Full Text of HB0938 95th General Assembly
HB0938 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB0938
Introduced 2/8/2007, by Rep. Mark H. Beaubien, Jr. SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/531.09 |
from Ch. 73, par. 1065.80-9 |
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Amends the Illinois Insurance Code. In an Article involving the Illinois Life and Health Insurance Guaranty Association, provides that the amount of any Class A assessment for member insurers shall be determined at the discretion of the board of directors of the Association and such assessments shall be authorized and called on a non pro-rata basis (instead of the amount being determined by the board, which may be made on a non-pro rata basis). Deletes a provision stating that such assessments shall not exceed $200
per company in any one calendar year.
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A BILL FOR
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HB0938 |
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LRB095 07026 KBJ 27148 b |
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 531.09 as follows:
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| (215 ILCS 5/531.09) (from Ch. 73, par. 1065.80-9)
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| Sec. 531.09. Assessments. | 8 |
| (1) For the purpose of providing the funds
necessary to | 9 |
| carry out the powers and duties of the Association, the board
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| of directors shall assess the member insurers, separately for | 11 |
| each account, at such
times and for such amounts as the board | 12 |
| finds necessary. Assessments shall
be due not less than 30 days | 13 |
| after written notice to the member insurers
and shall accrue | 14 |
| interest from the due date at such adjusted rate as is
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| established under Section 6621 of Chapter 26 of the United | 16 |
| States Code and
such interest shall be compounded daily.
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| (2) There shall be 2 classes of assessments, as follows:
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| (a) Class A assessments shall be made for the purpose | 19 |
| of meeting administrative
costs and other general expenses | 20 |
| and examinations conducted under the authority
of the | 21 |
| Director under subsection (5) of Section 531.12.
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| (b) Class B assessments shall be made to the extent | 23 |
| necessary to carry
out the powers and duties of the |
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HB0938 |
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| Association under Section 531.08 with regard
to an impaired | 2 |
| or insolvent domestic insurer or insolvent foreign or alien | 3 |
| insurers.
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| (3) (a) The amount of any Class A assessment shall be | 5 |
| determined at the discretion of the board of directors
by the
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| Board and such assessments shall
may be authorized and called
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| made on a non-pro rata basis. Such assessments shall not exceed | 8 |
| $200
per company in any one calendar year. The amount of any | 9 |
| Class B
assessment shall be allocated for assessment
purposes | 10 |
| among the accounts
and subaccounts pursuant to an allocation | 11 |
| formula which may be based on
the premiums or reserves of the | 12 |
| impaired or insolvent insurer or any other
standard deemed by | 13 |
| the board in its sole discretion as being fair and
reasonable | 14 |
| under the circumstances.
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| (b) Class B assessments against member insurers for | 16 |
| each account and
subaccount shall
be in the proportion that | 17 |
| the premiums received on business in this State
by each | 18 |
| assessed member insurer on policies or contracts covered by
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| each account or subaccount for the three most recent | 20 |
| calendar years
for which information is available | 21 |
| preceding the year in which the insurer
became impaired or | 22 |
| insolvent, as the case may be, bears to such premiums
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| received on business in this State for such calendar years | 24 |
| by all assessed
member insurers.
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| (c) Assessments for funds to meet the requirements of | 26 |
| the Association
with respect to an impaired or insolvent |
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| insurer shall not be made until
necessary to implement the | 2 |
| purposes of this Article. Classification
of assessments
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| under subsection (2) and computations of assessments under | 4 |
| this subsection
shall be made with a reasonable degree of | 5 |
| accuracy, recognizing that exact
determinations may not | 6 |
| always be possible.
