(215 ILCS 5/121-2.08) (from Ch. 73, par. 733-2.08)
Sec. 121-2.08. Transactions in this State involving contracts of
insurance independently procured directly from an unauthorized insurer by industrial insureds. (a) As used in this Section: "Exempt commercial purchaser" means exempt commercial purchaser as the term is defined in subsection (1) of Section 445 of this Code. "Home state" means home state as the term is defined in subsection (1) of Section 445 of this Code. "Industrial insured" means an insured:
(i) that procures the insurance of any risk or risks |
| of the kinds specified in Classes 2 and 3 of Section 4 of this Code by use of the services of a full-time employee who is a qualified risk manager or the services of a regularly and continuously retained consultant who is a qualified risk manager;
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(ii) that procures the insurance directly from an
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| unauthorized insurer without the services of an intermediary insurance producer; and
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(iii) that is an exempt commercial purchaser whose
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"Insurance producer" means insurance producer as the term is defined in Section 500-10 of this Code.
"Qualified risk manager" means qualified risk manager as the term is defined in subsection (1) of Section 445 of this Code.
"Safety-Net Hospital" means an Illinois hospital that qualifies as a Safety-Net Hospital under Section 5-5e.1 of the Illinois Public Aid Code.
"Unauthorized insurer" means unauthorized insurer as the term is defined in subsection (1) of Section 445 of this Code.
(b) For contracts of insurance effective January 1, 2015 or later, within 90 days after the effective date of each contract of insurance issued under this Section, the insured shall file a report with the Director by submitting the report to the Surplus Line Association of Illinois in writing or in a computer readable format and provide information as designated by the Surplus Line Association of Illinois. The information in the report shall be substantially similar to that required for surplus line submissions as described in subsection (5) of Section 445 of this Code. Where applicable, the report shall satisfy, with respect to the subject insurance, the reporting requirement of Section 12 of the Fire Investigation Act.
(c) For contracts of insurance effective January 1, 2015 through December 31, 2017, within 30 days after filing the report, the insured shall pay to the Director for the use and benefit of the State a sum equal to the gross premium of the contract of insurance multiplied by the surplus line tax rate, as described in paragraph (3) of subsection (a) of Section 445 of this Code, and shall pay the fire marshal tax that would otherwise be due annually in March for insurance subject to tax under Section 12 of the Fire Investigation Act. For contracts of insurance effective January 1, 2018 or later, within 30 days after filing the report, the insured shall pay to the Director for the use and benefit of the State a sum equal to 0.5% of the gross premium of the contract of insurance, and shall pay the fire marshal tax that would otherwise be due annually in March for insurance subject to tax under Section 12 of the Fire Investigation Act. For contracts of insurance effective January 1, 2015 or later, within 30 days after filing the report, the insured shall pay to the Surplus Line Association of Illinois a countersigning fee that shall be assessed at the same rate charged to members pursuant to subsection (4) of Section 445.1 of this Code.
(d) For contracts of insurance effective January 1, 2015 or later, the insured shall withhold the amount of the taxes and countersignature fee from the amount of premium charged by and otherwise payable to the insurer for the insurance. If the insured fails to withhold the tax and countersignature fee from the premium, then the insured shall be liable for the amounts thereof and shall pay the amounts as prescribed in subsection (c) of this Section.
(e) Contracts of insurance with an industrial insured that qualifies as a Safety-Net Hospital are not subject to subsections (b) through (d) of this Section.
(Source: P.A. 100-535, eff. 9-22-17; 100-1118, eff. 11-27-18.)
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(215 ILCS 5/121-3) (from Ch. 73, par. 733-3)
Sec. 121-3.
Transaction of insurance business defined.
Any of the following acts in this State, effected by mail or otherwise
by or on behalf of an unauthorized insurer, constitutes the transaction of
an insurance business in this State.
(a) The making of or proposing to make, as an insurer, an insurance
contract.
