Full Text of SB2817 96th General Assembly
SB2817ham001 96TH GENERAL ASSEMBLY
|
Insurance Committee
Filed: 4/20/2010
|
|
09600SB2817ham001 |
|
LRB096 18813 RPM 39867 a |
|
| 1 |
| AMENDMENT TO SENATE BILL 2817
| 2 |
| AMENDMENT NO. ______. Amend Senate Bill 2817 by replacing | 3 |
| everything after the enacting clause with the following:
| 4 |
| "Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Sections 131.4, 131.5, 131.8, 131.8a, 131.9, 131.10, | 6 |
| 131.11, 131.23, 136, and 404 as follows: | 7 |
| (215 ILCS 5/131.4) (from Ch. 73, par. 743.4) | 8 |
| Sec. 131.4. Acquisition , transfer, or divestiture of | 9 |
| control of or merger with domestic company. No person other | 10 |
| than the issuer may make a tender for or a request or
| 11 |
| invitation for tenders of, or enter into an agreement to | 12 |
| exchange
securities for or acquire , transfer, or divest in the | 13 |
| open market, or otherwise, any voting
security of a domestic | 14 |
| company or acquire , transfer, or divest policyholders' proxies | 15 |
| of a
domestic company for consideration , or otherwise, if, | 16 |
| after the consummation thereof, that
person would, directly or |
|
|
|
09600SB2817ham001 |
- 2 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| indirectly, (or by conversion or by exercise of
any right to | 2 |
| acquire) be in control of the company or transfer or divest a | 3 |
| controlling interest in the company , and no person may enter
| 4 |
| into an agreement to merge or consolidate with or otherwise to | 5 |
| acquire , transfer, or divest
control of a domestic company, | 6 |
| unless the offer, request, invitation, or
agreement is | 7 |
| conditioned on receiving the approval of the Director based on
| 8 |
| Section 131.8 of this Article
and no such acquisition , | 9 |
| transfer, or divestiture of control or a merger with a domestic
| 10 |
| company may be consummated unless the Director has approved the | 11 |
| transaction
or granted an exemption. For purposes of this | 12 |
| Section a
domestic company includes any other person which | 13 |
| controls a domestic company
or holds or controls sufficient | 14 |
| policyholders' proxies to elect the majority
of the board of | 15 |
| directors of the domestic company. Prior to the acquisition,
| 16 |
| transfer, or divestiture, the Director may conclude that a | 17 |
| statement need not be filed by the
acquiring , transferring, or | 18 |
| divesting
party if that the acquiring party demonstrates to the
| 19 |
| satisfaction of the Director that: | 20 |
| (1) such transaction will not result in the change of | 21 |
| control of the
domestic company; or | 22 |
| (2) the person which is subject to the acquisition , | 23 |
| transfer, or divestiture has assets in excess
of $1,000,000 | 24 |
| and shareholders of record of 500 or more and its insurance
| 25 |
| business either directly
or through its affiliates is an | 26 |
| insignificant portion of its total
business; or |
|
|
|
09600SB2817ham001 |
- 3 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| (3) the acquisition , transfer, or divestiture of, or | 2 |
| attempt to acquire , transfer, or divest control of, such | 3 |
| other
person is subject to requirements in the jurisdiction | 4 |
| of its domicile which
are substantially similar to those | 5 |
| contained in this Section and Sections
131.5 through | 6 |
| 131.12; or | 7 |
| (4) the control of the policyholders' proxies is being | 8 |
| held acquired solely
by virtue of the holders official | 9 |
| office and not as the result of any agreement
or for any | 10 |
| consideration ; or . | 11 |
| (5) such transaction involves a transfer or | 12 |
| divestiture of a controlling interest to a person acquiring | 13 |
| a controlling interest, for which the acquiring person must | 14 |
| file the statement required by Section 131.5 of this Code. | 15 |
| The purpose of this Section is to afford to the Director | 16 |
| the
opportunity to review acquisitions , transfers, or | 17 |
| divestitures of control in order to determine whether or not | 18 |
| the
acquisition , transfer, or divestiture would be adverse to | 19 |
| the interests of the existing and future
policyholders of the | 20 |
| company. A controlling person may not enter into transactions | 21 |
| that are part of a plan or series of like transactions if the | 22 |
| purpose of those separate transactions is to avoid the | 23 |
| statutory definition of control and thereby avoid the | 24 |
| requirements of this Section. | 25 |
| (Source: P.A. 86-784.) |
|
|
|
09600SB2817ham001 |
- 4 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| (215 ILCS 5/131.5) (from Ch. 73, par. 743.5) | 2 |
| Sec. 131.5. Statement-Contents. In order to seek the | 3 |
| approval of the
Director pursuant to Section 131.8, the | 4 |
| applicant must file a statement
with the Director under oath or | 5 |
| affirmation which contains as a minimum the
following | 6 |
| information: | 7 |
| (1) The name and address of each acquiring , transferring, | 8 |
| or divesting party, and | 9 |
| (a) if such person is an individual, his principal | 10 |
| occupation and all
offices and positions held during the | 11 |
| past 5 years, and any conviction of
crimes, other than | 12 |
| minor traffic violations, during the past 10 years; | 13 |
| (b) if such person is not an individual, a report of | 14 |
| the nature of
