Full Text of SB1377 101st General Assembly
SB1377enr 101ST 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 | 5 | | changing Section 35B-25 as follows: | 6 | | (215 ILCS 5/35B-25) | 7 | | Sec. 35B-25. Plan of division approval. | 8 | | (a) A division shall not become effective until it is | 9 | | approved by the Director after reasonable notice and a public | 10 | | hearing, if the notice and hearing are deemed by the Director | 11 | | to be in the public interest. The Director shall hold a public | 12 | | hearing if one is requested by the dividing company. A hearing | 13 | | conducted under this Section shall be conducted in accordance | 14 | | with Article 10 of the Illinois Administrative Procedure Act. | 15 | | (b) The Director shall approve a plan of division unless | 16 | | the Director finds that: | 17 | | (1) the interest of any class of policyholder or | 18 | | shareholder of the dividing company will not be properly | 19 | | protected; | 20 | | (2) each new company created by the proposed division, | 21 | | except a new company that is a nonsurviving party to a | 22 | | merger pursuant to subsection (b) of Section 156, would be | 23 | | ineligible to receive a license to do insurance business in |
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| 1 | | this State pursuant to Section 5; | 2 | | (2.5) each new company created by the proposed | 3 | | division, except a new company that is a nonsurviving party | 4 | | to a merger pursuant to subsection (b) of Section 156, that | 5 | | will be a member insurer of the Illinois Life and Health | 6 | | Insurance Guaranty Association and that will have policy | 7 | | liabilities allocated to it will not be licensed to do | 8 | | insurance business in each state where such policies were | 9 | | written by the dividing company; | 10 | | (3) the proposed division violates a provision of the | 11 | | Uniform Fraudulent Transfer Act; | 12 | | (4) the division is being made for purposes of | 13 | | hindering, delaying, or defrauding any policyholders or | 14 | | other creditors of the dividing company; | 15 | | (5) one or more resulting companies will not be solvent | 16 | | upon the consummation of the division; or | 17 | | (6) the remaining assets of one or more resulting | 18 | | companies will be, upon consummation of a division, | 19 | | unreasonably small in relation to the business and | 20 | | transactions in which the resulting company was engaged or | 21 | | is about to engage. | 22 | | (c) In determining whether the standards set forth in | 23 | | paragraph (3) of subsection (b) have been satisfied, the | 24 | | Director shall only apply the Uniform Fraudulent Transfer Act | 25 | | to a dividing company in its capacity as a resulting company | 26 | | and shall not apply the Uniform Fraudulent Transfer Act to any |
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| 1 | | dividing company that is not proposed to survive the division. | 2 | | (d) In determining whether the standards set forth in | 3 | | paragraphs (3), (4), (5), and (6) of subsection (b) have been | 4 | | satisfied, the Director may consider all proposed assets of the | 5 | | resulting company, including, without limitation, reinsurance | 6 | | agreements, parental guarantees, support or keep well | 7 | | agreements, or capital maintenance or contingent capital | 8 | | agreements, in each case, regardless of whether the same would | 9 | | qualify as an admitted asset as defined in Section 3.1. | 10 | | (e) In determining whether the standards set forth in | 11 | | paragraph (3) of subsection (b) have been satisfied, with | 12 | | respect to each resulting company, the Director shall, in | 13 | | applying the Uniform Fraudulent Transfer Act, treat: | 14 | | (1) the resulting company as a debtor; | 15 | | (2) liabilities allocated to the resulting company as | 16 | | obligations incurred by a debtor; | 17 | | (3) the resulting company as not having received | 18 | | reasonably equivalent value in exchange for incurring the | 19 | | obligations; and | 20 | | (4) assets allocated to the resulting company as | 21 | | remaining property. | 22 | | (f) All information, documents, materials, and copies | 23 | | thereof submitted to, obtained by, or disclosed to the Director | 24 | | in connection with a plan of division or in contemplation | 25 | | thereof, including any information, documents, materials, or | 26 | | copies provided by or on behalf of a domestic stock company in |
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| 1 | | advance of its adoption or submission of a plan of division, | 2 | | shall be confidential and shall be subject to the same | 3 | | protection and treatment in accordance with Section 131.14d as | 4 | | documents and reports disclosed to or filed with the Director | 5 | | pursuant to Section 131.14b until such time, if any, as a | 6 | | notice of the hearing contemplated by subsection (a) is issued. | 7 | | (g) From and after the issuance of a notice of the hearing | 8 | | contemplated by subsection (a), all business, financial, and | 9 | | actuarial information that the domestic stock company requests | 10 | | confidential treatment, other than the plan of division, shall | 11 | | continue to be confidential and shall not be available for | 12 | | public inspection and shall be subject to the same protection | 13 | | and treatment in accordance with Section 131.14d as documents | 14 | | and reports disclosed to or filed with the Director pursuant to | 15 | | Section 131.14b. | 16 | | (h) All expenses incurred by the Director in connection | 17 | | with proceedings under this Section, including expenses for the | 18 | | services of any attorneys, actuaries, accountants, and other | 19 | | experts as may be reasonably necessary to assist the Director | 20 | | in reviewing the proposed division, shall be paid by the | 21 | | dividing company filing the plan of division. A dividing | 22 | | company may allocate expenses described in this subsection in a | 23 | | plan of division in the same manner as any other liability. | 24 | | (i) If the Director approves a plan of division, the | 25 | | Director shall issue an order that shall be accompanied by | 26 | | findings of fact and conclusions of law. |
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| 1 | | (j) The conditions in this Section for freeing one or more | 2 | | of the resulting companies from the liabilities of the dividing | 3 | | company and for allocating some or all of the liabilities of | 4 | | the dividing company shall be conclusively deemed to have been | 5 | | satisfied if the plan of division has been approved by the | 6 | | Director in a final order that is not subject to further | 7 | | appeal.
| 8 | | (Source: P.A. 100-1118, eff. 11-27-18.)
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