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Public Act 103-0075 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by | ||||
changing Sections 408 and 534.4 and by adding Article XLVII as | ||||
follows:
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(215 ILCS 5/408) (from Ch. 73, par. 1020)
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Sec. 408. Fees and charges.
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(1) The Director shall charge, collect and
give proper | ||||
acquittances for the payment of the following fees and | ||||
charges:
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(a) For filing all documents submitted for the | ||||
incorporation or
organization or certification of a | ||||
domestic company, except for a fraternal
benefit society, | ||||
$2,000.
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(b) For filing all documents submitted for the | ||||
incorporation or
organization of a fraternal benefit | ||||
society, $500.
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(c) For filing amendments to articles of incorporation | ||||
and amendments to
declaration of organization, except for | ||||
a fraternal benefit society, a
mutual benefit association, | ||||
a burial society or a farm mutual, $200.
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(d) For filing amendments to articles of incorporation |
of a fraternal
benefit society, a mutual benefit | ||
association or a burial society, $100.
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(e) For filing amendments to articles of incorporation | ||
of a farm mutual,
$50.
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(f) For filing bylaws or amendments thereto, $50.
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(g) For filing agreement of merger or consolidation:
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(i) for a domestic company, except
for a fraternal | ||
benefit society, a
mutual benefit association, a | ||
burial society,
or a farm mutual, $2,000.
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(ii) for a foreign or
alien company, except for a | ||
fraternal
benefit society, $600.
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(iii) for a fraternal benefit society,
a mutual | ||
benefit association, a burial society,
or a farm | ||
mutual, $200.
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(h) For filing agreements of reinsurance by a domestic | ||
company, $200.
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(i) For filing all documents submitted by a foreign or | ||
alien
company to be admitted to transact business or | ||
accredited as a
reinsurer in this State, except for a
| ||
fraternal benefit society, $5,000.
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(j) For filing all documents submitted by a foreign or | ||
alien
fraternal benefit society to be admitted to transact | ||
business
in this State, $500.
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(k) For filing declaration of withdrawal of a foreign | ||
or
alien company, $50.
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(l) For filing annual statement by a domestic company, |
except a fraternal benefit
society, a mutual benefit | ||
association, a burial society, or
a farm mutual, $200.
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(m) For filing annual statement by a domestic | ||
fraternal benefit
society, $100.
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(n) For filing annual statement by a farm mutual, a | ||
mutual benefit
association, or a burial society, $50.
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(o) For issuing a certificate of authority or
renewal | ||
thereof except to a foreign fraternal benefit society, | ||
$400.
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(p) For issuing a certificate of authority or renewal | ||
thereof to a foreign
fraternal benefit society, $200.
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(q) For issuing an amended certificate of authority, | ||
$50.
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(r) For each certified copy of certificate of | ||
authority, $20.
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(s) For each certificate of deposit, or valuation, or | ||
compliance
or surety certificate, $20.
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(t) For copies of papers or records per page, $1.
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(u) For each certification to copies
of papers or | ||
records, $10.
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(v) For multiple copies of documents or certificates | ||
listed in
subparagraphs (r), (s), and (u) of paragraph (1) | ||
of this Section, $10 for
the first copy of a certificate of | ||
any type and $5 for each additional copy
of the same | ||
certificate requested at the same time, unless, pursuant | ||
to
paragraph (2) of this Section, the Director finds these |
additional fees
excessive.
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(w) For issuing a permit to sell shares or increase | ||
paid-up
capital:
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(i) in connection with a public stock offering, | ||
$300;
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(ii) in any other case, $100.
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(x) For issuing any other certificate required or | ||
permissible
under the law, $50.
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(y) For filing a plan of exchange of the stock of a | ||
domestic
stock insurance company, a plan of | ||
demutualization of a domestic
mutual company, or a plan of | ||
reorganization under Article XII, $2,000.
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(z) For filing a statement of acquisition of a
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domestic company as defined in Section 131.4 of this Code, | ||
$2,000.
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(aa) For filing an agreement to purchase the business | ||
of an
organization authorized under the Dental Service | ||
Plan Act
or the Voluntary Health Services Plans Act or
of a | ||
health maintenance
organization or a limited health | ||
service organization, $2,000.
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(bb) For filing a statement of acquisition of a | ||
foreign or alien
insurance company as defined in Section | ||
131.12a of this Code, $1,000.
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(cc) For filing a registration statement as required | ||
in Sections 131.13
and 131.14, the notification as | ||
required by Sections 131.16,
131.20a, or 141.4, or an
|
agreement or transaction required by Sections 124.2(2), | ||
141, 141a, or
141.1, $200.
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(dd) For filing an application for licensing of:
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(i) a religious or charitable risk pooling trust | ||
or a workers'
compensation pool, $1,000;
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(ii) a workers' compensation service company, | ||
$500;
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(iii) a self-insured automobile fleet, $200; or
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(iv) a renewal of or amendment of any license | ||
issued pursuant to (i),
(ii), or (iii) above, $100.
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(ee) For filing articles of incorporation for a | ||
syndicate to engage in
the business of insurance through | ||
the Illinois Insurance Exchange, $2,000.
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(ff) For filing amended articles of incorporation for | ||
a syndicate engaged
in the business of insurance through | ||
the Illinois Insurance Exchange, $100.
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(gg) For filing articles of incorporation for a | ||
limited syndicate to
join with other subscribers or | ||
limited syndicates to do business through
the Illinois | ||
Insurance Exchange, $1,000.
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(hh) For filing amended articles of incorporation for | ||
a limited
syndicate to do business through the Illinois | ||
Insurance Exchange, $100.
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(ii) For a permit to solicit subscriptions to a | ||
syndicate
or limited syndicate, $100.