its business operations during the past 5 | 15 |
| years or for such lesser period
as the person and any | 16 |
| predecessors thereof has been in existence; an
informative | 17 |
| description of the business intended to be conducted by the
| 18 |
| person and the person's subsidiaries; and a list of all | 19 |
| individuals who are
or who have been selected to become | 20 |
| directors or executive officers of the
person, or who | 21 |
| perform or will perform functions appropriate to such
| 22 |
| positions. The list must include for each individual the | 23 |
| information
required by subsection (1)(a). | 24 |
| (2) The source, nature and amount of the consideration used | 25 |
| or to be
used in effecting the merger, consolidation or other | 26 |
| acquisition , transfer, or divestiture of
control, a |
|
|
|
09600SB2817ham001 |
- 5 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| description of any transaction wherein funds were or are to be
| 2 |
| obtained for any such purpose, including any pledge of the | 3 |
| company's own
securities or the securities of any of its | 4 |
| subsidiaries or affiliates,
and the identity of persons | 5 |
| furnishing such
consideration. However, where a source of such | 6 |
| consideration is a loan made
in the lender's ordinary course of | 7 |
| business, the identity of the lender
must remain confidential, | 8 |
| if the person filing the statement so requests. | 9 |
| (3) Financial information as to the earnings and financial | 10 |
| condition of
each applicant acquiring party for the preceding | 11 |
| fiscal years of each applicant acquiring party
(or for such | 12 |
| lesser period as the applicant acquiring party and any | 13 |
| predecessors thereof
have been in existence) audited by an | 14 |
| independent
certified public accountant in accordance with | 15 |
| generally accepted auditing
standards and similar unaudited | 16 |
| information for the second and third preceding
fiscal years and | 17 |
| as of a date not earlier than 90 days prior to the filing
of the | 18 |
| statement. If an applicant acquiring party is an insurer which | 19 |
| has been actively
engaged in the business of insurance for 10 | 20 |
| years, the financial information
need not be audited, provided | 21 |
| it
is based on the annual statements of such acquiring person | 22 |
| filed with the
insurance department of the person's domiciliary | 23 |
| state and is in accordance
with the requirement of insurance or | 24 |
| other accounting principles prescribed
or permitted under the | 25 |
| laws and regulations of such state. | 26 |
| (a) When an applicant is controlled by an individual, |
|
|
|
09600SB2817ham001 |
- 6 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| financial information
for that individual will not be | 2 |
| required if the applicant is currently subject
to the | 3 |
| registration and reporting requirements of Section 12(g) | 4 |
| of the Securities
Exchange Act of 1934 or is an insurer | 5 |
| which has been actively engaged in
the business of | 6 |
| insurance for a period in excess of 10 years; | 7 |
| (b) When an individual as an applicant acquiring party | 8 |
| must file financial information
under this paragraph such | 9 |
| information need not be delivered to the company.
However, | 10 |
| such information shall be available if the Director holds a | 11 |
| hearing
pursuant to Section 131.8. | 12 |
| (4) Any plans or proposals which each applicant acquiring | 13 |
| party may have to
liquidate such company, to sell its assets or | 14 |
| merge or consolidate it with
any person, or to make any other | 15 |
| material change in its business or
corporate structure or | 16 |
| management. | 17 |
| (5) The number of shares of any security referred to in | 18 |
| Section 131.4
which each applicant acquiring party proposes to | 19 |
| acquire, transfer, or divest, and the terms of the offer,
| 20 |
| request, invitation, agreement, or acquisition , transfer, or | 21 |
| divestiture referred to in Section
131.4. | 22 |
| (6) The amount of each class of any security referred to in | 23 |
| Section
131.4 which is beneficially owned or concerning which | 24 |
| there is a right to
acquire , transfer, or divest beneficial | 25 |
| ownership by each applicant acquiring party . | 26 |
| (7) A full description of any existing contracts, |
|
|
|
09600SB2817ham001 |
- 7 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| arrangements or
understandings with respect to any security | 2 |
| referred to in Section 131.4 in
which any applicant acquiring | 3 |
| party is involved, including but not limited to
transfer of any | 4 |
| of the securities, joint ventures, loan or option
arrangements, | 5 |
| puts or calls, guarantees of loans, guarantees against loss
or | 6 |
| guarantees of profits, division of losses or profits, or the | 7 |
| giving or
withholding of proxies. The description must identify | 8 |
| the persons with whom
such contracts, arrangements or | 9 |
| understandings have been entered into. | 10 |
| (8) A description of the acquisition , transfer, or | 11 |
| divestiture of any security
or policyholders' proxy referred to | 12 |
| in Section
131.4 during the 12 calendar months preceding the | 13 |
| filing of the statement,
by any applicant acquiring party , | 14 |
| including the dates of acquisition, transfer, or divestiture, | 15 |
