Full Text of HB5160 100th General Assembly
HB5160eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by adding | 5 | | Article IIB and by changing Section 156 as follows: | 6 | | (215 ILCS 5/Art. IIB heading new) | 7 | | ARTICLE IIB. DOMESTIC STOCK COMPANY DIVISION | 8 | | (215 ILCS 5/35B-1 new) | 9 | | Sec. 35B-1. Short title. This Article may be cited as the | 10 | | Domestic Stock Company Division. | 11 | | (215 ILCS 5/35B-5 new) | 12 | | Sec. 35B-5. Purpose. The purpose of this Article is to | 13 | | stimulate economic development in the State of Illinois by | 14 | | creating and sustaining employment opportunities and | 15 | | increasing and sustaining taxable revenue, through improving | 16 | | the competitive position of domestic stock companies, | 17 | | maintaining the competitiveness of this State as a state of | 18 | | domicile for domestic stock companies, and enhancing the | 19 | | desirability of this State as a jurisdiction of domicile for | 20 | | newly incorporating and existing foreign stock companies. |
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| 1 | | (215 ILCS 5/35B-10 new) | 2 | | Sec. 35B-10. Definitions. As used in this Article: | 3 | | "Assets" means all assets or property, whether real, | 4 | | personal or mixed, tangible or intangible, and any right or | 5 | | interest therein, including all rights under contracts and | 6 | | other agreements. | 7 | | "Capital" means the capital stock component of statutory | 8 | | surplus, as defined in the National Association of Insurance | 9 | | Commissioners Accounting Practices and Procedures Manual, | 10 | | version effective January 1, 2001, and subsequent revisions. | 11 | | "Divide" or "division" means the act by operation of law by | 12 | | which a domestic stock company divides into 2 or more resulting | 13 | | companies in accordance with a plan of division and this | 14 | | Article; | 15 | | "Dividing company" means a domestic stock company that | 16 | | approves a plan of division pursuant to Section 35B-20; | 17 | | "Domestic stock company" means a domestic stock company | 18 | | transacting or being organized to transact any of the kinds of | 19 | | insurance business enumerated in Section 4. | 20 | | "Liability" means a liability or obligation of any kind, | 21 | | character, or description, whether known or unknown, absolute | 22 | | or contingent, accrued or unaccrued, disputed or undisputed, | 23 | | liquidated or unliquidated, secured or unsecured, joint or | 24 | | several, due or to become due, determined, determinable, or | 25 | | otherwise. | 26 | | "New company" means a domestic stock company that is |
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| 1 | | created by a division occurring on or after the effective date | 2 | | of this amendatory Act of the 100th General Assembly. | 3 | | "Plan of division" means a plan of division approved by a | 4 | | dividing company in accordance Section 35B-20. | 5 | | "Policy liability" means a liability as defined in this | 6 | | Section arising out of or related to an insurance policy, | 7 | | contract of insurance, or reinsurance agreement. | 8 | | "Recorder" means the office of the recorder of the county | 9 | | where the principal office of a domestic stock company is | 10 | | located. | 11 | | "Resulting company" means a domestic stock company created | 12 | | by a division or a dividing company that survives a division. | 13 | | "Shareholder" means the person in whose name shares are | 14 | | registered in the records of a corporation or the beneficial | 15 | | owner of shares to the extent of the rights granted by a | 16 | | nominee certificate on file with a corporation. | 17 | | "Sign" or "signature" includes a manual, facsimile, or | 18 | | conformed or electronic signature. | 19 | | "Surplus" means total statutory surplus less capital, | 20 | | calculated in accordance with the National Association of | 21 | | Insurance Commissioners Accounting Practices and Procedures | 22 | | Manual, version effective January 1, 2001, and subsequent | 23 | | revisions. | 24 | | "Transfer" includes an assignment, assumption, conveyance, | 25 | | sale, lease, encumbrance, including a mortgage or security | 26 | | interest, gift, or transfer by operation of law. |