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| (4) The Association may abate or defer, in whole or in | 8 |
| part, the assessment
of a member insurer if, in the opinion of | 9 |
| the board, payment of the assessment
would endanger the ability | 10 |
| of the member insurer to fulfill its contractual
obligations. | 11 |
| The total of all assessments upon a member insurer for the
life | 12 |
| and annuity
account and for each subaccount thereunder may not | 13 |
| in any one calendar
year exceed 2% and for the health account | 14 |
| may not in any one calendar
year exceed 2% of such insurer's
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| average premiums received in this State on the policies and | 16 |
| contracts
covered by the account or subaccount during the three | 17 |
| calendar years
preceding the year in which the insurer became | 18 |
| an impaired or insolvent
insurer. If a one percent assessment | 19 |
| for any subaccount of the life and
annuity account in any one | 20 |
| year does not provide an amount sufficient to
carry out the | 21 |
| responsibilities of the Association, then pursuant to
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| subsection 3(b), the board shall access all subaccounts of the | 23 |
| life and
annuity account for the necessary additional amount, | 24 |
| subject to the maximum
stated in this subsection.
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| (5) In the event an assessment against a member insurer is | 26 |
| abated, or deferred,
in whole or in part, because of the |
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| limitations set forth in subsection (4) of this
Section the | 2 |
| amount by which such assessment is abated or deferred, may be
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| assessed against the other member insurers in a manner | 4 |
| consistent with the
basis for assessments set forth in this | 5 |
| Section. If the maximum assessment,
together with the other | 6 |
| assets of the Association in either account, does
not provide | 7 |
| in any
one year in either account an amount sufficient to carry | 8 |
| out the
responsibilities
of the Association, the necessary | 9 |
| additional funds may be assessed as soon
thereafter
as | 10 |
| permitted by this Article.
The board may provide in the plan of | 11 |
| operation a method of allocating
funds among claims, whether | 12 |
| relating to one or more impaired or insolvent
insurers, when | 13 |
| the maximum assessment will be insufficient to cover | 14 |
| anticipated
claims.
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| (6) The board may, by an equitable method as established in | 16 |
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plan of operation, refund to member insurers, in proportion | 17 |
| to the contribution
of each insurer to that account, the amount | 18 |
| by which the assets of the account
exceed the amount the board | 19 |
| finds is necessary to carry out during the coming
year the | 20 |
| obligations of the Association with regard to that account, | 21 |
| including
assets accruing from net realized gains and income | 22 |
| from investments. A
reasonable amount may be retained in any | 23 |
| account to provide funds for the
continuing expenses of the | 24 |
| Association and for future losses if refunds are
impractical.
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| (7) An assessment is deemed to occur on the date upon which | 26 |
| the board
votes such assessment. The board may defer calling |
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| the payment of the
assessment or may call for payment in one or | 2 |
| more installments.
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| (8) It is proper for any member insurer, in determining its | 4 |
| premium
rates and policyowner dividends as to any kind of | 5 |
| insurance within the scope of
this Article, to consider the | 6 |
| amount reasonably necessary to meet its assessment
obligations | 7 |
| under this Article.
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| (9) The Association must issue to each insurer paying a
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| Class B assessment
under this Article a certificate of | 10 |
| contribution,
in a form acceptable to the
Director, for the | 11 |
| amount of the assessment so paid. All outstanding certificates
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| are of equal
dignity and priority without reference to amounts | 13 |
| or dates of issue. A certificate
of contribution may be shown | 14 |
| by the insurer in its financial statement as an asset
in such | 15 |
| form and for such amount, if any, and period of time as the | 16 |
| Director
may approve, provided the insurer shall in any event | 17 |
| at its option have
the right to show a certificate of | 18 |
| contribution as an admitted asset at
percentages of the | 19 |
| original face amount for calendar years as follows:
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| 100% for the calendar year after the year of issuance;
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| 80% for the second calendar year after the year of | 22 |
| issuance;
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| 60% for the third calendar year after the year of issuance;
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| 40% for the fourth calendar year after the year of | 25 |
| issuance;
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| 20% for the fifth calendar year after the year of issuance.
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| (Source: P.A. 86-753.)
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