Full Text of SB2877 97th General Assembly
SB2877eng 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning insurance.
| 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 Sections 131.1, 131.2, 131.3, 131.4, 131.5, 131.6, | 6 | | 131.8, 131.8a, 131.11, 131.12, 131.12a, 131.13, 131.14, | 7 | | 131.16, 131.17, 131.18, 131.19, 131.20, 131.20a, 131.20b, | 8 | | 131.21, 131.22, 131.23, 131.24, 131.26, 132.27, and 356z.12 and | 9 | | by adding Sections 131.14a, 131.14b, 131.14c, 131.20c, 131.29, | 10 | | and 131.30 as follows:
| 11 | | (215 ILCS 5/131.1) (from Ch. 73, par. 743.1)
| 12 | | Sec. 131.1. Definitions. As used in this Article, the | 13 | | following terms have the respective
meanings set forth in this | 14 | | Section unless the context requires otherwise:
| 15 | | (a) An "affiliate" of, or person "affiliated" with, a | 16 | | specific person,
is a person that directly, or indirectly | 17 | | through one or more
intermediaries, controls, or is controlled | 18 | | by, or is under common control
with, the person specified.
| 19 | | (a-5) "Acquiring party" means such person by whom or on | 20 | | whose behalf the merger or other acquisition of control | 21 | | referred to in Section 131.4 is to be affected and any person | 22 | | that controls such person or persons. | 23 | | (a-10) "Company" has the same meaning as "company" as |
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| 1 | | defined in Section 2 of this Code, except that it does not | 2 | | include agencies, authorities, or instrumentalities of the | 3 | | United States, its possessions and territories, the | 4 | | Commonwealth of Puerto Rico, the District of Columbia, or a | 5 | | state or political subdivision of a state. | 6 | | (b) "Control" (including the terms "controlling", | 7 | | "controlled by" and
"under common control with") means the | 8 | | possession, direct or indirect, of
the power to direct or cause | 9 | | the direction of the management and policies
of a person, | 10 | | whether through the ownership of voting securities, the holding
| 11 | | of policyholders' proxies by
contract other than a commercial | 12 | | contract for goods or non-management
services, or otherwise, | 13 | | unless the power is solely the result of an
official position | 14 | | with or corporate office held by the person. Control is | 15 | | presumed
to exist if any person, directly or indirectly, owns, | 16 | | controls, holds with
the power to vote, or holds shareholders' | 17 | | proxies representing 10% or
more of the voting securities of | 18 | | any other person, or holds or controls
sufficient | 19 | | policyholders' proxies to elect the majority of the board of
| 20 | | directors of the domestic company. This presumption may be | 21 | | rebutted by a
showing made in the manner as the Director may | 22 | | provide by rule. The Director
may determine, after
furnishing | 23 | | all persons in interest notice and opportunity to be heard and
| 24 | | making specific findings of fact to support such determination, | 25 | | that
control exists in fact, notwithstanding the absence of a | 26 | | presumption to
that effect.
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| 1 | | (b-5) "Enterprise risk" means any activity, circumstance, | 2 | | event, or series of events involving one or more affiliates of | 3 | | a company that, if not remedied promptly, is likely to have a | 4 | | material adverse effect upon the financial condition or | 5 | | liquidity of the company or its insurance holding company | 6 | | system as a whole, including, but not limited to, anything that | 7 | | would cause the company's risk-based capital to fall into | 8 | | company action level as set forth in Article IIA of this Code | 9 | | or would cause the company to be in
hazardous financial | 10 | | condition as set forth in Article XII 1/2 of this Code. | 11 | | (c) "Insurance holding company system" means two or more | 12 | | affiliated
persons, one or more of which is an insurance | 13 | | company as defined in
paragraph (e) of Section 2 of this Code.
| 14 | | (d) (Blank). "Company" has the same meaning as "Company" as | 15 | | defined in Section 2
of this Code, except that it does not | 16 | | include agencies, authorities or
instrumentalities of the | 17 | | United States, its possessions and territories,
the | 18 | | Commonwealth of Puerto Rico, the District of Columbia or a | 19 | | State or
political subdivision of a State.
| 20 | | (d-5) "Non-operating holding company" is a general | 21 | | business corporation functioning solely for the purpose of | 22 | | forming, owning, acquiring, and managing subsidiary business | 23 | | entities and having no other business operations not related | 24 | | thereto. | 25 | | (e) "Person" means an individual, a corporation, a limited | 26 | | liability company, a partnership, an
association, a joint stock |
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| 1 | | company, a trust, an unincorporated
organization, any similar | 2 | | entity or any combination of the foregoing acting
in concert, | 3 | | but does not include any securities broker performing no more
| 4 | | than the usual and customary broker's function or joint venture
| 5 | | partnership exclusively engaged in owning, managing, leasing | 6 | | or developing
real or tangible personal property other than | 7 | | capital stock.
| 8 | | (e-5) "Policyholders' proxies" are proxies that give the | 9 | | holder the right to vote for the election of the directors and | 10 | | other corporate actions not in the day to day operations of the | 11 | | company. | 12 | | (f) (Blank). "Securityholder" of a specified person is one | 13 | | who owns any security
of such person, including common stock, | 14 | | preferred stock, debt obligations,
and any other security | 15 | | convertible into or evidencing the right to acquire
any of the | 16 | | foregoing.
| 17 | | (g) "Subsidiary" of a specified person is an affiliate | 18 | | controlled by
such person directly, or indirectly through one | 19 | | or more intermediaries.
| 20 | | (h) "Voting Security" is a security which gives to the | 21 | | holder thereof
the right to vote for the election of directors | 22 | | and includes any security
convertible into or evidencing a | 23 | | right to acquire a voting security.
| 24 | | (i) (Blank). "Acquiring Party" means such person by whom or | 25 | | on whose
behalf the merger or other acquisition of control | 26 | | referred to in Section
131.4 is to be affected and any person |
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| 1 | | that controls such person or persons.
| 2 | | (j) (Blank). "Policyholders' Proxies" are proxies which | 3 | | give the holder the right
to vote for the election of the | 4 | | directors and other corporate actions not
in the day-to-day | 5 | | operations of the company.
| 6 | | (k) (Blank). "Non-operating Holding Company" is a general | 7 | | business corporation
functioning solely for the purpose of | 8 | | forming, owning, acquiring and
managing subsidiary business | 9 | | entities and having no other business
operations not related | 10 | | thereto.
| 11 | | (Source: P.A. 84-805.)
| 12 | | (215 ILCS 5/131.2) (from Ch. 73, par. 743.2)
| 13 | | Sec. 131.2. Subsidiaries. A domestic company, either by | 14 | | itself or in cooperation with one or more persons, may organize | 15 | | or acquire one or more subsidiaries. The subsidiaries may | 16 | | conduct any kind of business or businesses and their authority | 17 | | to do so shall not be limited by reason of the fact that they | 18 | | are subsidiaries of a domestic company. In addition to | 19 | | investments in common stock,
preferred stock, debt obligations | 20 | | and other securities of subsidiaries
permitted under all other | 21 | | sections of this Code, a domestic company, other
than a company | 22 | | subject to Articles XVIII or XIX, may also:
| 23 | | (a) invest, in common stock, preferred stock, debt | 24 | | obligations, and
other securities of one or more | 25 | | subsidiaries, amounts which do not exceed
the lesser of 10% |
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| 1 | | of the company's assets or 50% of the company's surplus as
| 2 | | regards policyholders, but after such investments the | 3 | | company's surplus as
regards policyholders must be | 4 | | reasonable in relation to the company's
outstanding | 5 | | liabilities and adequate to its financial needs. In | 6 | | calculating
the amount of such investments, there must be | 7 | | included (i) total net monies
or other consideration | 8 | | expended and obligations assumed in the acquisition
or | 9 | | formation of a subsidiary, including all organizational | 10 | | expenses and
contributions to capital and surplus of the | 11 | | subsidiary whether or not
represented by the purchase of | 12 | | capital stock or issuance of other
securities, and (ii) all | 13 | | amounts expended in acquiring additional common
stock, | 14 | | preferred stock, debt obligations, and other securities, | 15 | | and all
contributions to the capital or surplus of a | 16 | | subsidiary subsequent to its
acquisition or formation;
| 17 | | (b) invest any amount in common stock, preferred stock, | 18 | | debt obligations
and other securities of one or more direct | 19 | | subsidiaries
acting only as a non-operating holding | 20 | | company or engaged or organized
exclusively for the | 21 | | ownership and management of assets authorized as
| 22 | | investments for the company, provided that each
subsidiary | 23 | | agrees to limit its investments in any asset so that such
| 24 | | investments will not cause the amount of the total | 25 | | investment of the
company to exceed the amount the company | 26 | | could have invested in such asset.
For the purpose of this |
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| 1 | | clause, "the total investment of the company" will
include | 2 | | (i) any direct investment by the company in an asset and | 3 | | (ii) the
company's proportionate share of any investment in | 4 | | such asset by any
direct subsidiary of the company, which | 5 | | must be calculated by multiplying the
amount of the | 6 | | subsidiary's investment by the percentage of the company's
| 7 | | ownership of such subsidiary;
| 8 | | (c) invest in common stock of one or more insurance | 9 | | corporation
subsidiaries any amount by which the investing | 10 | | company's capital and
surplus exceeds the minimum capital | 11 | | and surplus required of a new company
under Section 13 to | 12 | | qualify for a certificate of authority to write the
kind or | 13 | | kinds of insurance which the company is authorized to | 14 | | write, if
the company is a stock company, and if the | 15 | | company is other than a stock
company, the company may | 16 | | invest the amount by which the company's surplus
exceeds | 17 | | the minimum surplus required of a new company under Section | 18 | | 43 or
66 to qualify for a certificate of authority to write | 19 | | the kind or kinds of
insurance which the company is | 20 | | authorized to write;
| 21 | | (d) with the approval of the Director, invest any | 22 | | greater amount in common
stock, preferred stock, debt | 23 | | obligations, or other securities of one or
more | 24 | | subsidiaries, but after such investment the company's | 25 | | surplus as
regards policyholders must be reasonable in | 26 | | relation to the company's
outstanding liabilities and |
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| 1 | | adequate to its financial needs.
| 2 | | (Source: P.A. 85-1186.)
| 3 | | (215 ILCS 5/131.3) (from Ch. 73, par. 743.3)
| 4 | | Sec. 131.3.
(1) Investments in common stock, preferred | 5 | | stock, debt obligations or
other securities of subsidiaries | 6 | | made under Section 131.2 of this Article
are subject to | 7 | | Sections 126.3, 126.4, 126.5, 126.6, 126.7, and 133 of this | 8 | | Code
but are not subject to any other of the otherwise | 9 | | applicable restrictions or
prohibitions contained in this Code | 10 | | applicable to such investments of a
domestic
company subject to | 11 | | this Code.
| 12 | | (2) If a company ceases to control a subsidiary, it must | 13 | | dispose of any
investment therein made under this section | 14 | | within 3 years from the time of
the cessation of control or | 15 | | within such further time as the Director may
prescribe, unless | 16 | | at any time after the investment is made, the investment
meets | 17 | | the requirements for investment under any other section of this | 18 | | Code,
and the company has notified the Director thereof.
| 19 | | (3) Whether any investment made pursuant to this Section | 20 | | meets the applicable requirements of this Section is to be | 21 | | determined before the investment is made by calculating the | 22 | | applicable investment limitations as though the investment had | 23 | | already been made, taking into account the then outstanding | 24 | | principal balance on all previous investments in debt | 25 | | obligations, and the value of all previous investments in |
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| 1 | | equity securities as of the day they were made, net of any | 2 | | return of capital invested, not including dividends. | 3 | | (Source: P.A. 90-418, eff. 8-15-97.)
| 4 | | (215 ILCS 5/131.4) (from Ch. 73, par. 743.4)
| 5 | | Sec. 131.4. Acquisition of control of or merger with | 6 | | domestic company. | 7 | | (a) No person other than the issuer may make a tender for | 8 | | or a request or
invitation for tenders of, or enter into an | 9 | | agreement to exchange
securities for , seek to acquire, or | 10 | | acquire in the open market, or otherwise, any voting
security | 11 | | of a domestic company or acquire policyholders' proxies of a
| 12 | | domestic company for consideration if, after the consummation | 13 | | thereof, that
person would, directly or indirectly, (or by | 14 | | conversion or by exercise of
any right to acquire) be in | 15 | | control of the company, and no person may enter
into an | 16 | | agreement to merge or consolidate with or otherwise to acquire
| 17 | | control of a domestic company, unless the offer, request, | 18 | | invitation, or
agreement is conditioned on receiving the | 19 | | approval of the Director based on
Section 131.8 of this Article
| 20 | | and no such acquisition of control or a merger with a domestic
| 21 | | company may be consummated unless the person has filed with the | 22 | | Director and has sent to the company a statement containing the | 23 | | information required by Section 131.5 and the Director has | 24 | | approved the transaction
or granted an exemption. For purposes | 25 | | of this Section a
domestic company includes any other person |
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| 1 | | which controls a domestic company
or holds or controls | 2 | | sufficient policyholders' proxies to elect the majority
of the | 3 | | board of directors of the domestic company. Prior to the | 4 | | acquisition,
the Director may conclude that a statement need | 5 | | not be filed by the
acquiring
party if the acquiring party | 6 | | demonstrates to the
satisfaction of the Director that:
| 7 | | (1) such transaction will not result in the change of | 8 | | control of the
domestic company; or
| 9 | | (2) (blank); the person which is subject to the | 10 | | acquisition has assets in excess
of $1,000,000 and | 11 | | shareholders of record of 500 or more and its insurance
| 12 | | business either directly
or through its affiliates is an | 13 | | insignificant portion of its total
business; or
| 14 | | (3) the acquisition of, or attempt to acquire control | 15 | | of, such other
person is subject to requirements in the | 16 | | jurisdiction of its domicile which
are substantially | 17 | | similar to those contained in this Section and Sections
| 18 | | 131.5 through 131.11 131.12 ; or
| 19 | | (4) the control of the policyholders' proxies is being | 20 | | acquired solely
by virtue of the holders official office | 21 | | and not as the result of any agreement
or for any | 22 | | consideration.
