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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

INSURANCE
(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/179E-40

    (215 ILCS 5/179E-40)
    Sec. 179E-40. Affiliation. Notwithstanding the provisions of Article VIII 1/2, the SPRV, the SPRV organizer, and subsequent debt or equity investors in SPRV securities shall not be deemed affiliates of the ceding insurer by virtue of the SPRV contract between the ceding insurer and the SPRV, the securities of the SPRV, or related agreements necessary to implement the SPRV insurance securitization. An SPRV may not be controlled by, may not control, and may not be under common control with any ceding insurer that is a party to an SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-45

    (215 ILCS 5/179E-45)
    Sec. 179E-45. Capitalization. An SPRV must have minimum initial capital of not less than $5,000. All of the initial capital must be received by the SPRV in cash. The minimum initial capital required and all other funds of the SPRV in excess of its minimum initial capital, including funds held in trust to secure the obligations of the SPRV pursuant to its obligations under the SPRV contracts, shall be invested as provided in Section 179E-85.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-50

    (215 ILCS 5/179E-50)
    Sec. 179E-50. Dividends. An SPRV may not declare or pay dividends in any form to its owners unless the dividends do not decrease the capital of the SPRV below $5,000, and after giving effect to the dividends, the assets of the SPRV, including assets held in trust pursuant to the terms of the insurance securitization, are sufficient to meet its obligations. Dividends may be declared by the board of directors of the SPRV if the declaration of dividends would not violate the provisions of this Article or jeopardize the fulfillment of the obligations of the SPRV or the trustee pursuant to the SPRV insurance securitization, the SPRV contract or any related transaction.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-55

    (215 ILCS 5/179E-55)
    Sec. 179E-55. Records and financial reports.
    (a) The records of the SPRV must be maintained in this State and must be available for examination by the Department. The Director shall have the right to examine the records of an SPRV at any time. No later than 5 months after the fiscal year end of the SPRV, the SPRV must file with the Director an audit by a certified public accounting firm of the financial statements of the SPRV and the trust accounts.
    (b) No later than March 1 of each year, an SPRV organized under this Article must file with the Director a statement of operations, including, but not limited to, a statement of income, a balance sheet, and a detailed listing of invested assets, including identification of assets held in trust to secure the SPRV's obligations under the SPRV contract, for the year ending the previous December 31. The statements shall be prepared in accordance with Section 136 of this Code on such forms and shall reveal such information as shall be required by the Director.
    (c) An SPRV must keep its books and records in a manner so that its financial condition, affairs, and operations can be ascertained, its financial statements filed with the Director can be readily verified, and its compliance with the provisions of this Article can be determined. An SPRV may cause any or all of the books or records to be photographed, reproduced on film, or stored and reproduced electronically.
    (d) All original books, records, documents, accounts, and vouchers, or reproductions of those items, must be preserved and kept available in this State for the purpose of examination and until authority to destroy or otherwise dispose of the records is secured from the Director. The original records may, however, be kept and maintained outside this State if, according to a plan adopted by the SPRV's board of directors and approved by the Director, it maintains other suitable records.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-60

    (215 ILCS 5/179E-60)
    Sec. 179E-60. Officers and directors.
    (a) The directors of an SPRV shall elect such officers they deem necessary to carry out the purposes of the SPRV pursuant to this Article. The provisions of Section 10 of this Code relating to the indemnification of officers and directors apply to and govern SPRVs organized under this Article.
    (b) An SPRV authorized to do business in this State must notify the Director of the appointment or election of any new officers or directors within 30 days after the appointment or election.
    (c) If, after notice and hearing afforded to the officer or director, and after a finding that the officer or director is incompetent or untrustworthy or of known bad character, the Director shall order the removal of the person. If the SPRV does not comply with a removal order within 30 days, the Director may suspend that SPRV's limited certificate of authority until such time as the order is complied with.
    (d) An SPRV may not make loans to any SPRV organizer, owner, director, officer, manager, or affiliate.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-65

    (215 ILCS 5/179E-65)
    Sec. 179E-65. Fees and taxes. The Director may charge fees to reimburse the Director for expenses and costs incurred by the Department incident to the examination of financial statements and review of the plan of operation and to reimburse other such activities of the Director related to the formation and ongoing operation of an SPRV. An SPRV is not be subject to State premium or other State taxes incidental to the operation of its business as long as the business remains within the limitations of this Article.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-70

    (215 ILCS 5/179E-70)
    Sec. 179E-70. Dissolution. An SPRV operating under this Article may be dissolved by a vote of its board of directors at any time after the Director has approved that action. A voluntary dissolution may not be effected or allowed until and unless all of the obligations of the SPRV pursuant to the insurance securitization have been fully and finally satisfied pursuant to their terms. In the case of voluntary dissolution, the disposition of the affairs of the SPRV (including the settlement of all outstanding obligations) shall be made by the officers or directors of the SPRV, and when the liquidation has been completed and a final statement, in acceptable form, filed with and approved, or deemed approved, by the Director, the provisions for voluntary dissolution under the laws of this State shall be followed to dissolve the SPRV.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-75