(b) The making of or proposing to make, as guarantor or surety, any
contract of guaranty or suretyship as a vocation and not merely incidental
to any other legitimate business or activity of the guarantor or surety.
(c) The taking or receiving of any application for insurance.
(d) The receiving or collection of any premium, commission, membership
fees, assessments, dues or other consideration for any insurance or any
part thereof.
(e) The issuance or delivery of contracts of insurance to residents of
this State or to persons authorized to do business in this State.
(f) Directly or indirectly acting as an agent for or otherwise
representing or aiding on behalf of another any person or insurer in the
solicitation, negotiation, procurement or effectuation of insurance or
renewals thereof or in the dissemination of information as to coverage or
rates, or forwarding of applications, or delivery of policies or contracts,
or inspection of risks, a fixing of rates or investigation or adjustment of
claims or losses or in the transaction of matters subsequent to
effectuation of the contract and arising out of that contract, or in any
other manner representing or assisting a person or insurer in the
transaction of insurance with respect to subjects of insurance resident,
located or to be performed in this State. This paragraph does not prohibit
full-time salaried employees of a corporate insured from acting in the
capacity of an insurance manager or buyer in placing insurance in behalf of
that employer.
(g) The transaction of any kind of insurance business specifically
recognized as transacting an insurance business within the meaning of this
Act.
(h) The transacting or proposing to transact any insurance business in
substance equivalent to any of the foregoing in a manner designed to evade
this Act.
The venue of an act committed by mail is at the point where the matter
transmitted by mail is delivered and takes effect. Unless otherwise
indicated, the term "insurer" as used in this Article includes all
corporations, associations, partnerships and individuals, engaged as
principals in the business of insurance and also includes interinsurance
exchanges and mutual benefit societies.
(Source: P.A. 77-1565.)
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(215 ILCS 5/121-7) (from Ch. 73, par. 733-7)
Sec. 121-7.
Service of process - notice.
Service of process in an action described in Section 121-6 shall be made
by delivering to and leaving with the Secretary of State, or some person in
apparent charge of his office, 2 copies thereof and by payment to the
Secretary of State of the fee prescribed by law. Service upon the Secretary
of State as such attorney shall be service upon the principal.
The Secretary of State shall forthwith forward by certified mail one of
the copies of the process or notice, order, pleading, or process in
proceedings before the Director to the defendant in such court proceeding
or to whom the notice, order, pleading, or process in such administrative
proceeding is addressed or directed at its last known principal place of
business and shall keep a record of all process so served on him which
shall show the day and hour of service. Such service is sufficient if:
(a) Notice of such service and a copy of the court process or the
notice, order, pleading, or process in such administrative proceeding are
sent within 10 days thereafter by certified mail by the plaintiff or the
plaintiff's attorney in the court proceeding, or by the Director of
Insurance in the administrative proceeding, to the defendant in the court
proceeding or to whom the notice, order, pleading, or process in such
administrative proceeding is addressed or directed at the last known
principal place of business of the defendant in the court or administrative
proceeding.
(b) The defendant's receipt or receipts issued by the post office with
which the letter is registered, showing the name of the sender of the
letter and the name and address of the person or insurer to whom the letter
is addressed, and an affidavit of the plaintiff or the plaintiff's attorney
in a court proceeding or of the Director in an administrative proceeding,
showing compliance therewith are filed with the clerk of the court in which
such action, suit, or proceeding is pending or with the Director in
administrative proceedings, by the date the defendant in the court or
administrative proceeding is required to appear or respond thereto, or
within such further time as the court or Director, as the case may be, may
allow.
(Source: P.A. 77-1565.)
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(215 ILCS 5/122-1) (from Ch. 73, par. 734-1)
Sec. 122-1.
The authority and jurisdiction of Insurance Department.
