State of Illinois
92nd General Assembly

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SB864 Enrolled                                LRB9205491JScsA

 1        AN ACT concerning reinsurance.

 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    adding Article XIE as follows:

 6        (215 ILCS 5/Art. XIE heading new)
 7        ARTICLE XIE.  Special Purpose Reinsurance Vehicle Law

 8        (215 ILCS 5/179E-1 new)
 9        Sec. 179E-1.  Short title. This Article may be  cited  as
10    the Special Purpose Reinsurance Vehicle Law.

11        (215 ILCS 5/179E-5 new)
12        Sec. 179E-5.  Purpose. This Article is adopted to provide
13    for  the  creation  of  Special  Purpose Reinsurance Vehicles
14    ("SPRV") exclusively to facilitate the securitization of  one
15    or  more  ceding  insurers'  risk  as  a  means  of accessing
16    alternative sources of capital and achieving the benefits  of
17    securitization.    Investors   in   fully   funded  insurance
18    securitization transactions provide funds that are  available
19    to  the  SPRV  to  secure  the  aggregate limit under an SPRV
20    contract that provides coverage against the occurrence  of  a
21    triggering  event.   The  creation  of  SPRVs  is intended to
22    achieve  greater   efficiencies   in   conducting   insurance
23    securitizations, to diversify and broaden insurers' access to
24    sources  of  risk  bearing  capital,  and  to  make insurance
25    securitization generally available on reasonable terms to  as
26    many U.S. insurers as possible.
27        Under  the  terms of the typical securities underlying an
28    insurance  securitization  transaction,  proceeds  from   the
29    issuance  of  securities  are  repaid  to  the  investor on a
SB864 Enrolled              -2-               LRB9205491JScsA
 1    specified maturity date with interest or dividends  unless  a
 2    triggering   event   occurs.   The  insurance  securitization
 3    proceeds are available to pay the SPRV's obligations  to  the
 4    ceding  insurer  if  the  triggering event occurs, as well as
 5    being available to satisfy the SPRV's obligation to repay the
 6    insurance securitization investors if a triggering event does
 7    not occur.  Insurance securitization transactions  have  been
 8    performed   by   alien   companies  to  utilize  efficiencies
 9    available to those alien companies  that  are  not  currently
10    available  to  domestic companies. This Article is adopted to
11    allow    more    efficiency    in    conducting     insurance
12    securitizations,  to  allow  ceding insurers easier access to
13    alternative sources of risk bearing capital, and  to  promote
14    the benefits of insurance securitization to U.S. insurers.

15        (215 ILCS 5/179E-10 new)
16        Sec.   179E-10.  Exemption  from  insurance  laws  within
17    limitations.
18        (a)  An SPRV is subject to the following:
19             (1) Articles I, XII 1/2, XXIV, XXV (Sections 408 and
20        412 only), and XXVIII (except for  Sections  445,  445.1,
21        445.2, 445.3, 445.4, and 445.5) of this Code; and
22             (2)  Sections  132.1  through  134, 137 through 140,
23        155.01, 155.03, and 155.04 of this Code.
24        (b)  No other provisions of this Code apply  to  an  SPRV
25    organized under this Article, except as otherwise provided in
26    this Article.

27        (215 ILCS 5/179E-15 new)
28        Sec. 179E-15.  Definitions. For purposes of this Article,
29    the following terms have the indicated meanings:
30        "Aggregate  limit"  means  the maximum sum payable to the
31    ceding insurer under an SPRV contract.
32          "Ceding  insurer"  means  one  or  more   insurers   or
SB864 Enrolled              -3-               LRB9205491JScsA
 1    reinsurers  under  common  control  that  enters into an SPRV
 2    contract with an SPRV.
 3        "Control" (including the terms "controlling," "controlled
 4    by" and "under common control with")  means  the  possession,
 5    direct  or  indirect,  of  the  power  to direct or cause the
 6    direction of the management and policies of a person, whether
 7    through the ownership of voting securities, by contract other
 8    than  a  commercial  contract  for  goods  or  non-management
 9    services, or otherwise, unless the power is the result of  an
10    official  position  with  or  corporate  office  held  by the
11    person.  Control shall be presumed to exist  if  any  person,
12    directly  or indirectly, owns, controls, holds with the power
13    to vote, or holds proxies representing, 10% or  more  of  the
14    voting  securities of any other person.  This presumption may
15    be rebutted by a showing that  control  does  not,  in  fact,
16    exist.    Notwithstanding the foregoing, for purposes of this
17    Article,  the  fact  that  an   SPRV   exclusively   provides
18    reinsurance  to a ceding insurer under an SPRV contract shall
19    not by itself be sufficient grounds for a  finding  that  the
20    SPRV or the SPRV organizer or owner is controlled by or under
21    common control with the ceding insurer.
22        "Fair Value" means:
23             (1)  as to cash, the amount thereof; and
24             (2)  as to an asset other than cash:
25                  (A)  the  amount  at  which that asset could be
26             bought or sold  in  a  current  transaction  between
27             arms-length, willing parties;
28                  (B)  quoted  market  price  for  the  asset  in
29             active markets should be used if available; and
30                  (C)  if quoted market prices are not available,
31             a   value  determined  using  the  best  information
32             available considering  values  of  like  assets  and
33             other  valuation  methods,  such as present value of
34             future cash flows, historical value of the  same  or
SB864 Enrolled              -4-               LRB9205491JScsA
 1             similar  assets  or  comparison  to  values of other
 2             asset  classes  the  value  of   which   have   been
 3             historically related to the subject asset.
 4        "Fully  funded"  means  that,  with  respect  to  an SPRV
 5    contract, the fair value of the assets held in trust by or on
 6    behalf of the SPRV under the SPRV contract  on  the  date  on
 7    which  the  SPRV  contract is effected, equals or exceeds the
 8    aggregate limit as defined in this Article.
 9        "Indemnity trigger" means a transaction term by which the
10    SPRV's obligation  to  pay  the  ceding  insurer  for  losses
11    covered  by  an  SPRV  contract  is  triggered  by the ceding
12    insurer incurring a specified level of losses.
13        "Insolvency" or "insolvent" means that the SPRV is unable
14    to pay its  obligations  when  they  are  due,  unless  those
15    obligations are the subject of a bona fide dispute.
16        "Non-indemnity trigger" means a transaction term by which
17    the SPRV's obligation to pay the ceding insurer under an SPRV
18    contract  arises  from  the  occurrence  or existence of some
19    event or condition other than the ceding insurer incurring  a
20    specified  level of losses under its insurance or reinsurance
21    contracts.
22        "Permitted investments" means those investments that meet
23    the qualifications set forth in Section 179E-85.
24        "Qualified  U.S.  financial   institution"   means,   for
25    purposes of meeting the requirements of a  trustee under this
26    Article, a financial institution that is eligible to act as a
27    fiduciary of a trust, and that is:
28             (1)  organized  or,  in the case of a U.S. branch or
29        agency  office  of  a   foreign   banking   organization,
30        licensed,  under  the  laws  of  the United States or any
31        state of the United States; and
32             (2)  regulated, supervised, and examined by  federal
33        or  state  authorities  having  regulatory authority over
34        banks and trust companies.
SB864 Enrolled              -5-               LRB9205491JScsA
 1        "Special purpose reinsurance vehicle" or "SPRV" means  an
 2    entity,  domiciled  in  and  organized under the laws of this
 3    State, that has received a limited certificate  of  authority
 4    from  the  Director  under  this  Article exclusively for the
 5    limited  purpose  of  entering  into  and  effectuating  SPRV
 6    insurance securitizations, SPRV contracts, and other  related
 7    transactions permitted by this Article.
 8        "SPRV contract" means a contract between the SPRV and the
 9    ceding  insurer  pursuant to which the SPRV agrees to pay the
10    ceding insurer an agreed amount  upon  the  occurrence  of  a
11    triggering event.
12        "SPRV   insurance  securitization"  means  a  package  of
13    related   risk   transfer   instruments   and    facilitating
14    administrative  agreements  by which proceeds are obtained by
15    an SPRV through the issuance of  securities,  which  proceeds
16    are  held  in  trust  pursuant  to  the  requirements of this
17    Article to secure the obligations of the SPRV under  an  SPRV
18    contract with one or more ceding insurers, wherein the SPRV's
19    obligation  to  return  the  full  initial  investment to the
20    holders of those  securities,  pursuant  to  the  transaction
21    terms,  is  contingent upon those funds not being used to pay
22    the obligations of the SPRV to the ceding insurers under  the
23    SPRV Contract.
24        "SPRV  organizer"  means  one  or  more  persons who have
25    organized or intend  to  organize  an  SPRV  under  authority
26    obtained pursuant to Section 179E-20.
27        "SPRV securities" means the securities issued by an SPRV.
28        "Triggering  event"  means an event or condition that, if
29    and when it occurs or exists, obligates the SPRV  to  make  a
30    payment to the ceding insurer under the provisions of an SPRV
31    contract.