| names of parties to the transaction the
acquirors , and | 16 |
| consideration paid or agreed to be paid therefor. | 17 |
| (9) A description of any recommendations to acquire , | 18 |
| transfer, or divest any security
referred to in Section 131.4 | 19 |
| made during the 12 calendar months preceding
the filing of the | 20 |
| statement, by any applicant acquiring party , or by anyone based
| 21 |
| upon interviews or at the suggestion of such applicant | 22 |
| acquiring party . | 23 |
| (10) Copies of all tender offers for, requests or | 24 |
| invitations for
tenders of, exchange offers for, and agreements | 25 |
| to acquire , transfer, divest, or exchange any
securities | 26 |
| referred to in Section 131.4, and (if distributed) of |
|
|
|
09600SB2817ham001 |
- 8 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| additional
soliciting material relating thereto. | 2 |
| (11) The terms of any agreement, contract or understanding | 3 |
| made with any
broker-dealer as to solicitation of securities | 4 |
| referred to in Section 131.4
for tender, and the amount of any | 5 |
| fees, commissions or other compensation
to be paid to | 6 |
| broker-dealers with regard thereto. | 7 |
| (12) Any additional information as the Director may by rule | 8 |
| or
regulation prescribe as necessary or appropriate for the | 9 |
| protection of
policyholders or in the public interest. | 10 |
| (Source: P.A. 84-805.) | 11 |
| (215 ILCS 5/131.8) (from Ch. 73, par. 743.8) | 12 |
| Sec. 131.8. (1) After the statement required by Section | 13 |
| 131.5 has been
filed, the Director must disapprove
any merger, | 14 |
| consolidation or other acquisition , transfer, or divestiture | 15 |
| of control referred to in
Section 131.4 unless the applicant | 16 |
| acquiring party demonstrates to
the Director that: | 17 |
| (a) After change of control the domestic company | 18 |
| referred to in
Section 131.4 would be able to satisfy the | 19 |
| requirements for the issuance of
a license to write the | 20 |
| line or lines of insurance for which it is presently
| 21 |
| licensed; | 22 |
| (b) the effect of the merger, consolidation or other | 23 |
| acquisition , transfer, or divestiture
of control would not | 24 |
| substantially lessen competition in insurance in
this | 25 |
| State or not tend to create a monopoly therein. In applying |
|
|
|
09600SB2817ham001 |
- 9 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| the
competitive
standard in this paragraph: | 2 |
| (i) the informational requirements of subsection | 3 |
| (3)(a) and the standards
of subsection (4)(b) of | 4 |
| Section 131.12a shall apply, | 5 |
| (ii) the merger or other acquisition , transfer, or | 6 |
| divestiture shall not be disapproved if the applicant | 7 |
| acquiring
party demonstrates that any of the | 8 |
| situations meeting the criteria provided
by subsection | 9 |
| (4)(c) of Section 131.12a exist, and | 10 |
| (iii) the Director may condition the approval of | 11 |
| the merger or other acquisition , transfer, or | 12 |
| divestiture
on the removal of the basis of disapproval | 13 |
| within a specified period of time; | 14 |
| (c) the financial condition of any applicant acquiring | 15 |
| party is such as to not
jeopardize the financial stability | 16 |
| of the domestic company or not
jeopardize the interests of | 17 |
| its policyholders; | 18 |
| (d) the plans or proposals which the applicant | 19 |
| acquiring party has to liquidate
the domestic company, sell | 20 |
| its assets or consolidate or merge it with any
person,
or | 21 |
| to make any other material change in its business or | 22 |
| corporate structure
or management, are fair and reasonable | 23 |
| to
policyholders of such company; or | 24 |
| (e) the competence, experience and integrity of those | 25 |
| persons who
would control the operation of the domestic | 26 |
| company are such that it would
be in the best interests of |
|
|
|
09600SB2817ham001 |
- 10 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| policyholders of such company and of the
insurance buying | 2 |
| public to permit the merger, consolidation or other
| 3 |
| acquisition , transfer, or divestiture of control. | 4 |
| (2) The Director may hold a public hearing on any merger,
| 5 |
| consolidation or other acquisition , transfer, or divestiture | 6 |
| of control referred to in Section 131.4 if
the Director | 7 |
| determines that the statement filed as required by
Section | 8 |
| 131.5 does
not demonstrate compliance with the standards | 9 |
| referred to in subsection (1), of
this Section, or if he | 10 |
| determines that such acquisition , transfer, or divestiture of | 11 |
| control will
adversely affect policyholders or the insurance | 12 |
| buying public. | 13 |
| (3) The public hearing referred to in subsection
(2) must | 14 |
| be held within 60 days after the statement
required by Section | 15 |
| 131.5 is filed, and at least 20 days'
notice thereof must be
| 16 |
| given by the Director to the person filing the statement and to | 17 |
| the domestic
company. Not less than 12 days' notice of such | 18 |
| hearing must be given by the person
filing the statement to | 19 |
| such other persons as may be designated by the
Director and by | 20 |
| the company to its securityholders. The Director must make
a | 21 |
| determination within 30 days after the conclusion of the | 22 |