Notwithstanding any other provision of law, and except as provided herein,
any person or other entity which provides coverage in this State for medical,
surgical, chiropractic, naprapathic, physical therapy, speech pathology,
audiology, professional mental health, dental, hospital, ophthalmologic, or
optometric expenses, whether such coverage is by direct-payment, reimbursement,
or otherwise, shall be presumed to be subject to the jurisdiction of the
Department unless the person or other entity shows that while providing such
coverage it is subject to the jurisdiction of another agency of this State,
any subdivision of this State, or the federal government, or is a plan of
self-insurance or other employee welfare benefit program of an individual
employer or labor union established or maintained under or pursuant to a
collective bargaining agreement or other arrangement which provides for
health care services solely for its employees or members and their dependents.
(Source: P.A. 90-7, eff. 6-10-97.)
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(215 ILCS 5/122-5) (from Ch. 73, par. 734-5)
Sec. 122-5.
Disclosure.
(1) Any agent, broker, producer, administrator, or other
person or company which advertises, solicits, negotiates, procures, sells,
renews, continues or administers coverage in this state, described in Section
122-1 and which is provided by any person or entity described in Section
122-3 shall, if that coverage is not fully insured or otherwise fully covered
by a company authorized to do such business in this State advise any purchaser,
prospective purchaser, and covered person of such
lack of insurance or other coverage.
(2) Any administrator which advertises or administers coverage in this
state, described in Section 122-1 and which is provided by any person or
entity described in Section 122-3 shall advise any agent, broker or other
person or company which advertises, solicits, negotiates, sells, procures,
renews or continues such coverage of the elements of the coverage including
the amount of
"stop-loss" insurance in effect.
(Source: P.A. 86-753.)
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(215 ILCS 5/123) (from Ch. 73, par. 735)
Sec. 123.
Service of process upon an unauthorized foreign or alien
company.
(1) The purpose of this Section is to subject unauthorized
foreign and alien companies to the jurisdiction of courts of this State in
actions by or on behalf of insureds, reinsureds, or beneficiaries under
insurance
or reinsurance contracts. The Legislature declares that it is a subject of
concern that
many residents of this State or corporations authorized to do business in
this State hold policies of insurance or reinsurance issued by companies
not authorized to do business in this State, thus presenting to such
residents or corporations authorized to do business in this State the often
insuperable obstacle of
resorting to distant forums for
the purpose of asserting legal rights under such policies. In furtherance
of such State interest, the Legislature herein provides a method of
substituted service of process upon such companies and declares that in so
doing it exercises its power to protect its residents and corporations
authorized to do business in this State and to define, for
the purpose of this statute, what constitutes doing business in this State,
and also exercises powers and
privileges available to the State by virtue of Public Law 15, 79th Congress
of the United States, Chapter 20, 1st. Sess., S. 340, as amended, which
declares that the business of insurance and every person engaged therein
shall be subject to the laws of the several states.
(2) Any of the following acts in this State, effected by mail or
otherwise, by an unauthorized foreign or alien company: (a) the issuance or
delivery of contracts of insurance or reinsurance to residents of
this State or to corporations authorized to do business therein, (b) the
solicitation of applications for such contracts, (c) the collection of
premiums, membership fees, assessments or other considerations for such
contracts, or (d) any other transaction of business, is equivalent to and
shall constitute an appointment by such company, of the Director and his or her
successor or successors in office, to be its true and lawful attorney upon
whom may be served all lawful process in any action or proceeding against
it, arising out of such policy or contract of insurance or reinsurance, and
the acts
shall be a signification of its agreement that any such process against it
which is so served shall be of the same legal force and validity as if
served upon the company.
(3) Service of such process shall be made by delivering and leaving with
the Director a copy thereof and the payment to the Director of the fee
prescribed by this Code. The Director shall keep a record of all process so
served upon him or her. Such process shall be sufficient service upon such
foreign or alien company provided notice of such service and a copy of the
process are, within 10 days thereafter, sent by certified or registered
mail by the plaintiff's attorney of record to the defendant at the last
known principal place of business of the defendant, and the defendant's
receipt and the plaintiff's attorney's affidavit of compliance herewith are
filed with the Clerk of the Court in which such action is pending on or
before the return date of the process or within such further time as the court may allow.