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| 1 | | (215 ILCS 5/35B-15 new) | 2 | | Sec. 35B-15. Plan of division. | 3 | | (a) A domestic stock company may, in accordance with the | 4 | | requirements of this Article, divide into 2 or more resulting | 5 | | companies pursuant to a plan of division. | 6 | | (b) Each plan of division shall include: | 7 | | (1) the name of the domestic stock company seeking to | 8 | | divide; | 9 | | (2) the name of each resulting company that will be | 10 | | created by the proposed division; | 11 | | (3) for each new company that will be created by the | 12 | | proposed division, a copy of its: | 13 | | (A) proposed articles of incorporation; | 14 | | (B) proposed bylaws; and | 15 | | (C) the kinds of insurance business enumerated in | 16 | | Section 4 that the new company would be authorized to | 17 | | conduct; | 18 | | (4) the manner of allocating between or among the | 19 | | resulting companies: | 20 | | (A) the assets of the domestic stock company that | 21 | | will not be owned by all of the resulting companies as | 22 | | tenants in common pursuant to Section 35B-35; and | 23 | | (B) the liabilities of the domestic stock company, | 24 | | including policy liabilities, to which not all of the | 25 | | resulting companies will become jointly and severally |
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| 1 | | liable pursuant to paragraph (3) of subsection (a) of | 2 | | Section 35B-40; | 3 | | (5) the manner of distributing shares in the new | 4 | | companies to the dividing company or its shareholders; | 5 | | (6) a reasonable description of the liabilities, | 6 | | including policy liabilities, and items of capital, | 7 | | surplus, or other assets, in each case, that the domestic | 8 | | stock company proposes to allocate to each resulting | 9 | | company, including specifying the reinsurance contract, | 10 | | reinsurance coverage obligations, and related claims that | 11 | | are applicable to those policies; | 12 | | (7) all terms and conditions required by the laws of | 13 | | this State or the articles of incorporation and bylaws of | 14 | | the domestic stock company; | 15 | | (8) evidence demonstrating that the interest of all | 16 | | classes of policyholders of the dividing company will be | 17 | | properly protected; and | 18 | | (9) all other terms and conditions of the division. | 19 | | Nothing in this subsection (b) shall expand or reduce the | 20 | | allocation and assignment of reinsurance as stated in the | 21 | | reinsurance contract. | 22 | | (c) If the domestic stock company survives the division, | 23 | | the plan of division shall include, in addition to the | 24 | | information required by subsection (b): | 25 | | (1) all proposed amendments to the dividing company's | 26 | | articles of incorporation and bylaws, if any; |
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| 1 | | (2) if the dividing company desires to cancel some, but | 2 | | less than all, shares in the dividing company, the manner | 3 | | in which it will cancel such shares; and | 4 | | (3) if the dividing company desires to convert some, | 5 | | but less than all, shares in the dividing company into | 6 | | shares, securities, obligations, money, other property, | 7 | | rights to acquire shares or securities, or any combination | 8 | | thereof, a statement disclosing the manner in which it will | 9 | | convert the shares. | 10 | | (d) If the domestic stock company does not survive the | 11 | | proposed division, the plan of division shall contain, in | 12 | | addition to the information required by subsection (b), the | 13 | | manner in which the dividing company will cancel or convert | 14 | | shares in the dividing company into shares, securities, | 15 | | obligations, money, other property, rights to acquire shares or | 16 | | securities, or any combination thereof. | 17 | | (e) Terms of a plan of division may be made dependent on | 18 | | facts objectively ascertainable outside of the plan of | 19 | | division. | 20 | | (f) A dividing company may amend a plan of division in | 21 | | accordance with any procedures set forth in the plan of | 22 | | division or, if no such procedures are set forth in the plan of | 23 | | division, in any manner determined by the board of directors of | 24 | | the dividing company, except that a shareholder that was | 25 | | entitled to vote on or consent to approval of the plan of | 26 | | division is entitled to vote on or consent to any amendment of |
