97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2877

 

Introduced 2/1/2012, by Sen. William R. Haine

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Insurance Code in the Article concerning insurance holding company systems. Makes changes to the definitions. Provides that a domestic company, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries, and that the subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic company. Makes changes to the provisions concerning a domestic company's permitted investments. Includes certain filing requirements in the provision concerning the acquisition of control of or merger with a domestic company. Makes changes to provisions concerning the statement that is required to be filed with the Director of Insurance. Deletes certain provisions concerning deposits made with the Director, orders entered by the Director, and reports of potential adverse economic impact made to the General Assembly by the Director. Makes changes to the provisions concerning certain violations, judicial jurisdiction, acquisitions, registration statements, reporting materials, termination of registration, disclaimers, prior notification, officers and directors, examination, confidential treatment, voting , sanctions, and judicial review. . Sets forth provisions concerning summary filing, enterprise risk filing, violations, and supervisory colleges. Repeals a provision concerning the delivery of certain filings. Contains a severability provision. Effective on January 1, 2013.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2877LRB097 16448 RPM 61612 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 131.1, 131.2, 131.3, 131.4, 131.5, 131.6,
6131.8, 131.8a, 131.11, 131.12, 131.12a, 131.13, 131.14,
7131.16, 131.17, 131.18, 131.19, 131.20, 131.20a, 131.20b,
8131.21, 131.22, 131.24, and 131.27 and by adding Sections
9131.14a, 131.14b, 131.14c, and 131.20c as follows:
 
10    (215 ILCS 5/131.1)  (from Ch. 73, par. 743.1)
11    Sec. 131.1. Definitions. As used in this Article, the
12following terms have the respective meanings set forth in this
13Section unless the context requires otherwise:
14    (a) An "affiliate" of, or person "affiliated" with, a
15specific person, is a person that directly, or indirectly
16through one or more intermediaries, controls, or is controlled
17by, or is under common control with, the person specified.
18    (a-5) "Acquiring party" means such person by whom or on
19whose behalf the merger or other acquisition of control
20referred to in Section 131.4 is to be affected and any person
21that controls such person or persons.
22    (a-10) "Company" has the same meaning as "company" as
23defined in Section 2 of this Code, except that it does not

 

 

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1include agencies, authorities, or instrumentalities of the
2United States, its possessions and territories, the
3Commonwealth of Puerto Rico, the District of Columbia, or a
4state or political subdivision of a state.
5    (b) "Control" (including the terms "controlling",
6"controlled by" and "under common control with") means the
7possession, direct or indirect, of the power to direct or cause
8the direction of the management and policies of a person,
9whether through the ownership of voting securities, the holding
10of policyholders' proxies by contract other than a commercial
11contract for goods or non-management services, or otherwise,
12unless the power is solely the result of an official position
13with or corporate office held by the person. Control is
14presumed to exist if any person, directly or indirectly, owns,
15controls, holds with the power to vote, or holds shareholders'
16proxies representing 10% or more of the voting securities of
17any other person, or holds or controls sufficient
18policyholders' proxies to elect the majority of the board of
19directors of the domestic company. This presumption may be
20rebutted by a showing made in the manner as the Director may
21provide by rule. The Director may determine, after furnishing
22all persons in interest notice and opportunity to be heard and
23making specific findings of fact to support such determination,
24that control exists in fact, notwithstanding the absence of a
25presumption to that effect.
26    (b-5) "Enterprise risk" means any activity, circumstance,

 

 

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1event, or series of events involving one or more affiliates of
2a company that, if not remedied promptly, is likely to have a
3material adverse effect upon the financial condition or
4liquidity of the company or its insurance holding company
5system as a whole, including, but not limited to, anything that
6would cause the company's risk-based capital to fall into
7company action level or would cause the company to be in
8hazardous financial condition.
9    (c) "Insurance holding company system" means two or more
10affiliated persons, one or more of which is an insurance
11company as defined in paragraph (e) of Section 2 of this Code.
12    (d) (Blank). "Company" has the same meaning as "Company" as
13defined in Section 2 of this Code, except that it does not
14include agencies, authorities or instrumentalities of the
15United States, its possessions and territories, the
16Commonwealth of Puerto Rico, the District of Columbia or a
17State or political subdivision of a State.
18    (d-5) "Non-operating holding company" is a general
19business corporation functioning solely for the purpose of
20forming, owning, acquiring, and managing subsidiary business
21entities and having no other business operations not related
22thereto.
23    (e) "Person" means an individual, a corporation, a limited
24liability company, a partnership, an association, a joint stock
25company, a trust, an unincorporated organization, any similar
26entity or any combination of the foregoing acting in concert,

 

 

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1but does not include any securities broker performing no more
2than the usual and customary broker's function or joint venture
3partnership exclusively engaged in owning, managing, leasing
4or developing real or tangible personal property other than
5capital stock.
6    (e-5) "Policyholders' proxies" are proxies that give the
7holder the right to vote for the election of the directors and
8other corporate actions not in the day to day operations of the
9company.
10    (f) (Blank). "Securityholder" of a specified person is one
11who owns any security of such person, including common stock,
12preferred stock, debt obligations, and any other security
13convertible into or evidencing the right to acquire any of the
14foregoing.
15    (g) "Subsidiary" of a specified person is an affiliate
16controlled by such person directly, or indirectly through one
17or more intermediaries.
18    (h) "Voting Security" is a security which gives to the
19holder thereof the right to vote for the election of directors
20and includes any security convertible into or evidencing a
21right to acquire a voting security.
22    (i) (Blank). "Acquiring Party" means such person by whom or
23on whose behalf the merger or other acquisition of control
24referred to in Section 131.4 is to be affected and any person
25that controls such person or persons.
26    (j) (Blank). "Policyholders' Proxies" are proxies which

 

 

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1give the holder the right to vote for the election of the
2directors and other corporate actions not in the day-to-day
3operations of the company.
4    (k) (Blank). "Non-operating Holding Company" is a general
5business corporation functioning solely for the purpose of
6forming, owning, acquiring and managing subsidiary business
7entities and having no other business operations not related
8thereto.
9(Source: P.A. 84-805.)
 