(4) Service of process in any such action against any such company shall
in addition to the mode hereinabove described be valid and legal if served
upon any person within this State who, in this State on behalf of such
company, is
(a) soliciting insurance or reinsurance, or
(b) making, issuing, or delivering any policies or |
| contracts of insurance or reinsurance, or
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(c) collecting or receiving any premium, membership
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| fee, assessment or other consideration for insurance or reinsurance, or
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(d) in any manner aiding or assisting in doing any of
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| the things enumerated in clauses (a), (b), or (c) of this subsection; and a copy of such process is within 10 days thereafter sent by certified or registered mail by the plaintiff's attorney of record to the defendant at the last known principal place of business of the defendant and the defendant's receipt and the plaintiff's attorney's affidavit of compliance herewith are filed with the clerk of the court in which such action is pending on or before the return date of the process or within such further time as the court may allow.
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(5) Before any unauthorized foreign or alien company shall file or cause
to be filed any pleading in any action or proceeding, including any
arbitration, instituted
against it, such unauthorized company shall either (1) deposit with the
clerk of the court in which such action or proceeding is pending or with the
clerk of the court in the jurisdiction in which the arbitration is pending
cash
or securities or file with such clerk a bond with good and sufficient
sureties, to be approved by the court, in an amount to be fixed by the
court sufficient to secure the payment of any final judgment which may be
rendered in such action, proceeding, or arbitration; or (2) where the
unauthorized company continues to transact the business of insurance by issuing
new contracts of insurance or reinsurance, procure a certificate of authority
to
transact the business of insurance in this State.
The court in any action or proceeding, in which service is made
in the manner provided in subsections (3) or (4) may, in its discretion,
order such postponement as may be necessary to afford the defendant
reasonable opportunity to comply with the provisions of this subsection and
to defend such action.
Nothing in this Section is to be construed to prevent an unauthorized
foreign or alien company from filing a motion to quash process or to set
aside service thereof made in the manner provided in subsections (3) or (4)
on the ground either (a) that such unauthorized company has not done any of
the acts enumerated in subsection (2) or (b) that the person on whom
service was made pursuant to subsection (4) was not doing any of the acts
therein enumerated.
(6) In any action against an unauthorized foreign or alien company upon
a contract of insurance or reinsurance issued or delivered in this State to
a resident
thereof or to a corporation authorized to do business therein, if the
company has failed for 30 days after demand prior to the commencement
of the action to make payment in accordance with the terms of the contract,
and it appears to the court that such refusal was vexatious and without
reasonable cause, the court may allow to the plaintiff a reasonable
attorney fee and include such fee in any judgment that may be rendered in
such action. Such fee shall not exceed 12-1/2 per cent of the
amount which the court or jury finds the plaintiff is entitled to recover
against the insurer, but in no event shall such fee be less than $25.
Failure of a company to defend any such action shall
be deemed prima facie evidence that its failure to make payment was
vexatious and without reasonable cause.
(7) No plaintiff shall be entitled to a judgment by
default under this Section until the expiration of 30 days from the
date of the filing of the affidavit of compliance.
(8) The provisions of this Section shall not apply to any action
or proceeding against any unauthorized foreign or alien company arising out
of any contract of direct insurance
(a) effected in accordance with Section 445, or
(b) covering ocean marine, aircraft, railway
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(c) against legal liability arising out of the
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| ownership, operation or maintenance of any property having a permanent situs outside this State, or
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(d) against loss of or damage to any property having
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| a permanent situs outside this State,
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where such contract of insurance contains a provision designating the
Director and his or her successor or successors in office or a bona fide
resident of Illinois to be the true and lawful attorney of such
non-admitted insurer upon whom may be served all lawful process in any
action or proceeding arising out of any such contract of insurance or where
the insurer enters a general appearance in any such action or proceeding.