| hearing. At the
hearing, the person filing the statement, the | 23 |
| domestic company, any person to
whom notice of the hearing was | 24 |
| sent, and any other person whose interests
may be affected | 25 |
| thereby has the right to present evidence, examine and
| 26 |
| cross-examine witnesses, and offer oral and written arguments |
|
|
|
09600SB2817ham001 |
- 11 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| and in connection
therewith is entitled to conduct discovery | 2 |
| proceedings in the same manner as is
presently allowed in the | 3 |
| Circuit Courts of this State. All discovery proceedings
must be | 4 |
| concluded not later than 3 days prior to the commencement of | 5 |
| the public hearing. | 6 |
| (Source: P.A. 84-805.) | 7 |
| (215 ILCS 5/131.8a) (from Ch. 73, par. 743.8a) | 8 |
| Sec. 131.8a. The Director may retain at the applicant's | 9 |
| expense any
attorneys,
actuaries, accountants and other | 10 |
| experts not otherwise a part of the Director's
staff as may be | 11 |
| reasonably necessary to assist in the conduct of financial
or | 12 |
| character examinations in conjunction with an acquisition , | 13 |
| transfer, or divestiture proposed under
Section 131.4. The | 14 |
| applicant shall deposit with the Director cash, bonds
or | 15 |
| securities, acceptable to the Director, in a reasonable amount | 16 |
| not to
exceed $100,000, for purpose of securing the payment of | 17 |
| any expert's cost. | 18 |
| (Source: P.A. 86-753.) | 19 |
| (215 ILCS 5/131.9) (from Ch. 73, par. 743.9) | 20 |
| Sec. 131.9. All statements, amendments or other material | 21 |
| filed under Section 131.5
must be delivered to the domestic | 22 |
| company
within 10 business days after the applicant
acquiring | 23 |
| party has made the
filing with the Director. The domestic | 24 |
| company shall then send
to its securityholders
the summary of |
|
|
|
09600SB2817ham001 |
- 12 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| the proposed acquisition , transfer, or divestiture within 5 | 2 |
| business days of such delivery.
The notice shall contain an | 3 |
| address where a copy of the statement filed
with the Director | 4 |
| can be obtained upon request. The expenses of the mailing
and | 5 |
| any requests
for the statement and the mailing
of the notice of | 6 |
| hearing by the company required under subsection (2) of
Section | 7 |
| 131.8 must be borne by the person making the filing. As | 8 |
| security
for the payment of the expenses, the person may be | 9 |
| required to
file with the Director an
acceptable bond or other | 10 |
| deposit in an amount to be determined by the
Director. | 11 |
| (Source: P.A. 84-805.)
| 12 |
| (215 ILCS 5/131.10) (from Ch. 73, par. 743.10)
| 13 |
| Sec. 131.10. Sections 131.4 through 131.12 do not apply to:
| 14 |
| (1) any transaction which is subject to Article X of this | 15 |
| Code
dealing with merger, consolidation or plans of exchange;
| 16 |
| (2) any offer, request, invitation, agreement or | 17 |
| acquisition , transfer, or divestiture which
the Director by | 18 |
| order exempts therefrom as (a) not having been made or
entered | 19 |
| into for the purpose and not having the effect of changing or
| 20 |
| influencing the control of a domestic company, or (b) as | 21 |
| otherwise not
comprehended within the purposes of Sections | 22 |
| 131.4 through 131.12.
| 23 |
| (Source: P.A. 80-545.)
| 24 |
| (215 ILCS 5/131.11) (from Ch. 73, par. 743.11) |
|
|
|
09600SB2817ham001 |
- 13 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| Sec. 131.11. The following are violations of Sections 131.4 | 2 |
| through 131.12: | 3 |
| (1) the failure to file any statement, amendment, or | 4 |
| other material
required to be filed under Sections 131.4 or | 5 |
| 131.5; or | 6 |
| (2) the effectuation or any attempt to effectuate an | 7 |
| acquisition , transfer, or divestiture of
control of or | 8 |
| merger or consolidation with, a domestic company unless the
| 9 |
| Director has given his approval thereto. | 10 |
| (Source: P.A. 77-673.) | 11 |
| (215 ILCS 5/131.23) (from Ch. 73, par. 743.23) | 12 |
| Sec. 131.23. Injunctions; prohibitions against voting | 13 |
| securities; sequestration of
voting securities. | 14 |
|
(1) Whenever it appears to the Director that any company | 15 |
| or any
director, officer, employee or agent thereof has | 16 |
| committed or is about to
commit a violation of this Article or | 17 |
| of any rule, regulation, or order
issued by the Director | 18 |
| hereunder, the Director may apply to the Circuit
Court for the | 19 |
| county in which the principal office of the company is
located | 20 |
| or to the Circuit Court for Sangamon County for an order | 21 |
| enjoining
the company or the director, officer, employee or | 22 |
| agent thereof from
violating or continuing to violate this | 23 |
| Article or any rule, regulation or
order, and for any other | 24 |
| equitable relief as the nature of the case and the
interests of | 25 |
| the company's policyholders, creditors or the
public may |
|
|
|
09600SB2817ham001 |
- 14 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| require. In any proceeding, the validity of the rule, | 2 |
| regulation
or order alleged to have been violated may be | 3 |
| determined by the Court. | 4 |
| (2) No security which is the subject of any agreement or | 5 |
| arrangement