10    (215 ILCS 5/131.2)  (from Ch. 73, par. 743.2)
11    Sec. 131.2. Subsidiaries. A domestic company, either by
12itself or in cooperation with one or more persons, may organize
13or acquire one or more subsidiaries. The subsidiaries may
14conduct any kind of business or businesses and their authority
15to do so shall not be limited by reason of the fact that they
16are subsidiaries of a domestic company. In addition to
17investments in common stock, preferred stock, debt obligations
18and other securities of subsidiaries permitted under all other
19sections of this Code, a domestic company, other than a company
20subject to Articles XVIII or XIX, may also:
21        (a) invest, in common stock, preferred stock, debt
22    obligations, and other securities of one or more
23    subsidiaries, amounts which do not exceed the lesser of 10%
24    of the company's assets or 50% of the company's surplus as
25    regards policyholders, but after such investments the

 

 

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1    company's surplus as regards policyholders must be
2    reasonable in relation to the company's outstanding
3    liabilities and adequate to its financial needs. In
4    calculating the amount of such investments, there must be
5    included (i) total net monies or other consideration
6    expended and obligations assumed in the acquisition or
7    formation of a subsidiary, including all organizational
8    expenses and contributions to capital and surplus of the
9    subsidiary whether or not represented by the purchase of
10    capital stock or issuance of other securities, and (ii) all
11    amounts expended in acquiring additional common stock,
12    preferred stock, debt obligations, and other securities,
13    and all contributions to the capital or surplus of a
14    subsidiary subsequent to its acquisition or formation;
15        (b) invest any amount in common stock, preferred stock,
16    debt obligations and other securities of one or more direct
17    subsidiaries acting only as a non-operating holding
18    company or engaged or organized exclusively for the
19    ownership and management of assets authorized as
20    investments for the company, provided that each subsidiary
21    agrees to limit its investments in any asset so that such
22    investments will not cause the amount of the total
23    investment of the company to exceed the amount the company
24    could have invested in such asset. For the purpose of this
25    clause, "the total investment of the company" will include
26    (i) any direct investment by the company in an asset and

 

 

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1    (ii) the company's proportionate share of any investment in
2    such asset by any direct subsidiary of the company, which
3    must be calculated by multiplying the amount of the
4    subsidiary's investment by the percentage of the company's
5    ownership of such subsidiary;
6        (c) invest in common stock of one or more insurance
7    corporation subsidiaries any amount by which the investing
8    company's capital and surplus exceeds the minimum capital
9    and surplus required of a new company under Section 13 to
10    qualify for a certificate of authority to write the kind or
11    kinds of insurance which the company is authorized to
12    write, if the company is a stock company, and if the
13    company is other than a stock company, the company may
14    invest the amount by which the company's surplus exceeds
15    the minimum surplus required of a new company under Section
16    43 or 66 to qualify for a certificate of authority to write
17    the kind or kinds of insurance which the company is
18    authorized to write;
19        (d) with the approval of the Director, invest any
20    greater amount in common stock, preferred stock, debt
21    obligations, or other securities of one or more
22    subsidiaries, but after such investment the company's
23    surplus as regards policyholders must be reasonable in
24    relation to the company's outstanding liabilities and
25    adequate to its financial needs.
26(Source: P.A. 85-1186.)
 

 

 

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1    (215 ILCS 5/131.3)  (from Ch. 73, par. 743.3)
2    Sec. 131.3. (1) Investments in common stock, preferred
3stock, debt obligations or other securities of subsidiaries
4made under Section 131.2 of this Article are subject to
5Sections 126.3, 126.4, 126.5, 126.6, 126.7, and 133 of this
6Code but are not subject to any other of the otherwise
7applicable restrictions or prohibitions contained in this Code
8applicable to such investments of a domestic company subject to
9this Code.
10    (2) If a company ceases to control a subsidiary, it must
11dispose of any investment therein made under this section
12within 3 years from the time of the cessation of control or
13within such further time as the Director may prescribe, unless
14at any time after the investment is made, the investment meets
15the requirements for investment under any other section of this
16Code, and the company has notified the Director thereof.
17    (3) Whether any investment made pursuant to this Section
18meets the applicable requirements of this Section is to be
19determined before the investment is made by calculating the
20applicable investment limitations as though the investment had
21already been made, taking into account the then outstanding
22principal balance on all previous investments in debt
23obligations, and the value of all previous investments in
24equity securities as of the day they were made, net of any
25return of capital invested, not including dividends.

 

 

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1(Source: P.A. 90-418, eff. 8-15-97.)
 
2    (215 ILCS 5/131.4)  (from Ch. 73, par. 743.4)
3    Sec. 131.4. Acquisition of control of or merger with
4domestic company.
5    (a) No person other than the issuer may make a tender for
6or a request or invitation for tenders of, or enter into an
7agreement to exchange securities for, seek to acquire, or
8acquire in the open market, or otherwise, any voting security
9of a domestic company or acquire policyholders' proxies of a
10domestic company for consideration if, after the consummation
11thereof, that person would, directly or indirectly, (or by
12conversion or by exercise of any right to acquire) be in
13control of the company, and no person may enter into an
14agreement to merge or consolidate with or otherwise to acquire
15control of a domestic company, unless the offer, request,
16invitation, or agreement is conditioned on receiving the
17approval of the Director based on Section 131.8 of this Article
18and no such acquisition of control or a merger with a domestic
19company may be consummated unless the person has filed with the
20Director and has sent to the company a statement containing the
21information required by Section 131.5, and the Director has
22approved the transaction or granted an exemption. For purposes
23of this Section a domestic company includes any other person
24which controls a domestic company or holds or controls
25sufficient policyholders' proxies to elect the majority of the

 

 