(9) Nothing in this Section contained shall limit or affect the right to
serve any process, notice or demand required or permitted by law to be
served upon any company in any other manner now or hereafter permitted by
law.
(Source: P.A. 90-53, eff. 7-3-97.)
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(215 ILCS 5/123.1) (from Ch. 73, par. 735.1)
Sec. 123.1.
Service of process upon unauthorized insurers for false
advertising.
(1) (a) The purpose of this Act is to subject to the jurisdiction of the
Director of Insurance of this State and to the jurisdiction of the courts
of this State insurers not authorized to transact business in this State
which place in or send into this State any false advertising designed to
induce residents of this State to purchase insurance from insurers not
authorized to transact business in this State. The Legislature declares it
is in the interest of the citizens of this State who purchase insurance
from insurers which solicit insurance business in this State in the manner
set forth in the preceding sentence that such insurers be subject to the
provisions of this Act. In furtherance of such state interest, the
Legislature herein provides a method of substituted service of process upon
such insurers and declares that in so doing, it exercises its power to
protect its residents and also exercises powers and privileges available to
the State by virtue of Public Law 15, 79th Congress of the United States,
Chapter 20, 1st Session, S. 340, which declares that the business of
insurance and every person engaged therein shall be subject to the laws of
the several states; the authority provided herein to be in addition to any
existing powers of this State.
(b) The provisions of this Section shall be liberally construed.
(2) No unauthorized foreign or alien insurer of the kind described in
subsection (1) shall make, issue, circulate or cause to be made, issued or
circulated, to residents of this State any estimate, illustration,
circular, pamphlet, or letter, or cause to be made in any newspaper,
magazine or other publication or over any radio or television station, any
announcement or statement to such residents misrepresenting its financial
condition or the terms of any contracts issued or to be issued or the
benefits or advantages promised thereby, or the dividends or share of the
surplus to be received thereon in violation of Article XXVI, and whenever
the Director shall have reason to believe that any such insurer is engaging
in such unlawful advertising, it shall be his duty to give notice of such
fact by certified or registered mail to such insurer and to the insurance
supervisory official of the domiciliary state of such insurer. For the purpose
of this Section the domiciliary state of an alien insurer shall be deemed to be
the state of entry or the state of the principal office in the United States.
(3) If after thirty days following the giving of the notice mentioned in
subsection (2) such insurer has failed to cease making, issuing, or
circulating such false misrepresentations or causing the same to be made,
issued or circulated in this State, and if the Director has reason to
believe that a proceeding by him in respect to such matters would be to the
interest of the public, and that such insurer is issuing or delivering
contracts of insurance to residents of this State or collecting premiums on
such contracts or doing any of the acts enumerated in subsection (4), he
shall take action against such insurer under Article XXVI.
(4) (a) Any of the following acts in this State, effected by mail or
otherwise, by any such unauthorized foreign or alien insurer:
(i) the issuance or delivery of contracts or |
| insurance to residents of this State; or
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(ii) the solicitation of applications for such
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(iii) the collection of premiums, membership fees,
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| assessments or other considerations for such contracts; or
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(iv) any other transaction of insurance business;
is equivalent to and shall constitute an appointment by such insurer of the
Director and his successor or successors in office, to be its true and lawful
attorney, upon whom may be served all statements of charges, notices and lawful
process in any proceeding instituted in respect to the misrepresentations set
forth in subsection (2) hereof under the provisions of Article XXVI, or in any
action, suit or proceeding for the recovery of any penalty therein provided,
and any such act shall be signification of its agreement that such service of
statement of charges, notices or process is of the same legal force and
validity as personal service of such statement of charges, notices or process
in this State, upon such insurer.