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| 1 | | the plan of division that will change: | 2 | | (1) the amount or kind of shares, securities, | 3 | | obligations, money, other property, rights to acquire | 4 | | shares or securities, or any combination thereof, to be | 5 | | received by any of the shareholders of the dividing company | 6 | | under the plan of division; | 7 | | (2) the articles of incorporation or bylaws of any | 8 | | resulting company that will be in effect when the division | 9 | | becomes effective, except for changes that do not require | 10 | | approval of the shareholders of the resulting company under | 11 | | its articles of incorporation or bylaws; or | 12 | | (3) any other terms or conditions of the plan of | 13 | | division, if the change would adversely affect the | 14 | | shareholders in any material respect. | 15 | | (g) A dividing company may abandon a plan of division after | 16 | | it has approved the plan of division without any action by the | 17 | | shareholders and in accordance with any procedures set forth in | 18 | | the plan of division or, if no such procedures are set forth in | 19 | | the plan of division, in a manner determined by the board of | 20 | | directors of the dividing company. | 21 | | (h) A dividing company may abandon a plan of division after | 22 | | it has filed a certificate of division with the recorder by | 23 | | filing with the recorder, with concurrent copy to the director, | 24 | | a certificate of abandonment signed by the dividing company. | 25 | | The certificate of abandonment shall be effective on the date | 26 | | it is filed with the recorder and the dividing company shall be |
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| 1 | | deemed to have abandoned its plan of division on such date. | 2 | | (i) A dividing company may not abandon or amend its plan of | 3 | | division once the division becomes effective. | 4 | | (215 ILCS 5/35B-20 new) | 5 | | Sec. 35B-20. Requirements of a plan of division. | 6 | | (a) A domestic stock company shall not file a plan of | 7 | | division with the Director unless the plan of division has been | 8 | | approved in accordance with: | 9 | | (1) any applicable provisions of its articles of | 10 | | incorporation and bylaws; and | 11 | | (2) all laws of this State governing the internal | 12 | | affairs of a domestic stock company that provide for | 13 | | approval of a merger. | 14 | | (b) If any provision of the articles of incorporation or | 15 | | bylaws of a domestic stock company requires that a specific | 16 | | number or percentage of board of directors or shareholders | 17 | | approve the proposal or adoption of a plan of merger, or | 18 | | imposes other special procedures for the proposal or adoption | 19 | | of a plan of merger, such domestic stock company shall adhere | 20 | | to such provision in proposing or adopting a plan of division. | 21 | | If any provision of the articles of incorporation or bylaws of | 22 | | a domestic stock company is amended, such amendment shall | 23 | | thereafter apply to a division only in accordance with its | 24 | | express terms. |
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| 1 | | (215 ILCS 5/35B-25 new) | 2 | | Sec. 35B-25. Plan of division approval. | 3 | | (a) A division shall not become effective until it is | 4 | | approved by the Director after reasonable notice and a public | 5 | | hearing, if the notice and hearing are deemed by the Director | 6 | | to be in the public interest. The Director shall hold a public | 7 | | hearing if one is requested by the dividing company. A hearing | 8 | | conducted under this Section shall be conducted in accordance | 9 | | with Article 10 of the Illinois Administrative Procedure Act. | 10 | | (b) The Director shall approve a plan of division unless | 11 | | the Director finds that: | 12 | | (1) the interest of any class of policyholder or | 13 | | shareholder of the dividing company will not be properly | 14 | | protected; | 15 | | (2) each new company created by the proposed division, | 16 | | except a new company that is a nonsurviving party to a | 17 | | merger pursuant to subsection (b) of Section 156, would be | 18 | | ineligible to receive a license to do insurance business in | 19 | | this State pursuant to Section 5; | 20 | | (3) the proposed division violates a provision of the | 21 | | Uniform Fraudulent Transfer Act; | 22 | | (4) the division is being made for purposes of | 23 | | hindering, delaying, or defrauding any policyholders or | 24 | | other creditors of the dividing company; | 25 | | (5) one or more resulting companies will not be solvent | 26 | | upon the consummation of the division; or |
