Illinois General Assembly - Full Text of Public Act 098-0110

Home

Legislation & Laws

Senate

House

My Legislation

Site Map

Previous General Assemblies

Public Act 098-0110

Bill Status Printer-Friendly Version PDF

Public Act 0110 98TH GENERAL ASSEMBLY

Public Act 098-0110

HB1571 Enrolled LRB098 09555 RPM 39699 b

    AN ACT concerning regulation.

    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:

    Section 5. The Illinois Insurance Code is amended by
changing Sections 26 and 53 as follows:

    (215 ILCS 5/26)  (from Ch. 73, par. 638)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 26. Deposit.
    (a)A company subject to the provisions of this Article
shall make and maintain with the Director for the protection of
all creditors, policyholders and policy obligations of the
company, a deposit of securities which are authorized
investments under Section 126.11A(1), 126.11A(2), 126.24A(1),
or 126.24A(2) having a fair market value equal to the minimum
capital and surplus required to be maintained under Section 13.
The Director may release the required deposit of securities
upon receipt of an order of a court having proper jurisdiction
or upon: (i) certification by the company that it has no
outstanding creditors, policyholders, or policy obligations in
effect and no plans to engage in the business of insurance;
(ii) receipt of a lawful resolution of the company's board of
directors effecting the surrender of its articles of
incorporation for administrative dissolution by the Director;
and (iii) receipt of the name and forwarding address for each
of the final officers and directors of the company, together
with a plan of dissolution approved by the Director.
    (b) All deposits by insurers subject to this Article must
be limited to the following types:
        (1) United States government bonds, notes, and bills
    for which the full faith and credit of the government of
    the United States is pledged for the payment of principal
    and interest.
        (2) United States public bonds and notes of any state
    or of the District of Columbia, or Canadian public bonds
    and notes of any province thereof, for which the full faith
    and credit of the issuer has been pledged for the payment
    of principal and interest.
        (3) United States and Canadian county, provincial,
    municipal, and district bonds and notes for which the
    issuer has lawful authority to levy taxes or make
    assessments for the payment of principal and interest.
        (4) Bonds and notes of any federal agency that are
    guaranteed as to payment of principal and interest by the
    United States.
        (5) International development bank bonds, bonds issued
    by the State of Israel and sold through the Development
    Corporation for Israel or its successor entities, and notes
    issued, assumed, and guaranteed by the International Bank
    for Reconstruction and Development, the Inter-American
    Development Bank, the Asian Development Bank, the African
    Development Bank, or the International Finance
    Corporation.
        (6) Corporate bonds and notes of any private
    corporations that are not affiliates or subsidiaries of the
    insurer, which corporations are organized under the laws of
    the United States, Canada, any state, the District of
    Columbia, any territory or possession of the United States,
    or any province of Canada.
        (7) Certificates of deposit.
    (c) To be eligible for deposit under subsection (b), any
bond or note must have the following characteristics:
        (1) The bond or note must be interest-bearing or
    interest-accruing, and the insurer must be the exclusive
    owner of the interest accruing thereon and entitled to
    receive the interest for its account.
        (2) The issuer must be in a solvent financial condition
    and the bond or note must not be in default.
        (3) The bond, note, or debt of the issuing country must