| 23 | | The purpose of this Section is to afford to the | 24 | | Director the
opportunity to review acquisitions in order to | 25 | | determine whether or not the
acquisition would be adverse | 26 | | to the interests of the existing and future
policyholders |
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| 1 | | of the company.
| 2 | | (b) For purposes of this Section, any controlling person of | 3 | | a domestic company seeking to divest its controlling interest | 4 | | in the domestic company in any manner shall file with the | 5 | | Director, with a copy to the company, confidential notice of | 6 | | its proposed divestiture at least 30 days prior to the | 7 | | cessation of control. The Director shall determine those | 8 | | instances in which the party or parties seeking to divest or to | 9 | | acquire a controlling interest in a company shall be required | 10 | | to file for and obtain approval of the transaction. The | 11 | | information shall remain confidential until the conclusion of | 12 | | the transaction unless the Director, in his or her discretion, | 13 | | determines that confidential treatment shall interfere with | 14 | | enforcement of this Section. If the statement referred to in | 15 | | subsection (a) of this Section is otherwise filed, this | 16 | | subsection (b) shall not apply. | 17 | | (c) For purposes of this Section, a domestic company shall | 18 | | include any person controlling a domestic company unless the | 19 | | person, as determined by the Director, is either directly or | 20 | | through its affiliates primarily engaged in business other than | 21 | | the business of insurance. For the purposes of this Section, | 22 | | "person" shall not include any securities broker holding, in | 23 | | the usual and customary broker's function, less than 20% of the | 24 | | voting securities of an insurance company or of any person that | 25 | | controls an insurance company. | 26 | | (Source: P.A. 86-784.)
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| 1 | | (215 ILCS 5/131.5) (from Ch. 73, par. 743.5)
| 2 | | Sec. 131.5. Statement; contents Statement-Contents . In | 3 | | order to seek the approval of the
Director pursuant to Section | 4 | | 131.8, the applicant must file a statement
with the Director | 5 | | under oath or affirmation which contains as a minimum the
| 6 | | following information:
| 7 | | (1) The name and address of each acquiring party, and
| 8 | | (a) if such person is an individual, his principal | 9 | | occupation and all
offices and positions held during the past 5 | 10 | | years, and any conviction of
crimes, other than minor traffic | 11 | | violations, during the past 10 years;
| 12 | | (b) if such person is not an individual, a report of the | 13 | | nature of
its business operations during the past 5 years or | 14 | | for such lesser period
as the person and any predecessors | 15 | | thereof has been in existence; an
informative description of | 16 | | the business intended to be conducted by the
person and the | 17 | | person's subsidiaries; and a list of all individuals who are
or | 18 | | who have been selected to become directors or executive | 19 | | officers of the
person, or who perform or will perform | 20 | | functions appropriate to such
positions. The list must include | 21 | | for each individual the information
required by subsection | 22 | | (1)(a).
| 23 | | (2) The source, nature and amount of the consideration used | 24 | | or to be
used in effecting the merger, consolidation or other | 25 | | acquisition of
control, a description of any transaction |
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| 1 | | wherein funds were or are to be
obtained for any such purpose, | 2 | | including any pledge of the company's own
securities or the | 3 | | securities of any of its subsidiaries or affiliates,
and the | 4 | | identity of persons furnishing such
consideration. However, | 5 | | where a source of such consideration is a loan made
in the | 6 | | lender's ordinary course of business, the identity of the | 7 | | lender
must remain confidential, if the person filing the | 8 | | statement so requests.
| 9 | | (3) Financial information as to the earnings and financial | 10 | | condition of
each acquiring party for the preceding 5 fiscal | 11 | | years of each acquiring party
(or for such lesser period as the | 12 | | acquiring party and any predecessors thereof
have been in | 13 | | existence) audited by an independent
certified public | 14 | | accountant in accordance with generally accepted auditing
| 15 | | standards and similar unaudited information for the second and | 16 | | third preceding
fiscal years and as of a date not earlier than | 17 | | 90 days prior to the filing
of the statement. If an acquiring | 18 | | party is an insurer which has been actively
engaged in the | 19 | | business of insurance for 10 years, the financial information
| 20 | | need not be audited, provided it
is based on the annual | 21 | | statements of such acquiring person filed with the
insurance | 22 | | department of the person's domiciliary state and is in | 23 | | accordance
with the requirement of insurance or other | 24 | | accounting principles prescribed
or permitted under the laws | 25 | | and regulations of such state.
| 26 | | (a) When an applicant is controlled by an individual, |
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| 1 | | financial information
for that individual will not be required | 2 | | if the applicant is currently subject
to the registration and | 3 | | reporting requirements of Section 12(g) of the Securities
| 4 | | Exchange Act of 1934 or is an insurer which has been actively | 5 | | engaged in
the business of insurance for a period in excess of | 6 | | 10 years;
| 7 | | (b) When an individual as an acquiring party must file | 8 | | financial information
under this paragraph such information | 9 | | need not be delivered to the company.
However, such information | 10 | | shall be available if the Director holds a hearing
pursuant to | 11 | | Section 131.8.
| 12 | | (4) Any plans or proposals which each acquiring party may | 13 | | have to
liquidate such company, to sell its assets or merge or | 14 | | consolidate it with
any person, or to make any other material | 15 | | change in its business or
corporate structure or management.
| 16 | | (5) The number of shares of any security referred to in | 17 | | Section 131.4
which each acquiring party proposes to acquire, | 18 | | and the terms of the offer,
request, invitation, agreement, or | 19 | | acquisition referred to in Section
131.4 , and a statement as to | 20 | | the method by which the fairness of the proposal was arrived .
| 21 | | (6) The amount of each class of any security referred to in | 22 | | Section
131.4 which is beneficially owned or concerning which | 23 | | there is a right to
acquire beneficial ownership by each | 24 | | acquiring party.
| 25 | | (7) A full description of any existing contracts, | 26 | | arrangements or
understandings with respect to any security |
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| 1 | | referred to in Section 131.4 in
which any acquiring party is | 2 | | involved, including but not limited to
transfer of any of the | 3 | | securities, joint ventures, loan or option
arrangements, puts | 4 | | or calls, guarantees of loans, guarantees against loss
or | 5 | | guarantees of profits, division of losses or profits, or the | 6 | | giving or
withholding of proxies. The description must identify | 7 | | the persons with whom
such contracts, arrangements or | 8 | | understandings have been entered into.
| 9 | | (8) A description of the acquisition of any security
or | 10 | | policyholders' proxy referred to in Section
131.4 during the 12 | 11 | | calendar months preceding the filing of the statement,
by any | 12 | | acquiring party, including the dates of acquisition, names of | 13 | | the
acquiring parties acquirors , and consideration paid or | 14 | | agreed to be paid therefor.
| 15 | | (9) A description of any recommendations to acquire any | 16 | | security
referred to in Section 131.4 made during the 12 | 17 | | calendar months preceding
the filing of the statement, by any | 18 | | acquiring party, or by anyone based
upon interviews or at the | 19 | | suggestion of such acquiring party.
| 20 | | (10) Copies of all tender offers for, requests or | 21 | | invitations for
tenders of, exchange offers for, and agreements | 22 | | to acquire or exchange any
securities referred to in Section | 23 | | 131.4, and (if distributed) of additional
soliciting material | 24 | | relating thereto.
| 25 | | (11) The terms of any agreement, contract or understanding | 26 | | made with , or proposed to be made with, any
broker-dealer as to |
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| 1 | | solicitation of securities referred to in Section 131.4
for | 2 | | tender, and the amount of any fees, commissions or other | 3 | | compensation
to be paid to broker-dealers with regard thereto.
| 4 | | (12) Beginning July 1, 2013, an agreement by the person | 5 | | required to file the statement referred to in this Section | 6 | | 131.5 that the person will provide the annual report specified | 7 | | in Section 131.14b for so long as control exists. | 8 | | (13) Beginning July 1, 2013, an acknowledgement by the | 9 | | person required to file the statement referred to in this | 10 | | Section 131.5 that the person and all subsidiaries within its | 11 | | control in the insurance holding company system shall provide | 12 | | information to the Director upon request as necessary to | 13 | | evaluate enterprise risk to the company. | 14 | | (14) Any additional information as the Director may by rule | 15 | | or
regulation prescribe as necessary or appropriate for the | 16 | | protection of
policyholders or in the public interest.
| 17 | | (Source: P.A. 84-805.)
| 18 | | (215 ILCS 5/131.6) (from Ch. 73, par. 743.6)
| 19 | | Sec. 131.6.
(1) If the person required to file the | 20 | | statement referred to in Section
131.5 is a partnership, | 21 | | limited partnership, syndicate or other group, the
Director may | 22 | | require that the information be
given with respect to each | 23 | | partner of such partnership or limited
partnership, each member | 24 | | of such syndicate or group, and each person who
controls such | 25 | | partner or member. If any partner, member or person is a
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| 1 | | corporation or the person required to file the statement | 2 | | referred to in
Section 131.5 is a corporation, the Director may | 3 | | require that the
information be given with respect to the
| 4 | | corporation, each officer and director of the corporation, and | 5 | | each person
who is directly or indirectly the beneficial owner | 6 | | of more than 10% of the
outstanding voting securities of the | 7 | | corporation.
| 8 | | (2) If any material change occurs in the facts set forth in | 9 | | the
statement filed with the Director and sent to the company | 10 | | under Section 131.5
131.9 , an amendment setting forth the | 11 | | change, together with
copies of all documents and other | 12 | | material relevant to the change, must be
filed with the | 13 | | Director and sent to the company within 2 business days
after | 14 | | the person learns of the change.
| 15 | | (Source: P.A. 84-805.)
| 16 | | (215 ILCS 5/131.8) (from Ch. 73, par. 743.8)
| 17 | | Sec. 131.8.
(1) After the statement required by Section | 18 | | 131.5 has been
filed, the Director shall approve must | 19 | | disapprove
any merger, consolidation or other acquisition of | 20 | | control referred to in
Section 131.4 unless the acquiring party | 21 | | demonstrates to
the Director finds that:
| 22 | | (a) after the After change of control , the domestic | 23 | | company referred to in
Section 131.4 would not be able to | 24 | | satisfy the requirements for the issuance of
a license to | 25 | | write the line or lines of insurance for which it is |
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| 1 | | presently
licensed;
| 2 | | (b) the effect of the merger, consolidation or other | 3 | | acquisition
of control would be not substantially to lessen | 4 | | competition in insurance in
this State or not tend to | 5 | | create a monopoly therein. In applying the
competitive
| 6 | | standard in this paragraph:
| 7 | | (i) the informational requirements of subsection | 8 | | (3)(a) and the standards
of subsection (4)(b) of | 9 | | Section 131.12a shall apply,
| 10 | | (ii) the merger or other acquisition shall not be | 11 | | disapproved if the Director finds acquiring
party | 12 | | demonstrates that any of the situations meeting the | 13 | | criteria provided
by subsection (4)(c) of Section | 14 | | 131.12a exist, and
| 15 | | (iii) the Director may condition the approval of | 16 | | the merger or other acquisition
on the removal of the | 17 | | basis of disapproval within a specified period of time;
| 18 | | (c) the financial condition of any acquiring party is | 19 | | such as might to not
jeopardize the financial stability of | 20 | | the domestic company or not
jeopardize the interests of its | 21 | | policyholders;
| 22 | | (d) the plans or proposals which the acquiring party | 23 | | has to liquidate
the domestic company, sell its assets or | 24 | | consolidate or merge it with any
person,
or to make any | 25 | | other material change in its business or corporate | 26 | | structure
or management, are unfair fair and unreasonable |
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| 1 | | reasonable to
policyholders of such company and not in the | 2 | | public interest ; or
| 3 | | (e) the competence, experience and integrity of those | 4 | | persons who
would not control the operation of the domestic | 5 | | company are such that it would
be in the best interests of | 6 | | policyholders of such company and of the
insurance buying | 7 | | public to permit the merger, consolidation or other
| 8 | | acquisition of control.