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(jj) For the filing of each form as required in |
Section 143 of this
Code, $50 per form. Informational and | ||
advertising filings shall be $25 per filing. The fee for | ||
advisory and rating
organizations shall be $200 per form.
| ||
(i) For the purposes of the form filing fee, | ||
filings made on insert page
basis will be considered | ||
one form at the time of its original submission.
| ||
Changes made to a form subsequent to its approval | ||
shall be considered a
new filing.
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(ii) Only one fee shall be charged for a form, | ||
regardless of the number
of other forms or policies | ||
with which it will be used.
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(iii) Fees charged for a policy filed as it will be | ||
issued regardless of the number of forms comprising | ||
that policy shall not exceed $1,500. For advisory or | ||
rating organizations, fees charged for a policy filed | ||
as it will be issued regardless of the number of forms | ||
comprising that policy shall not exceed $2,500.
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(iv) The Director may by rule exempt forms from | ||
such fees.
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(kk) For filing an application for licensing of a | ||
reinsurance
intermediary, $500.
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(ll) For filing an application for renewal of a | ||
license of a reinsurance
intermediary, $200.
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(mm) For filing a plan of division of a domestic stock | ||
company under Article IIB, $10,000. | ||
(nn) For filing all documents submitted by a foreign |
or alien company to be a certified reinsurer in this | ||
State, except for a fraternal benefit society, $1,000. | ||
(oo) For filing a renewal by a foreign or alien
| ||
company to be a certified reinsurer in this State, except
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for a fraternal benefit society, $400. | ||
(pp) For filing all documents submitted by a reinsurer | ||
domiciled in a reciprocal jurisdiction, $1,000. | ||
(qq) For filing a renewal by a reinsurer domiciled in | ||
a reciprocal jurisdiction, $400. | ||
(rr) For registering a captive management company or | ||
renewal thereof, $50. | ||
(ss) For filing an insurance business transfer plan | ||
under Article XLVII, $25,000. | ||
(2) When printed copies or numerous copies of the same | ||
paper or records
are furnished or certified, the Director may | ||
reduce such fees for copies
if he finds them excessive. He may, | ||
when he considers it in the public
interest, furnish without | ||
charge to state insurance departments and persons
other than | ||
companies, copies or certified copies of reports of | ||
examinations
and of other papers and records.
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(3) The expenses incurred in any performance
examination | ||
authorized by law shall be paid by the company or person being
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examined. The charge shall be reasonably related to the cost | ||
of the
examination including but not limited to compensation | ||
of examiners,
electronic data processing costs, supervision | ||
and preparation of an
examination report and lodging and |
travel expenses.
All lodging and travel expenses shall be in | ||
accord
with the applicable travel regulations as published by | ||
the Department of
Central Management Services and approved by | ||
the Governor's Travel Control
Board, except that out-of-state | ||
lodging and travel expenses related to
examinations authorized | ||
under Section 132 shall be in accordance with
travel rates | ||
prescribed under paragraph 301-7.2 of the Federal Travel
| ||
Regulations, 41 C.F.R. 301-7.2, for reimbursement of | ||
subsistence expenses
incurred during official travel. All | ||
lodging and travel expenses may be reimbursed directly upon | ||
authorization of the
Director. With the exception of the
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direct reimbursements authorized by the
Director, all | ||
performance examination charges collected by the
Department | ||
shall be paid
to the Insurance Producer Administration Fund,
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however, the electronic data processing costs
incurred by the | ||
Department in the performance of any examination shall be
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billed directly to the company being examined for payment to | ||
the Technology Management
Revolving Fund.
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(4) At the time of any service of process on the Director
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as attorney for such service, the Director shall charge and | ||
collect the
sum of $40, which may be recovered as taxable costs | ||
by
the party to the suit or action causing such service to be | ||
made if he prevails
in such suit or action.
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(5) (a) The costs incurred by the Department of Insurance
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in conducting any hearing authorized by law shall be assessed | ||
against the
parties to the hearing in such proportion as the |
Director of Insurance may
determine upon consideration of all | ||
relevant circumstances including: (1)
the nature of the | ||
hearing; (2) whether the hearing was instigated by, or
for the | ||
benefit of a particular party or parties; (3) whether there is | ||
a
successful party on the merits of the proceeding; and (4) the | ||
relative levels
of participation by the parties.
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(b) For purposes of this subsection (5) costs incurred | ||
shall
mean the hearing officer fees, court reporter fees, and | ||
travel expenses
of Department of Insurance officers and | ||
employees; provided however, that
costs incurred shall not | ||
include hearing officer fees or court reporter
fees unless the | ||
Department has retained the services of independent
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contractors or outside experts to perform such functions.
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(c) The Director shall make the assessment of costs | ||
incurred as part of
the final order or decision arising out of | ||
the proceeding; provided, however,
that such order or decision | ||
shall include findings and conclusions in support
of the | ||
assessment of costs. This subsection (5) shall not be | ||
construed as
permitting the payment of travel expenses unless | ||
calculated in accordance
with the applicable travel | ||
regulations of the Department
of Central Management Services, | ||
as approved by the Governor's Travel Control
Board. The | ||
Director as part of such order or decision shall require all
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assessments for hearing officer fees and court reporter fees, | ||
if any, to
be paid directly to the hearing officer or court | ||
reporter by the party(s)
assessed for such costs. The |
assessments for travel expenses of Department
officers and | ||
employees shall be reimbursable to the
Director of Insurance | ||
for
deposit to the fund out of which those expenses had been | ||
paid.
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(d) The provisions of this subsection (5) shall apply in | ||
the case of any
hearing conducted by the Director of Insurance | ||
not otherwise specifically
provided for by law.
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(6) The Director shall charge and collect an annual | ||
financial
regulation fee from every domestic company for | ||
examination and analysis of
its financial condition and to | ||
fund the internal costs and expenses of the
Interstate | ||
Insurance Receivership Commission as may be allocated to the | ||
State
of Illinois and companies doing an insurance business in | ||
this State pursuant to
Article X of the Interstate Insurance | ||
Receivership Compact. The fee shall be
the greater fixed | ||
amount based upon
the combination of nationwide direct premium | ||
income and
nationwide reinsurance
assumed premium
income or | ||
upon admitted assets calculated under this subsection as | ||
follows:
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(a) Combination of nationwide direct premium income | ||
and
nationwide reinsurance assumed premium.
