Illinois Director of Insurance Restricts Offshoring of Utilization Review Functions and Third Party Administrators

On January 18, 2013, the Illinois Director of Insurance issued Company Bulletin #2013 - 01, Offshoring, to insurers, registered utilization review organizations and licensed third party administrators conducting business affecting Illinois insureds. The Bulletin provides notice that the Illinois Department of Insurance will not permit the offshoring of either third party administration or utilization review functions. The Bulletin supersedes previous Bulletin #2012 - 12, Offshoring, dated December 20, 2012. Insurers utilizing the services of TPAs or UROs and independent entities providing TPA or URO services are subject to certain examinations prescribed by Illinois law which require that the Department have convenient and free access to the offices of such companies to all books, records, documents and papers relating to the business, performance and affairs of the companies. The Department’s position is that maintaining these records in foreign locations denies the Department the convenient and free access required by Illinois law. According to the Bulletin, maintaining these records on domestic servers does not satisfy this requirement, since the Department would be unable to conduct onsite observance and interview those generating the records.

The Bulletin has the potential to affect existing and future offshoring arrangements, and to disrupt portions of the operations of insurers subject to the Department’s jurisdiction. The Bulletin also has the potential to disrupt the arrangements of other registered or licensed entities providing TPA and URO services relating to Illinois insureds.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Eversheds Sutherland (US) LLP | Attorney Advertising

Written by:


Eversheds Sutherland (US) LLP on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.