    be rated in one of the 4 highest classifications by an
    established, nationally recognized investment rating
    service or must have been given a rating of 1 by the
    Securities Valuation Office of the National Association of
    Insurance Commissioners.
        (4) The market value of the bond or note must be
    readily ascertainable or the value of the bond or note must
    be obtainable by the insurer or its custodian from the
    issuer's fiscal agent.
        (5) The bond or note must be the direct obligation of
    the issuer.
        (6) The bond or note must be stated in United States
    dollar denominations.
        (7) The bond or note must be eligible for book-entry
    form on the books of the Federal Reserve's book-entry
    system or in a depository trust clearing system or on the
    books of the issuer's transfer agent or evidenced by a
    certificate delivered to the insurer or its custodian.
    (d) To be eligible for deposit under item (7) of subsection
(b), a certificate of deposit must have the following
characteristics:
        (1) The certificate of deposit must be issued by a
    bank, savings bank, or savings association that is
    organized under the laws of the United States, of this
    State, or of any other state and that has a principal
    office or branch office in this State that is authorized to
    receive deposits in this State.
        (2) The certificate of deposit must be
    interest-bearing and may not be issued in discounted form.
        (3) The certificate of deposit must be issued for a
    period of not less than one year.
        (4) The issuing bank, savings bank, or savings
    association must agree to the terms and conditions of the
    Director regarding the rights to the certificate of deposit
    and must have executed a written certificate of deposit
    agreement with the Director. The terms and conditions of
    the agreement shall include, but need not be limited to:
            (A) Exclusive authorized signature authority for
        the chief financial officer.
            (B) An agreement to pay, without protest, the
        proceeds of its certificate of deposit to the Director
        within 30 business days after presentation.
            (C) A prohibition against levies, setoffs,
        survivorship, or other conditions that might hinder
        the Director's ability to recover the full face value
        of a certificate of deposit.
            (D) Instructions regarding interest payments,
        renewals, taxpayer identification, and early
        withdrawal penalties.
            (E) An agreement to be subject to the jurisdiction
        of the courts of this State, or those of the United
        States that are located in this State, for the purposes
        of any litigation arising out of this Section.
            (F) Such other conditions as the Director
        requires.
    (e) The Director may refuse to accept certain securities or
refuse to accept the reported market value of certain
securities offered pursuant to this Section in order to ensure
that sufficient cash and securities are on hand to meet the
purposes of the deposit. In making a refusal under this
subsection (e), the guidelines for use of the Director may
include, but need not be limited to, whether the market value
of the securities cannot be readily ascertained and the lack of
liquidity of the securities. Securities refused under this
subsection (e) are not acceptable as deposits.
    (f) All deposits required of a domestic insurer pursuant to
the laws of another state, province, or country must be
comprised of securities of the kinds required under subsection
(b), having the characteristics required under subsections (c)
and (d), and permitted by the laws of the other state,
province, or country, except common stocks, mortgages or loans
of any kind, real estate investment trust funds or programs,
commercial paper, and letters of credit.
(Source: P.A. 92-75, eff. 7-12-01.)