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1board of directors of the domestic company. Prior to the
2acquisition, the Director may conclude that a statement need
3not be filed by the acquiring party if the acquiring party
4demonstrates to the satisfaction of the Director that:
5        (1) such transaction will not result in the change of
6    control of the domestic company; or
7        (2) (blank); the person which is subject to the
8    acquisition has assets in excess of $1,000,000 and
9    shareholders of record of 500 or more and its insurance
10    business either directly or through its affiliates is an
11    insignificant portion of its total business; or
12        (3) the acquisition of, or attempt to acquire control
13    of, such other person is subject to requirements in the
14    jurisdiction of its domicile which are substantially
15    similar to those contained in this Section and Sections
16    131.5 through 131.12a 131.12; or
17        (4) the control of the policyholders' proxies is being
18    acquired solely by virtue of the holders official office
19    and not as the result of any agreement or for any
20    consideration.
21        The purpose of this Section is to afford to the
22    Director the opportunity to review acquisitions in order to
23    determine whether or not the acquisition would be adverse
24    to the interests of the existing and future policyholders
25    of the company.
26    (b) For purposes of this Section, any controlling person of

 

 

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1a domestic company seeking to divest its controlling interest
2in the domestic company in any manner shall file with the
3Director, with a copy to the company, confidential notice of
4its proposed divestiture at least 30 days prior to the
5cessation of control. The Director shall determine those
6instances in which the parties seeking to divest or to acquire
7a controlling interest in a company shall be required to file
8for and obtain approval of the transaction. The information
9shall remain confidential until the conclusion of the
10transaction unless the Director, in his or her discretion,
11determines that confidential treatment shall interfere with
12enforcement of this Section. If the statement referred to in
13subsection (a) of this Section is otherwise filed, this
14subsection (b) shall not apply.
15    (c) For purposes of this Section, a domestic company shall
16include any person controlling a domestic company unless the
17person, as determined by the Director, is either directly or
18through its affiliates primarily engaged in business other than
19the business of insurance. For the purposes of this Section,
20"person" shall not include any securities broker holding, in
21the usual and customary broker's function, less than 20% of the
22voting securities of an insurance company or of any person that
23controls an insurance company.
24(Source: P.A. 86-784.)
 
25    (215 ILCS 5/131.5)  (from Ch. 73, par. 743.5)

 

 

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1    Sec. 131.5. Statement-Contents. In order to seek the
2approval of the Director pursuant to Section 131.8, the
3applicant must file a statement with the Director under oath or
4affirmation which contains as a minimum the following
5information:
6    (1) The name and address of each acquiring party, and
7    (a) if such person is an individual, his principal
8occupation and all offices and positions held during the past 5
9years, and any conviction of crimes, other than minor traffic
10violations, during the past 10 years;
11    (b) if such person is not an individual, a report of the
12nature of its business operations during the past 5 years or
13for such lesser period as the person and any predecessors
14thereof has been in existence; an informative description of
15the business intended to be conducted by the person and the
16person's subsidiaries; and a list of all individuals who are or
17who have been selected to become directors or executive
18officers of the person, or who perform or will perform
19functions appropriate to such positions. The list must include
20for each individual the information required by subsection
21(1)(a).
22    (2) The source, nature and amount of the consideration used
23or to be used in effecting the merger, consolidation or other
24acquisition of control, a description of any transaction
25wherein funds were or are to be obtained for any such purpose,
26including any pledge of the company's own securities or the

 

 

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1securities of any of its subsidiaries or affiliates, and the
2identity of persons furnishing such consideration. However,
3where a source of such consideration is a loan made in the
4lender's ordinary course of business, the identity of the
5lender must remain confidential, if the person filing the
6statement so requests.
7    (3) Financial information as to the earnings and financial
8condition of each acquiring party for the preceding 5 fiscal
9years of each acquiring party (or for such lesser period as the
10acquiring party and any predecessors thereof have been in
11existence) audited by an independent certified public
12accountant in accordance with generally accepted auditing
13standards and similar unaudited information for the second and
14third preceding fiscal years and as of a date not earlier than
1590 days prior to the filing of the statement. If an acquiring
16party is an insurer which has been actively engaged in the
17business of insurance for 10 years, the financial information
18need not be audited, provided it is based on the annual
19statements of such acquiring person filed with the insurance
20department of the person's domiciliary state and is in
21accordance with the requirement of insurance or other
22accounting principles prescribed or permitted under the laws
23and regulations of such state.
24    (a) (Blank). When an applicant is controlled by an
25individual, financial information for that individual will not
26be required if the applicant is currently subject to the

 

 

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1registration and reporting requirements of Section 12(g) of the
2Securities Exchange Act of 1934 or is an insurer which has been
3actively engaged in the business of insurance for a period in
4excess of 10 years;
5    (b) (Blank). When an individual as an acquiring party must
6file financial information under this paragraph such
7information need not be delivered to the company. However, such
8information shall be available if the Director holds a hearing
9pursuant to Section 131.8.
10    (4) Any plans or proposals which each acquiring party may
11have to liquidate such company, to sell its assets or merge or
12consolidate it with any person, or to make any other material
13change in its business or corporate structure or management.
14    (5) The number of shares of any security referred to in
15Section 131.4 which each acquiring party proposes to acquire,
16and the terms of the offer, request, invitation, agreement, or
17acquisition referred to in Section 131.4, and a statement as to
18the method by which the fairness was arrived.
19    (6) The amount of each class of any security referred to in
20Section 131.4 which is beneficially owned or concerning which
21there is a right to acquire beneficial ownership by each
22acquiring party.
23    (7) A full description of any existing contracts,
24arrangements or understandings with respect to any security
25referred to in Section 131.4 in which any acquiring party is
26involved, including but not limited to transfer of any of the

 

 