    (215 ILCS 5/179E-75)
    Sec. 179E-75. Conservation, rehabilitation, or liquidation.
    (a) The provisions of Articles XIII and XIII 1/2 apply to an SPRV, except to the extent modified in this Section.
    (b) Notwithstanding the provisions of Section 188 of this Code, the Director may apply by petition to the Circuit Court of Cook County, the Circuit Court of Sangamon County, or the circuit court of the county in which an SPRV has or last had its principal office for an order authorizing the Director to conserve, rehabilitate or liquidate an SPRV domiciled in this State solely on one or more of the following grounds:
        (1) there has been embezzlement, wrongful
    
sequestration, dissipation, or diversion of the assets of the SPRV intended to be used to pay amounts owed to the ceding insurer or the holders of SPRV securities; or
        (2) the SPRV is insolvent and the holders of a
    
majority in outstanding principal amount of each class of SPRV securities request or consent to conservation, rehabilitation, or liquidation under this Article.
    The court shall not grant relief under item (1) of this subsection unless, after notice and a hearing, the Director, who has the burden of proof, establishes by clear and convincing evidence that the relief should be granted.
    (c) Notwithstanding any contrary provision in this Code, the rules promulgated under this Code, or any other applicable law or rule, upon any order of conservation, rehabilitation, or liquidation of the SPRV, the receiver shall be bound to deal with the SPRV's assets and liabilities, in accordance with the requirements set forth in this Article.
    (d) With respect to amounts recoverable under an SPRV contract, the amount recoverable by the receiver may not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding insurer notwithstanding any provisions to the contrary in the contracts or other documentation governing the SPRV insurance securitization.
    (e) Notwithstanding the provisions of Article XIII and XIII 1/2 of this Code, any application, petition, or temporary restraining order or injunction issued under those Articles, with respect to a ceding insurer shall not prohibit the transaction of any business by an SPRV, including any payment by an SPRV made pursuant to an SPRV security, or any action or proceeding against an SPRV or its assets.
    (f) Notwithstanding the provisions of Articles XIII and XIII 1/2 of this Code, the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to an SPRV, and any order issued by the court thereunder, shall not prohibit:
        (1) the payment by an SPRV made pursuant to an SPRV
    
security or SPRV contract; or
        (2) the SPRV from taking any action required to make
    
the payment.
    (g) Notwithstanding any other provision of Articles XIII and XIII 1/2 of this Code or other State law:
        (1) a receiver of a ceding insurer may not avoid a
    
non-fraudulent transfer by a ceding insurer to an SPRV of money or other property made pursuant to an SPRV contract; and
        (2) a receiver of an SPRV may not void a
    
non-fraudulent transfer by the SPRV of money or other property made to a ceding insurer pursuant to an SPRV contract or made to or for the benefit of any holder of an SPRV security on account of the SPRV security.
    (h) With the exception of the fulfillment of the obligations under an SPRV contract, and notwithstanding any other provisions of this Article or other law of this State to the contrary, the assets of an SPRV, including assets held in trust, may not be consolidated with or included in the estate of a ceding insurer in any delinquency proceeding against the ceding insurer under this Article for any purpose, including, without limitation, distribution to creditors of the ceding insurer.
    (i) Notwithstanding any other provision of this Article:
        (1) A domiciliary receiver of an SPRV domiciled in
    
another state shall be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, and all of the books, accounts, and other records of the SPRV located in this State. The domiciliary receiver shall have the immediate right to recover all of the vested property, assets, and causes of action of the SPRV located in this State.
        (2) An ancillary proceeding may not be commenced or
    
prosecuted in this State against an SPRV domiciled in another state.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-80

    (215 ILCS 5/179E-80)
    Sec. 179E-80. SPRV not subject to guaranty funds, residual market, or similar arrangements.
    (a) An SPRV or the activities, assets, and obligations relating to the SPRV are not subject to the provisions of Articles XXXIII 1/2 and XXXIV of this Code, and an SPRV may not be assessed by or otherwise be required to contribute to any guaranty fund or guaranty association in this State with respect to the activities, assets, or obligations of an SPRV or the ceding insurer.
    (b) An SPRV may not be required to participate in residual market, FAIR plan, or other similar plans to provide insurance coverage, take out policies, assume risks, make capital contributions, pay or be otherwise obligated for assessments, surcharges, or fees, or otherwise support or participate in such plans or arrangements.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-85

    (215 ILCS 5/179E-85)
    Sec. 179E-85. Asset and investment limitations.
    (a) Assets of the SPRV held in trust to secure obligations under the SPRV contract must at all times be held in:
        (1) cash and cash equivalents;
        (2) securities listed by the Securities Valuation
    
Office of the NAIC and qualifying as admitted assets under statutory accounting convention in its state of domicile; and
        (3) any other form of security acceptable to the
    
Director.
    (b) An SPRV may enter into swap agreements or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing credit or interest rate risk of the investments in the trust to ensure that the investments are sufficient to assure payment or repayment of:
        (1) the securities (and related interest or principal
    
payments) issued pursuant to an SPRV insurance securitization transaction; or
        (2) the SPRV's obligations under the SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-90

    (215 ILCS 5/179E-90)
    Sec. 179E-90. Credit for reinsurance for the SPRV contract. An SPRV contract meeting the requirements under this Article shall be granted credit for reinsurance treatment or shall otherwise qualify as an asset or a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer under Section 173.1 of this Code for the benefit of the ceding insurer, provided and only to the extent that (i) the fair value of the assets held in trust for the benefit of the ceding insurer equal or exceed the obligations due and payable to the ceding insurer by the SPRV under the SPRV contract, (ii) the assets are held in trust in accordance with the requirements set forth in this Article, (iii) the assets are administered in the manner and pursuant to arrangements as set forth in this Article, and (iv) the assets are held or invested in one or more of the forms allowed in Section 179E-85.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-95