32        (215 ILCS 5/179E-20 new)
33        Sec. 179E-20.  Limited certificate of authority.
SB864 Enrolled              -6-               LRB9205491JScsA
 1        (a)  Within  30  days  after receipt by the Director of a
 2    complete  filing  by  the  prospective  SPRV  organizer   for
 3    authority  to form or acquire an SPRV, which SPRV shall exist
 4    and operate expressly for the limited purposes set  forth  in
 5    this  Article, the application shall be deemed approved and a
 6    limited certificate of  authority  shall  be  issued,  unless
 7    before  the  expiration  of  the  30-day  period the Director
 8    approves or disapproves the application in writing. A limited
 9    certificate of authority may not be issued unless the country
10    or state of domicile of each ceding insurer has notified  the
11    Director  in  writing  that  they  have  not  disapproved the
12    transaction.  A  complete  filing  of  the  application  must
13    include the following:
14             (1)  an affidavit verifying  that  each  prospective
15        SPRV  organizer  the  SPRV  meets the requirements as set
16        forth in this Article;
17             (2)  a  representation  that  the  prospective  SPRV
18        organizer  intends  to  form  an  SPRV  to   operate   in
19        accordance  with  the  requirements  set  forth  in  this
20        Article;
21             (3)  the proposed name of the subject SPRV;
22             (4)  biographical    descriptions   of   each   SPRV
23        organizer setting forth  their  legal  names,  any  names
24        under  which  they  have or are conducting their affairs,
25        and any affiliations with other  persons  as  defined  in
26        Article  VIII  1/2, together with such other biographical
27        information as the Director may request;
28             (5)  the source and form of the minimum  capital  to
29        be contributed to the SPRV;
30             (6)  any  persons  with  which  the SPRV is or, upon
31        formation, will be affiliated as defined in Article  VIII
32        1/2;
33             (7)  the  names  and biographical information of the
34        proposed members of the board of directors and  principal
SB864 Enrolled              -7-               LRB9205491JScsA
 1        officers  of  the  SPRV, setting forth their legal names,
 2        any names under which they have or are  conducting  their
 3        affairs  and  any  affiliations  with  other  persons  as
 4        defined  in  Article  VIII  1/2, together with such other
 5        biographical information as the Director may request; and
 6             (8)  a  plan   of   operation,   consisting   of   a
 7        description of the contemplated insurance securitization,
 8        the  SPRV  contract, and related transactions, which plan
 9        of operation must include:
10                  (A)  draft documentation or, at the  discretion
11             of  the Director, a written summary, of all material
12             agreements that will be entered into  to  effectuate
13             the  insurance  securitization  and the related SPRV
14             contract,  including  the  names   of   the   ceding
15             insurers, the nature of the risks being assumed, and
16             the    maximum   amounts,   purpose,   nature,   and
17             interrelationships  of  the   various   transactions
18             required to effectuate the insurance securitization;
19                  (B)  the investment strategy of the  SPRV and a
20             representation  that  (i)  the  investment  strategy
21             complies  with the investment requirements set forth
22             in  this  Article  and  (ii)   includes   investment
23             practices  or  other  provisions  to  preserve asset
24             values  that  will  facilitate  attainment  of  full
25             funding during the term of the  securitization  with
26             assets  that  can  be  monetized  in  response  to a
27             triggering  event  without  a  substantial  loss  in
28             value;
29                  (C)  a  description  of  the  method  by  which
30             losses covered by the SPRV contract that may develop
31             after the termination of the contract period are  to
32             be  addressed  under  the  provisions  of  the  SPRV
33             contract; and
34                  (D)  a  representation that the trust agreement
SB864 Enrolled              -8-               LRB9205491JScsA
 1             and  the  trusts  holding  assets  that  secure  the
 2             obligations of the SPRV under the SPRV contract  and
 3             the  SPRV  contract  with  the  ceding  insurers  in
 4             connection   with   the    contemplated    insurance
 5             securitization will be structured in accordance with
 6             the requirements set forth in this Article.
 7        (b)  The  Director  may  not  approve  the application or
 8    issue a limited certificate of authority until he or she  has
 9    found   that  the  proposed  plan  of  operation  provides  a
10    reasonable expectation of a successful  operation,  based  on
11    the proposed SPRV organizer, directors, and officers being of
12    known  good  character  and  that  there is no good reason to
13    believe that they are  affiliated,  directly  or  indirectly,
14    through    ownership,    control,   management,   reinsurance
15    transactions, or other insurance or business  relations  with
16    any  person  or  persons  known  to have been involved in the
17    improper manipulation of assets, accounts or reinsurance.
18        (c)  Upon approval by the Director of the application and
19    the issuance of a limited certificate of authority, the  SPRV
20    may  be  acquired  or  formed  and,  in  accordance  with the
21    approved plan of operation, the SPRV may enter into contracts
22    and conduct other activities within the parameters set  forth
23    in the filed plan of operation.
24        (d)  The limited certificate of authority so issued shall
25    state  that  the  SPRV's  authorization to be involved in the
26    business of reinsurance is limited to  only  the  reinsurance
27    activities  that  the  SPRV  is allowed to conduct under this
28    Article.
29        (e)  The SPRV organizer must provide a  complete  set  of
30    the  documentation  of  the  insurance  securitization to the
31    Director upon  closing of the transactions including, but not
32    limited to, an opinion  of  legal  counsel  with  respect  to
33    compliance  with this and any other applicable laws as of the
34    effective date of the transaction. Any material change of the
SB864 Enrolled              -9-               LRB9205491JScsA
 1    SPRV's plan of operation described in  items (1) through  (8)
 2    of subsection (a) including, but not limited to, the issuance
 3    of  new  securities to continue the securitization activities
 4    of the SPRV under this  Article  after  expiration  and  full
 5    satisfaction  of  the  initial  securitization  transactions,
 6    requires prior approval of the Director, however, a change in
 7    the   counterparty  to  swap  transactions  for  an  existing
 8    securitization as allowed under this  Article  shall  not  be
 9    deemed  a  material  change.  Any material change that is not
10    disapproved by the Director in writing within 15  days  after
11    its submission shall be deemed approved.

