Public Act 101-0549
 
SB1377 EnrolledLRB101 05283 SMS 50296 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 35B-25 as follows:
 
    (215 ILCS 5/35B-25)
    Sec. 35B-25. Plan of division approval.
    (a) A division shall not become effective until it is
approved by the Director after reasonable notice and a public
hearing, if the notice and hearing are deemed by the Director
to be in the public interest. The Director shall hold a public
hearing if one is requested by the dividing company. A hearing
conducted under this Section shall be conducted in accordance
with Article 10 of the Illinois Administrative Procedure Act.
    (b) The Director shall approve a plan of division unless
the Director finds that:
        (1) the interest of any class of policyholder or
    shareholder of the dividing company will not be properly
    protected;
        (2) each new company created by the proposed division,
    except a new company that is a nonsurviving party to a
    merger pursuant to subsection (b) of Section 156, would be
    ineligible to receive a license to do insurance business in
    this State pursuant to Section 5;
        (2.5) each new company created by the proposed
    division, except a new company that is a nonsurviving party
    to a merger pursuant to subsection (b) of Section 156, that
    will be a member insurer of the Illinois Life and Health
    Insurance Guaranty Association and that will have policy
    liabilities allocated to it will not be licensed to do
    insurance business in each state where such policies were
    written by the dividing company;
        (3) the proposed division violates a provision of the
    Uniform Fraudulent Transfer Act;
        (4) the division is being made for purposes of
    hindering, delaying, or defrauding any policyholders or
    other creditors of the dividing company;
        (5) one or more resulting companies will not be solvent
    upon the consummation of the division; or
        (6) the remaining assets of one or more resulting
    companies will be, upon consummation of a division,
    unreasonably small in relation to the business and
    transactions in which the resulting company was engaged or
    is about to engage.
    (c) In determining whether the standards set forth in
paragraph (3) of subsection (b) have been satisfied, the
Director shall only apply the Uniform Fraudulent Transfer Act
to a dividing company in its capacity as a resulting company
and shall not apply the Uniform Fraudulent Transfer Act to any
dividing company that is not proposed to survive the division.
    (d) In determining whether the standards set forth in
paragraphs (3), (4), (5), and (6) of subsection (b) have been
satisfied, the Director may consider all proposed assets of the
resulting company, including, without limitation, reinsurance
agreements, parental guarantees, support or keep well
agreements, or capital maintenance or contingent capital
agreements, in each case, regardless of whether the same would
qualify as an admitted asset as defined in Section 3.1.
    (e) In determining whether the standards set forth in
paragraph (3) of subsection (b) have been satisfied, with
respect to each resulting company, the Director shall, in
applying the Uniform Fraudulent Transfer Act, treat:
        (1) the resulting company as a debtor;
        (2) liabilities allocated to the resulting company as
    obligations incurred by a debtor;
        (3) the resulting company as not having received
    reasonably equivalent value in exchange for incurring the
    obligations; and
        (4) assets allocated to the resulting company as
    remaining property.
    (f) All information, documents, materials, and copies
thereof submitted to, obtained by, or disclosed to the Director
in connection with a plan of division or in contemplation
thereof, including any information, documents, materials, or
copies provided by or on behalf of a domestic stock company in
advance of its adoption or submission of a plan of division,
shall be confidential and shall be subject to the same
protection and treatment in accordance with Section 131.14d as
documents and reports disclosed to or filed with the Director
pursuant to Section 131.14b until such time, if any, as a
notice of the hearing contemplated by subsection (a) is issued.
    (g) From and after the issuance of a notice of the hearing
contemplated by subsection (a), all business, financial, and
actuarial information that the domestic stock company requests
confidential treatment, other than the plan of division, shall
continue to be confidential and shall not be available for
public inspection and shall be subject to the same protection
and treatment in accordance with Section 131.14d as documents
and reports disclosed to or filed with the Director pursuant to
Section 131.14b.
    (h) All expenses incurred by the Director in connection
with proceedings under this Section, including expenses for the
services of any attorneys, actuaries, accountants, and other
experts as may be reasonably necessary to assist the Director
in reviewing the proposed division, shall be paid by the
dividing company filing the plan of division. A dividing
company may allocate expenses described in this subsection in a
plan of division in the same manner as any other liability.
    (i) If the Director approves a plan of division, the
Director shall issue an order that shall be accompanied by
findings of fact and conclusions of law.
    (j) The conditions in this Section for freeing one or more
of the resulting companies from the liabilities of the dividing
company and for allocating some or all of the liabilities of
the dividing company shall be conclusively deemed to have been
satisfied if the plan of division has been approved by the
Director in a final order that is not subject to further
appeal.
(Source: P.A. 100-1118, eff. 11-27-18.)

Effective Date: 1/1/2020