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| 1 | | (6) the remaining assets of one or more resulting | 2 | | companies will be, upon consummation of a division, | 3 | | unreasonably small in relation to the business and | 4 | | transactions in which the resulting company was engaged or | 5 | | is about to engage. | 6 | | (c) In determining whether the standards set forth in | 7 | | paragraph (3) of subsection (b) have been satisfied, the | 8 | | Director shall only apply the Uniform Fraudulent Transfer Act | 9 | | to a dividing company in its capacity as a resulting company | 10 | | and shall not apply the Uniform Fraudulent Transfer Act to any | 11 | | dividing company that is not proposed to survive the division. | 12 | | (d) In determining whether the standards set forth in | 13 | | paragraphs (3), (4), (5), and (6) of subsection (b) have been | 14 | | satisfied, the Director may consider all proposed assets of the | 15 | | resulting company, including, without limitation, reinsurance | 16 | | agreements, parental guarantees, support or keep well | 17 | | agreements, or capital maintenance or contingent capital | 18 | | agreements, in each case, regardless of whether the same would | 19 | | qualify as an admitted asset as defined in Section 3.1. | 20 | | (e) In determining whether the standards set forth in | 21 | | paragraph (3) of subsection (b) have been satisfied, with | 22 | | respect to each resulting company, the Director shall, in | 23 | | applying the Uniform Fraudulent Transfer Act, treat: | 24 | | (1) the resulting company as a debtor; | 25 | | (2) liabilities allocated to the resulting company as | 26 | | obligations incurred by a debtor; |
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| 1 | | (3) the resulting company as not having received | 2 | | reasonably equivalent value in exchange for incurring the | 3 | | obligations; and | 4 | | (4) assets allocated to the resulting company as | 5 | | remaining property. | 6 | | (f) All information, documents, materials, and copies | 7 | | thereof submitted to, obtained by, or disclosed to the Director | 8 | | in connection with a plan of division or in contemplation | 9 | | thereof, including any information, documents, materials, or | 10 | | copies provided by or on behalf of a domestic stock company in | 11 | | advance of its adoption or submission of a plan of division, | 12 | | shall be confidential and shall be subject to the same | 13 | | protection and treatment in accordance with Section 131.14d as | 14 | | documents and reports disclosed to or filed with the Director | 15 | | pursuant to Section 131.14b until such time, if any, as a | 16 | | notice of the hearing contemplated by subsection (a) is issued. | 17 | | (g) From and after the issuance of a notice of the hearing | 18 | | contemplated by subsection (a), all business, financial, and | 19 | | actuarial information that the domestic stock company requests | 20 | | confidential treatment, other than the plan of division, shall | 21 | | continue to be confidential and shall not be available for | 22 | | public inspection and shall be subject to the same protection | 23 | | and treatment in accordance with Section 131.14d as documents | 24 | | and reports disclosed to or filed with the Director pursuant to | 25 | | Section 131.14b. | 26 | | (h) All expenses incurred by the Director in connection |
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| 1 | | with proceedings under this Section, including expenses for the | 2 | | services of any attorneys, actuaries, accountants, and other | 3 | | experts as may be reasonably necessary to assist the Director | 4 | | in reviewing the proposed division, shall be paid by the | 5 | | dividing company filing the plan of division. A dividing | 6 | | company may allocate expenses described in this subsection in a | 7 | | plan of division in the same manner as any other liability. | 8 | | (i) If the Director approves a plan of division, the | 9 | | Director shall issue an order that shall be accompanied by | 10 | | findings of fact and conclusions of law. | 11 | | (j) The conditions in this Section for freeing one or more | 12 | | of the resulting companies from the liabilities of the dividing | 13 | | company and for allocating some or all of the liabilities of | 14 | | the dividing company shall be conclusively deemed to have been | 15 | | satisfied if the plan of division has been approved by the | 16 | | Director in a final order that is not subject to further | 17 | | appeal. | 18 | | (215 ILCS 5/35B-30 new) | 19 | | Sec. 35B-30. Certificate of division. | 20 | | (a) After a plan of division has been adopted and approved, | 21 | | an officer or duly authorized representative of the dividing | 22 | | company shall sign a certificate of division. | 23 | | (b) The certificate of division shall set forth: | 24 | | (1) the name of the dividing company; | 25 | | (2) a statement disclosing whether the dividing |