    (215 ILCS 5/53)  (from Ch. 73, par. 665)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 53. Deposit.
    (a) A company subject to the provisions of this Article
shall make and maintain with the Director for the protection of
all creditors, policyholders and policy obligations of the
company, a deposit of securities which are authorized
investments under Section 126.11A(1), 126.11A(2), 126.24A(1),
or 126.24A(2) having a fair market value equal to the minimum
surplus required to be maintained under Section 43. The
Director may release the required deposit of securities upon
receipt of an order of a court having proper jurisdiction or
upon: (i) certification by the company that it has no
outstanding creditors, policyholders, or policy obligations in
effect and no plans to engage in the business of insurance;
(ii) receipt of a lawful resolution of the company's board of
directors effecting the surrender of its articles of
incorporation for administrative dissolution by the Director;
and (iii) receipt of the name and forwarding address for each
of the final officers and directors of the company, together
with a plan of dissolution approved by the Director.
    (b) All deposits by insurers subject to this Article must
be limited to the following types:
        (1) United States government bonds, notes, and bills
    for which the full faith and credit of the government of
    the United States is pledged for the payment of principal
    and interest.
        (2) United States public bonds and notes of any state
    or of the District of Columbia, or Canadian public bonds
    and notes of any province thereof, for which the full faith
    and credit of the issuer has been pledged for the payment
    of principal and interest.
        (3) United States and Canadian county, provincial,
    municipal, and district bonds and notes for which the
    issuer has lawful authority to levy taxes or make
    assessments for the payment of principal and interest.
        (4) Bonds and notes of any federal agency that are
    guaranteed as to payment of principal and interest by the
    United States.
        (5) International development bank bonds, bonds issued
    by the State of Israel and sold through the Development
    Corporation for Israel or its successor entities, and notes
    issued, assumed, and guaranteed by the International Bank
    for Reconstruction and Development, the Inter-American
    Development Bank, the Asian Development Bank, the African
    Development Bank, or the International Finance
    Corporation.
        (6) Corporate bonds and notes of any private
    corporations that are not affiliates or subsidiaries of the
    insurer, which corporations are organized under the laws of
    the United States, Canada, any state, the District of
    Columbia, any territory or possession of the United States,
    or any province of Canada.
        (7) Certificates of deposit.
    (c) To be eligible for deposit under subsection (b), any
bond or note must have the following characteristics:
        (1) The bond or note must be interest-bearing or
    interest-accruing, and the insurer must be the exclusive
    owner of the interest accruing thereon and entitled to
    receive the interest for its account.
        (2) The issuer must be in a solvent financial condition
    and the bond or note must not be in default.
        (3) The bond, note, or debt of the issuing country must
    be rated in one of the 4 highest classifications by an
    established, nationally recognized investment rating
    service or must have been given a rating of 1 by the
    Securities Valuation Office of the National Association of
    Insurance Commissioners.
        (4) The market value of the bond or note must be
    readily ascertainable or the value of the bond or note must
    be obtainable by the insurer or its custodian from the
    issuer's fiscal agent.
        (5) The bond or note must be the direct obligation of
    the issuer.
        (6) The bond or note must be stated in United States
    dollar denominations.
        (7) The bond or note must be eligible for book-entry
    form on the books of the Federal Reserve's book-entry
    system or in a depository trust clearing system or on the
    books of the issuer's transfer agent or evidenced by a
    certificate delivered to the insurer or its custodian.
    (d) To be eligible for deposit under item (7) of subsection
(b), a certificate of deposit must have the following
characteristics:
        (1) The certificate of deposit must be issued by a
    bank, savings bank, or savings association that is
    organized under the laws of the United States, of this
    State, or of any other state and that has a principal
    office or branch office in this State that is authorized to
    receive deposits in this State.
        (2) The certificate of deposit must be
    interest-bearing and may not be issued in discounted form.
        (3) The certificate of deposit must be issued for a
    period of not less than one year.
        (4) The issuing bank, savings bank, or savings
    association must agree to the terms and conditions of the
    Director regarding the rights to the certificate of deposit
    and must have executed a written certificate of deposit
    agreement with the Director. The terms and conditions of
    the agreement shall include, but need not be limited to:
            (A) Exclusive authorized signature authority for
        the chief financial officer.
            (B) An agreement to pay, without protest, the
        proceeds of its certificate of deposit to the Director
        within 30 business days after presentation.
            (C) A prohibition against levies, setoffs,
        survivorship, or other conditions that might hinder
        the Director's ability to recover the full face value
        of a certificate of deposit.
            (D) Instructions regarding interest payments,
        renewals, taxpayer identification, and early
        withdrawal penalties.
            (E) An agreement to be subject to the jurisdiction
        of the courts of this State, or those of the United
        States that are located in this State, for the purposes
        of any litigation arising out of this Section.
            (F) Such other conditions as the Director
        requires.
    (e) The Director may refuse to accept certain securities or
refuse to accept the reported market value of certain
securities offered pursuant to this Section in order to ensure
that sufficient cash and securities are on hand to meet the
purposes of the deposit. In making a refusal under this
subsection (e), the guidelines for use of the Director may
include, but need not be limited to, whether the market value
of the securities cannot be readily ascertained and the lack of
liquidity of the securities. Securities refused under this
subsection (e) are not acceptable as deposits.
    (f) All deposits required of a domestic insurer pursuant to
the laws of another state, province, or country must be
comprised of securities of the kinds required under subsection
(b), having the characteristics required under subsections (c)
and (d), and permitted by the laws of the other state,
province, or country, except common stocks, mortgages or loans
of any kind, real estate investment trust funds or programs,
commercial paper, and letters of credit.
(Source: P.A. 92-75, eff. 7-12-01.)

Effective Date: 1/1/2014

×