| 9 | | (2) The Director may hold a public hearing on any merger,
| 10 | | consolidation or other acquisition of control referred to in | 11 | | Section 131.4 if
the Director determines that the statement | 12 | | filed as required by
Section 131.5 does
not demonstrate | 13 | | compliance with the standards referred to in subsection (1), of
| 14 | | this Section, or if he determines that such acquisition of | 15 | | control is likely to be hazardous or prejudicial to the will
| 16 | | adversely affect policyholders or the insurance buying public.
| 17 | | (3) The public hearing referred to in subsection
(2) must | 18 | | be held within 60 days after the statement
required by Section | 19 | | 131.5 is filed, and at least 20 days'
notice thereof must be
| 20 | | given by the Director to the person filing the statement and to | 21 | | the domestic
company. Not less than 7 12 days' notice of such | 22 | | hearing must be given by the person
filing the statement to | 23 | | such other persons as may be designated by the
Director and by | 24 | | the company to its shareholders securityholders . The Director | 25 | | must make
a determination within 60 30 days after the | 26 | | conclusion of the hearing. At the
hearing, the person filing |
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| 1 | | the statement, the domestic company, any person to
whom notice | 2 | | of the hearing was sent, and any other person whose interests
| 3 | | may be affected thereby has the right to present evidence, | 4 | | examine and
cross-examine witnesses, and offer oral and written | 5 | | arguments and in connection
therewith is entitled to conduct | 6 | | discovery proceedings in the same manner as is
presently | 7 | | allowed in the Circuit Courts of this State. All discovery | 8 | | proceedings
must be concluded not later than 3 days prior to | 9 | | the commencement of the public hearing.
| 10 | | (4) If the proposed acquisition of control will require the | 11 | | approval of more than one state insurance commissioner, the | 12 | | public hearing referred to in subsection (2) of this Section | 13 | | may be held on a consolidated basis upon request of the person | 14 | | filing the statement referred to in Section 131.5 of this Code. | 15 | | Such person shall file the statement referred to in Section | 16 | | 131.5 of this Code with the National Association of Insurance | 17 | | Commissioners (NAIC) within 5 days after making the request for | 18 | | a public hearing. A commissioner may opt out of a consolidated | 19 | | hearing and shall provide notice to the applicant of the opt | 20 | | out within 10 days after the receipt of the statement referred | 21 | | to in Section 131.5 of this Code. A hearing conducted on a | 22 | | consolidated basis shall be public and shall be held within the | 23 | | United States before the commissioners of the states in which | 24 | | the companies are domiciled. Such commissioners shall hear and | 25 | | receive evidence. A commissioner may attend such hearing in | 26 | | person or by telecommunication. |
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| 1 | | (5) In connection with a change of control of a domestic | 2 | | company, any determination by the Director that the person | 3 | | acquiring control of the company shall be required to maintain | 4 | | or restore the capital of the company to the level required by | 5 | | the laws and regulations of this State shall be made not later | 6 | | than 60 days after the date of notification of the change in | 7 | | control. | 8 | | (Source: P.A. 84-805.)
| 9 | | (215 ILCS 5/131.8a) (from Ch. 73, par. 743.8a)
| 10 | | Sec. 131.8a.
The Director may retain at the applicant's | 11 | | expense any
attorneys,
actuaries, accountants and other | 12 | | experts not otherwise a part of the Director's
staff as may be | 13 | | reasonably necessary to assist in reviewing the conduct of | 14 | | financial
or character examinations in conjunction with an | 15 | | acquisition proposed under
Section 131.4. The applicant shall | 16 | | deposit with the Director cash, bonds
or securities, acceptable | 17 | | to the Director, in a reasonable amount not to
exceed $100,000, | 18 | | for purpose of securing the payment of any expert's cost.
| 19 | | (Source: P.A. 86-753.)
| 20 | | (215 ILCS 5/131.11) (from Ch. 73, par. 743.11)
| 21 | | Sec. 131.11.
The following are violations of Sections 131.4 | 22 | | through 131.12:
| 23 | | (1) the failure to file any statement, amendment, or other | 24 | | material
required to be filed under Sections 131.4 or 131.5; or
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| 1 | | (2) the effectuation or any attempt to effectuate an | 2 | | acquisition of
control of , divestiture of, or merger or | 3 | | consolidation with, a domestic company unless the
Director has | 4 | | given his approval thereto .
| 5 | | (Source: P.A. 77-673.)
| 6 | | (215 ILCS 5/131.12) (from Ch. 73, par. 743.12)
| 7 | | Sec. 131.12.
The courts of this State are hereby vested | 8 | | with jurisdiction over every
person not resident, domiciled, or | 9 | | authorized to do business in this State
who files a statement | 10 | | with the Director under Section 131.4, and over all
actions | 11 | | involving such person arising out of violations of Sections | 12 | | 131.4,
131.5, 131.6, 131.9 or 131.11, and each such person is | 13 | | deemed to have
performed acts equivalent to and constituting an | 14 | | appointment by such a
person of the Director to be his true and | 15 | | lawful attorney upon whom may be
served all lawful process in | 16 | | any action, suit or proceeding arising out of
violations of | 17 | | Sections 131.4, 131.5, 131.6, 131.9 or 131.11. Copies of all
| 18 | | such lawful process must be served on the Director and | 19 | | transmitted by
registered or certified mail by the Director to | 20 | | such person at his last
known address.
| 21 | | (Source: P.A. 77-673.)
| 22 | | (215 ILCS 5/131.12a) (from Ch. 73, par. 743.12a)
| 23 | | Sec. 131.12a. Acquisitions involving companies insurers | 24 | | not otherwise covered.
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| 1 | | (1) Definitions. The following definitions shall apply for | 2 | | the purposes
of this Section only:
| 3 | | (a) "Acquisition" means any agreement, arrangement or | 4 | | activity the
consummation
of which results in a person | 5 | | acquiring directly or indirectly the control
of another person | 6 | | or control of the insurance in force of another person,
and | 7 | | includes but is not limited to the acquisition of voting | 8 | | securities,
the acquisition of assets, the transaction of bulk | 9 | | reinsurance and the act
of merging or consolidating.
| 10 | | (b) An "involved company insurer " includes a company an | 11 | | insurer which either acquires or
is acquired, is affiliated | 12 | | with an acquirer or acquired or is the result of a
merger.
| 13 | | (2) Scope.
| 14 | | (a) Except as exempted in paragraph (b) of this subsection | 15 | | (2), this Section
applies to any acquisition in which there is | 16 | | a change in control of a company an insurer
authorized to do | 17 | | business in this State.
| 18 | | (b) This Section shall not apply to the following:
| 19 | | (i) an acquisition subject to approval or disapproval | 20 | | by the Director
pursuant to Section 131.8;
| 21 | | (ii) a purchase of securities solely for investment | 22 | | purposes so long as
such securities are not used by voting | 23 | | or otherwise to cause or attempt
to cause the substantial | 24 | | lessening of competition in any insurance market
in this | 25 | | State. If a purchase of securities results in a presumption |
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| 1 | | of
control under subsection (b) of Section 131.1, it is not | 2 | | solely for investment
purposes unless the commissioner of | 3 | | the company's insurer's state of domicile accepts
a | 4 | | disclaimer of control or affirmatively finds that control | 5 | | does not exist
and such disclaimer action or affirmative | 6 | | finding is communicated by the
domiciliary commissioner to | 7 | | the Director of this State;
| 8 | | (iii) the acquisition of a person by another person | 9 | | when both persons
are neither directly nor through | 10 | | affiliates primarily engaged in the business
of insurance, | 11 | | if pre-acquisition notification is filed with the Director
| 12 | | in accordance with subsection (3)(a) of this Section, 30 | 13 | | days prior to the
proposed effective date of the | 14 | | acquisition. However, such pre-acquisition
notification is | 15 | | not required for exclusion from this Section if the | 16 | | acquisition
would otherwise be excluded from this Section | 17 | | by any other subparagraph
of subsection (2)(b);
| 18 | | (iv) the acquisition of already affiliated persons;
| 19 | | (v) an acquisition if, as an immediate result of the | 20 | | acquisition,
| 21 | | (A) in no market would the combined market share of | 22 | | the involved
companies insurers exceed 5% of the total | 23 | | market,
| 24 | | (B) there would be no increase in any market share, | 25 | | or
| 26 | | (C) in no market would the combined market share of |
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| 1 | | the involved
companies insurers exceed 12% of the total | 2 | | market, and the market share increase by
more than 2% | 3 | | of the total market.
| 4 | | For the purpose of this subparagraph (b)(v), "market" | 5 | | means direct
written insurance premium in this State for a | 6 | | line of business as contained in
the annual statement | 7 | | required to be filed by companies insurers licensed to do | 8 | | business
in this State;
| 9 | | (vi) an acquisition for which a pre-acquisition | 10 | | notification would be
required pursuant to this Section due | 11 | | solely to the resulting effect on
the ocean marine | 12 | | insurance line of business;
| 13 | | (vii) an acquisition of a company an insurer whose | 14 | | domiciliary commissioner
affirmatively finds that such | 15 | | company insurer is in failing condition; there is a lack
of | 16 | | feasible alternative to improving such condition; the | 17 | | public benefits of
improving such company's insurer's | 18 | | condition through the acquisition exceed the public
| 19 | | benefits that would arise from not lessening competition; | 20 | | and such findings are
communicated by the domiciliary | 21 | | commissioner to the Director of this State.
| 22 | | (3) Pre-acquisition Notification; Waiting Period. An | 23 | | acquisition
covered by subsection (2) may be subject to an | 24 | | order pursuant to subsection
(5) unless the acquiring person | 25 | | files a pre-acquisition notification and the
waiting period has |
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| 1 | | expired. The acquired person may file a pre-acquisition
| 2 | | notification. The Director shall give confidential treatment | 3 | | to information
submitted under this subsection in the same | 4 | | manner as provided in Section
131.22 of this Article.
| 5 | | (a) The pre-acquisition notification shall be in such form | 6 | | and contain
such information as prescribed by the Director, | 7 | | which shall conform
substantially to the form of notification | 8 | | adopted by the National Association
of Insurance Commissioners | 9 | | relating to those markets which, under subsection
(b)(v) of | 10 | | Section (2), cause the acquisition not to be exempted from the
| 11 | | provisions of this Section. The Director may require such | 12 | | additional material
and information as he deems necessary to | 13 | | determine whether the proposed
acquisition, if consummated, | 14 | | would violate the competitive standard of
subsection (4). The | 15 | | required information may include an opinion of an
economist as | 16 | | to the competitive impact of the acquisition in this State
| 17 | | accompanied by a summary of the education and experience of | 18 | | such person
indicating his or her ability to render an informed | 19 | | opinion.
| 20 | | (b) The waiting period required shall begin on the date of | 21 | | the receipt
by the Director of a pre-acquisition notification | 22 | | and shall end on the earlier
of the 30th day after the date of | 23 | | such receipt, or termination of the waiting
period by the | 24 | | Director. Prior to the end of the waiting period, the Director
| 25 | | on a one time basis may require the submission of additional | 26 | | needed information
relevant to the proposed acquisition, in |
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| 1 | | which event the waiting period shall
end on the earlier of the | 2 | | 30th day after the receipt of such additional
information by | 3 | | the Director or termination of the waiting period by the
| 4 | | Director.
| 5 | | (4) Competitive Standard.
| 6 | | (a) The Director may enter an order under subsection (5)(a) | 7 | | with respect
to an acquisition if there is substantial evidence | 8 | | that the effect of the
acquisition may be substantially to | 9 | | lessen competition in any line of insurance
in this State or | 10 | | tend to create a monopoly therein or if the company insurer | 11 | | fails
to file adequate information in compliance with | 12 | | subsection (3).
| 13 | | (b) In determining whether a proposed acquisition would | 14 | | violate the
competitive standard of paragraph (a) of this | 15 | | subsection the
Director shall consider the following:
| 16 | | (i) any acquisition covered under subsection (2) | 17 | | involving 2 or more
companies insurers competing in the | 18 | | same market is prima facie evidence of violation of
the | 19 | | competitive standards:
| 20 | | (A) if the market is highly concentrated and the | 21 | | involved companies insurers
possess the following | 22 | | shares of the market:
| 23 | | Company Insurer A Company Insurer B
| 24 | | 4% 4% or more
| 25 | | 10% 2% or more
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| 1 | | 15% 1% or more
| 2 | | (B) if the market is not highly concentrated and | 3 | | the involved
companies insurers possess the following | 4 | | shares of the market:
| 5 | | Company Insurer A Company Insurer B
| 6 | | 5% 5% or more
| 7 | | 10% 4% or more
| 8 | | 15% 3% or more
| 9 | | 19% 1% or more
| 10 | | A highly concentrated market is one in which the share | 11 | | of the 4 largest
companies insurers is 75% or more of the | 12 | | market. Percentages not shown in the tables
are to be | 13 | | interpolated proportionately to the percentages that are | 14 | | shown.