12        (215 ILCS 5/179E-25 new)
13        Sec.  179E-25.  Limited  purpose  of  SPRV.  This Article
14    authorizes SPRVs to be created for  the  limited  purpose  of
15    entering  into  insurance  securitization  transactions  with
16    investors  and  into  related  agreements  to pay one or more
17    ceding insurers agreed upon amounts under  an  SPRV  contract
18    upon  the  occurrence  of  triggering  events  related to the
19    insurance business of the ceding insurer.  An  SPRV  may  not
20    issue a contract for assumption of risk or indemnification of
21    loss other than an SPRV contract as defined herein.

22        (215 ILCS 5/179E-30 new)
23        Sec.  179E-30.  Approved  transactions  and  operation of
24    SPRVs.
25        (a)  SPRVs authorized under this Article may at any given
26    time enter into and effectuate SPRV  contracts  with  one  or
27    more  ceding  insurers,  provided  that  the  SPRV  contracts
28    obligate  the SPRV to indemnify the ceding insurer for losses
29    and that contingent obligations of the SPRV  under  the  SPRV
30    contracts  are  securitized  in  full  through  a single SPRV
31    insurance securitization and are  fully  funded  and  secured
32    with assets held in trust in accordance with the requirements
SB864 Enrolled              -10-              LRB9205491JScsA
 1    of  this  Article pursuant to agreements contemplated by this
 2    Article and invested in a manner that meets the criteria  set
 3    forth in Section 179E-85 of this Article.
 4        (b)  An  SPRV  may  enter into such agreements with third
 5    parties and conduct such business as is necessary to  fulfill
 6    its  obligations  and  administrative  duties incident to the
 7    insurance  securitization  and  the   SPRV   contract.    The
 8    agreements may include entering into swap agreements or other
 9    transactions  that  have  the  objective  of  leveling timing
10    differences  in  funding  up-front  or  ongoing   transaction
11    expenses  or  managing  credit  or  interest rate risk of the
12    investments in trust to assure that the assets held in  trust
13    will be sufficient to satisfy (i) payment or repayment of the
14    securities  issued  pursuant  to  an insurance securitization
15    transaction or (ii) the obligations of  the  SPRV  under  the
16    SPRV  contract.   In  fulfilling its function, the SPRV shall
17    adhere to the following requirements and shall, to the extent
18    of its powers, ensure that contracts obligating other parties
19    to perform certain functions incident to its  operations  are
20    substantively  and  materially  consistent with the following
21    requirements and guidelines:
22             (1)  An SPRV shall have a distinct name, which shall
23        include the designation "SPRV".  The name of the SPRV may
24        not be deceptively similar to, or likely to  be  confused
25        with  or  mistaken  for, any other existing business name
26        registered in this State.
27             (2)  Unless  otherwise  provided  in  the  plan   of
28        operation,  the principal place of business and office of
29        any SPRV organized under this Article must be located  in
30        this State.
31             (3)  The  assets  of  an  SPRV must be preserved and
32        administered by or on behalf of the SPRV to  satisfy  the
33        liabilities  and  obligations of the SPRV incident to the
34        insurance securitization and  other  related  agreements,
SB864 Enrolled              -11-              LRB9205491JScsA
 1        including the SPRV contract.
 2             (4)  Assets  of  the SPRV that are pledged to secure
 3        obligations of the SPRV to a ceding insurer under an SPRV
 4        contract must be held in  trust  and  administered  by  a
 5        qualified U.S. financial institution.  The qualified U.S.
 6        financial  institution may not control, be controlled by,
 7        or be under common control with, the SPRV or  the  ceding
 8        insurers.
 9             (5)  The  agreement governing any  trust must create
10        one or more trust accounts into which all pledged  assets
11        must   be   deposited   and  held  until  distributed  in
12        accordance with the trust agreement.  The pledged  assets
13        must  be  held  by the trustee at the trustee's office in
14        the United States and may  be  held  in  certificated  or
15        electronic form.
16             (6)  The   provisions   for   withdrawal  by  ceding
17        insurers of assets from the  trust  shall  be  clean  and
18        unconditional,    subject    only    to   the   following
19        requirements:
20                  (A)  the ceding insurer shall have the right to
21             withdraw assets from the trust account at any  time,
22             without  notice to the SPRV, subject only to written
23             notice to the trustee from the ceding  insurer  that
24             funds in the amount requested are due and payable by
25             the SPRV;
26                  (B)  no  other  statement  or  document need be
27             presented in order to withdraw  assets,  except  the
28             ceding   insurer  may  be  required  to  acknowledge
29             receipt of withdrawn assets;
30                  (C)  the trust agreement must indicate that  it
31             is  not  subject to any conditions or qualifications
32             outside of the trust agreement;
33                  (D)  the  trust  agreement  may   not   contain
34             references to any other agreements or documents; and
SB864 Enrolled              -12-              LRB9205491JScsA
 1                  (E)  no  reference may be made to the fact that
 2             the funds may represent reinsurance premiums or that
 3             the funds  have  been  deposited  for  any  specific
 4             purpose.
 5             (7)  The trust agreement must be established for the
 6        sole  use  and  benefit of the ceding insurer at least to
 7        the full extent of the SPRV's obligations to  the  ceding
 8        insurer  under  the  SPRV contract. If there is more than
 9        one ceding insurer, a separate trust  agreement  must  be
10        entered  with  each  ceding  insurer and a separate trust
11        account must be maintained for each ceding insurer.
12             (8)  The  trust  agreement  must  provide  for   the
13        trustee to:
14                  (A)  receive  assets  and  hold all assets in a
15             safe place;
16                  (B)  determine that all assets are in a form so
17             that  the  ceding  insurer  or  the  trustee,   upon
18             direction   by  the  ceding  insurer  may,  whenever
19             necessary, negotiate any the assets, without consent
20             or signature from the SPRV or any  other  person  or
21             entity;
22                  (C)  furnish to the SPRV, the Director, and the
23             ceding  insurer  a  statement  of  all assets in the
24             trust  account  reported  at  fair  value  upon  its
25             inception and at intervals no less frequent than the
26             end of each calendar quarter;
27                  (D)  notify the SPRV and  the  ceding  insurer,
28             within  10  days,  of any deposits to or withdrawals
29             from the trust account;
30                  (E)  upon written demand of the ceding insurer,
31             immediately take any  and  all  steps  necessary  to
32             transfer  absolutely  and  unequivocally  all right,
33             title, and interest in the assets held in the  trust
34             account  to  the ceding insurer and deliver physical
SB864 Enrolled              -13-              LRB9205491JScsA
 1             custody of the assets to the ceding insurer; and
 2                  (F)  allow no substitutions or  withdrawals  of
 3             assets  from  the  trust  account, except on written
 4             instructions from the ceding insurer.
 5             (9)  The trust agreement must provide that at  least
 6        30 days, but not more than 45 days, before termination of
 7        the  trust  account,  written notification of termination
 8        shall be delivered by the trustee to the ceding insurer.
 9             (10)  The trust agreement may be made subject to and
10        governed by the laws of any state,  in  addition  to  the
11        requirements  for  the trust as provided in this Article,
12        provided that the state  is  disclosed  in  the  plan  of
13        operation filed with and approved, or deemed approved, by
14        the Director under Section 179E-20.
15             (11)  The  trust agreement must prohibit invasion of
16        the trust corpus for the purpose of  paying  compensation
17        to, or reimbursing the expenses of, the trustee.
18             (12)  The  trust  agreement  must  provide  that the
19        trustee shall be liable for its own  negligence,  willful
20        misconduct, or lack of good faith.
21             (13)  Notwithstanding   the   provisions   of  items
22        (6)(C), (6)(D), and (6)(E) of  this  subsection  or  item
23        (14)(E)  of  this  subsection,  when a trust agreement is
24        established in conjunction with an  SPRV  contract,  then
25        the  trust  agreement may provide that the ceding insurer
26        must undertake to use and apply any  amounts  drawn  upon
27        the  trust  account,  without  diminution  because of the
28        insolvency of the ceding insurer or  the  SPRV,  for  the
29        following purposes:
30                  (A)  to  pay  or  reimburse  the ceding insurer
31             amounts due to the ceding insurer under the specific
32             SPRV  contract  including,  but  not   limited   to,
33             unearned  premiums due to the ceding insurer, if not
34             otherwise paid by the SPRV in  accordance  with  the
SB864 Enrolled              -14-              LRB9205491JScsA
 1             terms of the agreement; or
 2                  (B)  when   the  ceding  insurer  has  received
 3             notification of termination of  the  trust  account,
 4             and  when  the SPRV's entire "obligations" under the
 5             specific  SPRV  contract  remain  unliquidated   and
 6             undischarged  10 days prior to the termination date,
 7             to withdraw amounts equal to those  obligations  and
 8             deposit  those amounts in a separate account, in the
 9             name of the ceding insurer, in  any  qualified  U.S.
10             financial   institution,   apart  from  its  general
