215 ILCS 5/155.35
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article IX - Provisions Applicable To All Companies

Sec. 155.35.     Insurance compliance self-evaluative privilege.(a) To encourage insurance companies and persons conducting activities  regulated under this Code, both to conduct voluntary internal audits of their  compliance programs and management systems and to assess and improve compliance  with State and federal statutes, rules, and orders, an insurance compliance  self-evaluative privilege is recognized to protect the confidentiality of  communications relating to voluntary internal compliance audits.  The General  Assembly hereby finds and declares that protection of insurance consumers is  enhanced by companies' voluntary compliance with this State's insurance and  other laws and that the public will benefit from incentives to identify and  remedy insurance and other compliance issues.  It is further declared that  limited expansion of the protection against disclosure will encourage voluntary  compliance and improve insurance market conduct quality and that the voluntary  provisions of this Section will not inhibit the exercise of the regulatory  authority by those entrusted with protecting insurance consumers.(b)(1) An insurance compliance self-evaluative audit document is privileged  information and is not admissible as evidence in any legal action in any  civil, criminal, or administrative proceeding, except as provided in  subsections (c) and (d) of this Section.  Documents, communications, data,  reports, or other information created as a result of a claim involving personal  injury or workers' compensation made against an insurance policy are not  insurance compliance self-evaluative audit documents and are admissible as  evidence in civil proceedings as otherwise provided by applicable rules of  evidence or civil procedure, subject to any applicable statutory or common law  privilege, including but not limited to the work product doctrine, the  attorney-client privilege, or the subsequent remedial measures exclusion.(2) If any company, person, or entity performs or directs the performance  of an insurance compliance audit, an officer or employee involved with the  insurance compliance audit, or any consultant who is hired for the purpose of  performing the insurance compliance audit, may not be examined in any civil,  criminal, or administrative proceeding as to the insurance compliance audit or  any insurance compliance self-evaluative audit document, as defined in this  Section. This subsection (b)(2) does not apply if the privilege set forth in  subsection (b)(1) of this Section is determined under subsection (c) or (d) not  to apply.(3) A company may voluntarily submit, in connection with examinations  conducted under this Article, an insurance compliance self-evaluative audit  document to the Director, or his or her designee, as a confidential document  under subsection (f) of Section 132.5 of this Code without waiving the  privilege set forth in this Section to which the company would otherwise be  entitled;  provided, however, that the provisions in subsection (f) of Section 132.5  permitting the Director to make confidential documents public pursuant to  subsection (e) of Section 132.5 and access to the National Association of  Insurance Commissioners shall not apply to the insurance compliance  self-evaluative audit  document so voluntarily submitted.  Nothing contained in this subsection shall  give the Director any authority to compel a company to disclose involuntarily  or otherwise provide an insurance compliance self-evaluative audit document.(c)(1) The privilege set forth in subsection (b) of this Section does not  apply to the extent that it is expressly waived by the company that prepared  or caused to be prepared the insurance compliance self-evaluative audit  document.(2) In a civil or administrative proceeding, a court of record may, after  an in camera review, require disclosure of material for which the privilege set  forth in subsection (b) of this Section is asserted, if the court determines  one of the following:(A) the privilege is asserted for a fraudulent     purpose;(B) the material is not subject to the privilege; or(C) even if subject to the privilege, the material     shows evidence of noncompliance with State and federal statutes, rules and orders and the company failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time.(3) In a criminal proceeding, a court of record may, after an in camera  review, require disclosure of material for which the privilege described in  subsection (b) of this Section is asserted, if the court determines one of the  following:(A) the privilege is asserted for a fraudulent     purpose;(B) the material is not subject to the privilege;(C) even if subject to the privilege, the material     shows evidence of noncompliance with State and federal statutes, rules and orders and the company failed to undertake reasonable corrective action or eliminate such noncompliance within a reasonable time; or(D) the material contains evidence relevant to     commission of a criminal offense under this Code, and all of the following factors are present:(i) the Director, State's Attorney, or Attorney         General has a compelling need for the information;(ii) the information is not otherwise available;         and(iii) the Director, State's Attorney, or Attorney         General is unable to obtain the substantial equivalent of the information by any means without incurring unreasonable cost and delay.(d)(1) Within 30 days after the Director, State's Attorney, or Attorney  General makes a written request by certified mail for disclosure of an  insurance compliance self-evaluative audit document under this subsection, the  company that  prepared or caused the document to be prepared may file with the appropriate  court a petition requesting an in camera hearing on whether the insurance  compliance self-evaluative audit document or portions of the document are  privileged under this Section or subject to disclosure.  The court has  jurisdiction over a petition filed by a company under this subsection  requesting an in camera hearing on whether the insurance compliance  self-evaluative audit document or portions of the document are privileged or  subject  to disclosure.  