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(i) $150, if the premium is less than $500,000 and | ||
there is
no
reinsurance assumed premium;
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(ii) $750, if the premium is $500,000 or more, but | ||
less
than $5,000,000
and there is no reinsurance | ||
assumed premium; or if the premium is less than
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$5,000,000 and the reinsurance assumed premium is less | ||
than $10,000,000;
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(iii) $3,750, if the premium is less than | ||
$5,000,000 and
the reinsurance
assumed premium is | ||
$10,000,000 or more;
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(iv) $7,500, if the premium is $5,000,000 or more, | ||
but
less than
$10,000,000;
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(v) $18,000, if the premium is $10,000,000 or | ||
more, but
less than $25,000,000;
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(vi) $22,500, if the premium is $25,000,000 or | ||
more, but
less
than $50,000,000;
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(vii) $30,000, if the premium is $50,000,000 or | ||
more,
but less than $100,000,000;
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(viii) $37,500, if the premium is $100,000,000 or | ||
more.
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(b) Admitted assets.
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(i) $150, if admitted assets are less than | ||
$1,000,000;
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(ii) $750, if admitted assets are $1,000,000 or | ||
more, but
less than
$5,000,000;
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(iii) $3,750, if admitted assets are $5,000,000 or | ||
more,
but less than
$25,000,000;
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(iv) $7,500, if admitted assets are $25,000,000 or | ||
more,
but less than
$50,000,000;
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(v) $18,000, if admitted assets are $50,000,000 or | ||
more,
but less than
$100,000,000;
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(vi) $22,500, if admitted assets are $100,000,000 | ||
or
more, but less
than $500,000,000;
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(vii) $30,000, if admitted assets are $500,000,000 | ||
or
more, but less
than $1,000,000,000;
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(viii) $37,500, if admitted assets are | ||
$1,000,000,000
or more.
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(c) The sum of financial regulation fees charged to | ||
the domestic
companies of the same affiliated group shall | ||
not exceed $250,000
in the aggregate in any single year | ||
and shall be billed by the Director to
the member company | ||
designated by the
group.
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(7) The Director shall charge and collect an annual | ||
financial regulation
fee from every foreign or alien company, | ||
except fraternal benefit
societies, for the
examination and | ||
analysis of its financial condition and to fund the internal
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costs and expenses of the Interstate Insurance Receivership | ||
Commission as may
be allocated to the State of Illinois and | ||
companies doing an insurance business
in this State pursuant | ||
to Article X of the Interstate Insurance Receivership
Compact.
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The fee shall be a fixed amount based upon Illinois direct | ||
premium income
and nationwide reinsurance assumed premium | ||
income in accordance with the
following schedule:
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(a) $150, if the premium is less than $500,000 and | ||
there is
no
reinsurance assumed premium;
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(b) $750, if the premium is $500,000 or more, but less | ||
than
$5,000,000
and there is no reinsurance assumed |
premium;
or if the premium is less than $5,000,000 and the | ||
reinsurance assumed
premium is less than $10,000,000;
| ||
(c) $3,750, if the premium is less than $5,000,000 and | ||
the
reinsurance
assumed premium is $10,000,000 or more;
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(d) $7,500, if the premium is $5,000,000 or more, but | ||
less
than
$10,000,000;
| ||
(e) $18,000, if the premium is $10,000,000 or more, | ||
but
less than
$25,000,000;
| ||
(f) $22,500, if the premium is $25,000,000 or more, | ||
but
less than
$50,000,000;
| ||
(g) $30,000, if the premium is $50,000,000 or more, | ||
but
less than
$100,000,000;
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(h) $37,500, if the premium is $100,000,000 or more.
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The sum of financial regulation fees under this subsection | ||
(7)
charged to the foreign or alien companies within the same | ||
affiliated group
shall not exceed $250,000 in the aggregate in | ||
any single year
and shall be
billed by the Director to the | ||
member company designated by the group.
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(8) Beginning January 1, 1992, the financial regulation | ||
fees imposed
under subsections (6) and (7)
of this Section | ||
shall be paid by each company or domestic affiliated group
| ||
annually. After January
1, 1994, the fee shall be billed by | ||
Department invoice
based upon the company's
premium income or | ||
admitted assets as shown in its annual statement for the
| ||
preceding calendar year. The invoice is due upon
receipt and | ||
must be paid no later than June 30 of each calendar year. All
|
financial
regulation fees collected by the Department shall be | ||
paid to the Insurance
Financial Regulation Fund. The | ||
Department may not collect financial
examiner per diem charges | ||
from companies subject to subsections (6) and (7)
of this | ||
Section undergoing financial examination
after June 30, 1992.
| ||
(9) In addition to the financial regulation fee required | ||
by this
Section, a company undergoing any financial | ||
examination authorized by law
shall pay the following costs | ||
and expenses incurred by the Department:
electronic data | ||
processing costs, the expenses authorized under Section 131.21
| ||
and
subsection (d) of Section 132.4 of this Code, and lodging | ||
and travel expenses.
| ||
Electronic data processing costs incurred by the | ||
Department in the
performance of any examination shall be | ||
billed directly to the company
undergoing examination for | ||
payment to the Technology Management Revolving
Fund. Except | ||
for direct reimbursements authorized by the Director or
direct | ||
payments made under Section 131.21 or subsection (d) of | ||
Section
132.4 of this Code, all financial regulation fees and | ||
all financial
examination charges collected by the Department | ||
shall be paid to the
Insurance Financial Regulation Fund.
| ||
All lodging and travel expenses shall be in accordance | ||
with applicable
travel regulations published by the Department | ||
of Central Management
Services and approved by the Governor's | ||
Travel Control Board, except that
out-of-state lodging and | ||
travel expenses related to examinations authorized
under |
Sections 132.1 through 132.7 shall be in accordance
with | ||
travel rates prescribed
under paragraph 301-7.2 of the Federal | ||
Travel Regulations, 41 C.F.R. 301-7.2,
for reimbursement of | ||
subsistence expenses incurred during official travel.