11             assets,  in  trust  for  those  uses  and   purposes
12             specified  in item (13)(A) of this subsection as may
13             remain executory after the withdrawal  and  for  any
14             period  after  the  termination date.  "Obligations"
15             within the meaning of this subsection  may,  without
16             duplication, include:
17                       (i)  losses  and loss expenses paid by the
18                  ceding insurer,  but  not  recovered  from  the
19                  SPRV;
20                       (ii)  reserves  for  losses  reported  and
21                  outstanding;
22                       (iii)  reserves  for  losses  incurred but
23                  not reported;
24                       (iv)  reserves for  loss expenses;
25                       (v)  reserves for unearned premiums; and
26                       (vi)  any  other  amounts  that,  together
27                  with  (iv),  represent  the   aggregate   limit
28                  remaining under the SPRV contract if the period
29                  of  coverage  or the agreed upon period of loss
30                  development has yet to expire.
31        The provisions to be  included  in  the  trust  agreement
32    pursuant  to this item (13) may, in lieu thereof, be included
33    in the underlying SPRV contract.
34             (14)  An SPRV contract must contain provisions that:
SB864 Enrolled              -15-              LRB9205491JScsA
 1                  (A)  require the SPRV to enter  into  a   trust
 2             agreement  specifying what recoverables or reserves,
 3             or both, the agreement is to cover and to  establish
 4             a  trust  account  for  the  benefit  of  the ceding
 5             insurer;
 6                  (B)  stipulate that  assets  deposited  in  the
 7             trust  account  must  be  valued  according to their
 8             current  fair  value,  and  may  consist   only   of
 9             permitted investments;
10                  (C)  require the SPRV, before depositing assets
11             with    the   trustee,   to   execute   assignments,
12             endorsements in blank, or transfer  legal  title  to
13             the trustee of all shares, obligations, or any other
14             assets  requiring  assignments,  in  order  that the
15             ceding insurer, or the trustee upon the direction of
16             the ceding insurer, may whenever necessary negotiate
17             the assets without consent  or  signature  from  the
18             SPRV or any other entity;
19                  (D)  require  that  all  settlements of account
20             between the ceding insurer and the SPRV be  made  in
21             cash or its equivalent; and
22                  (E)  stipulate  that  the  SPRV  and the ceding
23             insurer agree that the assets in the trust  account,
24             established   under   the  provisions  of  the  SPRV
25             contract, may be withdrawn by the ceding insurer  at
26             any  time,  notwithstanding  any other provisions in
27             the SPRV contract, and shall be utilized and applied
28             by the ceding insurer or any successor by  operation
29             of  law of the ceding insurer, including (subject to
30             the provisions  of  Section  179E-80),  but  without
31             further  limitation,  any liquidator, rehabilitator,
32             receiver, or  conservator  of  the  ceding  insurer,
33             without diminution because of insolvency on the part
34             of  the  ceding  insurer  or  the SPRV, only for the
SB864 Enrolled              -16-              LRB9205491JScsA
 1             following purposes:
 2                       (i)  to transfer all of those assets  into
 3                  the  trust  account  for  the  benefit  of  the
 4                  ceding insurer under  the  terms  of  the  SPRV
 5                  contract  and  in compliance with this Article;
 6                  and
 7                       (ii)  to pay any other amounts the  ceding
 8                  insurer claims are due under the SPRV contract.
 9             (15)  The SPRV contract entered into by the SPRV may
10        contain  provisions  that give the SPRV the right to seek
11        approval from the ceding insurer  to  withdraw  from  the
12        trust  all  or  part  of  the  assets contained in it and
13        transfer the assets to the SPRV, provided that:
14                  (A)  at the time of the  withdrawal,  the  SPRV
15             replaces  the  withdrawn assets with other qualified
16             assets having a fair value equal to the  fair  value
17             of   the   assets   withdrawn   and  that  meet  the
18             requirements of Section 179E-85; and
19                  (B)  after the withdrawals  and  transfer,  the
20             fair  value  of  the  assets  in trust  securing the
21             obligations of the SPRV under the SPRV  contract  is
22             no  less  than an amount needed to satisfy the fully
23             funded requirement of the SPRV contract. The  ceding
24             insurer   shall   be   the  sole  judge  as  to  the
25             application  of  these  provisions,  but  shall  not
26             unreasonably nor arbitrarily withhold its approval.
27             (16)  The investors in the SPRV must agree,  and  be
28        contractually  obligated to so do, that any obligation to
29        repay principal, interest, or dividends on the securities
30        issued by the SPRV shall be reduced upon  the  occurrence
31        of  a  triggering event, to the extent that the assets of
32        the SPRV held in trust for  the  benefit  of  the  ceding
33        insurer are remitted to the ceding insurer in fulfillment
34        of the obligations of the SPRV under the SPRV contract.
SB864 Enrolled              -17-              LRB9205491JScsA
 1             (17)  Assets held by an SPRV in trust must be valued
 2        at their fair value.
 3             (18)  The  proceeds  from  the sale of securities by
 4        the SPRV to investors must be deposited with the  trustee
 5        as  contemplated  by  this  Article,  and must be held or
 6        invested  by  the  trustee   in   accordance   with   the
 7        requirements of Section 179E-85.
 8             (19)  An  SPRV  organized  under  this  Article, may
 9        engage only in  fully  funded  indemnity  triggered  SPRV
10        contracts   to  support  in  full  the  ceding  insurers'
11        exposures assumed by the SPRV, except that  an  SPRV  may
12        engage   in   an  SPRV  contract  that  is  non-indemnity
13        triggered after the  Director,  in  accordance  with  the
14        authority granted under Section 179E-100 of this Article,
15        adopts  rules  addressing the treatment of the portion of
16        the  risk  that  is  not   indemnity   based,   including
17        accounting, disclosure, risk-based capital treatment, and
18        the   manner   in   which   risks   associated  with  the
19        non-indemnity based SPRV contract may  be  evaluated  and
20        managed.  An  SPRV may not at any time enter into an SPRV
21        contract that is  not  fully  funded,  whether  indemnity
22        triggered or non-indemnity triggered.  Assets of the SPRV
23        may be used to pay interest or other consideration on any
24        outstanding  debt  or  other  obligation of the SPRV, and
25        nothing in this item shall be construed or interpreted to
26        prevent an SPRV from entering into a  swap  agreement  or
27        other  transaction  that  has  the effect of guaranteeing
28        interest or other consideration.
29             (20)  The contracts or other documentation  relating
30        to   an   SPRV   insurance  securitization  must  contain
31        provisions identifying the SPRV that will enter into  the
32        special purpose reinsurance securitization. The contracts
33        or  other  documentation  must  clearly disclose that the
34        assets of the SPRV, and only those assets, are  available
SB864 Enrolled              -18-              LRB9205491JScsA
 1        to  pay the obligations of that SPRV. Notwithstanding the
 2        foregoing, and subject to the provisions of this  Article
 3        and  any  other  applicable  law  or rule, the failure to
 4        include  this  language  in  the   contracts   or   other
 5        documentation  may  not  be  used  as  the  sole basis by
 6        creditors, reinsurers, or other claimants  to  circumvent
 7        the provisions of this Article.
 8             (21)  Under   no   circumstances   may  an  SPRV  be
 9        authorized to:
10                  (A)  issue  or  otherwise  administer   primary
11             insurance policies;
12                  (B)  have  any  obligation to the policyholders
13             or reinsureds of the ceding insurer;
14                  (C)  enter into an SPRV contract with a  person
15             that  is  not  licensed  or  otherwise authorized to
16             conduct the business of insurance or reinsurance  in
17             at least its state or country of domicile; or
18                  (D)  assume  or retain exposure to insurance or
19             reinsurance losses for its own account that  is  not
20             initially  fully  funded  by  proceeds  from an SPRV
21             securitization that meets the requirements  of  this
22             Article.
23             (22)  At  the  cessation  of business of an SPRV the
24        limited certificate of authority granted by the  Director
25        shall  expire  and the SPRV shall no longer be authorized
26        to conduct activities under this Article unless and until
27        a new certificate of authority is issued  pursuant  to  a
28        new filing in accordance with Section 179E-20.
29             (23)  It   is  unlawful  for  an  SPRV  to  loan  or
30        otherwise invest, or place any of its assets in  custody,
31        trust,  or  under  management with, or to borrow money or
32        receive a loan  from  (other  than  by  issuance  of  the
33        securities pursuant to an SPRV insurance securitization),
34        or advance from, anyone convicted of a felony, anyone who
SB864 Enrolled              -19-              LRB9205491JScsA
 1        is  untrustworthy  or  of  known bad character, or anyone
 2        convicted of a criminal offense involving the  conversion
 3        or  misappropriation  of  fiduciary  funds  or  insurance
 4        accounts,  theft,  deceit,  fraud,  misrepresentation, or
 5        corruption.