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1securities, joint ventures, loan or option arrangements, puts
2or calls, guarantees of loans, guarantees against loss or
3guarantees of profits, division of losses or profits, or the
4giving or withholding of proxies. The description must identify
5the persons with whom such contracts, arrangements or
6understandings have been entered into.
7    (8) A description of the acquisition of any security or
8policyholders' proxy referred to in Section 131.4 during the 12
9calendar months preceding the filing of the statement, by any
10acquiring party, including the dates of acquisition, names of
11the acquiring parties acquirors, and consideration paid or
12agreed to be paid therefor.
13    (9) A description of any recommendations to acquire any
14security referred to in Section 131.4 made during the 12
15calendar months preceding the filing of the statement, by any
16acquiring party, or by anyone based upon interviews or at the
17suggestion of such acquiring party.
18    (10) Copies of all tender offers for, requests or
19invitations for tenders of, exchange offers for, and agreements
20to acquire or exchange any securities referred to in Section
21131.4, and (if distributed) of additional soliciting material
22relating thereto.
23    (11) The terms of any agreement, contract or understanding
24made with, or proposed to be made with, any broker-dealer as to
25solicitation of securities referred to in Section 131.4 for
26tender, and the amount of any fees, commissions or other

 

 

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1compensation to be paid to broker-dealers with regard thereto.
2    (12) An agreement by the person required to file the
3statement referred to in this Section 131.5 that it shall
4provide the annual report specified in Section 131.20c for so
5long as control exists.
6    (13) An acknowledgement by the person required to file the
7statement referred to in this Section 131.5 that the person and
8all subsidiaries within its control in the insurance holding
9company system shall provide information to the Director upon
10request as necessary to evaluate enterprise risk to the
11insurer.
12    (14) Any additional information as the Director may by rule
13or regulation prescribe as necessary or appropriate for the
14protection of policyholders or in the public interest.
15(Source: P.A. 84-805.)
 
16    (215 ILCS 5/131.6)  (from Ch. 73, par. 743.6)
17    Sec. 131.6. (1) If the person required to file the
18statement referred to in Section 131.5 is a partnership,
19limited partnership, syndicate or other group, the Director may
20require that the information be given with respect to each
21partner of such partnership or limited partnership, each member
22of such syndicate or group, and each person who controls such
23partner or member. If any partner, member or person is a
24corporation or the person required to file the statement
25referred to in Section 131.5 is a corporation, the Director may

 

 

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1require that the information be given with respect to the
2corporation, each officer and director of the corporation, and
3each person who is directly or indirectly the beneficial owner
4of more than 10% of the outstanding voting securities of the
5corporation.
6    (2) If any material change occurs in the facts set forth in
7the statement filed with the Director and sent to the company
8under Section 131.5 131.9, an amendment setting forth the
9change, together with copies of all documents and other
10material relevant to the change, must be filed with the
11Director and sent to the company within 2 business days after
12the person learns of the change.
13(Source: P.A. 84-805.)
 
14    (215 ILCS 5/131.8)  (from Ch. 73, par. 743.8)
15    Sec. 131.8. (1) After the statement required by Section
16131.5 has been filed, the Director shall approve must
17disapprove any merger, consolidation or other acquisition of
18control referred to in Section 131.4 unless the acquiring party
19demonstrates to the Director finds that:
20        (a) After the change of control the domestic company
21    referred to in Section 131.4 would not be able to satisfy
22    the requirements for the issuance of a license to write the
23    line or lines of insurance for which it is presently
24    licensed;
25        (b) the effect of the merger, consolidation or other

 

 

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1    acquisition of control would be to not substantially lessen
2    competition in insurance in this State or not tend to
3    create a monopoly therein. In applying the competitive
4    standard in this paragraph:
5            (i) the informational requirements of subsection
6        (3)(a) and the standards of subsection (4)(b) of
7        Section 131.12a shall apply,
8            (ii) the merger or other acquisition shall not be
9        disapproved if the Director finds acquiring party
10        demonstrates that any of the situations meeting the
11        criteria provided by subsection (4)(c) of Section
12        131.12a exist, and
13            (iii) the Director may condition the approval of
14        the merger or other acquisition on the removal of the
15        basis of disapproval within a specified period of time;
16        (c) the financial condition of any acquiring party is
17    such as might to not jeopardize the financial stability of
18    the domestic company or not jeopardize the interests of its
19    policyholders;
20        (d) the plans or proposals which the acquiring party
21    has to liquidate the domestic company, sell its assets or
22    consolidate or merge it with any person, or to make any
23    other material change in its business or corporate
24    structure or management, are unfair fair and unreasonable
25    reasonable to policyholders of such company and not in the
26    public interest; or

 

 

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1        (e) the competence, experience and integrity of those
2    persons who would control the operation of the domestic
3    company are such that it would be in the best interests of
4    policyholders of such company and of the insurance buying
5    public to permit the merger, consolidation or other
6    acquisition of control.
7    (2) The Director may hold a public hearing on any merger,
8consolidation or other acquisition of control referred to in
9Section 131.4 if the Director determines that the statement
10filed as required by Section 131.5 does not demonstrate
11compliance with the standards referred to in subsection (1), of
12this Section, or if he determines that such acquisition of
13control is likely to be hazardous or prejudicial to the will
14adversely affect policyholders or the insurance buying public.
15    (3) The public hearing referred to in subsection (2) must
16be held within 30 60 days after the statement required by
17Section 131.5 is filed, and at least 20 days' notice thereof
18must be given by the Director to the person filing the
19statement and to the domestic company. Not less than 7 12 days'
20notice of such hearing must be given by the person filing the
21statement to such other persons as may be designated by the
22Director and by the company to its securityholders. The
23Director must make a determination within 60 30 days after the
24conclusion of the hearing. At the hearing, the person filing
25the statement, the domestic company, any person to whom notice
26of the hearing was sent, and any other person whose interests

 

 