All | ||
lodging and travel expenses may be
reimbursed directly upon | ||
the authorization of the Director.
| ||
In the case of an organization or person not subject to the | ||
financial
regulation fee, the expenses incurred in any | ||
financial examination authorized
by law shall be paid by the | ||
organization or person being examined. The charge
shall be | ||
reasonably related to the cost of the examination including, | ||
but not
limited to, compensation of examiners and other costs | ||
described in this
subsection.
| ||
(10) Any company, person, or entity failing to make any | ||
payment of $150
or more as required under this Section shall be | ||
subject to the penalty and
interest provisions provided for in | ||
subsections (4) and (7)
of Section 412.
| ||
(11) Unless otherwise specified, all of the fees collected | ||
under this
Section shall be paid into the Insurance Financial | ||
Regulation Fund.
| ||
(12) For purposes of this Section:
| ||
(a) "Domestic company" means a company as defined in | ||
Section 2 of this
Code which is incorporated or organized | ||
under the laws of this State, and in
addition includes a | ||
not-for-profit corporation authorized under the Dental
| ||
Service Plan Act or the Voluntary Health
Services Plans |
Act, a health maintenance organization, and a
limited
| ||
health service organization.
| ||
(b) "Foreign company" means a company as defined in | ||
Section 2 of this
Code which is incorporated or organized | ||
under the laws of any state of the
United States other than | ||
this State and in addition includes a health
maintenance | ||
organization and a limited health service organization | ||
which is
incorporated or organized under the laws
of any | ||
state of the United States other than this State.
| ||
(c) "Alien company" means a company as defined in | ||
Section 2 of this Code
which is incorporated or organized | ||
under the laws of any country other than
the United | ||
States.
| ||
(d) "Fraternal benefit society" means a corporation, | ||
society, order,
lodge or voluntary association as defined | ||
in Section 282.1 of this
Code.
| ||
(e) "Mutual benefit association" means a company, | ||
association or
corporation authorized by the Director to | ||
do business in this State under
the provisions of Article | ||
XVIII of this Code.
| ||
(f) "Burial society" means a person, firm, | ||
corporation, society or
association of individuals | ||
authorized by the Director to do business in
this State | ||
under the provisions of Article XIX of this Code.
| ||
(g) "Farm mutual" means a district, county and | ||
township mutual insurance
company authorized by the |
Director to do business in this State under the
provisions | ||
of the Farm Mutual Insurance Company Act of 1986.
| ||
(Source: P.A. 102-775, eff. 5-13-22.)
| ||
(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
| ||
Sec. 534.4.
"Insolvent company" means a company
organized | ||
as a stock company, mutual company, reciprocal or Lloyds (a)
| ||
which holds a certificate of authority to transact insurance
| ||
in this State either at the time the policy was issued or when
| ||
the insured event occurred, or any company which has assumed | ||
or has been allocated
such policy obligation through merger, | ||
division, insurance business transfer, consolidation, or
| ||
reinsurance, whether or not such assuming company held a
| ||
certificate of authority to transact insurance in this State
| ||
at the time such policy was issued or when the insured event | ||
occurred; and (b)
against which a final Order of Liquidation | ||
with a finding of
insolvency to which there is no further right | ||
of appeal has been entered by
a court of competent | ||
jurisdiction in the company's State of domicile after the
| ||
effective date of this Article.
| ||
(Source: P.A. 100-1190, eff. 4-5-19.)
| ||
(215 ILCS 5/Art. XLVII heading new) | ||
ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS | ||
(215 ILCS 5/1701 new) |
Sec. 1701. Short title. This Article may be cited as the | ||
Insurance Business Transfer Law. | ||
(215 ILCS 5/1703 new) | ||
Sec. 1703. Purpose and intent. The purpose of this Article | ||
is to provide a mechanism for insurers to transfer or
assume | ||
blocks of insurance business in an efficient and
| ||
cost-effective manner that provides needed legal finality for
| ||
such transfers in order to provide for improved operational
| ||
and capital efficiency for insurance companies, while | ||
protecting the interests of the policyholders, reinsurers, and | ||
claimants of the subject business. This new process is | ||
intended to stimulate the
economy by attracting segments of | ||
the insurance industry to this State, make this State an | ||
attractive home jurisdiction
for insurance companies, | ||
encourage economic growth and
increased investment in the | ||
financial services sector, and
increase the availability of | ||
quality insurance industry jobs
in this State. These purposes | ||
are accomplished by providing a
basis and procedures for the | ||
transfer and statutory novation
of policies from a | ||
transferring insurer to an assuming insurer
by way of an | ||
insurance business transfer without the
affirmative consent of | ||
policyholders or reinsureds, but with consideration of their | ||
interests. This Article
establishes the requirements for | ||
notice and disclosure and standards and procedures for the | ||
approval of the transfer and
novation by a court pursuant to an |
insurance
business transfer plan. This Article does not limit | ||
or restrict
other means of effecting a transfer or novation. | ||
(215 ILCS 5/1705 new) | ||
Sec. 1705. Definitions. As used in this Article: | ||
"Affiliate" means a person that directly or indirectly,
| ||
through one or more intermediaries, controls, is controlled
| ||
by, or is under common control with the person specified. | ||
"Applicant" means a transferring insurer or reinsurer | ||
applying under this Article. | ||
"Assuming insurer" means an insurer domiciled in Illinois | ||
and authorized to transact the type of business described in | ||
clause (c) of Class 1, clauses (b) through (l) of Class 2, or | ||
Class 3 of Section 4 that
seeks to assume policies from a
| ||
transferring insurer pursuant to this Article. | ||
"Court" means the circuit court of Sangamon County or Cook | ||
County. | ||
"Department" means the Department of Insurance. | ||
"Director" means the Director of Insurance. | ||
"Implementation order" means an order issued by a court
| ||
under this Article. | ||
"Insurance business transfer" means a transfer and
| ||
novation that, once approved pursuant to this Article, | ||
transfers
insurance obligations or risks, or both, of existing | ||