 6        (215 ILCS 5/179E-35 new)
 7        Sec. 179E-35.  Powers.
 8        (a)  An SPRV authorized under this Article shall have the
 9    necessary powers to enter into contracts and to conduct  such
10    other  commercial  activities as are necessary to fulfill the
11    purposes of this Article.  Those activities may include,  but
12    are  not  limited  to,  entering into SPRV contracts, issuing
13    securities of the SPRV and complying with the terms  thereof,
14    entering  into  trust,  swap,  and other agreements as may be
15    necessary  to  effectuate  an  insurance  securitization   in
16    compliance   with   the   limitations  and  pursuant  to  the
17    authorities granted to the SPRV under  this  Article  or  the
18    plan   of  operation  approved  or  deemed  approved  by  the
19    Director.
20        (b)  An SPRV  organized  or  doing  business  under  this
21    Article  shall,  by  the name adopted by the SPRV, in law, be
22    capable of suing or being  sued,  and  may  make  or  enforce
23    contracts  in  relation to the business of the SPRV; may have
24    and use a common seal, and in the name of the SPRV  or  by  a
25    trustee  chosen  by the board of directors, shall, in law, be
26    capable of taking, purchasing, holding and disposing of  real
27    and  personal  property for carrying into effect the purposes
28    of its organization; and  may  by  its  board  of  directors,
29    trustees,  officers, or managers, make by-laws and amendments
30    thereto not inconsistent with the laws or the constitution of
31    this  State or of the  United  States,  which  by-laws  shall
32    define   the  manner  of  electing  directors,  trustees,  or
33    managers and  officers  of  the  SPRV,  together  with  their
SB864 Enrolled              -20-              LRB9205491JScsA
 1    qualifications and duties and fixing their term of office.