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1may be affected thereby has the right to present evidence,
2examine and cross-examine witnesses, and offer oral and written
3arguments and in connection therewith is entitled to conduct
4discovery proceedings in the same manner as is presently
5allowed in the Circuit Courts of this State. All discovery
6proceedings must be concluded not later than 3 days prior to
7the commencement of the public hearing.
8    (4) If the proposed acquisition of control will require the
9approval of more than one state insurance commissioner, the
10public hearing referred to in subsection (2) of this Section
11may be held on a consolidated basis upon request of the person
12filing the statement referred to in Section 131.5 of this Code.
13Such person shall file the statement referred to in Section
14131.5 of this Code with the National Association of Insurance
15Commissioners (NAIC) within 5 days after making the request for
16a public hearing. A commissioner may opt out of a consolidated
17hearing, and shall provide notice to the applicant of the opt
18out within 10 days after the receipt of the statement referred
19to in Section 131.5 of this Code. A hearing conducted on a
20consolidated basis shall be public and shall be held within the
21United States before the commissioners of the states in which
22the insurers are domiciled. Such commissioners shall hear and
23receive evidence. A commissioner may attend such hearing, in
24person or by telecommunication.
25    (5) In connection with a change of control of a domestic
26company, any determination by the Director that the person

 

 

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1acquiring control of the company shall be required to maintain
2or restore the capital of the company to the level required by
3the laws and regulations of this State shall be made not later
4than 60 days after the date of notification of the change in
5control.
6(Source: P.A. 84-805.)
 
7    (215 ILCS 5/131.8a)  (from Ch. 73, par. 743.8a)
8    Sec. 131.8a. The Director may retain at the applicant's
9expense any attorneys, actuaries, accountants and other
10experts not otherwise a part of the Director's staff as may be
11reasonably necessary to assist in reviewing the conduct of
12financial or character examinations in conjunction with an
13acquisition proposed under Section 131.4. The applicant shall
14deposit with the Director cash, bonds or securities, acceptable
15to the Director, in a reasonable amount not to exceed $100,000,
16for purpose of securing the payment of any expert's cost.
17(Source: P.A. 86-753.)
 
18    (215 ILCS 5/131.11)  (from Ch. 73, par. 743.11)
19    Sec. 131.11. The following are violations of Sections 131.4
20through 131.12:
21    (1) the failure to file any statement, amendment, or other
22material required to be filed under Sections 131.4 or 131.5; or
23    (2) the effectuation or any attempt to effectuate an
24acquisition of control of, divestiture of, or merger or

 

 

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1consolidation with, a domestic company unless the Director has
2given his approval thereto.
3(Source: P.A. 77-673.)
 
4    (215 ILCS 5/131.12)  (from Ch. 73, par. 743.12)
5    Sec. 131.12. The courts of this State are hereby vested
6with jurisdiction over every person not resident, domiciled, or
7authorized to do business in this State who files a statement
8with the Director under Section 131.4, and over all actions
9involving such person arising out of violations of Sections
10131.4, 131.5, 131.6, 131.9 or 131.11, and each such person is
11deemed to have performed acts equivalent to and constituting an
12appointment by such a person of the Director to be his true and
13lawful attorney upon whom may be served all lawful process in
14any action, suit or proceeding arising out of violations of
15Sections 131.4, 131.5, 131.6, 131.9 or 131.11. Copies of all
16such lawful process must be served on the Director and
17transmitted by registered or certified mail by the Director to
18such person at his last known address.
19(Source: P.A. 77-673.)
 
20    (215 ILCS 5/131.12a)  (from Ch. 73, par. 743.12a)
21    Sec. 131.12a. Acquisitions involving insurers not
22otherwise covered.
23    (1) Definitions. The following definitions shall apply for
24the purposes of this Section only:

 

 

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1    (a) "Acquisition" means any agreement, arrangement or
2activity the consummation of which results in a person
3acquiring directly or indirectly the control of another person
4or control of the insurance in force of another person, and
5includes but is not limited to the acquisition of voting
6securities, the acquisition of assets, the transaction of bulk
7reinsurance and the act of merging or consolidating.
8    (b) An "involved insurer" includes an insurer which either
9acquires or is acquired, is affiliated with an acquirer or
10acquired or is the result of a merger.
 
11    (2) Scope.
12    (a) Except as exempted in paragraph (b) of this subsection
13(2), this Section applies to any acquisition in which there is
14a change in control of an insurer authorized to do business in
15this State.
16    (b) This Section shall not apply to the following:
17        (i) an acquisition subject to approval or disapproval
18    by the Director pursuant to Section 131.8;
19        (ii) a purchase of securities solely for investment
20    purposes so long as such securities are not used by voting
21    or otherwise to cause or attempt to cause the substantial
22    lessening of competition in any insurance market in this
23    State. If a purchase of securities results in a presumption
24    of control under subsection (b) of Section 131.1, it is not
25    solely for investment purposes unless the commissioner of

 

 

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1    the insurer's state of domicile accepts a disclaimer of
2    control or affirmatively finds that control does not exist
3    and such disclaimer action or affirmative finding is
4    communicated by the domiciliary commissioner to the
5    Director of this State;
6        (iii) the acquisition of a person by another person
7    when both persons are neither directly nor through
8    affiliates primarily engaged in the business of insurance,
9    if pre-acquisition notification is filed with the Director
10    in accordance with subsection (3)(a) of this Section, 30
11    days prior to the proposed effective date of the
12    acquisition. However, such pre-acquisition notification is
13    not required for exclusion from this Section if the
14    acquisition would otherwise be excluded from this Section
15    by any other subparagraph of subsection (2)(b);
16        (iv) the acquisition of already affiliated persons;
17        (v) an acquisition if, as an immediate result of the
18    acquisition,
19            (A) in no market would the combined market share of
20        the involved insurers exceed 5% of the total market,
21            (B) there would be no increase in any market share,
22        or
23            (C) in no market would the combined market share of
24        the involved insurers exceed 12% of the total market,
25        and the market share increase by more than 2% of the
26        total market.