regarding acquisition, transfer, or divestiture, | 6 |
| or which is acquired , transferred, or divested or to be | 7 |
| acquired, transferred, or divested in
contravention of this | 8 |
| Article or of any rule, regulation or order issued by
the | 9 |
| Director hereunder may be voted at any securityholders' | 10 |
| meeting, or may be
counted for quorum purposes, and any action | 11 |
| of securityholders' requiring the
affirmative vote of a | 12 |
| percentage of securities may be taken as though such
securities | 13 |
| were not issued and outstanding; but no action taken at any | 14 |
| such
meeting may be invalidated by the voting of such | 15 |
| securities, unless the
action would materially affect control | 16 |
| of the company or unless any court
of this State has so | 17 |
| ordered. If the Director has reason to
believe that any | 18 |
| security of the company has been or is about to be
acquired , | 19 |
| transferred, or divested in contravention of this Article or of | 20 |
| any rule, regulation or
order issued by the Director hereunder | 21 |
| the company or the Director may
apply to the Circuit Court for | 22 |
| Sangamon County or to the Circuit Court for
the county in which | 23 |
| the company has its principal place of business (a) to
enjoin | 24 |
| the further pursuit or use of any offer, request, invitation,
| 25 |
| agreement or acquisition , transfer, or divestiture made in | 26 |
| contravention of Sections 131.4 through
131.12 or any rule, |
|
|
|
09600SB2817ham001 |
- 15 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| regulation, or order issued by the Director thereunder;
(b) to | 2 |
| enjoin the voting of any such security so acquired ; (c) to void | 3 |
| any vote
of such security already cast at any meeting of | 4 |
| securityholders; and (d) for
any other equitable relief as the | 5 |
| nature of the case and the interests of
the company's | 6 |
| policyholders, creditors, or the public may
require. | 7 |
| (3) In any case where a person has acquired , transferred, | 8 |
| or divested or is proposing to acquire , transfer, or divest
any | 9 |
| voting securities in violation of this Article or any rule, | 10 |
| regulation
or order issued by the Director hereunder, the | 11 |
| Circuit Court for Sangamon
County or the Circuit Court for the | 12 |
| county in which the company has its
principal place of business | 13 |
| may, on such notice as the court deems
appropriate, upon the | 14 |
| application of the company or the Director seize or
sequester | 15 |
| any voting securities of the company owned directly or | 16 |
| indirectly
by such person, and issue any orders with respect | 17 |
| thereto as may be
appropriate to effectuate this Article. | 18 |
| Notwithstanding any other
provisions of law, for the purposes | 19 |
| of this Article, the situs of the
ownership of the securities | 20 |
| of domestic companies is deemed to be in this
State. | 21 |
| (4) If the Director has reason to believe that any | 22 |
| policyholders' proxies
have been or are about to be acquired , | 23 |
| transferred, or divested in contravention of this Article or
of | 24 |
| any rule, regulations or order issued by the Director | 25 |
| hereunder, the
Director may apply to the Circuit Court for | 26 |
| Sangamon County or to the Circuit
Court for the county in which |
|
|
|
09600SB2817ham001 |
- 16 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| the company has its principal place of business
(a) to enjoin | 2 |
| further pursuit or use of any offer, request, invitation,
| 3 |
| agreement or acquisition , transfer, or divestiture made in | 4 |
| contravention of Section 131.4 through
131.12 and (b) for any | 5 |
| other equitable relief as the nature of the case
and the | 6 |
| interests of the company's policyholders, creditors or the | 7 |
| public may require. | 8 |
| (Source: P.A. 84-805.)
| 9 |
| (215 ILCS 5/136) (from Ch. 73, par. 748)
| 10 |
| Sec. 136. Annual statement.
| 11 |
| (1) Every company authorized to do business in this State | 12 |
| or accredited by
this State shall submit to file with the | 13 |
| Director by March 1st in each year 2 copies of
its financial | 14 |
| statement for the year ending December 31st immediately | 15 |
| preceding in such manner and in such form as
on forms | 16 |
| prescribed by the Director, which shall conform substantially | 17 |
| to the
form of statement adopted by the National Association of | 18 |
| Insurance
Commissioners. Unless the Director provides | 19 |
| otherwise, the annual statement is
to be prepared in accordance | 20 |
| with the annual statement instructions and the
Accounting | 21 |
| Practices and Procedures Manual adopted by the National | 22 |
| Association
of Insurance Commissioners. The Director shall | 23 |
| have power to make such
modifications and additions in this | 24 |
| form as he may deem desirable
or necessary to ascertain the | 25 |
| condition and affairs of the company. The
Director shall have |
|
|
|
09600SB2817ham001 |
- 17 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| authority to extend the time for filing any statement by
any | 2 |
| company for reasons which he considers good and sufficient. In | 3 |
| every
statement the admitted assets shall be shown at the | 4 |
| actual values as of the
last day of the preceding year, in | 5 |
| accordance with Section 126.7.