or
in-force contracts of insurance or reinsurance from a
| ||
transferring insurer to an assuming insurer, and effects a
|
novation of the transferred contracts of insurance or
| ||
reinsurance with the result that the assuming insurer becomes
| ||
directly liable to the policyholders of the transferring
| ||
insurer and the transferring insurer's insurance obligations
| ||
or risks, or both, under the contracts are extinguished. | ||
"Insurance business transfer plan" means the plan
| ||
submitted to the Department to accomplish the transfer and
| ||
novation pursuant to an insurance business transfer, including
| ||
any associated transfer of assets and rights from or on behalf
| ||
of the transferring insurer to the assuming insurer. An | ||
"insurance business transfer plan" is limited to the types of | ||
insurance described in clause (c) of Class 1, clauses (b) | ||
through (l) of Class 2, or Class 3 of Section 4. | ||
"Independent expert" means the impartial person procured | ||
to assist the Director and the court in connection with their | ||
review of a proposed transaction. The independent expert | ||
shall: | ||
(i) have no current or past, direct or indirect,
| ||
financial interest in either the assuming insurer or
| ||
transferring insurer or any of their respective | ||
affiliates, | ||
(ii) have not been employed by or acted as an
officer, | ||
director, consultant, or other independent contractor
for | ||
either the assuming insurer or transferring insurer or any | ||
of their respective affiliates within
the past 12 months, | ||
(iii) not currently be appointed by the Director to |
assist
in any capacity in any proceeding initiated under | ||
Article XIII, and | ||
(iv) receive no compensation in connection with
the | ||
transaction governed by this Article other than a fee | ||
based on
a fixed or hourly basis that is not contingent on | ||
the approval
or consummation of an insurance business | ||
transfer. | ||
"Insurer" means an insurance, surety, or reinsurance
| ||
company, corporation, partnership, association, society,
| ||
order, individual, or aggregation of individuals engaging in
| ||
or proposing or attempting to engage in insurance
or surety | ||
business, including the exchanging of reciprocal or
| ||
inter-insurance contracts between individuals, partnerships,
| ||
and corporations. | ||
"Policy" means a policy, certificate of
insurance, or a | ||
contract of reinsurance pursuant to which an
insurer agrees to | ||
assume an obligation or risk, or both, of the
policyholder or | ||
to make payments on behalf of, or to, the
policyholder or its | ||
beneficiaries, and includes property and
casualty insurance. | ||
"Policy" does not include any policy, contract, or certificate | ||
of life, accident, or health insurance, including those | ||
defined in clause (a) or (b) of Class 1 or clause (a) of Class | ||
2 of Section 4. | ||
"Policyholder" means an insured or a reinsured under a
| ||
policy that is part of the subject business. | ||
"State guaranty association" means the Illinois Insurance |
Guaranty Fund, the Illinois Life and Health Guaranty | ||
Association, or any similar organization in another state. | ||
"Subject business" means the policy or policies that are
| ||
the subject of the insurance business transfer plan. | ||
"Transfer and novation" means the transfer of insurance
| ||
obligations or risks, or both, of existing or in-force
| ||
policies from a transferring insurer to an assuming insurer
| ||
that is intended to effect a novation of the transferred
| ||
policies with the result that the assuming insurer becomes
| ||
directly liable to the policyholders of the transferring
| ||
insurer on the transferred policies and the transferring
| ||
insurer's obligations or risks, or both, under the transferred
| ||
policies are extinguished. | ||
"Transferring insurer" means an insurer or reinsurer that
| ||
transfers and novates or seeks to transfer and novate
| ||
obligations or risks, or both, under one or more policies to an
| ||
assuming insurer pursuant to an insurance business transfer
| ||
plan. | ||
(215 ILCS 5/1710 new) | ||
Sec. 1710. Court authority. Notwithstanding any other
| ||
provision of law, a court may issue any order, process, or
| ||
judgment that is necessary or appropriate to carry out the
| ||
provisions of this Article. No provision of this Article shall | ||
be
construed to preclude a court from, on its own motion, | ||
taking
any action or making any determination necessary or
|
appropriate to enforce or implement court orders or rules or
| ||
to prevent an abuse of power. | ||
(215 ILCS 5/1715 new) | ||
Sec. 1715. Notice requirements. | ||
(a) Whenever notice is required to be given by an
| ||
applicant under this Article, except as otherwise permitted by | ||
a
court or the Director, the applicant shall within 15 days
| ||
after the event triggering the requirement transmit the
| ||
notice: | ||
(1) to the chief insurance regulator in each
| ||
jurisdiction: | ||
(A) in which the applicant holds or has ever held a
| ||
certificate of authority; and | ||
(B) in which policies that are part of the subject
| ||
business were issued or policyholders currently
| ||
reside; | ||
(2) to the National Conference of Insurance Guaranty
| ||
Funds, the National Organization of Life and Health
| ||
Insurance Guaranty Associations, and all state insurance
| ||
guaranty associations for the states: | ||
(A) in which the applicant holds or has ever held a
| ||
certificate of authority; and | ||
(B) in which policies that are part of the subject
| ||
business were issued or policyholders currently
| ||
reside; |
(3) to reinsurers of the applicant pursuant to the
| ||
notice provisions of the reinsurance agreements applicable
| ||
to the policies that are part of the subject business or,
| ||
where an agreement has no provision for notice, by
| ||
internationally recognized delivery service; | ||
(4) to all policyholders holding policies that are
| ||
part of the subject business at their last known address
| ||
as indicated by the records of the applicant or to the
| ||
address to which premium notices or other policy documents
| ||
are sent. A notice of transfer shall also be sent to the
| ||
transferring insurer's agents or brokers of record on the
| ||
subject business; and | ||
(5) by publication in a newspaper of general
| ||
circulation in the state in which the applicant has its
| ||
principal place of business and in such other publications
| ||
that the Director requires. | ||
(b) If notice is given in accordance with this Section,
| ||
any orders under this Article shall be conclusive with respect | ||
to
all intended recipients of the notice whether or not they
| ||