 

 

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1        For the purpose of this subparagraph (b)(v), "market"
2    means direct written insurance premium in this State for a
3    line of business as contained in the annual statement
4    required to be filed by insurers licensed to do business in
5    this State;
6        (vi) an acquisition for which a pre-acquisition
7    notification would be required pursuant to this Section due
8    solely to the resulting effect on the ocean marine
9    insurance line of business;
10        (vii) an acquisition of an insurer whose domiciliary
11    commissioner affirmatively finds that such insurer is in
12    failing condition; there is a lack of feasible alternative
13    to improving such condition; the public benefits of
14    improving such insurer's condition through the acquisition
15    exceed the public benefits that would arise from not
16    lessening competition; and such findings are communicated
17    by the domiciliary commissioner to the Director of this
18    State.
 
19    (3) Pre-acquisition Notification; Waiting Period. An
20acquisition covered by subsection (2) may be subject to an
21order pursuant to subsection (5) unless the acquiring person
22files a pre-acquisition notification and the waiting period has
23expired. The acquired person may file a pre-acquisition
24notification. The Director shall give confidential treatment
25to information submitted under this subsection in the same

 

 

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1manner as provided in Section 131.22 of this Article.
2    (a) The pre-acquisition notification shall be in such form
3and contain such information as prescribed by the Director,
4which shall conform substantially to the form of notification
5adopted by the National Association of Insurance Commissioners
6relating to those markets which, under subsection (b)(v) of
7Section (2), cause the acquisition not to be exempted from the
8provisions of this Section. The Director may require such
9additional material and information as he deems necessary to
10determine whether the proposed acquisition, if consummated,
11would violate the competitive standard of subsection (4). The
12required information may include an opinion of an economist as
13to the competitive impact of the acquisition in this State
14accompanied by a summary of the education and experience of
15such person indicating his or her ability to render an informed
16opinion.
17    (b) The waiting period required shall begin on the date of
18the receipt by the Director of a pre-acquisition notification
19and shall end on the earlier of the 30th day after the date of
20such receipt, or termination of the waiting period by the
21Director. Prior to the end of the waiting period, the Director
22on a one time basis may require the submission of additional
23needed information relevant to the proposed acquisition, in
24which event the waiting period shall end on the earlier of the
2530th day after the receipt of such additional information by
26the Director or termination of the waiting period by the

 

 

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1Director.
 
2    (4) Competitive Standard.
3    (a) The Director may enter an order under subsection (5)(a)
4with respect to an acquisition if there is substantial evidence
5that the effect of the acquisition may be substantially to
6lessen competition in any line of insurance in this State or
7tend to create a monopoly therein or if the insurer fails to
8file adequate information in compliance with subsection (3).
9    (b) In determining whether a proposed acquisition would
10violate the competitive standard of paragraph (a) of this
11subsection the Director shall consider the following:
12        (i) any acquisition covered under subsection (2)
13    involving 2 or more insurers competing in the same market
14    is prima facie evidence of violation of the competitive
15    standards:
16            (A) if the market is highly concentrated and the
17        involved insurers possess the following shares of the
18        market:
19               Insurer A                 Insurer B
20                  4%                    4% or more
21                 10%                    2% or more
22                 15%                    1% or more
23            (B) if the market is not highly concentrated and
24        the involved insurers possess the following shares of
25        the market:

 

 

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1               Insurer A                 Insurer B
2                  5%                    5% or more
3                 10%                    4% or more
4                 15%                    3% or more
5                 19%                    1% or more
6        A highly concentrated market is one in which the share
7    of the 4 largest insurers is 75% or more of the market.
8    Percentages not shown in the tables are to be interpolated
9    proportionately to the percentages that are shown. If more
10    than 2 insurers are involved, exceeding the total of the 2
11    columns in the table is prima facie evidence of violation
12    of the competitive standard in paragraph (a) of this
13    subsection. For the purpose of this subparagraph, the
14    insurer with the largest share of the market shall be
15    deemed to be Insurer A.
16        (ii) There is a significant trend toward increased
17    concentration when the aggregate market share of any
18    grouping of the largest insurers in the market from the 2
19    largest to the 8 largest has increased by 7% or more of the
20    market over a period of time extending from any base year
21    5-10 years prior to the acquisition up to the time of the
22    acquisition. Any acquisition covered under subsection (2)
23    involving 2 or more insurers competing in the same market
24    is prima facie evidence of violation of the competitive
25    standard in paragraph (a) of this subsection if:
26            (A) there is a significant trend toward increased

 

 

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1        concentration in the market,
2            (B) one of the insurers involved is one of the
3        insurers in a grouping of such large insurers showing
4        the requisite increase in the market share, and
5            (C) another involved insurer's market is 2% or
6        more.
7        (iii) For the purpose of subsection (4)(b):
8            (A) The term "company" "insurer" includes any
9        company or group of companies under common management,
10        ownership or control.
11            (B) The term "market" means the relevant product
12        and geographic markets. In determining the relevant
13        product and geographical markets, the Director shall
14        give due consideration to, among other things, the
15        definitions or guidelines, if any, promulgated by the
16        National Association of Insurance Commissioners and to
17        information, if any, submitted by parties to the
18        acquisition. In the absence of sufficient information
19        to the contrary, the relevant product market is assumed
20        to be the direct written insurance premium for a line
21        of business with such line being that used in the
22        annual statement required to be filed by insurers doing
23        business in this State and the relevant geographical
24        market is assumed to be this State.
25            (C) The burden of showing prima facie evidence of
26        violation of the competitive standard rests upon the

 

 

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1        Director.
2        (iv) Even though an acquisition is not prima facie
3    violative of the competitive standard under subparagraph
4    (b)(i) and (b)(ii) of this subsection the Director may
5    establish the requisite anticompetitive effect based upon
6    other substantial evidence. Even though an acquisition is
7    prima facie violative of the competitive standard under
8    subparagraphs (b)(i) and (b)(ii) of this subsection (4), a
9    party may establish the absence of the requisite
10    anticompetitive effect based upon other substantial
11    evidence. Relevant factors in making a determination under
12    this paragraph include, but are not limited to, the
13    following: market shares, volatility of ranking of market
14    leaders, number of competitors, concentration, trend of
15    concentration in the industry, and ease of entry and exit
16    into the market.
17    (c) An order may not be entered under subsection (5)(a) if:
18        (i) the acquisition will yield substantial economies
19    of scale or economies in resource utilization that cannot
20    be feasibly achieved in any other way, and the public
21    benefits which would arise from such economies exceed the
22    public benefits which would arise from not lessening
23    competition; or
24        (ii) the acquisition will substantially increase the
25    availability of insurance, and the public benefits of such
26    increase exceed the public benefits which would arise from

 

 

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1    not lessening competition.
 