The statement
shall be verified | 6 |
| by oaths of the president and secretary of the company or, in
| 7 |
| their absence, by 2 other principal officers. In addition, any | 8 |
| company may be
required by the Director, when he considers that | 9 |
| action to be necessary and
appropriate for the protection of | 10 |
| policyholders, creditors, shareholders, or
claimants, to file, | 11 |
| within 60 days after mailing to the company a notice that
such | 12 |
| is required, a supplemental summary statement as of the last | 13 |
| day of any
calendar month occurring during the 100 days next | 14 |
| preceding the mailing of such
notice designated by him on forms | 15 |
| prescribed and furnished by the Director. The
Director may | 16 |
| require supplemental summary statements to be certified by an
| 17 |
| independent actuary deemed competent by the Director or by an | 18 |
| independent
certified public accountant.
| 19 |
| (2) The statement of an alien company shall embrace only | 20 |
| its
condition and transactions in the United States and shall | 21 |
| be verified by
the oaths of its resident manager or principal | 22 |
| representative in the
United States, except that in the case of | 23 |
| any life company organized
under the laws of Canada or any | 24 |
| province thereof, the statement may be
verified by the oaths of | 25 |
| any of its principal officers designated for
that purpose by | 26 |
| its board of directors.
|
|
|
|
09600SB2817ham001 |
- 18 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| (3) For the information of the public generally the | 2 |
| Director shall
cause an abstract of the information contained | 3 |
| in the annual statement
to be made available to the public as | 4 |
| soon as practicable after filing
with the Department, by | 5 |
| printing those abstracts in pamphlet tabular form
for free | 6 |
| general distribution by the Department, or by such other
| 7 |
| publication in the city of Springfield or in the city of | 8 |
| Chicago as may
be reasonably necessary more fully to inform the | 9 |
| public of the financial
condition of companies transacting | 10 |
| business in this State.
| 11 |
| (4) Each domestic, foreign, and alien insurer authorized to
| 12 |
| do business in this State or accredited by this State shall | 13 |
| participate
in the National Association of Insurance | 14 |
| Commissioners' Insurance Regulatory
Information System, | 15 |
| including the payment of all fees and charges of the
system. | 16 |
| Each company shall, on or before March 1 of each year, file | 17 |
| with the
National Association of Insurance Commissioners a copy | 18 |
| of its annual financial
statement along with any additional | 19 |
| filings prescribed by the Director for the
preceding year. The | 20 |
| statement filed with the National Association of Insurance
| 21 |
| Commissioners shall be in the same format and scope as that | 22 |
| required by this
Code and shall include a signed jurat page and | 23 |
| actuarial certification. Any
amendments and addendums to the | 24 |
| annual statement shall also be filed with the
National | 25 |
| Association of Insurance Commissioners. Each company shall | 26 |
| also file
with the National Association of Insurance |
|
|
|
09600SB2817ham001 |
- 19 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| Commissioners annual and quarterly
financial statement | 2 |
| information in computer readable format as required by the
| 3 |
| Insurance Regulatory Information System.
Failure of a company | 4 |
| to file financial statement information in computer
readable | 5 |
| format shall subject the company to the provisions of Section | 6 |
| 139.
| 7 |
| (5) All financial analysis ratios and examination synopsis | 8 |
| concerning
insurance companies that are submitted to the | 9 |
| Director by the National
Association of Insurance | 10 |
| Commissioners' Insurance Regulatory Information
System are | 11 |
| confidential and may not be disclosed by the Director.