receive actual notice. | ||
(c) If this Article requires that the applicant provide | ||
notice
but the Director has been named receiver of the | ||
applicant pursuant to Article XIII, the
Director shall provide | ||
the required notice. | ||
(d) Notice under this Section may take the form of
| ||
first-class mail, facsimile, or electronic notice. The court |
may order that notice take a specific form. | ||
(215 ILCS 5/1720 new) | ||
Sec. 1720. Application procedure. | ||
(a) Before filing an insurance business transfer plan, the | ||
applicant shall file with the Department a notice of its | ||
intention to file a plan and shall pay the required fee. Upon | ||
request, the applicant and the assuming insurer shall provide | ||
the Department with any information necessary for the | ||
Department to procure an independent expert that meets the | ||
requirements of this Article. | ||
(b) An insurance business transfer plan shall be filed by
| ||
the applicant with the Director for his or her review and
| ||
approval. The plan may be supplemented by other information
| ||
deemed necessary by the Director, and shall contain the
| ||
following information or an explanation as to why the
| ||
following information is not included: | ||
(1) the name, address, and telephone number of the
| ||
transferring insurer and the assuming insurer and their
| ||
respective direct and indirect controlling persons, if
| ||
any; | ||
(2) a summary of the insurance business transfer plan; | ||
(3) an identification and description of the subject
| ||
business; | ||
(4) the most recent audited financial statements and
| ||
statutory annual and quarterly reports of the transferring
|
insurer and the assuming insurer filed with their
| ||
domiciliary regulator; | ||
(5) the most recent actuarial report and opinion that | ||
quantify the liabilities associated with the subject
| ||
business; | ||
(6) pro forma financial statements showing the
| ||
projected statutory balance sheet, results of operation,
| ||
and cash flows of the assuming insurer for the 3 years
| ||
following the proposed transfer and novation; | ||
(7) officers' certificates of the transferring insurer
| ||
and the assuming insurer attesting that each has obtained
| ||
all required internal approvals and authorizations
| ||
regarding the insurance business transfer plan and
| ||
completed all necessary and appropriate actions relating
| ||
thereto; | ||
(8) a proposal for plan implementation and | ||
administration, including the form of notice to be
| ||
provided under the insurance business transfer plan to any
| ||
policyholder whose policy is part of the subject business; | ||
(9) a full description as to how notice under the
| ||
insurance business transfer plan shall be provided; | ||
(10) a description of any reinsurance arrangements
| ||
that would pass to the assuming insurer under the
| ||
insurance business transfer plan; | ||
(11) a description of any guarantees or additional
| ||
reinsurance that will cover the subject business following
|
the transfer and novation; | ||
(12) a statement describing the assuming insurer's
| ||
proposed investment policies and any contemplated | ||
third-party claims management and administration
| ||
arrangements; | ||
(13) a description of how the transferring and
| ||
assuming insurers will be licensed for the purpose of | ||
preserving state
guaranty association coverage; | ||
(14) a description of the financial implications of | ||
the transaction
including solvency, capital adequacy, cash | ||
flow,
reserves, asset quality, and risk-based capital; | ||
(15) an analysis of the assuming insurer's
corporate | ||
governance structure to ensure that there is
proper board | ||
management oversight and expertise to
manage the subject | ||
business; | ||
(16) an evaluation of the competency, experience, and | ||
integrity of
the persons who would control the operation | ||
of an
involved insurer; | ||
(17) a certified statement that the transaction is not | ||
being made for improper purposes, including fraud; | ||
(18) evidence of approval or nonobjection of the
| ||
transfer from the chief insurance regulator of the state
| ||
of the transferring insurer's domicile; and | ||
(19) a report from the independent expert that shall | ||
provide the following: | ||
(A) a statement of the independent expert's
|
professional qualifications and descriptions of the
| ||
experience that qualifies him or her as an expert
| ||
suitable for the engagement; | ||
(B) a certified statement from the independent | ||
expert that he or she meets the standards for an | ||
independent expert under this Article; | ||
(C) a description of the scope of the report; | ||
(D) a summary of the terms of the insurance
| ||
business transfer plan to the extent relevant to the
| ||
report; | ||
(E) a listing and summaries of documents, reports,
| ||
and other material information the independent expert
| ||
has considered in preparing the report and whether any
| ||
information requested was not provided; | ||
(F) the extent to which the independent expert has
| ||
relied on information provided by or judgment of
| ||
others; | ||
(G) the people on whom the independent expert has
| ||
relied and why, in his or her opinion, such reliance is
| ||
reasonable; | ||
(H) the independent expert's opinion of the likely | ||
effects of the insurance business transfer plan on
| ||
policyholders, reinsurers, and claimants,
| ||
distinguishing between: | ||
(i) transferring policyholders, reinsurers,
| ||
and claimants; |
(ii) policyholders, reinsurers, and claimants
| ||
of the transferring insurer whose policies will
| ||
not be transferred; and | ||
(iii) policyholders, reinsurers, and claimants
| ||
of the assuming insurer; | ||
(I) the facts and circumstances supporting each
| ||
opinion that the independent expert expresses in the
| ||
report; and | ||
(J) consideration as to whether the security
| ||
position of policyholders that are affected by the
| ||
insurance business transfer are materially adversely
| ||
affected by the transfer, including, but not limited | ||
to, state guaranty association coverage. | ||
(c) The independent expert's report as required by
| ||
paragraph (19) of subsection (b) shall also include, but not | ||
be
limited to, a review of and report on the following: | ||
(1) analysis of the transferring insurer's actuarial
| ||
review of resources for the subject business to determine
| ||
the reserve adequacy; | ||
(2) analysis of the financial condition of the
| ||
transferring and assuming insurers and the effect the
| ||
transfer will have on the financial condition of each
| ||
company; | ||
(3) review of the plans or proposals the assuming
| ||
insurer has with respect to the administration of the