2    (5) Orders and Penalties:
3        (a)(i) If an acquisition violates the standard of this
4    Section, the Director may enter an order
5            (A) requiring an involved insurer to cease and
6        desist from doing business in this State with respect
7        to the line or lines of insurance involved in the
8        violation, or
9            (B) denying the application of an acquired or
10        acquiring insurer for a license to do business in this
11        State.
12        (ii) Such an order shall not be entered unless there is
13    a hearing, notice of such hearing is issued prior to the
14    end of the waiting period and not less than 15 days prior
15    to the end of the waiting period and not less than 15 days
16    prior to the hearing, and the hearing is concluded and the
17    order is issued no later than 60 days after the end of the
18    waiting period. Every order shall be accompanied by a
19    written decision of the Director setting forth his findings
20    of fact and conclusions of law.
21        (iii) (Blank). An order entered under this paragraph
22    shall not become final earlier than 30 days after it is
23    issued, during which time the involved insurer may submit a
24    plan to remedy the anticompetitive impact of the
25    acquisition within a reasonable time. Based upon such plan

 

 

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1    or other information, the Director shall specify, if any,
2    the conditions under and the time period during which the
3    aspects of the acquisition causing a violation of the
4    standards of this Section would be remedied and the order
5    vacated or modified.
6        (iv) An order pursuant to this paragraph shall not
7    apply if the acquisition is not consummated.
8    (b) Any person who violates a cease and desist order of the
9Director under paragraph (a) and while such order is in effect
10may after notice and hearing and upon order of the Director be
11subject at the discretion of the Director to any one or more of
12the following:
13        (i) a monetary penalty of not more than $10,000 for
14    every day of violation or
15        (ii) suspension or revocation of such person's license
16    or both.
17    (c) Any insurer or other person who fails to make any
18filing required by this Section and who also fails to
19demonstrate a good faith effort to comply with any such filing
20requirement shall be subject to a civil penalty of not more
21than $50,000.
 
22    (6) Inapplicable Provisions. Subsections (2) and (3) of
23Section 131.23 and Section 131.25 do not apply to acquisitions
24covered under subsection (2).
25(Source: P.A. 92-16, eff. 6-28-01.)
 

 

 

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1    (215 ILCS 5/131.13)  (from Ch. 73, par. 743.13)
2    Sec. 131.13. Registration of companies. Every company
3which is authorized to do business in this State and which is a
4member of an insurance holding company system must register
5with the Director, except a foreign or alien company subject to
6registration requirements and standards adopted by statute or
7regulation in the jurisdiction of its domicile which are
8substantially similar to those contained in this section and
9Sections 131.14 through 131.19. Any company which is subject to
10registration under this section must register within 60 days
11after the effective date of this Article or 15 days after it
12becomes subject to registration, whichever is later, unless the
13Director for good cause shown extends the time for
14registration, and then within such extended time. The Director
15may require any authorized company which is a member of a
16holding company system which is not subject to registration
17under this section to furnish a copy of the registration
18statement or other information filed by such company with the
19insurance regulatory authority of its domiciliary
20jurisdiction.
21    If upon review of the information filed pursuant to this
22Section and the information included in the annual statement
23filed pursuant to Section 136, the Director determines there is
24a potential for adverse economic impact due to substantial
25ownership of companies authorized to do business in this State

 

 

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1by persons who are not citizens or residents of the United
2States or entities which are not organized or created under the
3laws of any state or territory of the United States, he shall
4report such determination along with any legislative
5recommendations to the General Assembly.
6(Source: P.A. 84-805.)
 
7    (215 ILCS 5/131.14)  (from Ch. 73, par. 743.14)
8    Sec. 131.14. Every company subject to registration must
9file a registration statement on a in the form and in a format
10prescribed designated by the Director, which shall contain the
11following contains current information about:
12    (1) the capital structure, general financial condition,
13ownership and management of the company and any person
14controlling the company;
15    (2) the identity and relationship of every member of the
16insurance holding company system;
17    (3) the following agreements in force, relationships
18subsisting, and transactions currently outstanding or that
19have occurred during the last calendar year between such
20company and its affiliates:
21    (a) loans, other investments, or purchases, sales or
22exchanges of or securities of the affiliates by the company or
23of the company by its affiliates;
24    (b) purchases, sales, or exchanges of assets;
25    (c) transactions not in the ordinary course of business;

 

 

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1    (d) guarantees or undertakings for the benefit of an
2affiliate which result in an actual contingent exposure of the
3company's assets to liability, other than insurance contracts
4entered into in the ordinary course of the company's business;
5    (e) all management agreements, and service contracts, and
6all cost-sharing arrangements, other than cost allocation
7arrangements based upon generally accepted accounting
8principles; and
9    (f) reinsurance agreements;
10    (f-5) dividends and other distributions to shareholders;
11    (g) any pledge of the company's own securities, securities
12of any subsidiary or affiliate, to secure a loan made to any
13member of the insurance holding company system; and
14    (h) consolidated tax allocation agreements; .
15    (4) (blank); other matters concerning transactions between
16registered companies and any affiliates as may be included from
17time to time in any registration forms adopted or approved by
18the Director.
19    (5) financial statements of or within an insurance holding
20company system, including all affiliates, if requested by the
21Director; financial statements may include, but are not limited
22to, annual audited financial statements filed with the U.S.
23Securities and Exchange Commission (SEC) pursuant to the
24Securities Act of 1933, as amended, or the Securities Exchange
25Act of 1934, as amended; a company required to file financial
26statements pursuant to this paragraph (5) may satisfy the

 

 

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1request by providing the Director with the most recently filed
2parent corporation financial statements that have been filed
3with the SEC;
4    (6) statements that the company's board of directors is
5responsible for and oversees corporate governance and internal
6controls and that the company's officers or senior management
7have approved and implemented and continue to maintain and
8monitor corporate governance and internal control procedures;
9and
10    (7) other matters concerning transactions between
11registered companies and any affiliates as may be included from
12time to time in any registration forms adopted or approved by
13the Director.
14(Source: P.A. 84-805.)
 