| 12 |
| (6) Every property and casualty insurance company doing | 13 |
| business in this State, unless otherwise exempted by the | 14 |
| Director, shall annually submit the opinion of an appointed | 15 |
| actuary entitled "Statement of Actuarial Opinion". This | 16 |
| opinion shall be filed in accordance with the appropriate | 17 |
| National Association of Insurance Commissioners Property and | 18 |
| Casualty Annual Statement Instructions. | 19 |
| (a) Every property and casualty insurance company | 20 |
| domiciled in this State that is required to submit a | 21 |
| Statement of Actuarial Opinion shall annually submit an | 22 |
| Actuarial Opinion Summary, written by the company's | 23 |
| appointed actuary. This Actuarial Opinion Summary shall be | 24 |
| filed in accordance with the appropriate National | 25 |
| Association of Insurance Commissioners Property and | 26 |
| Casualty Annual Statement Instructions and shall be |
|
|
|
09600SB2817ham001 |
- 20 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| considered as a document supporting the Actuarial Opinion | 2 |
| required in this subsection (6). Each foreign and alien | 3 |
| property and casualty company authorized to do business in | 4 |
| this State shall provide the Actuarial Opinion Summary upon | 5 |
| request. | 6 |
| (b) An Actuarial Report and underlying workpapers as | 7 |
| required by the appropriate National Association of | 8 |
| Insurance Commissioners Property and Casualty Annual | 9 |
| Statement Instructions shall be prepared to support each | 10 |
| Actuarial Opinion. If the insurance company fails to | 11 |
| provide a supporting Actuarial Report or workpapers at the | 12 |
| request of the Director or the Director determines that the | 13 |
| supporting Actuarial Report or workpapers provided by the | 14 |
| insurance company is otherwise unacceptable to the | 15 |
| Director, the Director may engage a qualified actuary at | 16 |
| the expense of the company to review the opinion and the | 17 |
| basis for the opinion and prepare the supporting Actuarial | 18 |
| Report or workpapers. | 19 |
| (c) The appointed actuary shall not be liable for | 20 |
| damages to any person (other than the insurance company and | 21 |
| the Director) for any act, error, omission, decision, or | 22 |
| conduct with respect to the actuary's opinion, except in | 23 |
| cases of fraud or willful misconduct on the part of the | 24 |
| appointed actuary. | 25 |
| (d) The Statement of Actuarial Opinion shall be | 26 |
| provided with the Annual Statement in accordance with the |
|
|
|
09600SB2817ham001 |
- 21 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| appropriate National Association of Insurance | 2 |
| Commissioners Property and Casualty Annual Statement | 3 |
| Instructions and shall be treated as a public document. | 4 |
| Documents, materials, or other information in the | 5 |
| possession or control of the Director that are considered | 6 |
| an Actuarial Report, workpapers, or Actuarial Opinion | 7 |
| Summary provided in support of the opinion, and any other | 8 |
| material provided by the company to the Director in | 9 |
| connection with the Actuarial Report, workpapers or | 10 |
| Actuarial Opinion Summary, must be given confidential | 11 |
| treatment, are not subject to subpoena, and may not be made | 12 |
| public by the Director or any other persons. This paragraph | 13 |
| (d) shall not be construed to limit the Director's | 14 |
| authority to release the documents to the Actuarial Board | 15 |
| for Counseling and Discipline (ABCD), so long as the | 16 |
| material is required for the purpose of professional | 17 |
| disciplinary proceedings and that the ABCD establishes | 18 |
| procedures satisfactory to the Director for preserving the | 19 |
| confidentiality of the documents, nor shall this paragraph | 20 |
| (d) be construed to limit the Director's authority to use | 21 |
| the documents, materials or other information in | 22 |
| furtherance of any regulatory or legal action brought as | 23 |
| part of the Director's official duties. Neither the | 24 |
| Director nor any person who received documents, materials, | 25 |
| or other information while acting under the authority of | 26 |
| the Director shall be permitted or required to testify in |
|
|
|
09600SB2817ham001 |
- 22 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| any private civil action concerning any confidential | 2 |
| documents, materials, or information subject to this | 3 |
| subsection (6). Except where another provision of this Code | 4 |
| expressly prohibits a disclosure of confidential | 5 |
| information to the specific officials or organizations | 6 |
| described in this subsection, the Director may: | 7 |
| (i) share documents, materials, or other | 8 |
| information, including the confidential and privileged | 9 |
| documents, materials or information subject to this | 10 |
| paragraph (d) with the insurance department of any | 11 |
| other state or country or with law enforcement | 12 |
| officials of this or any other state or agency of the | 13 |
| federal government at any time, as long as the agency | 14 |
| or office receiving the document, material, or other | 15 |
| information agrees in writing to hold it confidential | 16 |
| and in a manner consistent with this Code; | 17 |
| (ii) receive documents, materials, or information, | 18 |
| including otherwise confidential and privileged | 19 |
| documents, materials, or information, from the | 20 |
| National Association of Insurance Commissioners and | 21 |
| its affiliates and subsidiaries, and from regulatory | 22 |
| and law enforcement officials of other foreign or | 23 |
| domestic jurisdictions, and shall maintain as | 24 |
| confidential or privileged any document, material, or | 25 |
| information received with notice or the understanding | 26 |
| that it is confidential or privileged under the laws of |
|
|
|
09600SB2817ham001 |
- 23 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| the jurisdiction that is the source of the document, | 2 |
| material, or information; and | 3 |
| (iii) enter into agreements governing sharing and | 4 |
| use of information consistent with paragraph (d). | 5 |
| (e) No waiver of any applicable privilege or claim of | 6 |
| confidentiality in the documents, materials or information | 7 |
| shall occur as a result of disclosure to the Director under | 8 |
| this Section or as a result of sharing as authorized in | 9 |
| subparagraphs (i), (ii), and (iii) of paragraph (d) of | 10 |
| subsection (6) of this Section.
All 2008 Annual Statements, | 11 |
| which are filed in 2009, and all subsequent Annual | 12 |
| Statement filings shall be done in accordance with | 13 |
| subsection (6) of this Section. | 14 |
| (Source: P.A. 96-145, eff. 8-7-09.)
| 15 |
| (215 ILCS 5/404) (from Ch. 73, par. 1016)
| 16 |
| Sec. 404.