| ||
policies subject to the proposed transfer; |
(4) whether the proposed transfer has a material,
| ||
adverse impact on the policyholders, reinsurers, and
| ||
claimants of the transferring and the assuming insurers; | ||
(5) analysis of the assuming insurer's corporate
| ||
governance structure to ensure that there is proper board
| ||
and management oversight and expertise to manage the
| ||
subject business; | ||
(6) analysis of whether any policyholder or group of | ||
policyholders will lose or gain state guaranty association | ||
coverage as a result of the transaction; and | ||
(7) any other information that the Director requests
| ||
in order to review the insurance business transfer. | ||
(d) After the
receipt of a complete insurance business | ||
transfer plan,
the Director shall review the plan to determine | ||
if the applicant is authorized
to submit it to a court. | ||
(e) The Director shall authorize the submission of the
| ||
insurance business transfer plan to a court unless he or she
| ||
finds that the insurance business transfer would have a
| ||
material adverse impact on the interests of policyholders,
| ||
reinsurers, or claimants that are part of the subject
| ||
business. | ||
(f) If the Director determines that the insurance business
| ||
transfer would have a material adverse impact on the interests
| ||
of policyholders, reinsurers, or claimants that are part of
| ||
the subject business, he or she shall notify the applicant and
| ||
specify any modifications, supplements, or amendments and any
|
additional information or documentation with respect to the
| ||
plan that must be provided to the Director before he or she
| ||
shall allow the applicant to proceed with the court filing. | ||
(g) The applicant shall have 30 days following the date
| ||
the Director notifies him or her of a determination under
| ||
subsection (f) to file an amended insurance business transfer
| ||
plan providing the modifications, supplements, or amendments
| ||
and additional information or documentation as requested by
| ||
the Director. If necessary, the applicant may request in
| ||
writing an extension of time of 30 days. If the applicant does
| ||
not make an amended filing within the time period provided in
| ||
this subsection, including any extension of time granted by
| ||
the Director, the insurance business transfer plan filing
| ||
shall terminate and a subsequent filing by the applicant shall
| ||
be considered a new filing which shall require compliance with
| ||
all provisions of this Article as if the prior filing had never
| ||
been made. | ||
(h)
When the modification, supplement, amendment, or
| ||
additional information requested in subsection (f) is
| ||
received, the Director shall review the amended plan in | ||
accordance with subsection (c). | ||
(i) If the Director determines that the plan may proceed
| ||
with the court filing, the Director shall confirm that fact in
| ||
writing to the applicant. | ||
(215 ILCS 5/1725 new) |
Sec. 1725. Application to the court for approval of a | ||
plan. | ||
(a) Within 30 days after notice from the Director that the | ||
applicant may proceed with the court filing, the applicant | ||
shall apply to the court for approval of the insurance | ||
business transfer plan. Upon written request by the applicant, | ||
the Director may extend the period for filing an application | ||
with the court for an additional 30 days. | ||
(b) The applicant shall inform the court of the reasons | ||
why he or she petitions the court to find no material adverse | ||
impact to policyholders, reinsurers, or claimants affected by | ||
the proposed transfer. | ||
(c) The application shall be in the form of a verified | ||
petition for implementation of the insurance business transfer | ||
plan in the court. The petition shall include the insurance | ||
business transfer plan and shall identify any documents and | ||
witnesses which the applicant intends to present at a hearing | ||
regarding the petition. | ||
(d) The Director shall be a party to the proceedings | ||
before the court concerning the petition and shall be served | ||
with copies of all filings. The Director's position in the | ||
proceeding shall not be limited by his or her initial review of | ||
the plan. The Director shall have all the rights of a litigant | ||
under the Illinois Supreme Court Rules and the Code of Civil | ||
Procedure, including, but not limited to, the right to appeal. | ||
(e) Following the filing of the petition, the applicant |
shall file a motion for a scheduling order setting a hearing on | ||
the petition. | ||
(f) Within 15 days after receipt of the scheduling order, | ||
the applicant shall cause notice of the hearing to be provided | ||
in accordance with the notice provisions of Section 1715. | ||
Following the date of distribution of the notice, there shall | ||
be a 60-day comment period. The notice and all comments | ||
received shall be part of the court record. | ||
(g) The notice shall be filed with and approved by the | ||
court before distribution, and the Director shall be given the | ||
opportunity to review and comment on the sufficiency of the | ||
notice before court approval. The notice shall state or | ||
provide: | ||
(1) the date and time of the approval hearing; | ||
(2) the name, address, and telephone number of the | ||
assuming insurer and transferring insurer; | ||
(3) that the recipient may comment on or object to the | ||
transfer and novation; | ||
(4) the procedures and deadline for submitting | ||
comments or objections on the plan; | ||
(5) a summary of any effect that the transfer and | ||
novation will have on the policyholder's rights; | ||
(6) a statement that the assuming insurer is | ||
authorized to assume the subject business and that court | ||
approval of the plan shall extinguish all rights of | ||
policyholders under policies that are part of the subject |
business against the transferring insurer; | ||
(7) a statement regarding whether any policyholder or | ||
group of policyholders may or will lose or gain state | ||
guaranty association coverage as a result of the transfer | ||
and the implication of losing or gaining state guaranty | ||
association coverage; | ||
(8) that recipients shall not have the opportunity to | ||
opt out of or otherwise reject the transfer and novation; | ||
(9) contact information for the Department where the | ||
policyholder may obtain further information; | ||
(10) information on how an electronic copy of the | ||
insurance business transfer plan may be accessed. If | ||
policyholders are unable to readily access electronic | ||
copies, the applicant shall provide hard copies by | ||
first-class mail; and | ||
