications shall consist of the amounts determined at the most recent
year end adjusted for subsequent acquisition and disposition of investments.
(f) Valuation of investments. Investments shall be valued in
accordance with the published valuation standards of the National
Association of Insurance Commissioners. Securities investments as to which
the National Association of Insurance Commissioners has not published
valuation standards in its Valuations of Securities manual or its successor
publication shall be valued as follows:
(g) Definitions. As used in this Section, unless the context otherwise
requires.
(h) Authorized investments. Any Health Maintenance Organization, except
those organized as an insurance company, may acquire the assets set forth
in paragraphs 1 through 17, inclusive. A Health Maintenance Organization
that is organized as an insurance company may acquire the investment assets
authorized for an insurance company pursuant to the laws applicable to an
insurance company in the organization's state of domicile. Any
restriction, exclusion or provision appearing in any paragraph shall apply
only with respect to the authorization of the particular paragraph in which
it appears and shall not constitute a general prohibition and shall not be
applicable to any other paragraph. The qualifications or disqualifications
of an investment under one paragraph shall not prevent its qualification in
whole or in part under another paragraph, and an investment authorized by
more than one paragraph may be held under whichever authorizing paragraph the
organization elects. An investment which qualified under any paragraph at
the time it was acquired or entered into by an organization shall continue
to be qualified under that paragraph. An investment in whole or in part
may be transferred from time to time, at the election of the organization,
to the authority of any paragraph under which it qualifies, whether
originally qualifying thereunder or not.
(Source: P.A. 92-140, eff. 7-24-01; 92-651, eff. 7-11-02.)
Structure Illinois Compiled Statutes