If more than 2 companies insurers are involved, | 15 | | exceeding the total of the 2 columns
in the table is prima | 16 | | facie evidence of violation of the competitive standard
in | 17 | | paragraph (a) of this subsection. For the purpose of this | 18 | | subparagraph,
the company insurer with the largest share of | 19 | | the market shall be deemed to be Company Insurer
A.
| 20 | | (ii) There is a significant trend toward increased | 21 | | concentration when
the aggregate market share of any | 22 | | grouping of the largest companies insurers in the
market | 23 | | from the 2 largest to the 8 largest has increased by 7% or | 24 | | more of
the market over a period of time extending from any | 25 | | base year 5-10 years
prior to the acquisition up to the | 26 | | time of the acquisition. Any acquisition
covered under |
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| 1 | | subsection (2) involving 2 or more companies insurers | 2 | | competing in the
same market is prima facie evidence of | 3 | | violation of the competitive standard
in paragraph (a) of | 4 | | this subsection if:
| 5 | | (A) there is a significant trend toward increased | 6 | | concentration in the
market,
| 7 | | (B) one of the companies insurers involved is one | 8 | | of the companies insurers in a grouping
of such large | 9 | | companies insurers showing the requisite increase in | 10 | | the market share, and
| 11 | | (C) another involved company's insurer's market is | 12 | | 2% or more.
| 13 | | (iii) For the purpose of subsection (4)(b):
| 14 | | (A) The term "company" "insurer" includes any | 15 | | company or group of
companies under common management, | 16 | | ownership or control.
| 17 | | (B) The term "market" means the relevant product | 18 | | and geographic
markets. In determining the relevant | 19 | | product and geographical markets, the
Director shall | 20 | | give due consideration to, among other things, the | 21 | | definitions
or guidelines, if any, promulgated by the | 22 | | National Association of Insurance
Commissioners and to | 23 | | information, if any, submitted by parties to the
| 24 | | acquisition. In the absence of sufficient information | 25 | | to the contrary, the
relevant product market is assumed | 26 | | to be the direct written insurance premium
for a line |
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| 1 | | of business with such line being that used in the | 2 | | annual statement
required to be filed by companies | 3 | | insurers doing business in this State and the relevant
| 4 | | geographical market is assumed to be this State.
| 5 | | (C) The burden of showing prima facie evidence of | 6 | | violation of the
competitive standard rests upon the | 7 | | Director.
| 8 | | (iv) Even though an acquisition is not prima facie | 9 | | violative of the
competitive standard under subparagraph | 10 | | (b)(i) and (b)(ii) of this subsection
the Director may | 11 | | establish the requisite anticompetitive effect based upon
| 12 | | other substantial evidence. Even though an acquisition is | 13 | | prima facie
violative of the competitive standard under | 14 | | subparagraphs (b)(i) and (b)(ii)
of this subsection (4), a | 15 | | party may establish the absence of the requisite
| 16 | | anticompetitive effect based upon other substantial | 17 | | evidence. Relevant factors
in making a determination under | 18 | | this paragraph include, but are not limited to,
the | 19 | | following: market shares, volatility of ranking of market | 20 | | leaders, number
of competitors, concentration, trend of | 21 | | concentration in the industry, and ease
of entry and exit | 22 | | into the market.
| 23 | | (c) An order may not be entered under subsection (5)(a) if:
| 24 | | (i) the acquisition will yield substantial economies | 25 | | of scale or economies
in resource utilization that cannot | 26 | | be feasibly achieved in any other way,
and the public |
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| 1 | | benefits which would arise from such economies exceed the
| 2 | | public benefits which would arise from not lessening | 3 | | competition; or
| 4 | | (ii) the acquisition will substantially increase the | 5 | | availability of
insurance, and the public benefits of such | 6 | | increase exceed the public benefits
which would arise from | 7 | | not lessening competition.
| 8 | | (5) Orders and Penalties:
| 9 | | (a)(i) If an acquisition violates the standard of this | 10 | | Section, the
Director may enter an order
| 11 | | (A) requiring an involved company insurer to cease | 12 | | and desist from doing
business in this State with | 13 | | respect to the line or lines of insurance involved
in | 14 | | the violation, or
| 15 | | (B) denying the application of an acquired or | 16 | | acquiring company insurer for a
license to do business | 17 | | in this State.
| 18 | | (ii) Such an order shall not be entered unless there is | 19 | | a hearing, notice
of such hearing is issued prior to the | 20 | | end of the waiting period and not
less than 15 days prior | 21 | | to the end of the waiting period and not less than
15 days | 22 | | prior to the hearing, and the hearing is concluded and the | 23 | | order
is issued no later than 60 days after the end of the | 24 | | waiting period. Every
order shall be accompanied by a | 25 | | written decision of the Director setting
forth his findings |
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| 1 | | of fact and conclusions of law.
| 2 | | (iii) (Blank). An order entered under this paragraph | 3 | | shall not become final earlier
than 30 days after it is | 4 | | issued, during which time the involved insurer may
submit a | 5 | | plan to remedy the anticompetitive impact of the | 6 | | acquisition within
a reasonable time. Based upon such plan | 7 | | or other information, the Director
shall specify, if any, | 8 | | the conditions under and the time period during which
the | 9 | | aspects of the acquisition causing a violation of the | 10 | | standards of this
Section would be remedied and the order | 11 | | vacated or modified.
| 12 | | (iv) An order pursuant to this paragraph shall not | 13 | | apply if the
acquisition is not consummated.
| 14 | | (b) Any person who violates a cease and desist order of the | 15 | | Director under
paragraph (a) and while such order is in effect | 16 | | may after notice and hearing
and upon order of the Director be | 17 | | subject at the discretion of the Director to
any one or more of | 18 | | the following:
| 19 | | (i) a monetary penalty of not more than $10,000 for | 20 | | every day of
violation or
| 21 | | (ii) suspension or revocation of such person's license | 22 | | or both .
| 23 | | (c) Any company insurer or other person who fails to make | 24 | | any filing required
by this Section and who also fails to | 25 | | demonstrate a good faith effort to
comply with any such filing | 26 | | requirement shall be subject to a civil penalty of
not more |
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| 1 | | than $50,000.
| 2 | | (6) Inapplicable Provisions. Subsections (2) and (3) of | 3 | | Section 131.23 and
Section 131.25 do not apply to acquisitions | 4 | | covered under subsection (2).
| 5 | | (Source: P.A. 92-16, eff. 6-28-01 .)
| 6 | | (215 ILCS 5/131.13) (from Ch. 73, par. 743.13)
| 7 | | Sec. 131.13. Registration of companies. Every company | 8 | | which is authorized to do business in this State and which
is a | 9 | | member of an insurance holding company system must register | 10 | | with the
Director, except a foreign or alien company subject to | 11 | | registration
requirements and standards adopted by statute or | 12 | | regulation in the
jurisdiction of its domicile which are | 13 | | substantially similar to those
contained in this section and | 14 | | Sections 131.14 through 131.20a 131.19 . Any company
which is | 15 | | subject to registration under this section must register within | 16 | | 60
days after the effective date of this Article or 15 days | 17 | | after it becomes
subject to registration, whichever is later, | 18 | | unless the Director for good
cause shown extends the time for | 19 | | registration, and then within such
extended time. The Director | 20 | | may require any authorized company which is a
member of a | 21 | | holding company system which is not subject to registration
| 22 | | under this section to furnish a copy of the registration | 23 | | statement or other
information filed by such company with the | 24 | | insurance regulatory authority
of its domiciliary |
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| 1 | | jurisdiction.
| 2 | | If upon review of the information filed pursuant to this | 3 | | Section and
the information included in the annual statement | 4 | | filed pursuant to Section
136, the Director determines there is | 5 | | a potential for adverse economic impact
due to substantial | 6 | | ownership of companies authorized to do business in this
State | 7 | | by persons who are not citizens or residents of the United | 8 | | States
or entities which are not organized or created under the | 9 | | laws of any state
or territory of the United States, he shall | 10 | | report such determination along
with any legislative | 11 | | recommendations to the General Assembly.
| 12 | | (Source: P.A. 84-805.)
| 13 | | (215 ILCS 5/131.14) (from Ch. 73, par. 743.14)
| 14 | | Sec. 131.14.
Every company subject to registration must | 15 | | file a registration statement on a
in the form and in a format | 16 | | prescribed designated by the Director, which shall contain the | 17 | | following contains current information
about :
| 18 | | (1) the capital structure, general financial condition, | 19 | | ownership and
management of the company and any person | 20 | | controlling the company;
| 21 | | (2) the identity and relationship of every member of the | 22 | | insurance holding company
system;
| 23 | | (3) the following agreements in force, relationships | 24 | | subsisting, and
transactions currently outstanding or that | 25 | | have occurred during the last calendar year between such |
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| 1 | | company and its affiliates:
| 2 | | (a) loans, other investments, or purchases, sales or | 3 | | exchanges of or
securities of the affiliates by the company or | 4 | | of the company by its
affiliates;
| 5 | | (b) purchases, sales, or exchanges of assets;
| 6 | | (c) transactions not in the ordinary course of business;
| 7 | | (d) guarantees or undertakings for the benefit of an | 8 | | affiliate which
result in an actual contingent exposure of the | 9 | | company's assets to
liability, other than insurance contracts | 10 | | entered into in the ordinary
course of the company's business;
| 11 | | (e) all management agreements, and service contracts , and | 12 | | all cost-sharing
arrangements , other than cost allocation | 13 | | arrangements based upon generally
accepted accounting | 14 | | principles ; and
| 15 | | (f) reinsurance agreements;
| 16 | | (f-5) dividends and other distributions to shareholders; | 17 | | (g) any pledge of the company's own securities, securities | 18 | | of any
subsidiary or controlling affiliate, to secure a loan | 19 | | made to any member of the
insurance holding company system; and
| 20 | | (h) consolidated tax allocation agreements ; .
| 21 | | (4) (blank); other matters concerning transactions between | 22 | | registered companies
and any affiliates as may be included from | 23 | | time to time in any registration
forms adopted or approved by | 24 | | the Director.
| 25 | | (5) financial statements of or within an insurance holding | 26 | | company system, including all affiliates, if requested by the |
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| 1 | | Director; financial statements may include, but are not limited | 2 | | to, annual audited financial statements filed with the U.S. | 3 | | Securities and Exchange Commission (SEC) pursuant to the | 4 | | Securities Act of 1933, as amended, or the Securities Exchange | 5 | | Act of 1934, as amended; a company required to file financial | 6 | | statements pursuant to this paragraph (5) may satisfy the | 7 | | request by providing the Director with the most recently filed | 8 | | parent corporation financial statements that have been filed | 9 | | with the SEC; | 10 | | (6) statements that the company's board of directors | 11 | | oversees corporate governance and internal controls and that | 12 | | the company's officers or senior management have approved and | 13 | | implemented and continue to maintain and monitor corporate | 14 | | governance and internal control procedures; and | 15 | | (7) other matters concerning transactions between | 16 | | registered companies and any affiliates as may be included from | 17 | | time to time in any registration forms adopted or approved by | 18 | | the Director. | 19 | | (Source: P.A. 84-805.)
| 20 | | (215 ILCS 5/131.14a new) | 21 | | Sec. 131.14a. Summary filing. Every company subject to | 22 | | registration must file a summary outlining all items in the | 23 | | current registration statement representing changes from the | 24 | | prior registration statement. |
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| 1 | | (215 ILCS 5/131.14b new) | 2 | | Sec. 131.14b. Enterprise risk filing. The ultimate | 3 | | controlling person of every company subject to registration | 4 | | shall also file an annual enterprise risk report. The report | 5 | | shall, to the best of the ultimate controlling person's | 6 | | knowledge and belief, identify the material risks within the | 7 | | insurance holding company system that could pose enterprise | 8 | | risk to the company. The report shall be filed with the lead | 9 | | state commissioner of the insurance holding company system as | 10 | | determined by the procedures within the Financial Analysis | 11 | | Handbook adopted by the National Association of Insurance | 12 | | Commissioners. | 13 | | (215 ILCS 5/131.14c new) | 14 | | Sec. 131.14c. Violations. The failure to file a | 15 | | registration statement or any summary of the registration | 16 | | statement or enterprise risk filing required by this Article | 17 | | within the time specified for filing shall be a violation of | 18 | | this Article.
| 19 | | (215 ILCS 5/131.16) (from Ch. 73, par. 743.16)
| 20 | | Sec. 131.16. Reporting material changes or additions; | 21 | | penalty for late
registration statement. | 22 | | (1) Each registered company must keep current the | 23 | | information required to be
included in its registration | 24 | | statement by reporting all material changes
or additions on |
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| 1 | | amendment forms designated by the Director within 15 days
after | 2 | | the end of the month in which it learns of each change or | 3 | | addition,
or within a longer time thereafter as the Director | 4 | | may establish. Any
transaction which has been submitted to the | 5 | | Director pursuant to Section
131.20a need not be reported to | 6 | | the Director under this subsection; except
each registered | 7 | | company must
report all dividends and other distributions to | 8 | | shareholders within 15 5
business days following the | 9 | | declaration and no less than 10 business days
prior to payment | 10 | | thereof .
| 11 | | (2) On or before May 1 each year, each company subject to | 12 | | registration
under this Article shall file a statement in a | 13 | | format as designated by
the Director. This statement shall | 14 | | include information previously included
in an amendment under | 15 | | subsection (1) of this Section, transactions and
agreements
| 16 | | submitted under Section 131.20a, and any other material | 17 | | transactions which
are required to be reported.
| 18 | | (2.5) Any person within an insurance holding company system | 19 | | subject to registration shall be required to provide complete | 20 | | and accurate information to a company where the information is | 21 | | reasonably necessary to enable the company to comply with the | 22 | | provisions of this Article. | 23 | | (3) Any company failing, without just cause, to file any | 24 | | registration
statement , any summary of changes to a | 25 | | registration statement, or any Enterprise Risk Filing or any | 26 | | person within an insurance holding company system who fails to |
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| 1 | | provide complete and accurate information to a company as | 2 | | required in this Code shall be required, after notice and | 3 | | hearing,
to pay a penalty of up to $1,000 for each day's delay, | 4 | | to be
recovered by the Director
of Insurance of the State of | 5 | | Illinois and the penalty so recovered shall
be paid into the | 6 | | General Revenue Fund of the State of Illinois. The maximum
| 7 | | penalty under this section is $50,000. The Director may reduce
| 8 | | the penalty if the company demonstrates to the Director that | 9 | | the imposition
of the penalty would constitute a financial | 10 | | hardship to the company.
| 11 | | (Source: P.A. 88-364.)
| 12 | | (215 ILCS 5/131.17) (from Ch. 73, par. 743.17)
| 13 | | Sec. 131.17.