(11) any other information that the court may require. | ||
(h) Any person, including by their legal representative, | ||
who considers himself, herself, or itself to be adversely | ||
affected can present evidence or comments to the court at the | ||
approval hearing. Any person participating in the approval | ||
hearing must follow the process established by the court and | ||
shall bear his or her own costs and attorney's fees. | ||
(215 ILCS 5/1730 new) | ||
Sec. 1730. Approval; denial; insurance business transfer | ||
plans. |
(a) After the comment period pursuant to subsection (f) of | ||
Section 1725 has ended the insurance business transfer plan | ||
shall be presented by the applicant for approval by the court. | ||
(b) At any time before the court issues an order approving | ||
the insurance business transfer plan, the applicant may | ||
withdraw the petition without prejudice. | ||
(c) If the court finds that the implementation of the | ||
insurance business transfer plan would not materially | ||
adversely affect the interests of policyholders, reinsurers, | ||
or claimants that are part of the subject business, the court | ||
shall enter a judgment and implementation order. The judgment | ||
and implementation order shall: | ||
(1) order implementation of the insurance business | ||
transfer plan; | ||
(2) order a statutory novation with respect to all | ||
policyholders or reinsureds and their respective policies | ||
and reinsurance agreements under the subject business, | ||
including the extinguishment of all rights of | ||
policyholders under policies that are part of the subject | ||
business against the transferring insurer, and providing | ||
that the transferring insurer shall have no further | ||
rights, obligations, or liabilities with respect to such | ||
policies, and that the assuming insurer shall have all | ||
such rights, obligations, and liabilities as if it were | ||
the original insurer of such policies; | ||
(3) release the transferring insurer from all |
obligations or liabilities under policies that are part of | ||
the subject business; | ||
(4) authorize and order the transfer of property or | ||
liabilities, including, but not limited to, the ceded | ||
reinsurance of transferred policies and contracts on the | ||
subject business, notwithstanding any non-assignment | ||
provisions in any such reinsurance contracts. The subject | ||
business shall vest in and become liabilities of the | ||
assuming insurer; | ||
(5) order that the applicant provide notice of the | ||
transfer and novation in accordance with the notice | ||
provisions in Section 1715; and | ||
(6) make such other provisions with respect to | ||
incidental, consequential, and supplementary matters as | ||
are necessary to assure the insurance business transfer | ||
plan is fully and effectively carried out. | ||
(d) If the court finds that the insurance business | ||
transfer plan should not be approved, the court by its order | ||
shall deny the petition. | ||
(e) The applicant shall have 30 days following the | ||
withdrawal or denial of the petition to file an amended | ||
business transfer plan with the Director in accordance with | ||
Section 1720. | ||
(f) Nothing in this Section in any way affects the right of | ||
appeal of any party.
|
(215 ILCS 5/1735 new) | ||
Sec. 1735. Rules. The Department may adopt rules that are | ||
consistent with the provisions of this Article. | ||
(215 ILCS 5/1740 new) | ||
Sec. 1740. Confidentiality. The portion of the application | ||
for an insurance business transfer that would otherwise be | ||
confidential, including any documents, materials, | ||
communications, or other information submitted to the Director | ||
in contemplation of such application, shall not lose such | ||
confidentiality, except (i) the Director may disclose | ||
confidential information as needed to procure the independent | ||
expert and ensure that the expert meets the requirements under | ||
this Article and (ii) if the Director determines that | ||
disclosure of confidential information is necessary to fully | ||
and fairly advise policyholders and others entitled to notice | ||
of the material implications of the insurance business | ||
transfer plan. | ||
(215 ILCS 5/1745 new) | ||
Sec. 1745. Department oversight. Insurers engaging in an | ||
insurance business transfer under this Article consent to the | ||
jurisdiction of the Director with regard to any aspect of the | ||
transferred business or business transfer plan, including the | ||
authority of the Director to conduct financial analysis and | ||
examinations, regardless of whether the insurer has a |
certificate of authority or another basis for the Director's | ||
jurisdiction exists. | ||
(215 ILCS 5/1750 new) | ||
Sec. 1750. Fees and costs. | ||
(a) All expenses incurred by the Director for the | ||
compensation, costs, and expenses of the independent expert | ||
and any consultants retained by the independent expert | ||
incurred in fulfilling the obligations of the independent | ||
expert under this Article shall be paid by the applicant. | ||
(b) The Director may retain the services of any attorneys, | ||
actuaries, accountants, and other professionals and | ||
specialists as may be reasonably necessary to assist the | ||
Director in reviewing the insurance business transfer plan. | ||
All expenses incurred by the Director in connection with | ||
proceedings under this Article, including, but not limited to, | ||
expenses for the services of any attorneys, actuaries, | ||
accountants, and other professionals and specialists, shall be | ||
paid by the applicant. | ||
(c) The transferring insurer and the assuming insurer | ||
shall jointly be obligated to pay all debts incurred pursuant | ||
to this Section. Nothing in this Article shall be construed to | ||
create any duty for the independent expert to any party other | ||
than the Department or a court. | ||
(d) Failure to pay any of the requisite fees or costs | ||
within 30 days after demand shall be grounds for the Director |
to request that a court dismiss the petition for approval of | ||
the insurance business transfer plan before the filing of an | ||
implementation order by the court or, if after the filing of an | ||
implementation order, the Director may suspend or revoke the | ||
assuming insurer's certificate of authority to transact | ||
insurance business in this State. The Director may also take | ||
any other action authorized by law against an insurer who | ||
fails to pay the requisite fees or costs.
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law, except that the changes to Section 408 and | ||
Article XLVII of the Illinois Insurance Code take effect | ||
January 1, 2025.
|