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| 1 | | company will survive the division; | 2 | | (3) the name of each new company that will be created | 3 | | by the division; | 4 | | (4) the kinds of insurance business enumerated in | 5 | | Section 4 that the new company will be authorized to | 6 | | conduct; | 7 | | (5) the date that the division is to be effective, | 8 | | which shall not be more than 90 days after the dividing | 9 | | company has filed the certificate of division with the | 10 | | recorder, with a concurrent copy to the Director; | 11 | | (6) a statement that the division was approved by the | 12 | | Director in accordance with Section 35B-25; | 13 | | (6) a statement that the dividing company provided, no | 14 | | later than 10 business days after the dividing company | 15 | | filed the plan of division with the Director, reasonable | 16 | | notice to each reinsurer that is party to a reinsurance | 17 | | contract that is applicable to the policies included in the | 18 | | plan of division; | 19 | | (7) if the dividing company will survive the division, | 20 | | an amendment to its articles of incorporation or bylaws | 21 | | approved as part of the plan of division; | 22 | | (8) for each new company created by the division, its | 23 | | articles of incorporation and bylaws, provided that the | 24 | | articles of incorporation and bylaws need not state the | 25 | | name or address of an incorporator; and | 26 | | (9) a reasonable description of the capital, surplus, |
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| 1 | | other assets and liabilities, including policy | 2 | | liabilities, of the dividing company that are to be | 3 | | allocated to each resulting company. | 4 | | (c) The articles of incorporation and bylaws of each new | 5 | | company must satisfy the requirements of the laws of this | 6 | | State, provided that the documents need not be signed or | 7 | | include a provision that need not be included in a restatement | 8 | | of the document. | 9 | | (d) A certificate of division is effective when filed with | 10 | | the recorder, with a concurrent copy to the Director, as | 11 | | provided in this Section or on another date specified in the | 12 | | plan of division, whichever is later, provided that a | 13 | | certificate of division shall become effective not more than 90 | 14 | | days after it is filed with the recorder. A division is | 15 | | effective when the relevant certificate of division is | 16 | | effective. | 17 | | (215 ILCS 5/35B-35 new) | 18 | | Sec. 35B-35. Effects of division. | 19 | | (a) When a division becomes effective pursuant to Section | 20 | | 35B-30: | 21 | | (1) if the dividing company has survived the division: | 22 | | (A) it continues to exist; | 23 | | (B) its articles of incorporation shall be | 24 | | amended, if necessary, as provided in the plan of | 25 | | division; and |
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| 1 | | (C) its bylaws shall be amended, if necessary, as | 2 | | provided in the plan of division; | 3 | | (2) if the dividing company has not survived the | 4 | | division, its separate existence ceases to exist; | 5 | | (3) each new company: | 6 | | (A) comes into existence; | 7 | | (B) shall hold any capital, surplus, and other | 8 | | assets allocated to such new company by the plan of | 9 | | division as a successor to the dividing company, | 10 | | automatically, by operation of law and not by transfer, | 11 | | whether directly or indirectly; and | 12 | | (C) its articles of incorporation, if any, and | 13 | | bylaws, if any, shall be effective; | 14 | | (4) capital, surplus, and other assets of the dividing | 15 | | company: | 16 | | (A) that is allocated by the plan of division | 17 | | either: | 18 | | (i) vests in the applicable new company as | 19 | | provided in the plan of division; or | 20 | | (ii) remains vested in the dividing company as | 21 | | provided in the plan of division; | 22 | | (B) that is not allocated by the plan of division | 23 | | either: | 24 | | (i) remains vested in the dividing company, if | 25 | | the dividing company survives the division; or | 26 | | (ii) is allocated to and vests equally in the |