(1) The Director must terminate the | 14 | | registration of any company which
demonstrates that it no | 15 | | longer is a member of an insurance holding company
system.
| 16 | | (2) The Director may require or allow 2 or more
affiliated | 17 | | companies subject to registration to file a consolidated | 18 | | registration statement. Two or more affiliated companies | 19 | | subject to registration hereunder
may file a consolidated | 20 | | registration statement or consolidated reports
amending their | 21 | | consolidated registration statement or their individual
| 22 | | registration statements unless the Director requires a | 23 | | separate
registration statement or report from each registered | 24 | | company.
| 25 | | (3) A company which is authorized to do business in this |
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| 1 | | State and which
is part of an insurance holding company system | 2 | | may register on behalf of
any affiliated company which is | 3 | | required to register under Section 131.13
and to file all | 4 | | information and material required to be filed under this
| 5 | | Article unless the Director requires a separate registration by | 6 | | the
affiliated company.
| 7 | | (Source: P.A. 77-673.)
| 8 | | (215 ILCS 5/131.18) (from Ch. 73, par. 743.18)
| 9 | | Sec. 131.18.
Sections 131.13 through 131.19 do not apply to | 10 | | any company, information ,
or transaction if and to the extent | 11 | | that the Director by rule, regulation,
or order may exempt the | 12 | | same from Sections 131.13 through 131.19.
| 13 | | Any requirement for the furnishing of financial statements | 14 | | of the
insurance holding company system, or any member thereof, | 15 | | as part of or in
connection with the registration statement | 16 | | filed under Section 131.14 shall
not apply to any company which | 17 | | submits and maintains in effect in lieu
thereof a guarantee or | 18 | | a bond acceptable to the Director in an amount equal
to the | 19 | | capital and surplus of the company as shown on its most recent
| 20 | | audited financial statements, payable to the Director for the | 21 | | benefit of
the creditors, policyholders and stockholders of the | 22 | | company as their
interests may appear. Such guarantee, if | 23 | | issued by a national bank, and
such a bond, if issued by a | 24 | | licensed insurance company which is not a
member of the | 25 | | insurance holding company system, in each case having capital
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| 1 | | and surplus in excess of $25,000,000, shall be deemed | 2 | | acceptable.
| 3 | | (Source: P.A. 77-673.)
| 4 | | (215 ILCS 5/131.19) (from Ch. 73, par. 743.19)
| 5 | | Sec. 131.19. Disclaimer of affiliation. Any person may file | 6 | | with the Director a disclaimer of affiliation
with any | 7 | | authorized company or a disclaimer may be filed by the a | 8 | | company or
any member of an insurance holding company system. | 9 | | The disclaimer shall must
fully disclose all material | 10 | | relationships and bases basis for affiliation between
the | 11 | | person and the company as well as the basis for disclaiming the
| 12 | | affiliation. A disclaimer of affiliation shall be deemed to | 13 | | have been granted unless the Director, within 30 days following | 14 | | receipt of a complete disclaimer, notifies the filing party | 15 | | that the disclaimer is disallowed. In the event of | 16 | | disallowance, the disclaiming party may request an | 17 | | administrative hearing, which shall be granted. The | 18 | | disclaiming party shall be relieved of its duty to register | 19 | | under this Section if approval of the disclaimer has been | 20 | | granted by the Director or if the disclaimer is deemed to have | 21 | | been approved. After a disclaimer is filed, the company is | 22 | | relieved of any
duty to register or report under Section 131.13 | 23 | | which may arise out of the
company's relationship with the | 24 | | person unless and until the Director
disallows the disclaimer. | 25 | | The Director may disallow such a disclaimer only
after |
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| 1 | | furnishing all parties in interest with notice and opportunity | 2 | | to be
heard and after making specific findings of fact to | 3 | | support the
disallowance.
| 4 | | (Source: P.A. 84-805.)
| 5 | | (215 ILCS 5/131.20) (from Ch. 73, par. 743.20)
| 6 | | Sec. 131.20. Standards for transactions with affiliates; | 7 | | adequacy of
surplus. | 8 | | (1) Transactions Material transactions with their | 9 | | affiliates by
companies subject to registration
are subject to | 10 | | the following standards:
| 11 | | (a) the terms are fair and reasonable;
| 12 | | (a-5) agreements for cost sharing services and | 13 | | management shall include such provisions as required by | 14 | | rules and regulations issued by the Director;
| 15 | | (b) charges or fees for services performed are | 16 | | reasonable;
| 17 | | (c) expenses incurred and payment received must be | 18 | | allocated to the
company insurer in conformity with | 19 | | customary insurance accounting practices
consistently | 20 | | applied;
| 21 | | (d) the books, accounts, and records of each party must | 22 | | be
so
maintained
as to clearly and accurately disclose the | 23 | | precise nature and details of the
transactions, including | 24 | | accounting information necessary to support the
| 25 | | reasonableness of the charges or fees to the respective |
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| 1 | | parties; and
| 2 | | (e) the company's surplus as regards policyholders | 3 | | following
any
transactions with affiliates or dividends or | 4 | | distributions to
securityholders or affiliates must be | 5 | | reasonable in
relation to the company's outstanding | 6 | | liabilities and adequate to meet its
financial needs.
| 7 | | (2) For purposes of this Article, in determining whether a | 8 | | company's
surplus as regards policyholders is reasonable in | 9 | | relation to the company's
outstanding liabilities and adequate | 10 | | to meet its needs, the following factors,
among others, may be | 11 | | considered:
| 12 | | (a) the size of the company as measured by its assets, | 13 | | capital and
surplus, reserves, premium writings, insurance | 14 | | in force and other
appropriate criteria;
| 15 | | (b) the extent to which the company's business is | 16 | | diversified among the
several lines of insurance;
| 17 | | (c) the number and size of risks insured in each line | 18 | | of business;
| 19 | | (d) the extent of the geographical dispersion of the | 20 | | company's insured
risks;
| 21 | | (e) the nature and extent of the company's reinsurance | 22 | | program;
| 23 | | (f) the quality, diversification, and liquidity of the | 24 | | company's
investment portfolio;
| 25 | | (g) the recent past and projected future trend in the | 26 | | size of the
company's investment portfolio surplus as |
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| 1 | | regards policyholders ;
| 2 | | (h) the surplus as regards policyholders maintained by | 3 | | companies
comparable to the registrant in respect of the | 4 | | factors enumerated in this
paragraph;
| 5 | | (i) the adequacy of the company's reserves;
| 6 | | (j) the quality of the company's earnings and the | 7 | | extent to which
the reported earnings include | 8 | | extraordinary items; and
| 9 | | (k) the quality and liquidity of investments in | 10 | | affiliates subsidiaries
made under
Section 131.2 or 131.3 . | 11 | | The Director may discount any such
investment or
treat any | 12 | | such investment as a non-admitted asset for purposes of
| 13 | | determining the adequacy of surplus as regards | 14 | | policyholders whenever the
investment so warrants.
| 15 | | (Source: P.A. 88-364.)
| 16 | | (215 ILCS 5/131.20a) (from Ch. 73, par. 743.20a)
| 17 | | Sec. 131.20a. Prior notification of transactions; | 18 | | dividends and
distributions. | 19 | | (1) (a) The following transactions involving between a | 20 | | domestic
company and any person in its insurance holding | 21 | | company system , including amendments or modifications of | 22 | | affiliate agreements previously filed pursuant to this | 23 | | Section, which are subject to any materiality standards | 24 | | contained in this Section, may not be entered
into unless the | 25 | | company has notified the Director in writing of its
intention |
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| 1 | | to enter into such transaction at least 30 days prior thereto, | 2 | | or
such shorter period as the Director may permit, and the | 3 | | Director has not
disapproved it within such period . The notice | 4 | | for amendments or modifications shall include the reasons for | 5 | | the change and the financial impact on the domestic company. | 6 | | Informal notice shall be reported, within 30 days after a | 7 | | termination of a previously filed agreement, to the Director | 8 | | for determination of the type of filing required, if any :
| 9 | | (i) Sales, purchases, exchanges of assets, loans or | 10 | | extensions of credit,
guarantees, investments, or any | 11 | | other transaction , except dividends, (A) that involves the
| 12 | | transfer of assets from or liabilities to a company (A) | 13 | | equal to or exceeding the
lesser of 3% of the
company's | 14 | | admitted assets or 25% of its surplus as regards
| 15 | | policyholders as
of the 31st day of December next preceding | 16 | | or (B) that is proposed when the
domestic
company is not | 17 | | eligible to declare and pay a dividend or other | 18 | | distribution
pursuant to the provisions of Section 27.
| 19 | | (ii) Loans or extensions of credit to any person that | 20 | | is not an
affiliate (A) that involve the lesser of 3% of | 21 | | the company's
admitted assets
or 25% of the company's | 22 | | surplus, each as of the 31st day of December next
| 23 | | preceding, made with the agreement or understanding that | 24 | | the proceeds of
such transactions, in whole or in | 25 | | substantial part, are to be used to make
loans or | 26 | | extensions of credit to, to purchase assets of, or to make
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| 1 | | investments in, any affiliate of the company making such | 2 | | loans or extensions of
credit or (B) that are proposed when | 3 | | the domestic company is not eligible to
declare and
pay a | 4 | | dividend or other distribution pursuant to the provisions | 5 | | of
Section 27.
| 6 | | (iii) Reinsurance agreements or modifications thereto, | 7 | | including all reinsurance pooling agreements, reinsurance | 8 | | agreements in which the reinsurance premium or a change in | 9 | | the company's liabilities, or the projected reinsurance | 10 | | premium or a change in the company's liabilities in any of | 11 | | the next 3 years, equals or exceeds 5% of the company's | 12 | | surplus as regards policyholders, as of the 31st day of | 13 | | December next preceding, including those
agreements that | 14 | | may require as consideration the transfer of assets from a | 15 | | company an
insurer to a nonaffiliate, if an agreement or | 16 | | understanding exists between the
company insurer and | 17 | | nonaffiliate that any portion of those assets will be | 18 | | transferred
to one or more affiliates of the company | 19 | | insurer .
| 20 | | (iv) All management agreements, service contracts, | 21 | | other than agency contracts, tax allocation agreements, | 22 | | all reinsurance allocation agreements related to | 23 | | reinsurance agreements required to be filed under this | 24 | | Section, and all cost-sharing
arrangements , and any other | 25 | | contracts providing for the rendering of services
on a | 26 | | regular systematic basis .
