(215 ILCS 5/144) (from Ch. 73, par. 756)
Sec. 144.
Limitation
of risk.
(1) No company authorized to transact any of the kind of business
enumerated in Classes 2 and 3 of Section 4 in this State may expose itself
to any loss on any one risk or hazard to an amount exceeding 10% of its
admitted assets in excess of its liabilities excluding, in the case of a
stock company, its capital stock liability. No portion of any such risk or
hazard which has been reinsured in a domestic or an approved foreign or
alien company, in accordance with this Code, shall be included in
determining the limitation of risk prescribed herein.
(2) Any company transacting the kind of business enumerated in clause
(g) of Class 2 of Section 4 may expose itself to a risk or hazard in excess
of the amount prescribed in subsection (1) if it is protected in excess of
that amount by the following:
(a) The co-suretyship of such a company similarly authorized; or
(b) By deposit with it in pledge or conveyance to it in trust for its protection of |
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(c) By conveyance or mortgage for its protection; or
(d) In case a suretyship obligation was made on behalf or on account of a fiduciary
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| holding property in a trust capacity, by deposit or other disposition of a portion of the property so held in trust that no future sale, mortgage, pledge or other disposition can be made thereof without the consent of such company except by a judgment or order of a court of competent jurisdiction.
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(3) A company designated in subsection (2) may also execute
transportation or warehouse bonds for United States Internal Revenue taxes
to an amount equal to 50% of its capital and surplus. When the penalty of
the suretyship obligation exceeds the amount of a judgment described
therein as appealed from and thereby secured, or exceeds the amount of the
subject matter in controversy or of the estate in the custody of the
fiduciary for the performance of whose duties it is conditioned, the bond
may be executed if the actual amount of the judgment or the subject matter
in controversy or estate not subject to supervision or control of the
surety is not in excess of such limitation. When the penalty of the
suretyship obligation executed for the performance of a contract exceeds
the contract price, the latter shall be taken as the basis for estimating
the limit of risk within the meaning of this Section.
(4) Whenever the ratio of the annual premium volume in proportion to the
policyholder surplus of any company transacting the kinds of business
authorized in Class 2 and Class 3 of Section 4 when reviewed in conjunction
with the kinds and nature of risks insured, the financial condition of the
company and its ownership including but not limited to the liquidity of
assets, relationship of surplus to liabilities and adequacy of outstanding
loss reserves, creates a condition such that the further assumption of
risks might be hazardous to policyholders, creditors or the general public,
then the Director may order such company to take one or more of the
following steps:
(a) to reduce the loss exposure by reinsurance;
(b) to reduce the volume of new business being accepted;
(c) to suspend the writing of new business for a period not to exceed 3
months;
(d) to increase and maintain the company's surplus by a contribution to surplus which
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(e) to reduce general or acquisition expenses by specified methods.
(f) (Blank).
(5) The provisions of this Section do not apply to domestic, foreign, and
alien Lloyds.
The company may, within 10 days after receipt of an Order of the
Director under this Section, request that the Director hold a hearing to
determine whether the Order of the Director should be modified in any way.
A request for a hearing by a company under this Section stays any Order of
the Director entered under this Section until such time as the Director has
entered an Order pursuant to the hearing.
(Source: P.A. 89-97, eff. 7-7-95; 90-794, eff. 8-14-98.)
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