    (215 ILCS 5/179E-95)
    Sec. 179E-95. Insurance securitization deemed not to be transaction of insurance business. The securities issued by the SPRV under an SPRV insurance securitization shall not be deemed to be insurance or reinsurance contracts. An investor in securities issued pursuant to an SPRV insurance securitization or any holder of those securities shall not, by sole means of the investment or holding, be deemed to be transacting an insurance business in this State. The underwriters or selling agents (and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors) involved in an SPRV insurance securitization shall not be deemed to be conducting an insurance or reinsurance agency, brokerage, intermediary, advisory, or consulting business by virtue of their activities in connection therewith.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-100

    (215 ILCS 5/179E-100)
    Sec. 179E-100. Authority to adopt rules. The Director may promulgate rules necessary to effectuate the purposes of this Article. Any rules so promulgated will not affect any existing SPRV insurance securitization in effect at the time of the promulgation.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/Art. XII

 
    (215 ILCS 5/Art. XII heading)
ARTICLE XII. DOMESTICATION OF
FOREIGN AND ALIEN COMPANIES

215 ILCS 5/180

    (215 ILCS 5/180) (from Ch. 73, par. 792)
    Sec. 180. Companies that may domesticate.
    (1) Any domestic, foreign, or alien stock company, mutual company, assessment legal reserve company, reciprocal, or fraternal benefit society, authorized or which may be authorized to do business in this State, may reorganize under the laws of this State (including a reorganization as a captive insurance company under the laws of this State), by complying with the provisions of this Article.
    (2) As used in this Article: "reorganize" means reorganize, reincorporate, or domesticate as an Illinois insurer; "reorganization" means reorganization, reincorporation, or domestication as an Illinois insurer; "reorganized company" means any company that has availed itself of the provisions of this Article, and the reorganization of which has been effected as in this Article provided; and "similar domestic company" means, in the case of an application for reorganization as a domestic captive insurance company, a domestic captive insurance company organized under Article VIIC.
(Source: P.A. 87-1216.)

215 ILCS 5/181

    (215 ILCS 5/181) (from Ch. 73, par. 793)
    Sec. 181. Articles of reorganization. (1) The board of directors, trustees or other governing body of any such company desiring to reorganize under this Article shall comply with all laws and requirements of its domiciliary state or country with reference to reorganization under the laws of another state or country.
    (2) Such board of directors, trustees or other governing body shall adopt a resolution approving articles of reorganization setting forth:
    (a) the name of the company; and if the name of the company upon reorganization is to be changed, the proposed name of the reorganized company;
    (b) the title of the act under which it was organized or incorporated;
    (c) the matters required to be set forth in original articles of incorporation of a similar domestic company;
    (d) that it shall be bound by all the terms and provisions of this Code, applicable to similar domestic companies organized or incorporated thereunder; and
    (e) such other particulars as are deemed necessary or advisable.
(Source: P.A. 86-632; 86-634; 86-1028.)

215 ILCS 5/182

    (215 ILCS 5/182) (from Ch. 73, par. 794)
    Sec. 182. Execution of articles.
    The articles of reorganization shall be executed in duplicate by the president or vice-president, and secretary or assistant secretary of the company, or the executive officers corresponding thereto, and shall be acknowledged and sworn to.
(Source: Laws 1937, p. 696.)

215 ILCS 5/183

    (215 ILCS 5/183) (from Ch. 73, par. 795)
    Sec. 183. Certificate of Reorganization - Date Reorganization Effected. (1) Upon the execution of the articles of reorganization there shall be delivered to the Director
    (a) two duplicate originals of the articles;
    (b) a copy of the resolution of the board of directors, trustees or other governing body, adopting said articles, duly certified by the secretary of the company or officer corresponding thereto;
    (c) information satisfactory to the Director that the company has complied with all the laws and requirements of the domiciliary state or country with reference to the proposed reorganization and the protection of policyholders; and
    (d) securities of the kind and amount, if any, required as a deposit of a similar domestic company doing the same kind or kinds of business proposed to be done by the reorganized company.
    (2) If the Director finds that the articles of reorganization are in accordance with the provisions of this Article, and that the company has complied with all provisions of this Code applicable to similar domestic companies, he shall approve the articles of reorganization and shall forthwith file one of the duplicate originals of the articles, together with the resolution and certificate of reorganization and certificate of authority, in his office, endorse upon the other duplicate original, his approval thereof, and deliver it together with a certificate of reorganization and a certificate of authority to the reorganized company. Upon such filing, the reorganization of the company shall be effected.
(Source: P.A. 85-131.)

215 ILCS 5/184

    (215 ILCS 5/184) (from Ch. 73, par. 796)
    Sec. 184. Recording Articles of Reorganization. The articles of reorganization, approved by the Director and returned to the reorganized company, shall be recorded in the office of the recorder in the county where the principal office of the reorganized company is to be located.
(Source: P.A. 85-131.)

215 ILCS 5/185

    (215 ILCS 5/185) (from Ch. 73, par. 797)
    Sec. 185. Board of directors, trustees, etc. to continue.
    The directors, trustees, or members of any other governing body of the company so reorganized, shall become the directors, trustees or members of the governing body of the reorganized company and shall hold office until their successors are elected or chosen in the manner provided therefor by the articles of reorganization.
(Source: Laws 1937, p. 696.)