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| 1 | | (v) Direct or indirect acquisitions or investments in a | 2 | | person that controls the company, or in an affiliate of the | 3 | | company, in an amount which, together with its present | 4 | | holdings in such investments, exceeds 2.5% of the company's | 5 | | surplus as regards policyholders. Direct or indirect | 6 | | acquisitions or investments in subsidiaries acquired | 7 | | pursuant to Section 131.2 of this Article (or authorized | 8 | | under any other Section of this Code), or in non-subsidiary | 9 | | insurance affiliates that are subject to the provisions of | 10 | | this Article, are exempt from this requirement. | 11 | | (vi) Any series of the previously described | 12 | | transactions that are
substantially similar to each other, | 13 | | that take place within any 180 day period,
and that in | 14 | | total are equal to or exceed the lesser of 3% of the | 15 | | domestic
company's insurer's
admitted assets or 25% of its | 16 | | policyholders surplus, as of the 31st day of the
December | 17 | | next preceding.
| 18 | | (vii) (vi) Any other material transaction that the
| 19 | | Director by rule determines
might render the company's | 20 | | surplus as regards policyholders
unreasonable in
relation | 21 | | to the company's outstanding liabilities and inadequate to | 22 | | its
financial needs or may otherwise adversely affect the | 23 | | interests of the
company's policyholders or shareholders.
| 24 | | Nothing herein contained shall be deemed to authorize or | 25 | | permit any
transactions that, in the case of a company an | 26 | | insurer not a member of the same holding
company system, would |
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| 1 | | be otherwise contrary to law.
| 2 | | (b) Any transaction or contract otherwise described in | 3 | | paragraph (a) of this
subsection that is between a domestic | 4 | | company insurer and any person that is not its
affiliate and | 5 | | that precedes or follows within 180 days or is concurrent with | 6 | | a
similar transaction between that nonaffiliate and an | 7 | | affiliate of the domestic
company and that involves amounts | 8 | | that are equal to or exceed the lesser of 3%
of the domestic | 9 | | company's insurer's admitted assets or 25% of its surplus as | 10 | | regards
policyholders at the end of the prior year may not be | 11 | | entered into unless the
company has notified the Director in | 12 | | writing of its intention to enter into the
transaction at least | 13 | | 30 days prior thereto or such shorter period as the
Director | 14 | | may permit, and the Director has not disapproved it within such
| 15 | | period.
| 16 | | (c) A company may not enter into transactions which are | 17 | | part of
a plan
or series of like transactions with any person | 18 | | within the holding company
system if the purpose of those | 19 | | separate transactions is to avoid the
statutory threshold | 20 | | amount and thus avoid the review that would occur
otherwise. If | 21 | | the Director determines that such separate transactions were
| 22 | | entered into for such purpose, he may
exercise his authority | 23 | | under subsection (2) of Section 131.24.
| 24 | | (d) The Director, in reviewing transactions pursuant to | 25 | | paragraph (a),
shall consider whether the transactions comply | 26 | | with the standards set forth in
Section 131.20 and whether they |
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| 1 | | may adversely affect the interests of
policyholders.
| 2 | | (e) The Director shall be notified within 30 days of any | 3 | | investment of the
domestic company insurer in any one | 4 | | corporation if the total investment in that
corporation by the | 5 | | insurance holding company system exceeds 10% of that
| 6 | | corporation's voting securities.
| 7 | | (f) Except for those transactions subject to approval
under | 8 | | other
Sections
of this Code,
any such transaction or agreements | 9 | | which are not disapproved by the
Director may be effective as | 10 | | of the date set forth in the notice required
under this | 11 | | Section.
| 12 | | (g) If a domestic company insurer enters into a transaction | 13 | | described in this
subsection without having given the required | 14 | | notification, the Director may
cause the company insurer to pay | 15 | | a civil forfeiture of not more than $250,000. Each
transaction | 16 | | so entered shall be considered a separate offense.
| 17 | | (2) No domestic company subject to registration under | 18 | | Section 131.13 may
pay any extraordinary dividend or make any | 19 | | other extraordinary distribution
to its shareholders | 20 | | securityholders until: (a) 30 days after the Director has | 21 | | received
notice of the declaration thereof and has not within | 22 | | such period
disapproved the payment, or (b) the Director | 23 | | approves such payment within
the 30-day period. For purposes of | 24 | | this subsection, an extraordinary
dividend or distribution is | 25 | | any dividend or distribution of cash or other
property whose | 26 | | fair market value, together with that of other dividends or
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| 1 | | distributions, made within the period of 12 consecutive months | 2 | | ending on the
date on which the proposed dividend is scheduled | 3 | | for payment or
distribution exceeds the greater of: (a) 10% of | 4 | | the company's
surplus as regards policyholders as of the 31st | 5 | | day of December next
preceding, or (b) the net income of the | 6 | | company for the 12-month period ending the 31st day
of December | 7 | | next preceding, but does not include pro rata distributions of
| 8 | | any class of the company's own securities.
| 9 | | Notwithstanding any other provision of law, the company may | 10 | | declare an
extraordinary dividend or distribution which is | 11 | | conditional upon the
Director's approval, and such a | 12 | | declaration confers no rights upon
security holders until: (a) | 13 | | the Director has approved the payment of the
dividend or | 14 | | distribution, or (b) the Director has not disapproved the
| 15 | | payment within the 30-day period referred to above.
| 16 | | (Source: P.A. 92-140, eff. 7-24-01.)
| 17 | | (215 ILCS 5/131.20b)
| 18 | | Sec. 131.20b. Controlled companies insurers ; management; | 19 | | directors.
| 20 | | (1) Notwithstanding the control of a domestic company | 21 | | insurer by any person, the
officers and directors of the | 22 | | company insurer shall not thereby be relieved of any
obligation | 23 | | or liability to which they would otherwise be subject by law, | 24 | | and
the company insurer shall be managed so as to assure its | 25 | | separate operating identity
consistent with this Article VIII |
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| 1 | | 1/2 of this Code .
| 2 | | (2) Nothing in this Section shall preclude a domestic | 3 | | company insurer from having or
sharing a common management or a | 4 | | cooperative or joint use of personnel,
property,
or services | 5 | | with one or more affiliated persons under arrangements meeting | 6 | | the
standards and requirements of Sections 131.20 and 131.20a.
| 7 | | (3) Not After June 30, 2002, not less than one-third of the | 8 | | directors of a
domestic company, and not less than one-third of | 9 | | the members of each committee of the board of directors of any | 10 | | domestic company, insurer that is a member of an insurance | 11 | | holding company system shall
be persons who are not officers or | 12 | | employees of the company insurer or of any entity
controlling, | 13 | | controlled by, or under common control with the company insurer | 14 | | and who
are not beneficial owners of a controlling interest in | 15 | | the voting stock of the
company insurer or any such entity. At | 16 | | least one such person shall be included in any
quorum for the | 17 | | transaction of business at any meeting of the board of | 18 | | directors
or any committee thereof.
| 19 | | (3.5) The board of directors of a domestic company shall | 20 | | establish one or more committees comprised solely of directors | 21 | | who are not officers or employees of the company or of any | 22 | | entity controlling, controlled by, or under common control with | 23 | | the company and who are not beneficial owners of a controlling | 24 | | interest in the voting stock of the company or any such entity. | 25 | | The committee or committees shall have responsibility for | 26 | | nominating candidates for director for election by |
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| 1 | | shareholders or policyholders, evaluating the performance of | 2 | | officers deemed to be principal officers of the company, and | 3 | | recommending to the board of directors the selection and | 4 | | compensation of the principal officers. | 5 | | (4) Subsections Subsection (3) and (3.5) of this Section do | 6 | | does not apply to a domestic company insurer if
the person | 7 | | entity controlling the company, such as a company, a mutual | 8 | | insurance holding company, or a publicly held corporation, has | 9 | | a board of directors and committees thereof that meet the | 10 | | requirements of subsections (3) and (4) with respect to such | 11 | | controlling entity the insurer, whether directly or through an | 12 | | intermediate
subsidiary, has a board of directors composed in | 13 | | accordance with that
subsection .
| 14 | | (5) (Blank). Subsection (3) of this Section does not apply | 15 | | to a domestic insurer if
the ultimate controlling party of the | 16 | | domestic insurer is a corporation whose
equity securities or | 17 | | equivalent instruments are listed on the New York Stock
| 18 | | Exchange.
| 19 | | (6) A company may make application to the Director for a | 20 | | waiver from the requirements of this Section, if the company's | 21 | | annual direct written and assumed premium, excluding premiums | 22 | | reinsured with the Federal Crop Insurance Corporation and | 23 | | Federal Flood Program, is less than $300,000,000. A company may | 24 | | also make application to the Director for a waiver from the | 25 | | requirements of this subsection (6) based upon unique | 26 | | circumstances. The Director may consider various factors, |
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| 1 | | including, but not limited to, the type of business entity, | 2 | | volume of business written, availability of qualified board | 3 | | members, or the ownership or organizational structure of the | 4 | | entity. | 5 | | (Source: P.A. 92-140, eff. 7-24-01.)
| 6 | | (215 ILCS 5/131.20c new) | 7 | | Sec. 131.20c. Supervisory colleges. | 8 | | (a) With respect to any company registered under Section | 9 | | 131.13 of this Code, and in accordance with subsection (c) of | 10 | | this Section, the Director shall also have the power to | 11 | | participate in a supervisory college for any domestic company | 12 | | that is part of an insurance holding company system with | 13 | | international operations in order to determine compliance by | 14 | | the company with this Article. The powers of the Director with | 15 | | respect to supervisory colleges include, but are not limited | 16 | | to: | 17 | | (1) initiating the establishment of a supervisory | 18 | | college; | 19 | | (2) clarifying the membership and participation of | 20 | | other supervisors in the supervisory college; | 21 | | (3) clarifying the functions of the supervisory | 22 | | college and the role of other regulators, including the | 23 | | establishment of a group-wide supervisor; | 24 | | (4) coordinating the ongoing activities of the | 25 | | supervisory college, including planning meetings, |
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| 1 | | supervisory activities, and processes for information | 2 | | sharing; and | 3 | | (5) establishing a crisis management plan. | 4 | | (b) Each registered company subject to this Section shall | 5 | | be liable for and shall pay the reasonable expenses of the | 6 | | Director's participation in a supervisory college in | 7 | | accordance with subsection (c) of this Section, including | 8 | | reasonable travel expenses. For purposes of this Section, a | 9 | | supervisory college may be convened as either a temporary or | 10 | | permanent forum for communication and cooperation between the | 11 | | regulators charged with the supervision of the company or its | 12 | | affiliates, and the Director may establish a regular assessment | 13 | | to the company for the payment of these expenses. | 14 | | (c) In order to assess the business strategy, financial | 15 | | position, legal and regulatory position, risk exposure, risk | 16 | | management, and governance processes, and as part of the | 17 | | examination of individual companies in accordance with Section | 18 | | 131.21 of this Code, the Director may participate in a | 19 | | supervisory college with other regulators charged with | 20 | | supervision of the company or its affiliates, including other | 21 | | state, federal, and international regulatory agencies. The | 22 | | Director may enter into agreements in accordance with Section | 23 | | 131.22 of this Code providing the basis for cooperation between | 24 | | the Director and the other regulatory agencies and the | 25 | | activities of the supervisory college. Nothing in this Section | 26 | | shall delegate to the supervisory college the authority of the |
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| 1 | | Director to regulate or supervise the company or its affiliates | 2 | | within its jurisdiction.
| 3 | | (215 ILCS 5/131.21) (from Ch. 73, par. 743.21)
| 4 | | Sec. 131.21. Examination.
| 5 | | (1) Subject to the limitation contained in this section and | 6 | | in addition
to the powers which the Director has under Sections | 7 | | 132 through 132.7 and
401 through 403
of this Code relating to | 8 | | the examination of companies, the Director shall have the power | 9 | | to examine any company registered under Section 131.13 of this | 10 | | Code and its affiliates to ascertain the financial condition of | 11 | | the company, including the enterprise risk to the company by | 12 | | the ultimate controlling party, or by any entity or combination | 13 | | of entities within the insurance holding company system, or by | 14 | | the insurance holding company system on a consolidated basis. | 15 | | also
has the power to order any company registered under | 16 | | Section 131.13 to
produce such records, books, or other | 17 | | information papers in the possession
of the company or its | 18 | | affiliates as are reasonably necessary to ascertain the
| 19 | | financial condition of such company or to determine compliance | 20 | | with this
Article. In the event the
company fails to comply | 21 | | with the order, the Director has the power to
examine the | 22 | | affiliates to obtain such information.
| 23 | | (1.5) The Director may order any company registered under | 24 | | Section 131.13 of this Code to produce such records, books, or | 25 | | other information papers in the possession of the company or |
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| 1 | | its affiliates as are reasonably necessary to determine | 2 | | compliance with this Article. To determine compliance with this | 3 | | Article, the Director may order any company registered under | 4 | | Section 131.13 of this Code to produce information not in the | 5 | | possession of the company if the company can obtain access to | 6 | | such information pursuant to contractual relationships, | 7 | | statutory obligations, or other methods. In the event the | 8 | | company cannot obtain the information requested by the | 9 | | Director, the company shall provide the Director a detailed | 10 | | explanation of the reason that the company cannot obtain the | 11 | | information and the identity of the holder of the information. | 12 | | Whenever it appears to the Director that the detailed | 13 | | explanation is without merit, the Director may require, after | 14 | | notice and hearing, the company to pay a penalty of up to | 15 | | $1,000 for each day's delay, or may suspend or revoke the | 16 | | company's license. | 17 | | (2) The Director may retain at the registered company's | 18 | | expense any
attorneys, actuaries, accountants and other | 19 | | experts not otherwise a part of
the Director's staff as may be | 20 | | reasonably necessary to assist in the
conduct of the | 21 | | examination under subsection (1). Any
persons so retained are
| 22 | | under the direction and control of the Director and may act in | 23 | | a purely
advisory capacity.