 2        (215 ILCS 5/179E-40 new)
 3        Sec.     179E-40.  Affiliation.    Notwithstanding    the
 4    provisions of Article VIII 1/2, the SPRV, the SPRV organizer,
 5    and subsequent debt or equity investors  in  SPRV  securities
 6    shall  not  be  deemed  affiliates  of  the ceding insurer by
 7    virtue of the SPRV contract between the  ceding  insurer  and
 8    the  SPRV,  the securities of the SPRV, or related agreements
 9    necessary to implement the SPRV insurance securitization.  An
10    SPRV  may  not be controlled by, may not control, and may not
11    be under common control with any ceding  insurer  that  is  a
12    party to an SPRV contract.

13        (215 ILCS 5/179E-45 new)
14        Sec.  179E-45.  Capitalization. An SPRV must have minimum
15    initial capital of not less than $5,000.  All of the  initial
16    capital  must  be  received by the SPRV in cash.  The minimum
17    initial capital required and all other funds of the  SPRV  in
18    excess  of  its minimum initial capital, including funds held
19    in trust to secure the obligations of the  SPRV  pursuant  to
20    its  obligations  under the SPRV contracts, shall be invested
21    as provided in Section 179E-85.

22        (215 ILCS 5/179E-50 new)
23        Sec. 179E-50.  Dividends. An SPRV may not declare or  pay
24    dividends  in  any form to its owners unless the dividends do
25    not decrease the capital of the SPRV below $5,000, and  after
26    giving  effect  to  the  dividends,  the  assets of the SPRV,
27    including assets held in trust pursuant to the terms  of  the
28    insurance   securitization,   are   sufficient  to  meet  its
29    obligations. Dividends  may  be  declared  by  the  board  of
30    directors  of  the SPRV if the declaration of dividends would
31    not violate the provisions of this Article or jeopardize  the
SB864 Enrolled              -21-              LRB9205491JScsA
 1    fulfillment  of  the  obligations  of the SPRV or the trustee
 2    pursuant to  the  SPRV  insurance  securitization,  the  SPRV
 3    contract or any related transaction.

 4        (215 ILCS 5/179E-55 new)
 5        Sec. 179E-55.  Records and financial reports.
 6        (a)  The  records  of the SPRV must be maintained in this
 7    State  and  must  be  available  for   examination   by   the
 8    Department.  The Director shall have the right to examine the
 9    records of an SPRV at any time.  No later than 5 months after
10    the  fiscal year end of the SPRV, the SPRV must file with the
11    Director an audit by a certified public  accounting  firm  of
12    the financial statements of the SPRV and the trust accounts.
13        (b)  No  later  than  March  1  of  each  year,  an  SPRV
14    organized  under  this  Article must file with the Director a
15    statement of operations, including, but  not  limited  to,  a
16    statement  of income, a balance sheet, and a detailed listing
17    of invested assets, including identification of  assets  held
18    in  trust  to  secure  the  SPRV's obligations under the SPRV
19    contract, for the year ending the previous December 31.   The
20    statements  shall  be prepared in accordance with Section 136
21    of this Code on such forms and shall reveal such  information
22    as shall be required by the Director.
23        (c)  An  SPRV must keep its books and records in a manner
24    so that its financial condition, affairs, and operations  can
25    be  ascertained,  its  financial  statements  filed  with the
26    Director can be readily verified, and its compliance with the
27    provisions of this Article can be  determined.  An  SPRV  may
28    cause  any or all of the books or records to be photographed,
29    reproduced on film, or stored and reproduced electronically.
30        (d)  All original books,  records,  documents,  accounts,
31    and  vouchers,  or  reproductions  of  those  items,  must be
32    preserved and kept available in this State for the purpose of
33    examination and  until  authority  to  destroy  or  otherwise
SB864 Enrolled              -22-              LRB9205491JScsA
 1    dispose  of  the  records  is  secured from the Director. The
 2    original records may, however, be kept and maintained outside
 3    this State if, according to a  plan  adopted  by  the  SPRV's
 4    board of directors and approved by the Director, it maintains
 5    other suitable records.