215 ILCS 5/185.1

    (215 ILCS 5/185.1) (from Ch. 73, par. 797.1)
    Sec. 185.1. Effect of Reorganization.
    When the reorganization has been effected:
    (a) The articles of reorganization shall be the articles of incorporation of the reorganized company and said company shall continue in existence as, and thereafter be, a company of this State.
    (b) The reorganized company shall make its reports in accordance with the laws of this State and shall be subject to the exclusive regulation and supervision by the Department of Insurance of this State and shall be subject to regulation and supervision by the Insurance Departments of other states and countries as a foreign or alien company.
    (c) The reorganized company shall have all of the rights, privileges, immunities and powers and shall be subject to all of the duties and liabilities granted or imposed by this Code (except in the case of a domestic captive insurance company, which shall have all of the rights, privileges, immunities and powers and shall be subject to all of the duties and liabilities granted or imposed by Article VIIC of this Code).
    (d) The reorganized company shall thereupon and thereafter possess all the rights, privileges, immunities, powers and franchises of a public as well as a private nature, theretofore possessed by the company so reorganized. Without limiting the generality of the foregoing, (i) the agency appointments, licenses, certificates of authority and rates which are in existence at the time of the reorganization of such reorganized company takes effect shall continue in full force and effect; (ii) all property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, assessments payable from members or policyholders, and all other choses in action, and all and every other interest of, or belonging to or due to the company so reorganized, shall be deemed to be transferred to and vested in the reorganized company without further act or deed; and (iii) the title to any real estate or any interest therein theretofore vested in the company so reorganized, shall not revert or be in any way impaired by reason of such reorganization.
    (e) The reorganized company shall thenceforth be responsible and liable for all the liabilities and obligations of the company so reorganized. Any claim existing, or action or proceeding pending by or against the company so reorganized, may be prosecuted to judgment as if such reorganization had not taken place, or such reorganized company may be substituted in its place. Neither the rights of creditors nor any liens upon the property of the company so reorganized, shall be impaired by such reorganization, but such liens shall be limited to the property upon which they were liens immediately prior to the reorganization, unless otherwise provided in the articles of reorganization.
(Source: P.A. 85-131.)

215 ILCS 5/185.2

    (215 ILCS 5/185.2) (from Ch. 73, par. 797.2)
    Sec. 185.2. Conversion to Foreign Insurer. Any domestic insurer may, upon the approval of the Director, transfer its domicile to any other state in which it is admitted to transact the business of insurance, and upon such a transfer shall cease to be a domestic insurer. The Director shall approve any such proposed transfer unless he shall determine such transfer is not in the interest of the policyholders of this State.
(Source: P.A. 85-131.)

215 ILCS 5/Art. XII.5

 
    (215 ILCS 5/Art. XII.5 heading)
ARTICLE XII 1/2. CORRECTIVE ORDERS

215 ILCS 5/186.1

    (215 ILCS 5/186.1) (from Ch. 73, par. 798.1)
    Sec. 186.1. Supervision by the Director. (1)If the Director determines that any domestic insurance company is operating in a manner, that could lead to, or is in, a financial condition, which if continued would make it hazardous to the public, and its policyholders, the Director may issue an order:
    (a) notifying the company and its Board of Directors of his determination and setting forth the specific deficiencies leading to the determination;
    (b) setting forth the specific action required or prohibited to correct the cited deficiencies; and
    (c) ordering the company to comply with the Director's order within such reasonable time as the Director shall prescribe.
    (2) Operation or financial condition deficiencies supporting the Director's determination under subsection (1) may include, but are not limited to, the following:
    (a) The company has failed to maintain a relationship of policyholder surplus to premium writings or policyholder surplus to claim and unearned premium reserves which provides a reasonable margin of safety for the policyholders considering the classes of insurance the company is writing.
    (b) The company's asset liquidity is not adequate to provide orderly payment of its obligations.
    (c) The company's current or projected net income is inadequate to meet its present or projected obligations.
    (d) The company has a history of claim reserve inadequacy which affects the reliability of its financial statements.
    (e) The company has failed to maintain adequate books and records or has otherwise conducted its insurance operation in a manner which impairs the Director's ability to determine its true financial condition.
    (3) If a company fails to comply with the Director's order issued pursuant to subsection (1) within the time prescribed for such compliance the Director may institute proceedings for the conservation, rehabilitation or liquidation of the company under Article XIII of this Code.
    (4)(a) The Director may require that the company prepare and file a plan to correct the deficiencies cited by the Director in his order within such time as the Director may prescribe. A corrective order may require, prohibit or permit certain acts subject to conditions including the Director's prior approval. The scope of a corrective order may relate to but shall not be limited to:
    (i) the disposition, recovery or mix of assets;
    (ii) the assumption or cession of reinsurance, including reinsurance of outstanding risks;
    (iii) lending and borrowing;
    (iv) investments;
    (v) restricting underwriting and marketing activities.
    (b) The Director may require that any company under such corrective order direct any certified public accountants, consulting actuary or financial consultant retained by the company to prepare for the Director such reports, accounting data and such other reports as the Director may reasonably require to assist in carrying out the responsibilities of the Director under this Section.
    (5)(a) Any company subject to an order under subsections (1) or (4) may request a hearing before the Director to review that order. Such request shall be made in writing within 10 days of the receipt of such order, shall state the company's objections to the order, and shall be addressed to the Director. Such hearing shall be convened not less than 10 days nor more than 20 days after receipt of the written request for hearing unless otherwise agreed to by the company. The Director shall make a final determination within 10 days after the conclusion of the hearing. The Director shall hold all hearings under this subsection privately in accordance with subsection (6) of this Section. The pendency of a hearing or pendency of the Director's final determination shall not stay the effect of the Director's order.
    (b) After the Director's final determination pursuant to any hearing under this subsection, any party to the proceedings whose interests are affected by the Director's final determination shall be entitled to judicial review of such final determination pursuant to the provisions of the "Administrative Review Law".
    Notwithstanding the availability of administrative remedies or judicial review under the "Administrative Review Law", a company which is subject to an order of the Director under this Section shall be entitled to immediate judicial review and injunctive relief in the Circuit Court of Cook County or the Circuit Court of Sangamon County upon satisfying the court:
    (i) that accepting the facts set forth in the order as true, the order is arbitrary or capricious;
    (ii) that the company's interests are substantially impaired by the order; and
    (iii) that the company will suffer permanent injury in the absence of immediate injunctive relief.
    (6) All administrative and judicial proceedings arising under this Article shall be held privately unless a public hearing is requested by the company, and all records of the company, and all records of the Department concerning the company, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential, unless the company requests otherwise. Such records shall not be subject to public disclosure under "The Illinois Freedom of Information Act", certified December 27, 1983, as amended, or otherwise, nor shall such records be subject to subpoena by third parties, unless the company and Director consent to such disclosure or release under subpoena.
    (7) The powers vested in the Director by this Section are additional to any and all other powers and remedies vested in the Director by law, and nothing herein contained shall prohibit the Director from proceeding under any other applicable law or under this Section in conjunction with any other law.
(Source: P.A. 84-715.)