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| 1 | | resulting companies as tenants in common, if the | 2 | | dividing company does not survive the division; or | 3 | | (C) otherwise vests as provided in this subsection | 4 | | without transfer, reversion, or impairment; | 5 | | (5) a resulting company to which a cause of action is | 6 | | allocated as provided in paragraph (4) of this subsection | 7 | | (a) may be substituted or added in any pending action or | 8 | | proceeding to which the dividing company is a party when | 9 | | the division becomes effective; | 10 | | (6) the liabilities, including policy liabilities, of | 11 | | the dividing company are allocated between or among the | 12 | | resulting companies as provided in Section 35B-40 and each | 13 | | resulting company to which liabilities are allocated is | 14 | | liable only for those liabilities, including policy | 15 | | liabilities, so allocated as successors to the dividing | 16 | | company, automatically, by operation of law, and not by | 17 | | transfer (or, for the avoidance of doubt, assumption), | 18 | | whether directly or indirectly; and | 19 | | (7) the shares in the dividing company that are to be | 20 | | converted or canceled in the division are converted or | 21 | | canceled, and the shareholders of those shares are entitled | 22 | | only to the rights provided to them under the plan of | 23 | | division and any appraisal rights that they may have | 24 | | pursuant to Section 35B-45. | 25 | | (b) Except as provided in the articles of incorporation or | 26 | | bylaws of the dividing company, the division does not give rise |
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| 1 | | to any rights that a shareholder, director of a domestic stock | 2 | | company, or third party would have upon a dissolution, | 3 | | liquidation, or winding up of the dividing company. | 4 | | (c) The allocation to a new company of capital, surplus, or | 5 | | other assets that is collateral covered by an effective | 6 | | financing statement shall not be effective until a new | 7 | | financing statement naming the new company as a debtor is | 8 | | effective under the Uniform Commercial Code. | 9 | | (d) Unless otherwise provided in the plan of division, the | 10 | | shares in and any securities of each new company shall be | 11 | | distributed to: | 12 | | (1) the dividing company, if it survives the division; | 13 | | or | 14 | | (2) shareholders of the dividing company that do not | 15 | | assert any appraisal rights that they may have pursuant to | 16 | | Section 35B-45, pro rata. | 17 | | (215 ILCS 5/35B-40 new) | 18 | | Sec. 35B-40. Resulting company liabilities. | 19 | | (a) Except as otherwise expressly provided in this Section, | 20 | | when a division becomes effective, each resulting company is | 21 | | responsible, automatically, by operation of law, for: | 22 | | (1) individually, the liabilities, including policy | 23 | | liabilities, that the resulting company issues, | 24 | | undertakes, or incurs in its own name after the division; | 25 | | (2) individually, the liabilities, including policy |
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| 1 | | liabilities, of the dividing company that are allocated to | 2 | | or remain the liability of the resulting company to the | 3 | | extent specified in the plan of division; and | 4 | | (3) jointly and severally with the other resulting | 5 | | companies, the liabilities, including policy liabilities, | 6 | | of the dividing company that are not allocated by the plan | 7 | | of division. | 8 | | (b) Except as otherwise expressly provided in this Section, | 9 | | when a division becomes effective, no resulting company is | 10 | | responsible for or shall have any liability or obligation in | 11 | | respect of: | 12 | | (1) any liabilities, including policy liabilities, | 13 | | that another resulting company issues, undertakes, or | 14 | | incurs in its own name after the division; or | 15 | | (2) any liabilities, including policy liabilities, of | 16 | | the dividing company that are allocated to or remain the | 17 | | liability of another resulting company in accordance with | 18 | | the plan of division. | 19 | | (c) If a provision of a debt security, note, or similar | 20 | | evidence of indebtedness for money borrowed, whether secured or | 21 | | unsecured, indenture or other contract relating to | 22 | | indebtedness, or a provision of any other type of contract | 23 | | other than an insurance policy, annuity, or reinsurance | 24 | | agreement, that was issued, incurred, or executed by the | 25 | | domestic stock company before requires the consent of the | 26 | | obligee to a merger of the dividing company or treats the |