 6        (215 ILCS 5/179E-60 new)
 7        Sec. 179E-60.  Officers and directors.
 8        (a)  The  directors  of an SPRV shall elect such officers
 9    they deem necessary to carry out the  purposes  of  the  SPRV
10    pursuant  to  this  Article.  The provisions of Section 10 of
11    this Code relating to the  indemnification  of  officers  and
12    directors  apply  to  and  govern  SPRVs organized under this
13    Article.
14        (b)  An SPRV authorized to do business in this State must
15    notify the Director of the appointment or election of any new
16    officers or directors within 30 days after the appointment or
17    election.
18        (c)  If, after notice and hearing afforded to the officer
19    or director, and after a finding that the officer or director
20    is incompetent or untrustworthy or of  known  bad  character,
21    the  Director  shall  order the removal of the person. If the
22    SPRV does not comply with a removal order within 30 days, the
23    Director may  suspend  that  SPRV's  limited  certificate  of
24    authority until such time as the order is complied with.
25        (d)  An  SPRV  may  not make loans to any SPRV organizer,
26    owner, director, officer, manager, or affiliate.

27        (215 ILCS 5/179E-65 new)
28        Sec. 179E-65.  Fees and taxes. The  Director  may  charge
29    fees  to  reimburse  the  Director  for  expenses  and  costs
30    incurred  by  the  Department  incident to the examination of
31    financial statements and review of the plan of operation  and
32    to reimburse other such activities of the Director related to
SB864 Enrolled              -23-              LRB9205491JScsA
 1    the  formation  and  ongoing operation of an SPRV. An SPRV is
 2    not  be  subject  to  State  premium  or  other  State  taxes
 3    incidental to the operation of its business as  long  as  the
 4    business remains within the limitations of this Article.

 5        (215 ILCS 5/179E-70 new)
 6        Sec.  179E-70.  Dissolution. An SPRV operating under this
 7    Article may be dissolved by a vote of its board of  directors
 8    at  any  time after the Director has approved that action.  A
 9    voluntary dissolution may not be effected  or  allowed  until
10    and unless all of the obligations of the SPRV pursuant to the
11    insurance   securitization   have   been  fully  and  finally
12    satisfied pursuant to their terms.  In the case of  voluntary
13    dissolution,  the  disposition  of  the  affairs  of the SPRV
14    (including the settlement  of  all  outstanding  obligations)
15    shall  be  made by the officers or directors of the SPRV, and
16    when  the  liquidation  has  been  completed  and   a   final
17    statement,  in  acceptable  form, filed with and approved, or
18    deemed  approved,  by  the  Director,  the   provisions   for
19    voluntary  dissolution  under the laws of this State shall be
20    followed to dissolve the SPRV.

21        (215 ILCS 5/179E-75 new)
22        Sec.    179E-75.  Conservation,    rehabilitation,     or
23    liquidation.
24        (a)  The  provisions  of Articles XIII and XIII 1/2 apply
25    to an SPRV, except to the extent modified in this Section.
26        (b)  Notwithstanding the provisions  of  Section  188  of
27    this  Code, the Director may apply by petition to the Circuit
28    Court of Cook County, the Circuit Court of  Sangamon  County,
29    or  the  circuit  court of the county in which an SPRV has or
30    last had its principal office for an  order  authorizing  the
31    Director  to  conserve,  rehabilitate  or  liquidate  an SPRV
32    domiciled in  this  State  solely  on  one  or  more  of  the
SB864 Enrolled              -24-              LRB9205491JScsA
 1    following grounds:
 2             (1)  there    has    been   embezzlement,   wrongful
 3        sequestration, dissipation, or diversion of the assets of
 4        the SPRV intended to be used to pay amounts owed  to  the
 5        ceding insurer or the holders of SPRV securities; or
 6             (2)  the  SPRV  is  insolvent  and  the holders of a
 7        majority in outstanding principal amount of each class of
 8        SPRV  securities  request  or  consent  to  conservation,
 9        rehabilitation, or liquidation under this Article.
10        The court shall not grant relief under item (1)  of  this
11    subsection  unless, after notice and a hearing, the Director,
12    who has  the  burden  of  proof,  establishes  by  clear  and
13    convincing evidence that the relief should be granted.
14        (c)  Notwithstanding any contrary provision in this Code,
15    the   rules   promulgated  under  this  Code,  or  any  other
16    applicable law or  rule,  upon  any  order  of  conservation,
17    rehabilitation,  or  liquidation  of  the  SPRV, the receiver
18    shall  be  bound  to  deal  with  the   SPRV's   assets   and
19    liabilities, in accordance with the requirements set forth in
20    this Article.
21        (d)  With  respect  to  amounts recoverable under an SPRV
22    contract, the amount recoverable by the receiver may  not  be
23    reduced or diminished as a result of the entry of an order of
24    conservation,  rehabilitation, or liquidation with respect to
25    the ceding insurer  notwithstanding  any  provisions  to  the
26    contrary  in  the  contracts or other documentation governing
27    the SPRV insurance securitization.
28        (e)  Notwithstanding the provisions of Article  XIII  and
29    XIII   1/2  of  this  Code,  any  application,  petition,  or
30    temporary restraining order or injunction issued under  those
31    Articles, with respect to a ceding insurer shall not prohibit
32    the  transaction  of  any  business by an SPRV, including any
33    payment by an SPRV made pursuant to an SPRV security, or  any
34    action or proceeding against an SPRV or its assets.
SB864 Enrolled              -25-              LRB9205491JScsA
 1        (f)  Notwithstanding  the provisions of Articles XIII and
 2    XIII  1/2  of  this  Code,  the  commencement  of  a  summary
 3    proceeding or other interim  proceeding  commenced  before  a
 4    formal  delinquency  proceeding  with respect to an SPRV, and
 5    any order issued by the court thereunder, shall not prohibit:
 6             (1)  the payment by an SPRV made pursuant to an SPRV
 7        security or SPRV contract; or
 8             (2)  the SPRV from taking  any  action  required  to
 9        make the payment.
10        (g)  Notwithstanding any other provision of Articles XIII
11    and XIII 1/2 of this Code or other State law:
12             (1)  a  receiver of a ceding insurer may not avoid a
13        non-fraudulent transfer by a ceding insurer to an SPRV of
14        money  or  other  property  made  pursuant  to  an   SPRV
15        contract; and
16             (2)  a   receiver   of   an  SPRV  may  not  void  a
17        non-fraudulent transfer by the SPRV  of  money  or  other
18        property  made  to  a  ceding insurer pursuant to an SPRV
19        contract or made to or for the benefit of any  holder  of
20        an SPRV security on account of the SPRV security.
21        (h)  With   the  exception  of  the  fulfillment  of  the
22    obligations under an SPRV contract, and  notwithstanding  any
23    other  provisions  of this Article or other law of this State
24    to the contrary, the assets of an SPRV, including assets held
25    in trust, may not be consolidated with  or  included  in  the
26    estate  of  a  ceding  insurer  in any delinquency proceeding
27    against  the  ceding  insurer  under  this  Article  for  any
28    purpose,  including,  without  limitation,  distribution   to
29    creditors of the ceding insurer.
30        (i)  Notwithstanding any other provision of this Article:
31             (1)  A  domiciliary receiver of an SPRV domiciled in
32        another state shall be vested by operation  of  law  with
33        the  title to all of the assets, property, contracts, and
34        rights of action, and all of  the  books,  accounts,  and
SB864 Enrolled              -26-              LRB9205491JScsA
 1        other  records  of  the  SPRV located in this State.  The
 2        domiciliary receiver shall have the  immediate  right  to
 3        recover all of the vested property, assets, and causes of
 4        action of the SPRV located in this State.
 5             (2)  An ancillary proceeding may not be commenced or
 6        prosecuted  in  this  State  against an SPRV domiciled in
 7        another state.