215 ILCS 5/186.2

    (215 ILCS 5/186.2) (from Ch. 73, par. 798.2)
    Sec. 186.2. (1) Any officer, manager, director, trustee, owner, employee, or agent of any insurer, or any other person with authority over or in charge of any segment of the company's affairs, shall cooperate with the Director in any proceeding under this Article or any investigation preliminary to the proceeding. The term "person" as used in this Section shall include any person who exercises control directly or indirectly over activities of the company through any holding company or other affiliate of the company. To "cooperate" shall include, but shall not be limited to, the following:
    (a) to reply promptly in writing to any inquiry from the Director of Insurance requesting such a reply; and
    (b) to make available to the Director any books, accounts, documents, or other records or information or property of or pertaining to the company and in such person's possession, custody or control.
    (2) No person shall obstruct or interfere with the Director in the conduct of any proceeding under Sections 186.1 and 186.2 or any investigation preliminary or incidental thereto.
    (3) This Section shall not be construed to abridge otherwise existing legal rights, including the right to contest any order issued under this Code.
    (4) Any person who obstructs or interferes with the Director in the conduct of any proceeding or investigation under this Article, or who violates any valid order issued under this Article shall be subject to civil forfeitures, fines or penalties pursuant to Sections 134, 149, 403A and 505.1 of this Code.
(Source: P.A. 84-715.)

215 ILCS 5/Art. XIII

 
    (215 ILCS 5/Art. XIII heading)
ARTICLE XIII. REHABILITATION, LIQUIDATION, CONSERVATION AND DISSOLUTION OF
COMPANIES

215 ILCS 5/187

    (215 ILCS 5/187) (from Ch. 73, par. 799)
    Sec. 187. Scope of Article.
    (1) This Article shall apply to every corporation, association, society, order, firm, company, partnership, individual, and aggregation of individuals to which any Article of this Code is applicable, or which is subject to examination, visitation or supervision by the Director under any provision of this Code or under any law of this State, or which is engaging in or proposing or attempting to engage in or is representing that it is doing an insurance or surety business, or is undertaking or proposing or attempting to undertake to provide or arrange for health care services as a health care plan as defined in subsection (7) of Section 1-2 of the Health Maintenance Organization Act, including the exchanging of reciprocal or inter-insurance contracts between individuals, partnerships and corporations in this State, or which is in the process of organization for the purpose of doing or attempting or intending to do such business, anything as to any such corporation, association, society, order, firm, company, partnership, individual or aggregation of individuals provided in this Code or elsewhere in the laws of this State to the contrary notwithstanding.
    (2) The word "company" as used in this Article includes all of the corporations, associations, societies, orders, firms, companies, partnerships, and individuals specified in subsections (1), (4), and (5) of this Section and agents, managing general agents, brokers, premium finance companies, insurance holding companies, and all other non-risk bearing entities or persons engaged in any aspect of the business of insurance on behalf of an insurer against which a receivership proceeding has been or is being filed under this Article, including, but not limited to, entities or persons that provide management, administrative, accounting, data processing, marketing, underwriting, claims handling, or any other similar services to that insurer, whether or not those entities are licensed to engage in the business of insurance in Illinois, if the entity or person is an affiliate of that insurer.
    (3) The word "court" shall mean the court before which the conservation, rehabilitation, or liquidation proceeding of the company is pending, or the judge presiding in such proceedings.
    (4) The word "affiliate" as used in this Article means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified.
    (5) The word "person" as used in this Article means an individual, an aggregation of individuals, a partnership, or a corporation.
    (6) The word "assets" as used in this Article includes all deposits and funds of a special or trust nature.
    (7) The words "receivership proceedings" mean any conservation, rehabilitation, liquidation, or ancillary receivership.
    (8) "Netting agreement", as used in this Article, means (a) a contract or agreement (including terms and conditions incorporated by reference therein), including a master agreement (which master agreement, together with all schedules, confirmations, definitions, and addenda thereto and transactions under any thereof, shall be treated as one netting agreement), that documents one or more transactions between the parties to the agreement for or involving one or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close out under or in connection with one or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements thereunder (including liquidation or close-out values relating to such obligations or entitlements) among the parties to the netting agreement; (b) any master agreement or bridge agreement for one or more master agreements described in paragraph (a) of this subsection (8); or (c) any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in paragraph (a) or (b) of this subsection (8); provided that any contract or agreement described in paragraphs (a) or (b) of this subsection (8) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts.
    (9) "Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, or any similar agreement that the Director determines by regulation, resolution, or order to be a qualified financial contract for the purposes of this Act.
        (a) "Commodity contract" means:
            (1) a contract for the purchase or sale of a
        
commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the federal Commodity Exchange Act or a board of trade outside the United States;
            (2) an agreement that is subject to regulation
        
under Section 19 of the federal Commodity Exchange Act and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract;
            (3) an agreement or transaction that is subject
        
to regulation under Section 4c(b) of the federal Commodity Exchange Act and that is commonly known to the commodities trade as a commodity option;
            (4) any combination of the agreements or
        
transactions referred to in this paragraph (a); or
            (5) any option to enter into an agreement or
        
transaction referred to in this paragraph (a).
        (b) "Forward contract", "repurchase agreement",
    
"securities contract", and "swap agreement" shall have the meanings set forth in the Federal Deposit Insurance Act, 12 U.S.C. 1821(e)(8)(D), as amended from time to time.
(Source: P.A. 96-1450, eff. 8-20-10.)

215 ILCS 5/188

    (215 ILCS 5/188) (from Ch. 73, par. 800)
    Sec. 188. Grounds for rehabilitation and liquidation of a domestic company or an unauthorized foreign or alien company. Whenever any domestic company or any unauthorized foreign or alien company:
        1. is insolvent;
        2. has failed or refused to submit its books, papers,
    
accounts, records or affairs to the reasonable inspection or examination of the Director or his actuaries, supervisors, deputies, or examiners;
        3. has concealed, removed, altered, destroyed or
    
failed to establish and maintain books, records, documents, accounts, vouchers and other pertinent material adequate for the determination of its financial condition by examination under Sections 132 through 132.7 or has failed to properly administer claims and to maintain claims records which are adequate for the determination of its outstanding claims liability;
        4. has failed or refused to observe an order of the
    
Director to make good within the time prescribed by law any deficiency, whenever its capital and minimum required surplus, if a stock company, or its required surplus, if a company other than stock, has become impaired;
        5. has, by articles of consolidation, contract of
    
reinsurance or otherwise, transferred or attempted to transfer its entire property or business not in conformity with this Code, or entered into any transaction the effect of which is to merge substantially its entire property or business in any other company without having first obtained the written approval of the Director under this Code;
        6. is found to be in such condition that its further
    
transaction of business would be hazardous to its policyholders, or to its creditors, or to the public;
        7. has violated its charter or any law of this State
    
or has exceeded or is exceeding its corporate powers;
        8. has an officer who has refused upon reasonable
    
demand to be examined under oath touching its affairs;
        9. is found to be in such condition that it could not
    
meet the requirements for organization and authorization as required by law, except as to the amount of the original surplus required of a stock company in Section 13, and except as to the amount of the surplus required of a mutual company in excess of the minimum surplus required by this Code to be maintained, or either an authorized control level event or a mandatory control level event as set forth in Article IIA exists;
        10. has ceased for the period of one year to transact
    
insurance business;
        11. has commenced, or has attempted to commence, any
    
voluntary liquidation or dissolution proceeding, or any proceeding to procure the appointment of a receiver, liquidator, rehabilitator, sequestrator, or a similar officer for itself;
        12. is a party, whether plaintiff or defendant in any
    
proceeding in which an application is made for the appointment of a receiver, custodian, liquidator, rehabilitator, sequestrator, or similar officer for such company or its property, or a receiver, custodian, liquidator, rehabilitator, sequestrator or similar officer, for such company or its property is appointed by any court, or such appointment is imminent;
        13. consents by a majority of its directors,
    
stockholders or members;
        14. has not organized and obtained a certificate
    
authorizing it to commence the transaction of its business within the period of time prescribed by the sections of this Code under which it is or proposes to be organized; or
        15. has failed or refused to pay any valid final
    
judgment within 30 days after the rendition thereof, or whenever it appears to the Director that any person has committed a violation of Article VIII 1/2 with the result described in Section 131.26,
sufficient grounds shall be deemed to exist for the commencement of rehabilitation or liquidation proceedings.
    With respect to a domestic company, the Director must report, and with respect to an unauthorized foreign or alien company, the Director may report any such case to the Attorney General of this State whose duty it shall be to apply forthwith by complaint on relation of the Director in the name of the People of the State of Illinois, as plaintiff, to the Circuit Court of Cook County, the Circuit Court of Sangamon County, or the circuit court of the county in which such company has, or last had its principal office, for an order to rehabilitate or liquidate the defendant company as provided in this Article, and for such other relief as the nature of the case and the interests of its policyholders, creditors, members, stockholders or the public may require.
    When, upon investigation, the Director finds that a company is engaged in any aspect of the business of insurance on behalf of or in association with any domestic insurance company, against which a receivership proceeding has been or is being filed under this Article, in a manner that appears to be detrimental to policyholders, creditors, members, shareholders, or the public, the Director may report such case to the Attorney General of this State, whose duty it is to apply forthwith by complaint on relation of the Director in the name of the People of the State of Illinois, as plaintiff, to the court in which the receivership proceeding is pending for an order to appoint the Director as receiver to assume control of the assets and operation of the company pending a complete investigation and determination of the rights of the policyholders, creditors, members, shareholders, and the general public.
(Source: P.A. 92-140, eff. 7-24-01.)