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| 1 | | merger as a default, that provision applies to a division of | 2 | | the dividing company as if the division was a merger. | 3 | | (d) If a division breaches a contractual obligation of the | 4 | | dividing company at the time the division becomes effective, | 5 | | all of the resulting companies are liable, jointly and | 6 | | severally, for the contractual breach, but the validity and | 7 | | effectiveness of the division, including, without limitation, | 8 | | the allocation of liabilities in accordance with the plan of | 9 | | division, shall not be affected by the contractual breach. | 10 | | (e) A direct or indirect allocation of capital, surplus, | 11 | | assets, or liabilities, including policy liabilities, in a | 12 | | division shall occur automatically, by operation of law, and | 13 | | shall not be treated as a distribution or transfer for any | 14 | | purpose with respect to either the dividing company or any of | 15 | | the resulting companies. | 16 | | (f) Liens, security interests, and other charges on the | 17 | | capital, surplus, or other assets of the dividing company are | 18 | | not impaired by the division, notwithstanding any otherwise | 19 | | enforceable allocation of liabilities, including policy | 20 | | liabilities, of the dividing company. | 21 | | (g) If the dividing company is bound by a security | 22 | | agreement governed by Article 9 of the Uniform Commercial Code | 23 | | as enacted in this State or in any other jurisdiction, and the | 24 | | security agreement provides that the security interest | 25 | | attaches to after-acquired collateral, each resulting company | 26 | | is bound by the security agreement. |
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| 1 | | (h) An allocation of a policy or other liability does not: | 2 | | (1) except as provided in the plan of division and | 3 | | specifically approved by the Director, affect the rights | 4 | | that a policyholder or creditor has under other law in | 5 | | respect of the policy or other liability, except that those | 6 | | rights are available only against a resulting company | 7 | | responsible for the policy or liability under this Section; | 8 | | or | 9 | | (2) release or reduce the obligation of a reinsurer, | 10 | | surety, or guarantor of the policy or liability. | 11 | | (215 ILCS 5/35B-45 new) | 12 | | Sec. 35B-45. Shareholder rights. If the dividing company | 13 | | does not survive the division, an objecting shareholder of a | 14 | | dividing company is entitled to appraisal rights and to obtain | 15 | | payment of the fair value of that shareholder's shares, in the | 16 | | same manner and to the extent provided for pursuant to Section | 17 | | 167. | 18 | | (215 ILCS 5/35B-50 new) | 19 | | Sec. 35B-50. Rules. The Director may adopt such rules as | 20 | | are necessary or appropriate to carry out this Article.
| 21 | | (215 ILCS 5/156) (from Ch. 73, par. 768)
| 22 | | Sec. 156. Merger and
consolidation permitted. | 23 | | (a) Upon complying with the provisions of this article, any |
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| 1 | | domestic
company, except a Lloyds, is hereby authorized and | 2 | | empowered to merge or
consolidate with any domestic company or | 3 | | with any foreign or alien company,
except a Lloyds if the | 4 | | surviving company meets the requirements for
authorization to | 5 | | engage in the insurance business in this state and, if
such | 6 | | merger or consolidation is authorized by the laws of the state | 7 | | or
country under which such foreign or alien company is | 8 | | incorporated or
organized. | 9 | | (b) The Director may permit the formation of a domestic | 10 | | stock company that is established for the sole purpose of | 11 | | merging or consolidating with an existing stock company | 12 | | simultaneously with the effectiveness of a division authorized | 13 | | by this Code. Upon request of the dividing company, the | 14 | | Director may waive the requirements of Section 131.8 of this | 15 | | Code. Each domestic stock company formed under this subsection | 16 | | shall be deemed to exist before a merger and division under | 17 | | this Section becomes effective, but solely for the purpose of | 18 | | being a party to such merger and division. The Director shall | 19 | | not require that such domestic stock company be licensed to | 20 | | transact insurance business in this state before such merger | 21 | | and division. All insurance policies, annuities, or | 22 | | reinsurance agreements allocated to such domestic stock | 23 | | company shall become the obligation of the domestic stock | 24 | | company that survives the merger simultaneously with the | 25 | | effectiveness of the merger and division. The plan of merger or | 26 | | consolidation shall be deemed to have been authorized and |
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| 1 | | approved by such domestic stock company if the dividing company | 2 | | authorized and approved such plan. The certificate of merger | 3 | | shall state that it was approved by the domestic stock company | 4 | | formed under this subsection.
| 5 | | (Source: Laws 1967, p. 1760.)
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