(b) Service of a statement of charges and notices under Article XXVI
shall be made by any deputy or employee of the Department of Insurance
delivering to and leaving with the Director or some person in apparent
charge of his office, two copies thereof. Service of process issued by any
court in any action, suit or proceeding to collect any penalty under
Article XXVI provided, shall be made by delivering and leaving with the
Director, or some person in apparent charge of his office, two copies
thereof. The Director shall forthwith cause to be mailed by certified
or registered mail one of the copies of such statement of charges, notices or
process to the defendant at its last known principal place of business, and
shall keep a record of all statements of charges, notices and process so
served. Such service of statement of charges, notices or process shall be
sufficient provided they shall have been so mailed and the defendant's receipt
or receipt issued by the post office with which the letter is certified or
registered, showing the name of the sender of the letter and the name and
address of the person to whom the letter is addressed, and the affidavit of the
person mailing such letter showing a compliance herewith are filed with the
Director in the case of any statement of charges or notices, or with the clerk
of the court in which such action is pending in the case of any process, on or
before the date the defendant is required to appear or within such further time
as may be allowed.
(c) Service of statement of charges, notices and process in any such
proceeding, action or suit shall in addition to the manner provided in
paragraph (b) of this subsection be valid if served upon any person within
this State who on behalf of such insurer is
(i) soliciting insurance; or
(ii) making, issuing or delivering any policies or
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(iii) collecting or receiving in this State any
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| premium, membership fee, assessment or other consideration for insurance; or
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(iv) in any manner aiding or assisting in doing any
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| of the things enumerated in clauses (i), (ii) or (iii) of this paragraph;
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and a copy of such statement of charges, notices or process is sent within
ten days thereafter by certified or registered mail by or on behalf
of the Director to the defendant at the last known principal place of business
of the defendant, and the defendant's receipt, or the receipt issued by the
post office with which the letter is certified or registered, showing the name
of the sender of the letter, the name and address of the person to whom the
letter is addressed, and the affidavit of the person mailing the same showing a
compliance herewith, are filed with the Director in the case of any statement
of charges or notices, or with the clerk of the court in which such action is
pending in the case of any process, on or before the date the defendant is
required to appear or within such further time as the court may allow.
(d) No cease or desist order or judgment by default under this section
shall be entered until the expiration of thirty days from the date of the
filing of the affidavit of compliance.
(e) Service of process and notice under the provisions of this section
shall be in addition to all other methods of service provided by law, and
nothing in this section shall limit or prohibit the right to serve any
statement of charges, notices or process upon any insurer in any other
manner now or hereafter permitted by law.
(5) When used in this Act, "residents" shall mean and include person,
partnership or corporation, domestic, alien or foreign.
(Source: P.A. 83-598.)
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(215 ILCS 5/123.3) (from Ch. 73, par. 735.3)
Sec. 123.3.
Insurance Sales by Companies in Hazardous Financial
Condition Prohibited. Notwithstanding any other provision of this Code, no
unauthorized foreign or alien company officer, director, trustee, agent or
employee of such company may renew, issue, or deliver or cause to be
renewed, issued or delivered any policy, contract, or certificate of
insurance for which a premium is charged or collected if the Director of
Insurance has found that such company is in a hazardous financial condition
and such officer, director, trustee, agent or employee is aware of such finding.
If upon request of the Director, such company officer, director, trustee
or employee is unable or unwilling to submit to the Director a copy of such
unauthorized company's most recent financial statement, such unwillingness
or inability shall be deemed prima facie evidence of a hazardous financial condition.
However, a finding of hazardous financial condition does not prevent the
issuance or renewal of a policy when an insured or owner exercises an
option granted to him under an existing policy to obtain new, renewed or
converted insurance coverage.
Any company officer, director, trustee, agent, or employee of such
company violating this Section shall be guilty of a Class A misdemeanor.
(Source: P.A. 85-1139.)
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