Full Text of SB3266 097th General Assembly
SB3266 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB3266 Introduced 2/1/2012, by Sen. Jeffrey M. Schoenberg SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Insurance Code. Provides that no domestic insurer shall acquire any investment respecting a foreign jurisdiction, or any investment denominated in the currency of that foreign jurisdiction, if that jurisdiction is designated as a state sponsor of terrorism by the United States Secretary of State pursuant to the federal Export Administration Act, the Arms Export Control Act, and the Foreign Assistance Act.
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| | A BILL FOR |
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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 Section 126.3 as follows:
| 6 | | (215 ILCS 5/126.3)
| 7 | | Sec. 126.3. General investment qualifications.
| 8 | | A. Insurers may acquire, hold or invest in investments or | 9 | | engage in
investment practices as set forth in this Article. | 10 | | Insurers may also acquire,
hold or invest in investments not | 11 | | conforming to the requirements of this
Article that are not | 12 | | otherwise prohibited by this Code. Investments not
conforming | 13 | | to this Article shall not be admitted assets unless they are
| 14 | | acquired under other authority of this Code.
| 15 | | B. Subject to subsection C of this Section, an insurer | 16 | | shall not acquire or
hold an
investment as an admitted asset | 17 | | unless at the time of acquisition it is:
| 18 | | (1) Eligible for the payment or accrual of interest or | 19 | | discount (whether
in
cash
or other forms of income or | 20 | | securities), eligible to receive dividends or
other | 21 | | distributions or is otherwise income producing; or
| 22 | | (2) Acquired under Section 126.15B, 126.15C, 126.16, | 23 | | 126.18, 126.20,
126.28C, 126.29, 126.31, or 126.32 or under
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| 1 | | the authority of Sections of the Code other than this | 2 | | Article.
| 3 | | C. An insurer may acquire or hold as admitted assets | 4 | | investments that do not
otherwise qualify as provided in this | 5 | | Article if the insurer has not acquired
them for the purpose of | 6 | | circumventing any limitations contained in this
Article, if the | 7 | | insurer acquires the investments in the following | 8 | | circumstances
and the insurer complies with the provisions of | 9 | | Sections 126.5 and 126.7 as to
the investments:
| 10 | | (1) As payment on account of existing indebtedness or | 11 | | in connection with
the
refinancing, restructuring or | 12 | | workout of existing indebtedness, if taken to
protect the | 13 | | insurer's interest in that investment;
| 14 | | (2) As realization on collateral for indebtedness;
| 15 | | (3) In connection with an otherwise qualified | 16 | | investment or investment
practice, as interest on or a | 17 | | dividend or other distribution related to the
investment or | 18 | | investment practice or in connection with the refinancing | 19 | | of
the investment, in each case for no additional or only | 20 | | nominal
consideration;
| 21 | | (4) Under a lawful and bona fide agreement of | 22 | | recapitalization or
voluntary
or involuntary | 23 | | reorganization in connection with an investment held by the
| 24 | | insurer; or
| 25 | | (5) Under a bulk reinsurance, merger or consolidation | 26 | | transaction approved
by the Director if the assets |
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| 1 | | constitute admissible investments for the ceding,
merged | 2 | | or consolidated companies.
| 3 | | D. An investment or portion of an investment acquired by an | 4 | | insurer under
subsection C of this Section shall become a | 5 | | nonadmitted asset 3 years
(or 5 years in the case of mortgage | 6 | | loans and real estate) from the date of
its acquisition, unless | 7 | | within that period the investment has become a
qualified | 8 | | investment under a Section of this Article other than | 9 | | subsection C of
this Section, but an investment acquired under | 10 | | an agreement of bulk
reinsurance, merger or consolidation may | 11 | | be qualified for a longer period if so
provided in the plan for | 12 | | reinsurance, merger or consolidation as approved by
the | 13 | | Director. Upon application by the insurer and a showing that | 14 | | the
nonadmission of an asset held under subsection C of this | 15 | | Section would injure
the interests of the insurer, the Director | 16 | | may extend the period for
admissibility for an additional | 17 | | reasonable period of time.
