Public Act 098-0110
 
HB1571 EnrolledLRB098 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    (Section scheduled to be repealed on January 1, 2017)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.)