Office of Director; A public office; destruction | 17 |
| or
disposal of records, papers, documents, and memoranda.
| 18 |
| (1) (a) The office of the Director shall be a public office | 19 |
| and the
records,
books, and papers thereof on file
therein, | 20 |
| except those records
or documents containing or disclosing any | 21 |
| analysis, opinion, calculation,
ratio, recommendation, advice, | 22 |
| viewpoint, or estimation by any Department staff
regarding the | 23 |
| financial or market condition of an insurer not otherwise made
| 24 |
| part of the public record by the Director,
shall be accessible | 25 |
| to the
inspection of the public, except as the Director, for |
|
|
|
09600SB2817ham001 |
- 24 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| good reason, may
decide otherwise, or except as may be | 2 |
| otherwise provided in this Code.
| 3 |
| (b) Except where another provision of this Code expressly | 4 |
| prohibits a
disclosure of confidential information to the | 5 |
| specific officials or
organizations described in this | 6 |
| subsection, the Director may disclose or share
any confidential | 7 |
| records or information in his custody and control with any
| 8 |
| insurance regulatory officials of any state or country, with | 9 |
| the law
enforcement officials of this State, any other state, | 10 |
| or the federal
government, or with the National Association of | 11 |
| Insurance Commissioners, upon
the written agreement of the | 12 |
| official or organization receiving the information
to hold the | 13 |
| information or records confidential and in a manner consistent | 14 |
| with
this Code.
| 15 |
| (c) The Director shall maintain as confidential any records | 16 |
| or
information received from the National Association of | 17 |
| Insurance Commissioners
or insurance regulatory officials of | 18 |
| other states or countries or law enforcement officials of this | 19 |
| or any other state or country or agency of the federal | 20 |
| government which is confidential in that
other jurisdiction.
| 21 |
| (2) Upon the filing of the examination to which they | 22 |
| relate, the Director
is authorized to destroy or otherwise | 23 |
| dispose of all working papers relative
to any company which | 24 |
| has been examined at any time prior to that last
| 25 |
| examination by the Department, so that in such | 26 |
| circumstances only current
working papers of that last |
|
|
|
09600SB2817ham001 |
- 25 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| examination may be retained by the Department.
| 2 |
| (3) Five years after the conclusion of the transactions | 3 |
| to
which they relate, the Director is authorized to destroy | 4 |
| or otherwise
dispose of all books, records, papers, | 5 |
| memoranda and correspondence
directly related to consumer | 6 |
| complaints or inquiries.
| 7 |
| (4) Two years after the conclusion of the transactions | 8 |
| to which they
relate, the Director is authorized to destroy | 9 |
| or otherwise dispose of all
books, records, papers, | 10 |
| memoranda, and correspondence directly related to
all | 11 |
| void, obsolete, or superseded rate filings and schedules | 12 |
| required to be
filed by statute; and all individual company | 13 |
| rating experience data and all
records, papers, documents | 14 |
| and memoranda in the possession of the Director
relating | 15 |
| thereto.
| 16 |
| (5) Five years after the conclusion of the transactions | 17 |
| to which
they relate, the Director is authorized to destroy | 18 |
| or otherwise dispose
of all examination reports of | 19 |
| companies made by the insurance supervisory
officials of | 20 |
| states other than Illinois; applications, requisitions, | 21 |
| and
requests for licenses; all records of hearings; and all | 22 |
| similar records,
papers, documents, and memoranda in the | 23 |
| possession of the Director.
| 24 |
| (6) Ten years after the conclusion of the transactions | 25 |
| to which they
relate, the Director is authorized to destroy | 26 |
| or otherwise dispose of all
official correspondence of |
|
|
|
09600SB2817ham001 |
- 26 - |
LRB096 18813 RPM 39867 a |
|
| 1 |
| foreign and alien companies, all foreign
companies' and | 2 |
| alien companies' annual statements, valuation reports, tax
| 3 |
| reports, and all similar records, papers, documents and | 4 |
| memoranda in the
possession of the Director.
| 5 |
| (7) Whenever any records, papers, documents or | 6 |
| memoranda are
destroyed or otherwise disposed of pursuant | 7 |
| to the provisions of this
section, the Director shall | 8 |
| execute and file in a separate, permanent
office file a | 9 |
| certificate listing and setting forth by summary
| 10 |
| description the records, papers, documents or memoranda so | 11 |
| destroyed or
otherwise disposed of, and the Director may, | 12 |
| in his discretion, preserve
copies of any such records, | 13 |
| papers, documents or memoranda by means of
microfilming or | 14 |
| photographing the same.
| 15 |
| (8) This Section shall apply to records, papers, | 16 |
| documents, and
memoranda presently in the possession of the | 17 |
| Director as well as to
records, papers, documents, and | 18 |
| memoranda hereafter coming into his
possession.
| 19 |
| (Source: P.A. 89-97, eff. 7-7-95.)
| 20 |
| Section 99. Effective date. This Act takes effect upon | 21 |
| becoming law.".
|
|