215 ILCS 5/188.1

    (215 ILCS 5/188.1) (from Ch. 73, par. 800.1)
    Sec. 188.1. Provisions for conservation of assets of a domestic, foreign, or alien company.
    (1) Upon the filing by the Director of a verified complaint alleging (a) that with respect to a domestic, foreign, or alien company, whether authorized or unauthorized, a condition exists that would justify a court order for proceedings under Section 188, and (b) that the interests of creditors, policyholders or the public will probably be endangered by delay, then the circuit court of Sangamon or Cook County or the circuit court of the county in which such company has or last had its principal office shall enter forthwith without a hearing or prior notice an order directing the director to take possession and control of the property, business, books, records, and accounts of the company, and of the premises occupied by it for the transaction of its business, or such part of each as the complaint shall specify, and enjoining the company and its officers, directors, agents, servants, and employees from disposition of its property and from transaction of its business except with the concurrence of the Director until the further order of the court. Copies of the verified complaint and the seizure order shall be served upon the company.
    (2) The order shall continue in force and effect for such time as the court deems necessary for the Director to ascertain the condition and situation of the company. On motion of either party or on its own motion, the court may from time to time hold such hearings as it deems desirable, and may extend, shorten, or modify the terms of, the seizure order. So far as the court deems it possible, the parties shall be given adequate notice of such hearings. As soon as practicable, the court shall vacate the seizure order or terminate the conservation proceedings of the company, either when the Director has failed to institute proceedings under Section 188 having a reasonable opportunity to do so, or upon an order of the court pursuant to such proceedings.
    (3) Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the company.
    (4) The court may hold all hearings in conservation proceedings privately in chambers, and shall do so on request of any officer of the company proceeded against.
    (5) In conservation proceedings and judicial reviews thereof, all records of the company, other documents, and all insurance department files and court records and papers, so far as they pertain to and are a part of the record of the conservation proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless and until the court, after hearing arguments in chambers from the Director and the company, shall decide otherwise, or unless the company requests that the matter be made public.
    (6) Any person having possession of and refusing to deliver any of the property, business, books, records or accounts of a company against which a seizure order has been issued shall be guilty of a Class A misdemeanor.
(Source: P.A. 89-206, eff. 7-21-95.)

215 ILCS 5/188.2

    (215 ILCS 5/188.2)
    Sec. 188.2. Grounds for and provisions applicable to rehabilitation or liquidation of a domestic company that is a covered financial company under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act.
    (a) The provisions of this Section apply in accordance with Title II of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, with respect to an insurance company that is a covered financial company, as that term is defined under 12 U.S.C. 5381.
    (b) The Director may file a complaint for an order of rehabilitation or liquidation pursuant to Section 188 of this Code on any of the following grounds:
        (1) upon a determination and notification given by
    
the Secretary of the Treasury of the United States (in consultation with the President of the United States) that the insurance company is a financial company satisfying the requirements of 12 U.S.C. 5383(b), and the board of directors (or body performing similar functions) of the insurance company acquiesces or consents to the appointment of a receiver pursuant to 12 U.S.C. 5382(a)(l)(A)(i), with such consent to be considered as consent to an order of rehabilitation or liquidation;
        (2) upon an order of the United States District Court
    
for the District of Columbia under 12 U.S.C. 5382(a)(l)(A)(iv)(I) granting the petition of the Secretary of the Treasury of the United States concerning the insurance company under 12 U.S.C. 5382(a)(l)(A)(i); or
        (3) a petition by the Secretary of the Treasury of
    
the United States concerning the insurance company is granted by operation of law under 12 U.S.C. 5382(a)(l)(A)(v).
    (c) Notwithstanding any other provision in this Article, this Code, or any other law, after notice to the insurance company, the receivership court may grant an order on the complaint for rehabilitation or liquidation within 24 hours after the filing of a complaint pursuant to this Section.
    (d) If the receivership court does not make a determination on a complaint for rehabilitation or liquidation filed by the Director pursuant to this Section within 24 hours after its filing, then it shall be deemed granted by operation of law upon the expiration of the 24-hour period. At the time that an order is deemed granted under this Section, the provisions of Article XIII of this Code shall be deemed to be in effect, and the Director shall be deemed to be affirmed as receiver and have all of the applicable powers provided by this Code, regardless of whether an order has been entered. The receivership court shall expeditiously enter an order of rehabilitation or liquidation that:
        (1) is effective as of the date that it is deemed
    
granted by operation of law; and
        (2) conforms to the provisions for rehabilitation or
    
liquidation contained in Article XIII of this Code, as applicable.
    (e) Any order of rehabilitation or liquidation made pursuant to this Section shall not be subject to any stay or injunction pending appeal.
    (f) Nothing in this Section shall be construed to supersede or impair any other power or authority of the Director or the court under this Article or Code.
(Source: P.A. 98-136, eff. 8-2-13.)