| 24 | | (3) Each registered company producing for examination | 25 | | records, books and
papers under subsection (1.5) (1) is liable | 26 | | for and must pay
the expense of the
examination in accordance |
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| 1 | | with Section 408 of this Code.
| 2 | | (4) In the event the company fails to comply with an order, | 3 | | the Director shall have the power to examine the affiliates to | 4 | | obtain the information. The Director shall also have the power | 5 | | to issue subpoenas, to administer oaths, and to examine under | 6 | | oath any person for purposes of determining compliance with | 7 | | this Section. Upon the failure or refusal of any person to obey | 8 | | a subpoena, the Director may petition a court of competent | 9 | | jurisdiction and, upon proper showing, the court may enter an | 10 | | order compelling the witness to appear and testify or produce | 11 | | documentary evidence. Failure to obey the court order shall be | 12 | | punishable as contempt of court. Every person shall be obliged | 13 | | to attend as a witness at the place specified in the subpoena, | 14 | | when subpoenaed, anywhere within the State. He or she shall be | 15 | | entitled to the same fees and mileage, if claimed, as a witness | 16 | | in the Circuit Court, which fees, mileage, and actual expense, | 17 | | if any, necessarily incurred in securing the attendance of | 18 | | witnesses, and their testimony, shall be itemized and charged | 19 | | against, and be paid by, the company being examined. | 20 | | (Source: P.A. 89-97, eff. 7-7-95.)
| 21 | | (215 ILCS 5/131.22) (from Ch. 73, par. 743.22)
| 22 | | Sec. 131.22. Confidential treatment. | 23 | | (a) Documents, materials, or other information in the | 24 | | possession or control of the Department that are obtained by or | 25 | | disclosed to the Director or any other person in the course of |
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| 1 | | an examination or investigation made pursuant to this Article | 2 | | and all information reported pursuant to this Article shall be | 3 | | confidential by law and privileged, shall not be subject to the | 4 | | Illinois Freedom of Information Act, shall not be subject to | 5 | | subpoena, and shall not be subject to discovery or admissible | 6 | | in evidence in any private civil action. However, the Director | 7 | | is authorized to use the documents, materials, or other | 8 | | information in the furtherance of any regulatory or legal | 9 | | action brought as a part of the Director's official duties. The | 10 | | Director shall not otherwise make the documents, materials, or | 11 | | other information public without the prior written consent of | 12 | | the company to which it pertains unless the Director, after | 13 | | giving the company and its affiliates who would be affected | 14 | | thereby notice and opportunity to be heard, determines that the | 15 | | interest of policyholders, shareholders, or the public shall be | 16 | | served by the publication thereof, in which event the Director | 17 | | may publish all or any part in such manner as may be deemed | 18 | | appropriate. | 19 | | (b) Neither the Director nor any person who received | 20 | | documents, materials, or other information while acting under | 21 | | the authority of the Director or with whom such documents, | 22 | | materials, or other information are shared pursuant to this | 23 | | Code shall be permitted or required to testify in any private | 24 | | civil action concerning any confidential documents, materials, | 25 | | or information subject to subsection (a) of this Section. | 26 | | (c) In order to assist in the performance of the Director's |
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| 1 | | duties, the Director: | 2 | | (1) may share documents, materials, or other | 3 | | information, including the confidential and privileged | 4 | | documents, materials, or information subject to subsection | 5 | | (a) of this Section, with other state, federal, and | 6 | | international regulatory agencies, with the NAIC and its | 7 | | affiliates and subsidiaries, and with state, federal, and | 8 | | international law enforcement authorities, including | 9 | | members of any supervisory college allowed by this Article, | 10 | | provided that the recipient agrees in writing to maintain | 11 | | the confidentiality and privileged status of the document, | 12 | | material, or other information, and has verified in writing | 13 | | the legal authority to maintain confidentiality; | 14 | | (1.5) notwithstanding paragraph (1) of this subsection | 15 | | (c), may only share confidential and privileged documents, | 16 | | material, or information reported pursuant to Section | 17 | | 131.14b with commissioners of states having statutes or | 18 | | regulations substantially similar to subsection (a) of | 19 | | this Section and who have agreed in writing not to disclose | 20 | | such information; | 21 | | (2) may receive documents, materials, or information, | 22 | | including otherwise confidential and privileged documents, | 23 | | materials, or information from the NAIC and its affiliates | 24 | | and subsidiaries and from regulatory and law enforcement | 25 | | officials of other foreign or domestic jurisdictions, and | 26 | | shall maintain as confidential or privileged any document, |
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| 1 | | material, or information received with notice or the | 2 | | understanding that it is confidential or privileged under | 3 | | the laws of the jurisdiction that is the source of the | 4 | | document, material, or information; and | 5 | | (3) shall enter into written agreements with the NAIC | 6 | | governing sharing and use of information provided pursuant | 7 | | to this Code consistent with this subsection (c) that shall
| 8 | | (i)
specify procedures and protocols regarding the | 9 | | confidentiality and security of information shared with | 10 | | the NAIC and its affiliates and subsidiaries pursuant to | 11 | | this Code, including procedures and protocols for sharing | 12 | | by the NAIC with other state, federal, or international | 13 | | regulators;
(ii)
specify that ownership of information | 14 | | shared with the NAIC and its affiliates and subsidiaries | 15 | | pursuant to this Code remains with the Director and the | 16 | | NAIC's use of the information is subject to the direction | 17 | | of the Director;
(iii)
require prompt notice to be given to | 18 | | a company whose confidential information in the possession | 19 | | of the NAIC pursuant to this Code is subject to a request | 20 | | or subpoena to the NAIC for disclosure or production; and
| 21 | | (iv)
require the NAIC and its affiliates and subsidiaries | 22 | | to consent to intervention by a company in any judicial or | 23 | | administrative action in which the NAIC and its affiliates | 24 | | and subsidiaries may be required to disclose confidential | 25 | | information about the company shared with the NAIC and its | 26 | | affiliates and subsidiaries pursuant to this Code. |
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| 1 | | (d) The sharing of information by the Director pursuant to | 2 | | this Code shall not constitute a delegation of regulatory | 3 | | authority or rulemaking, and the Director is solely responsible | 4 | | for the administration, execution, and enforcement of the | 5 | | provisions of this Code. | 6 | | (e) No waiver of any applicable privilege or claim of | 7 | | confidentiality in the documents, materials, or information | 8 | | shall occur as a result of disclosure to the Director under | 9 | | this Section or as a result of sharing as authorized in | 10 | | subsection (c) of this Section. | 11 | | (f) Documents, materials, or other information in the | 12 | | possession or control of the NAIC pursuant to this Code shall | 13 | | be confidential by law and privileged, shall not be subject to | 14 | | the Illinois Freedom of Information Act, shall not be subject | 15 | | to subpoena, and shall not be subject to discovery or | 16 | | admissible in evidence in any private civil action. All | 17 | | information, documents, and copies thereof obtained by or | 18 | | disclosed
to the Director or any other person in the course of | 19 | | an examination
or investigation made under
Section 131.21 and | 20 | | all information submitted under Sections 131.13 or 131.20a
and | 21 | | all personal financial statement information submitted under | 22 | | Section
131.5 must be given confidential treatment and is not
| 23 | | subject to
subpoena and may not be made public by the Director | 24 | | or any other person, without the prior written consent of
the | 25 | | company to which it pertains unless the Director, after giving | 26 | | the
company and its affiliates who would be affected thereby |
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| 1 | | notice and
opportunity to be heard, determines that the | 2 | | interests of policyholders,
shareholders or the public will be | 3 | | served by the publication thereof in
which event he may publish | 4 | | all or any part thereof in such manner as he may
deem | 5 | | appropriate.
| 6 | | Nothing contained in this Section shall prevent or be | 7 | | construed as
prohibiting the Director from disclosing such | 8 | | information to the insurance
department of any other state or | 9 | | county or to law enforcement officials of this
or any other | 10 | | state or agency of the federal government at any time upon the
| 11 | | written agreement of the entity receiving the information to | 12 | | hold that
information confidential and in a manner consistent | 13 | | with this Code.
| 14 | | (Source: P.A. 88-364.)
| 15 | | (215 ILCS 5/131.23) (from Ch. 73, par. 743.23)
| 16 | | Sec. 131.23.
Injunctions; prohibitions against voting | 17 | | securities; sequestration of
voting securities.
(1) Whenever | 18 | | it appears to the Director that any company or any
director, | 19 | | officer, employee or agent thereof has committed or is about to
| 20 | | commit a violation of this Article or of any rule, regulation, | 21 | | or order
issued by the Director hereunder, the Director may | 22 | | apply to the Circuit
Court for the county in which the | 23 | | principal office of the company is
located or to the Circuit | 24 | | Court for Sangamon County for an order enjoining
the company or | 25 | | the director, officer, employee or agent thereof from
violating |
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| 1 | | or continuing to violate this Article or any rule, regulation | 2 | | or
order, and for any other equitable relief as the nature of | 3 | | the case and the
interests of the company's policyholders, | 4 | | creditors or the
public may require. In any proceeding, the | 5 | | validity of the rule, regulation
or order alleged to have been | 6 | | violated may be determined by the Court.
| 7 | | (2) No security which is the subject of any agreement or | 8 | | arrangement
regarding acquisition, or which is acquired or to | 9 | | be acquired, in
contravention of this Article or of any rule, | 10 | | regulation or order issued by
the Director hereunder may be | 11 | | voted at any shareholders' securityholders' meeting, or may be
| 12 | | counted for quorum purposes, and any action of shareholders | 13 | | securityholders' requiring the
affirmative vote of a | 14 | | percentage of securities may be taken as though such
securities | 15 | | were not issued and outstanding; but no action taken at any | 16 | | such
meeting may be invalidated by the voting of such | 17 | | securities, unless the
action would materially affect control | 18 | | of the company or unless any court
of this State has so | 19 | | ordered. If the Director has reason to
believe that any | 20 | | security of the company has been or is about to be
acquired in | 21 | | contravention of this Article or of any rule, regulation or
| 22 | | order issued by the Director hereunder the company or the | 23 | | Director may
apply to the Circuit Court for Sangamon County or | 24 | | to the Circuit Court for
the county in which the company has | 25 | | its principal place of business (a) to
enjoin the further | 26 | | pursuit or use of any offer, request, invitation,
agreement or |
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| 1 | | acquisition made in contravention of Sections 131.4 through
| 2 | | 131.12 or any rule, regulation, or order issued by the Director | 3 | | thereunder;
(b) to enjoin the voting of any security so | 4 | | acquired; (c) to void any vote
of such security already cast at | 5 | | any meeting of shareholders securityholders ; and (d) for
any | 6 | | other equitable relief as the nature of the case and the | 7 | | interests of
the company's policyholders, creditors, or the | 8 | | public may
require.
| 9 | | (3) In any case where a person has acquired or is proposing | 10 | | to acquire
any voting securities in violation of this Article | 11 | | or any rule, regulation
or order issued by the Director | 12 | | hereunder, the Circuit Court for Sangamon
County or the Circuit | 13 | | Court for the county in which the company has its
principal | 14 | | place of business may, on such notice as the court deems
| 15 | | appropriate, upon the application of the company or the | 16 | | Director seize or
sequester any voting securities of the | 17 | | company owned directly or indirectly
by such person, and issue | 18 | | any orders with respect thereto as may be
appropriate to | 19 | | effectuate this Article. Notwithstanding any other
provisions | 20 | | of law, for the purposes of this Article, the situs of the
| 21 | | ownership of the securities of domestic companies is deemed to | 22 | | be in this
State.
| 23 | | (4) If the Director has reason to believe that any | 24 | | policyholders' proxies
have been or are about to be acquired in | 25 | | contravention of this Article or
of any rule, regulations or | 26 | | order issued by the Director hereunder, the
Director may apply |
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| 1 | | to the Circuit Court for Sangamon County or to the Circuit
| 2 | | Court for the county in which the company has its principal | 3 | | place of business
(a) to enjoin further pursuit or use of any | 4 | | offer, request, invitation,
agreement or acquisition made in | 5 | | contravention of Section 131.4 through
131.12 and (b) for any | 6 | | other equitable relief as the nature of the case
and the | 7 | | interests of the company's policyholders, creditors or the | 8 | | public may require.
| 9 | | (Source: P.A. 84-805.)
| 10 | | (215 ILCS 5/131.24) (from Ch. 73, par. 743.24)
| 11 | | Sec. 131.24. Sanctions.
| 12 | | (1) Every director or officer of an insurance
holding | 13 | | company system who knowingly violates, participates in, or | 14 | | assents
to, or who knowingly permits any of the officers or | 15 | | agents of the
company to engage in transactions or make | 16 | | investments which have not been
properly filed or approved or | 17 | | which violate this Article, shall pay, in
their individual | 18 | | capacity, a civil forfeiture of not more than $100,000
per | 19 | | violation, after notice and hearing before the Director. In | 20 | | determining
the amount of the civil forfeiture, the Director | 21 | | shall take into account the
appropriateness of the forfeiture | 22 | | with respect to the gravity of the
violation, the history of | 23 | | previous violations, and such other matters as
justice may | 24 | | require.
| 25 | | (2) Whenever it appears to the Director that any company |
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| 1 | | subject to this
Article or any director, officer, employee or | 2 | | agent thereof has engaged in
any transaction or entered into a | 3 | | contract which is subject to Section
131.20, and any one of | 4 | | Sections 131.16, 131.20a, 141, 141.1, or 174 of this
Code and | 5 | | which would not have been approved had such
approval been | 6 | | requested or would have been disapproved had required notice
| 7 | | been given, the Director may order the company to cease and
| 8 | | desist immediately any further activity under that transaction | 9 | | or contract.