 8        (215 ILCS 5/179E-80 new)
 9        Sec.  179E-80.  SPRV  not  subject  to  guaranty   funds,
10    residual market, or similar arrangements.
11        (a)  An  SPRV  or the activities, assets, and obligations
12    relating to the SPRV are not subject  to  the  provisions  of
13    Articles  XXXIII  1/2 and XXXIV of this Code, and an SPRV may
14    not be assessed by or otherwise be required to contribute  to
15    any  guaranty fund or guaranty association in this State with
16    respect to the activities, assets, or obligations of an  SPRV
17    or the ceding insurer.
18        (b)  An  SPRV  may  not  be  required  to  participate in
19    residual market, FAIR plan, or other similar plans to provide
20    insurance coverage, take out  policies,  assume  risks,  make
21    capital  contributions,  pay  or  be  otherwise obligated for
22    assessments, surcharges, or fees,  or  otherwise  support  or
23    participate in such plans or arrangements.

24        (215 ILCS 5/179E-85 new)
25        Sec. 179E-85.  Asset and investment limitations.
26        (a)  Assets   of   the  SPRV  held  in  trust  to  secure
27    obligations under the SPRV contract must at all times be held
28    in:
29             (1)  cash and cash equivalents;
30             (2)  securities listed by the  Securities  Valuation
31        Office  of  the  NAIC  and  qualifying as admitted assets
32        under statutory accounting convention  in  its  state  of
SB864 Enrolled              -27-              LRB9205491JScsA
 1        domicile; and
 2             (3)  any  other  form  of security acceptable to the
 3        Director.
 4        (b)  An SPRV may enter  into  swap  agreements  or  other
 5    transactions  that  have  the  objective  of  leveling timing
 6    differences in funding of  up-front  or  ongoing  transaction
 7    expenses  or  managing  credit  or  interest rate risk of the
 8    investments in the trust to ensure that the  investments  are
 9    sufficient to assure payment or repayment of:
10             (1)  the   securities   (and   related  interest  or
11        principal payments) issued pursuant to an SPRV  insurance
12        securitization transaction; or
13             (2)  the SPRV's obligations under the SPRV contract.

14        (215 ILCS 5/179E-90 new)
15        Sec.   179E-90.  Credit  for  reinsurance  for  the  SPRV
16    contract. An SPRV contract  meeting  the  requirements  under
17    this   Article   shall  be  granted  credit  for  reinsurance
18    treatment or  shall  otherwise  qualify  as  an  asset  or  a
19    reduction  from liability for reinsurance ceded by a domestic
20    insurer to an assuming insurer under Section  173.1  of  this
21    Code for the benefit of the ceding insurer, provided and only
22    to  the  extent that (i) the fair value of the assets held in
23    trust for the benefit of the ceding insurer equal  or  exceed
24    the  obligations due and payable to the ceding insurer by the
25    SPRV under the SPRV contract, (ii) the  assets  are  held  in
26    trust  in  accordance with the requirements set forth in this
27    Article, (iii)  the assets are administered in the manner and
28    pursuant to arrangements as set forth in  this  Article,  and
29    (iv)  the  assets  are held or invested in one or more of the
30    forms allowed in Section 179E-85.

31        (215 ILCS 5/179E-95 new)
32        Sec. 179E-95.  Insurance securitization deemed not to  be
SB864 Enrolled              -28-              LRB9205491JScsA
 1    transaction  of  insurance business. The securities issued by
 2    the SPRV under an SPRV insurance securitization shall not  be
 3    deemed  to be insurance or reinsurance contracts. An investor
 4    in  securities  issued  pursuant   to   an   SPRV   insurance
 5    securitization  or  any holder of those securities shall not,
 6    by sole means of the investment or holding, be deemed  to  be
 7    transacting   an   insurance  business  in  this  State.  The
 8    underwriters  or  selling   agents   (and   their   partners,
 9    directors,  officers,  members,  managers, employees, agents,
10    representatives, and advisors) involved in an SPRV  insurance
11    securitization  shall  not  be  deemed  to  be  conducting an
12    insurance or  reinsurance  agency,  brokerage,  intermediary,
13    advisory,   or   consulting   business  by  virtue  of  their
14    activities in connection therewith.

15        (215 ILCS 5/179E-100 new)
16        Sec. 179E-100.  Authority to adopt  rules.  The  Director
17    may  promulgate rules necessary to effectuate the purposes of
18    this Article.  Any rules so promulgated will not  affect  any
19    existing  SPRV insurance securitization in effect at the time
20    of the promulgation.

21        Section 99.  Effective date.  This Act takes effect  upon
22    becoming law.

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