Failure by the company to file a petition waives the privilege.(2) A company asserting the insurance compliance self-evaluative privilege  in response to a request for disclosure under this subsection shall include in  its request for an in camera hearing all of the information set forth in  subsection (d)(5) of this Section.(3) Upon the filing of a petition under this subsection, the court shall  issue an order scheduling, within 45 days after the filing of the petition, an  in camera hearing to determine whether the insurance compliance self-evaluative  audit document or portions of the document are privileged under this Section or  subject to disclosure.(4) The court, after an in camera review, may require disclosure of  material for which the privilege in subsection (b) of this Section is asserted  if the court determines, based upon its in camera review, that any one of the  conditions set forth in subsection (c)(2)(A) through (C) is applicable as to a  civil or administrative proceeding or that any one of the conditions set forth  in subsection (c)(3)(A) through (D) is applicable as to a criminal proceeding.  Upon making such a determination, the court may only compel the disclosure of  those portions of an insurance compliance self-evaluative audit document  relevant to issues in dispute in the underlying proceeding.  Any compelled disclosure will not be considered to be a public document or be  deemed to be a waiver of the privilege for any other civil, criminal, or  administrative proceeding.  A party unsuccessfully opposing disclosure may  apply to the court for an appropriate order protecting the document from  further disclosure.(5) A company asserting the insurance compliance self-evaluative privilege  in response to a request for disclosure under this subsection (d) shall provide  to the Director, State's Attorney, or Attorney General, as the case may be, at  the time of  filing any objection to the disclosure, all of the following information:(A) The date of the insurance compliance     self-evaluative audit document.(B) The identity of the entity conducting the audit.(C) The general nature of the activities covered by     the insurance compliance audit.(D) An identification of the portions of the     insurance compliance self-evaluative audit document for which the privilege is being asserted.(e) (1) A company asserting the insurance compliance self-evaluative  privilege set forth in subsection (b) of this Section has the burden of  demonstrating the applicability of the privilege. Once a company has  established the applicability of the privilege, a party  seeking disclosure under subsections (c)(2)(A) or (C) of this Section has the  burden of proving that the privilege is asserted for  a fraudulent purpose or that the company failed to  undertake reasonable corrective action or eliminate the noncompliance with a  reasonable time. The Director, State's Attorney, or Attorney General seeking  disclosure under subsection (c)(3) of this Section has the burden of proving  the elements set forth in subsection (c)(3) of this Section.(2) The parties may at any time stipulate in proceedings under subsections  (c) or (d) of this Section to entry of an order directing that specific  information contained in an insurance compliance self-evaluative audit document  is or is not subject to the privilege provided under subsection (b) of this  Section.(f) The privilege set forth in subsection (b) of this Section shall not  extend to any of the following:(1) documents, communications, data, reports, or     other information required to be collected, developed, maintained, reported, or otherwise made available to a regulatory agency pursuant to this Code, or other federal or State law, rule, or order;(2) information obtained by observation or monitoring     by any regulatory agency; or(3) information obtained from a source independent of     the insurance compliance audit.(g) As used in this Section:(1) "Insurance compliance audit" means a voluntary,     internal evaluation, review, assessment, or audit not otherwise expressly required by law of a company or an activity regulated under this Code, or other State or federal law applicable to a company, or of management systems related to the company or activity, that is designed to identify and prevent noncompliance and to improve compliance with those statutes, rules, or orders.  An insurance compliance audit may be conducted by the company, its employees, or by independent contractors.(2) "Insurance compliance self-evaluative audit     document" means documents prepared as a result of or in connection with and not prior to an insurance compliance audit. An insurance compliance self-evaluation audit document may include a written response to the findings of an insurance compliance audit.  An insurance compliance self-evaluative audit document may include, but is not limited to, as applicable, field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, computer-generated or electronically recorded information, phone records, maps, charts, graphs, and surveys, provided this supporting information is collected or developed for the primary purpose and in the course of an insurance compliance audit.  An insurance compliance self-evaluative audit document may also include any of the following:(A) an insurance compliance audit report prepared         by an auditor, who may be an employee of the company or an independent contractor, which may include the scope of the audit, the information gained in the audit, and conclusions and recommendations, with exhibits and appendices;(B) memoranda and documents analyzing portions or         all of the insurance compliance audit report and discussing potential implementation issues;(C) an implementation plan that addresses         correcting past noncompliance, improving current compliance, and preventing future noncompliance; or(D) analytic data generated in the course of         conducting the insurance compliance audit.(3) "Company" has the same meaning as provided in     Section 2 of this Code.(h) Nothing in this Section shall limit, waive, or abrogate the scope or  nature of any statutory or common law privilege including, but not limited to,  the work product doctrine, the attorney-client privilege, or the subsequent  remedial measures exclusion.    (Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)