215 ILCS 5/189

    (215 ILCS 5/189) (from Ch. 73, par. 801)
    Sec. 189. Injunction. The court shall have jurisdiction, upon, or at any time after the filing of the complaint to issue an injunction restraining such company and its officers, agents, directors, employees and all other persons from transacting any company business or disposing of its property until the further order of the court. The court may also restrain all persons, companies, and entities from bringing or further prosecuting all actions and proceedings at law or in equity or otherwise, whether in this State or elsewhere, against the company or its assets or property or the Director except insofar as those actions or proceedings arise in or are brought in the conservation, rehabilitation, or liquidation proceeding. The court may issue such other injunctions or enter such other orders as may be deemed necessary to prevent interference with the proceedings, or with the Director's possession and control or title, rights or interests as herein provided or to prevent interference with the conduct of the business by the Director, and may issue such other injunctions or enter such other orders as may be deemed necessary to prevent waste of assets or the obtaining, asserting, or enforcing of preferences, judgments, attachments, or other like liens, including common law retaining liens, or the making of any levy against such company or its property and assets while in the possession and control of the Director. The court may issue any other injunctions or enter any other orders that are necessary to protect enrollees in accordance with subsection (c) of Section 5-6 of the Health Maintenance Organization Act. Any injunction issued under this article may be served and enforced as in other civil proceedings, but no bond or other security shall be required of the plaintiff, either for costs or for any injunction.
(Source: P.A. 88-297; 89-206, eff. 7-21-95.)

215 ILCS 5/190

    (215 ILCS 5/190) (from Ch. 73, par. 802)
    Sec. 190. Practice, hearing, order and appeal.
    (1) The defendant company shall appear within 10 days after the service of the summons as in this Article provided, exclusive of the day of service. If, on the return day of the summons the defendant shall enter its appearance in the action and apply for further time in which to answer, the court shall, upon request of the defendant, extend the time for answering for a period not to exceed 10 days from said return day. If the defendant fails to answer on the return day or within the time granted, or fails to appear, the court shall proceed to hear and determine the cause as herein provided.
    (2) The court, on the return day of the summons as originally fixed or extended hereunder, shall set the cause for hearing on some day not exceeding 20 days from the return day, or the extended return day as herein provided.
    (3) No motions or other pleadings, whether to dissolve, modify or continue any injunction or otherwise, shall be filed by, or permitted on behalf of the defendant prior to the filing of an answer to the complaint. All pleadings shall be filed within the time herein provided.
    (4) The pleadings and proceedings insofar as not otherwise regulated by this Article, shall be as in other civil proceedings.
    (5) Upon the hearing, at which the complaint and any exhibits filed therewith shall be received as prima facie evidence of the facts therein recited, the court shall enter an order either dismissing the complaint or finding that sufficient cause exists for rehabilitation or liquidation and directing the Director to take possession of the property, business and affairs of such company and to rehabilitate or liquidate the same as the case may be. The Director shall be responsible on his official bond for all assets coming into his possession.
    (6) An appeal, if taken from such order, shall be prosecuted on an expedited basis as provided for in such cases by Illinois Supreme Court Rule 307.
    (7) A claim for attorneys' fees incurred by the company in contesting its conservation, rehabilitation, or liquidation may be filed in the proceedings, and the claim may be allowed upon a showing that (i) the attorneys' fees incurred are reasonable; (ii) the board of directors of the company incurred such attorneys' fees based upon their best knowledge, information, and belief formed after reasonable inquiry indicating such contention is well grounded in fact and is warranted by existing law or a good faith argument of the extension, modification, or reversal of existing law; and (iii) the contention is not pursued for any improper purpose, including harassment, unnecessary delay in the proceedings, or waste of estate assets. Such claims, if allowed, shall be accorded a priority of distribution under paragraph (g) of subsection (1) of Section 205. This subsection (7) applies to all liquidation, rehabilitation, or conservation proceedings that are pending on the effective date of this amendatory Act of 1993 and to all future liquidation, rehabilitation, or conservation proceedings.
(Source: P.A. 88-297; 88-670, eff. 12-2-94; 89-206, eff. 7-21-95.)

215 ILCS 5/190.1

    (215 ILCS 5/190.1) (from Ch. 73, par. 802.1)
    Sec. 190.1. Appeal of order directing liquidation - special claims procedure.
    (1) Within 5 days of the effective date of this amendatory Act of 1982, or, if later, within 5 days after the filing of a notice of appeal of an order of liquidation, which order has not been stayed, the Director shall present for the circuit court's approval a plan for the continued performance of the defendant company's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. Such plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the defendant company's financial condition will not, in the judgment of the Director, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the Director finds to be fair and equitable considering the relative circumstances of such policyholders and claimants. The circuit court shall examine the plan submitted by the Director and if it finds the plan to be in the best interests of the parties, the circuit court shall approve the plan. No action shall lie against the Director or any of his deputies, agents, clerks, assistants or attorneys by any party based on preference in an appeal pendency plan approved by the circuit court.
    (2) The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty fund which under its own state law is required to pay covered claims obligations during the appeal pendency period.
(Source: P.A. 96-1000, eff. 7-2-10.)