| 18 | | E. Except as provided in subsections F and H of this | 19 | | Section, an investment
shall qualify under this Article if, on | 20 | | the date the insurer committed to
acquire the investment or on | 21 | | the date of its acquisition, it would have
qualified under this | 22 | | Article. For the purposes of determining limitations
contained | 23 | | in this Article, an insurer shall give appropriate recognition | 24 | | to any
commitments to acquire investments.
| 25 | | F. (1) An investment held as an admitted asset by an | 26 | | insurer on the
effective date of this amendatory Act of |
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| 1 | | 1997 which qualified immediately
prior to the effective | 2 | | date of this amendatory Act of 1997 shall remain
qualified | 3 | | as an admitted asset under this Article.
| 4 | | (2) Each specific transaction constituting an | 5 | | investment practice of the
type described in this Article | 6 | | immediately prior to the effective date of this
amendatory | 7 | | Act of 1997 that was lawfully entered into by an insurer | 8 | | and
was in effect on the effective date of this amendatory | 9 | | Act of 1997 shall
continue to be
permitted under this | 10 | | Article until its expiration or termination under its
| 11 | | terms.
| 12 | | G. Unless otherwise specified, an investment limitation | 13 | | computed on the
basis of an
insurer's admitted assets or | 14 | | capital and surplus shall relate to the amount
required to be | 15 | | shown on the statutory balance sheet of the insurer most
| 16 | | recently required to be filed (annual or last quarter) with the | 17 | | Director.
Solely for purposes of
computing any limitation under | 18 | | this Article based upon admitted assets, the
insurer shall | 19 | | deduct from the amount of its admitted assets the amount of the
| 20 | | liability recorded on such statutory balance sheet for:
| 21 | | (1) The return of acceptable collateral received in a | 22 | | reverse repurchase
transaction or a securities lending | 23 | | transaction;
| 24 | | (2) Cash received in a dollar roll transaction; and
| 25 | | (3) The amount reported as borrowed money in such | 26 | | statutory balance sheet
to
the extent not included in |
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| 1 | | paragraphs (1) and (2) of this subsection.
| 2 | | H. An investment qualified, in whole or in part, for | 3 | | acquisition or holding
as an admitted asset may be qualified or | 4 | | requalified at the time of acquisition
or a later date, in | 5 | | whole or in part, under any other Section, if the relevant
| 6 | | conditions contained in the other Section are satisfied at the | 7 | | time of
qualification or requalification.
| 8 | | I. An insurer shall maintain documentation demonstrating | 9 | | that investments
were acquired in accordance with this Article, | 10 | | and specifying the Section of
this Article under which they | 11 | | were acquired.
| 12 | | J. An insurer shall not enter into an agreement to purchase | 13 | | securities in
advance of their issuance for resale to the | 14 | | public as part of a distribution of
the securities by
the | 15 | | issuer or otherwise guarantee the distribution, except that an | 16 | | insurer may
acquire privately placed securities with | 17 | | registration rights.
| 18 | | K. Notwithstanding the provisions of this Article, the | 19 | | Director, for good
cause, may
order an insurer to nonadmit, | 20 | | limit, dispose of, withdraw from or discontinue
an investment | 21 | | or investment practice in accordance with Article XXIV. The
| 22 | | authority of the Director under this subsection is in addition | 23 | | to any other
authority of the Director.
| 24 | | L. No domestic insurer shall acquire any investment | 25 | | respecting a foreign jurisdiction, or any investment | 26 | | denominated in the currency of that foreign jurisdiction, if |
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| 1 | | that jurisdiction is designated as a state sponsor of terrorism | 2 | | by the United States Secretary of State pursuant to Section | 3 | | 6(j) of the Export Administration Act, Section 40 of the Arms | 4 | | Export Control Act, and Section 620A of the Foreign Assistance | 5 | | Act. | 6 | | (Source: P.A. 90-418, eff. 8-15-97.)
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