After notice and hearing the Director may also | 10 | | order (a) the company to void
any such contracts and restore | 11 | | the status quo if such action is in the best
interest of the | 12 | | policyholders or the public, and (b) any affiliate of the
| 13 | | company, which has received from the company dividends, | 14 | | distributions,
assets, loans, extensions of credit, | 15 | | guarantees, or investments in
violation of any such Section, to | 16 | | immediately repay, refund or restore to
the company such | 17 | | dividends, distributions, assets, extensions of credit,
| 18 | | guarantees or investments.
| 19 | | (3) Whenever it appears to the Director that any company or | 20 | | any
director, officer, employee or agent thereof has committed | 21 | | a willful
violation of this Article, the Director may cause | 22 | | criminal proceedings to
be instituted in the Circuit Court for | 23 | | the county in which the principal
office of the company is | 24 | | located or in the Circuit Court of Sangamon or
Cook County | 25 | | against such company or the responsible director, officer,
| 26 | | employee or agent thereof. Any company which willfully violates |
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| 1 | | this
Article commits a business offense and may be fined up to | 2 | | $500,000. Any individual
who willfully
violates this Article | 3 | | commits a Class 4 felony and may be fined in his
individual | 4 | | capacity not more than
$500,000 or be imprisoned for not less | 5 | | than one year nor more
than
3 years, or both.
| 6 | | (4) Any officer, director, or employee of an insurance | 7 | | holding company
system who willfully and knowingly subscribes | 8 | | to or makes or causes to be
made any false statements or false | 9 | | reports or false filings with the intent
to deceive the | 10 | | Director in the performance of his duties under this
Article, | 11 | | commits a Class 3 felony and upon conviction thereof, shall be
| 12 | | imprisoned for not less than 2 years nor more than
5 years or | 13 | | fined $500,000 or both. Any fines imposed shall be
paid by
the | 14 | | officer, Director, or employee
in his individual capacity.
| 15 | | (5) Whenever it appears to the Director that any person has | 16 | | committed a violation of Section 131.14b of this Code which | 17 | | prevents the full understanding of the enterprise risk to the | 18 | | company by affiliates or by the insurance holding company | 19 | | system, the violation may serve as an independent basis for | 20 | | disapproving dividends or distributions and for placing the | 21 | | company under an order of supervision in accordance with | 22 | | Article XII 1/2 of this Code. | 23 | | (Source: P.A. 93-32, eff. 7-1-03.)
| 24 | | (215 ILCS 5/131.26) (from Ch. 73, par. 743.26)
| 25 | | Sec. 131.26. Revocation, suspension, or non-renewal of |
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| 1 | | company's license.
| 2 | | Whenever it appears to the Director that any person has | 3 | | committed a
violation of this Article which makes the continued | 4 | | operation of a company
contrary to the interests of | 5 | | policyholders or the public, the Director may,
after notice and | 6 | | hearing suspend, revoke or refuse to renew the company's
| 7 | | license or authority to do business in this State for such a | 8 | | period as the Director he finds
is required for the protection | 9 | | of policyholders or the public. Any such
determination must be | 10 | | accompanied by specific findings of fact and
conclusions of | 11 | | law.
| 12 | | (Source: P.A. 77-673.)
| 13 | | (215 ILCS 5/131.27) (from Ch. 73, par. 743.27)
| 14 | | Sec. 131.27. Judicial review. | 15 | | (1) Any order or decision made,
issued or executed by the | 16 | | Director under this Article whereby any person
or company is | 17 | | aggrieved is subject to review
by the Circuit Court of
Sangamon | 18 | | County.
| 19 | | The Administrative Review Law, as now or hereafter amended, | 20 | | and the rules
adopted pursuant
thereto, applies to and governs | 21 | | all proceedings for review of final
administrative decisions of | 22 | | the Director provided for in this Section. The
term | 23 | | "administrative decision" is defined as in Section 3-101 of the | 24 | | Code
of Civil Procedure.
| 25 | | (2) The filing of an appeal pursuant to this Section shall |
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| 1 | | stay the application of any rule, regulation, order, or other | 2 | | action of the Director to the appealing party unless the court, | 3 | | after giving the party notice and an opportunity to be heard, | 4 | | determines that a stay would be detrimental to the interest of | 5 | | policyholders, shareholders, creditors, or the public. | 6 | | (3) Any person aggrieved by any failure of the Director to | 7 | | act or make a determination required by this Code may petition | 8 | | for a writ in the nature of a mandamus or a peremptory mandamus | 9 | | directing the Director to act or make a determination. | 10 | | (Source: P.A. 82-783.)
| 11 | | (215 ILCS 5/131.29 new) | 12 | | Sec. 131.29. Rulemaking power.
The Director may adopt such | 13 | | administrative rules as are necessary to implement the | 14 | | provisions of this Article. | 15 | | (215 ILCS 5/131.30 new) | 16 | | Sec. 131.30. Conflict with other laws.
This Code supersedes | 17 | | all laws and parts of laws of this State inconsistent with this | 18 | | Code with respect to matters covered by this Code.
| 19 | | (215 ILCS 5/356z.12) | 20 | | Sec. 356z.12. Dependent coverage. | 21 | | (a) A group or individual policy of accident and health | 22 | | insurance or managed care plan that provides coverage for | 23 | | dependents and that is amended, delivered, issued, or renewed |
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| 1 | | after the effective date of this amendatory Act of the 95th | 2 | | General Assembly shall not terminate coverage or deny the | 3 | | election of coverage for an unmarried dependent by reason of | 4 | | the dependent's age before the dependent's 26th birthday. | 5 | | (b) A policy or plan subject to this Section shall, upon | 6 | | amendment, delivery, issuance, or renewal, establish an | 7 | | initial enrollment period of not less than 90 days during which | 8 | | an insured may make a written election for coverage of an | 9 | | unmarried person as a dependent under this Section. After the | 10 | | initial enrollment period, enrollment by a dependent pursuant | 11 | | to this Section shall be consistent with the enrollment terms | 12 | | of the plan or policy. | 13 | | (c) A policy or plan subject to this Section shall allow | 14 | | for dependent coverage during the annual open enrollment date | 15 | | or the annual renewal date if the dependent, as of the date on | 16 | | which the insured elects dependent coverage under this | 17 | | subsection, has: | 18 | | (1) a period of continuous creditable coverage of 90 | 19 | | days or more; and | 20 | | (2) not been without creditable coverage for more than | 21 | | 63 days. | 22 | | An insured may elect coverage for a dependent who does not meet | 23 | | the continuous creditable coverage requirements of this | 24 | | subsection (c) and that dependent shall not be denied coverage | 25 | | due to age. | 26 | | For purposes of this subsection (c), "creditable coverage" |
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| 1 | | shall have the meaning provided under subsection (C)(1) of | 2 | | Section 20 of the Illinois Health Insurance Portability and | 3 | | Accountability Act. | 4 | | (d) Military personnel. A group or individual policy of | 5 | | accident and health insurance or managed care plan that | 6 | | provides coverage for dependents and that is amended, | 7 | | delivered, issued, or renewed after the effective date of this | 8 | | amendatory Act of the 95th General Assembly shall not terminate | 9 | | coverage or deny the election of coverage for an unmarried | 10 | | dependent by reason of the dependent's age before the | 11 | | dependent's 30th birthday if the dependent (i) is an Illinois | 12 | | resident, (ii) served as a member of the active or reserve | 13 | | components of any of the branches of the Armed Forces of the | 14 | | United States, and (iii) has received a release or discharge | 15 | | other than a dishonorable discharge. To be eligible for | 16 | | coverage under this subsection (d), the eligible dependent | 17 | | shall submit to the insurer a form approved by the Illinois | 18 | | Department of Veterans' Affairs stating the date on which the | 19 | | dependent was released from service. | 20 | | (e) Calculation of the cost of coverage provided to an | 21 | | unmarried dependent under this Section shall be identical. | 22 | | (f) Nothing in this Section shall prohibit an employer from | 23 | | requiring an employee to pay all or part of the cost of | 24 | | coverage provided under this Section. | 25 | | (g) No exclusions or limitations may be applied to coverage | 26 | | elected pursuant to this Section that do not apply to all |
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| 1 | | dependents covered under the policy. | 2 | | (h) A policy or plan subject to this Section shall not | 3 | | condition eligibility for dependent coverage provided pursuant | 4 | | to this Section on enrollment in any educational institution. | 5 | | (i) Notice regarding coverage for a dependent as provided | 6 | | pursuant to this Section shall be provided to an insured by the | 7 | | insurer: | 8 | | (1) upon application or enrollment; | 9 | | (2) in the certificate of coverage or equivalent | 10 | | document prepared for an insured and delivered on or about | 11 | | the date on which the coverage commences; and | 12 | | (3) (blank) in a notice delivered to an insured on a | 13 | | semi-annual basis .
| 14 | | (Source: P.A. 95-958, eff. 6-1-09 .) | 15 | | (215 ILCS 5/131.9 rep.) | 16 | | Section 10. The Illinois Insurance Code is amended by | 17 | | repealing Section 131.9. | 18 | | Section 97. Severability. The provisions of this Act are | 19 | | severable under Section 1.31 of the Statute on Statutes.
| 20 | | Section 99. Effective date. This Act takes effect January | 21 | | 1, 2013, except that Section 131.14b of the Illinois Insurance | 22 | | Code takes effect July 1, 2013.
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| 1 | |
INDEX
| 2 | |
Statutes amended in order of appearance
| | 3 | | 215 ILCS 5/131.1 | from Ch. 73, par. 743.1 | | 4 | | 215 ILCS 5/131.2 | from Ch. 73, par. 743.2 | | 5 | | 215 ILCS 5/131.3 | from Ch. 73, par. 743.3 | | 6 | | 215 ILCS 5/131.4 | from Ch. 73, par. 743.4 | | 7 | | 215 ILCS 5/131.5 | from Ch. 73, par. 743.5 | | 8 | | 215 ILCS 5/131.6 | from Ch. 73, par. 743.6 | | 9 | | 215 ILCS 5/131.8 | from Ch. 73, par. 743.8 | | 10 | | 215 ILCS 5/131.8a | from Ch. 73, par. 743.8a | | 11 | | 215 ILCS 5/131.11 | from Ch. 73, par. 743.11 | | 12 | | 215 ILCS 5/131.12 | from Ch. 73, par. 743.12 | | 13 | | 215 ILCS 5/131.12a | from Ch. 73, par. 743.12a | | 14 | | 215 ILCS 5/131.13 | from Ch. 73, par. 743.13 | | 15 | | 215 ILCS 5/131.14 | from Ch. 73, par. 743.14 | | 16 | | 215 ILCS 5/131.14a new | | | 17 | | 215 ILCS 5/131.14b new | | | 18 | | 215 ILCS 5/131.14c new | | | 19 | | 215 ILCS 5/131.16 | from Ch. 73, par. 743.16 | | 20 | | 215 ILCS 5/131.17 | from Ch. 73, par. 743.17 | | 21 | | 215 ILCS 5/131.18 | from Ch. 73, par. 743.18 | | 22 | | 215 ILCS 5/131.19 | from Ch. 73, par. 743.19 | | 23 | | 215 ILCS 5/131.20 | from Ch. 73, par. 743.20 | | 24 | | 215 ILCS 5/131.20a | from Ch. 73, par. 743.20a | | 25 | | 215 ILCS 5/131.20b | | |
| | | SB2877 Engrossed | - 74 - | LRB097 16448 RPM 61612 b |
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| 1 | | 215 ILCS 5/131.20c new | | | 2 | | 215 ILCS 5/131.21 | from Ch. 73, par. 743.21 | | 3 | | 215 ILCS 5/131.22 | from Ch. 73, par. 743.22 | | 4 | | 215 ILCS 5/131.24 | from Ch. 73, par. 743.24 | | 5 | | 215 ILCS 5/131.27 | from Ch. 73, par. 743.27 | | 6 | | 215 ILCS 5/131.9 rep. | |
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