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| Public Act 103-0075
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| SB0762 Enrolled | LRB103 03216 CPF 48222 b |
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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 |
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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
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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, |
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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 |
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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
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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 |
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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.
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(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.
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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 |
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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
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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 |
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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
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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 |
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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 |
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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 |
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premium;
or if the premium is less than $5,000,000 and the |
reinsurance assumed
premium is less than $10,000,000;
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(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;
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(e) $18,000, if the premium is $10,000,000 or more, |
but
less than
$25,000,000;
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(f) $22,500, if the premium is $25,000,000 or more, |
but
less than
$50,000,000;
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(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
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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
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preceding calendar year. The invoice is due upon
receipt and |
must be paid no later than June 30 of each calendar year. All
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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.
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(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.
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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.
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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 |
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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.
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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.
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(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.
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(11) Unless otherwise specified, all of the fees collected |
under this
Section shall be paid into the Insurance Financial |
Regulation Fund.
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(12) For purposes of this Section:
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(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
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Service Plan Act or the Voluntary Health
Services Plans |
|
Act, a health maintenance organization, and a
limited
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health service organization.
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(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.
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(d) "Fraternal benefit society" means a corporation, |
society, order,
lodge or voluntary association as defined |
in Section 282.1 of this
Code.
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(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.
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(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.
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(Source: P.A. 102-775, eff. 5-13-22.)
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(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
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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
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in this State either at the time the policy was issued or when
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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.
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(Source: P.A. 100-1190, eff. 4-5-19.)
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(215 ILCS 5/Art. XLVII heading new) |
ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS
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(215 ILCS 5/1701 new) |
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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
|
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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.
|