15    (215 ILCS 5/131.14a new)
16    Sec. 131.14a. Summary filing. Every company subject to
17registration must file a summary outlining all items in the
18current registration statement representing changes from the
19prior registration statement.
 
20    (215 ILCS 5/131.14b new)
21    Sec. 131.14b. Enterprise risk filing. The ultimate
22controlling person of every company subject to registration
23shall also file an annual enterprise risk report. The report
24shall, to the best of the ultimate controlling person's

 

 

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1knowledge and belief, identify the material risks within the
2insurance holding company system that could pose enterprise
3risk to the company. The report shall be filed with the lead
4state commissioner of the insurance holding company system as
5determined by the procedures within the Financial Analysis
6Handbook adopted by the National Association of Insurance
7Commissioners.
 
8    (215 ILCS 5/131.14c new)
9    Sec. 131.14c. Violations. The failure to file a
10registration statement or any summary of the registration
11statement or enterprise risk filing required by this Article
12within the time specified for filing shall be a violation of
13this Article.
 
14    (215 ILCS 5/131.16)  (from Ch. 73, par. 743.16)
15    Sec. 131.16. Reporting material changes or additions;
16penalty for late registration statement.
17    (1) Each registered company must keep current the
18information required to be included in its registration
19statement by reporting all material changes or additions on
20amendment forms designated by the Director within 15 days after
21the end of the month in which it learns of each change or
22addition, or within a longer time thereafter as the Director
23may establish. Any transaction which has been submitted to the
24Director pursuant to Section 131.20a need not be reported to

 

 

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1the Director under this subsection; except each registered
2company must report all dividends and other distributions to
3shareholders within 5 business days following the declaration
4and no less than 10 business days prior to payment thereof.
5    (2) On or before May 1 each year, each company subject to
6registration under this Article shall file a statement in a
7format as designated by the Director. This statement shall
8include information previously included in an amendment under
9subsection (1) of this Section, transactions and agreements
10submitted under Section 131.20a, and any other material
11transactions which are required to be reported.
12    (2.5) Any person within an insurance holding company system
13subject to registration shall be required to provide complete
14and accurate information to a company where the information is
15reasonably necessary to enable the company to comply with the
16provisions of this Article.
17    (3) Any company failing, without just cause, to file any
18registration statement or any person within an insurance
19holding company system who fails to provide complete and
20accurate information to a company as required in this Code
21shall be required, after notice and hearing, to pay a penalty
22of up to $1,000 for each day's delay, to be recovered by the
23Director of Insurance of the State of Illinois and the penalty
24so recovered shall be paid into the General Revenue Fund of the
25State of Illinois. The maximum penalty under this section is
26$50,000. The Director may reduce the penalty if the company

 

 

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1demonstrates to the Director that the imposition of the penalty
2would constitute a financial hardship to the company.
3(Source: P.A. 88-364.)
 
4    (215 ILCS 5/131.17)  (from Ch. 73, par. 743.17)
5    Sec. 131.17. (1) The Director must terminate the
6registration of any company which demonstrates that it no
7longer is a member of an insurance holding company system.
8    (2) The Director may require or allow 2 or more affiliated
9companies subject to registration to file a consolidated
10registration statement. Two or more affiliated companies
11subject to registration hereunder may file a consolidated
12registration statement or consolidated reports amending their
13consolidated registration statement or their individual
14registration statements unless the Director requires a
15separate registration statement or report from each registered
16company.
17    (3) A company which is authorized to do business in this
18State and which is part of an insurance holding company system
19may register on behalf of any affiliated company which is
20required to register under Section 131.13 and to file all
21information and material required to be filed under this
22Article unless the Director requires a separate registration by
23the affiliated company.
24(Source: P.A. 77-673.)
 

 

 

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1    (215 ILCS 5/131.18)  (from Ch. 73, par. 743.18)
2    Sec. 131.18. Sections 131.13 through 131.19 do not apply to
3any company, information, or transaction if and to the extent
4that the Director by rule, regulation, or order may exempt the
5same from Sections 131.13 through 131.19.
6    Any requirement for the furnishing of financial statements
7of the insurance holding company system, or any member thereof,
8as part of or in connection with the registration statement
9filed under Section 131.14 shall not apply to any company which
10submits and maintains in effect in lieu thereof a guarantee or
11a bond acceptable to the Director in an amount equal to the
12capital and surplus of the company as shown on its most recent
13audited financial statements, payable to the Director for the
14benefit of the creditors, policyholders and stockholders of the
15company as their interests may appear. Such guarantee, if
16issued by a national bank, and such a bond, if issued by a
17licensed insurance company which is not a member of the
18insurance holding company system, in each case having capital
19and surplus in excess of $25,000,000, shall be deemed
20acceptable.
21(Source: P.A. 77-673.)
 
22    (215 ILCS 5/131.19)  (from Ch. 73, par. 743.19)
23    Sec. 131.19. Disclaimer of affiliation. Any person may file
24with the Director a disclaimer of affiliation with any
25authorized company or a disclaimer may be filed by the a

 

 

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1company or any member of an insurance holding company system.
2The disclaimer shall must fully disclose all material
3relationships and bases basis for affiliation between the
4person and the company as well as the basis for disclaiming the
5affiliation. A disclaimer of affiliation shall be deemed to
6have been granted unless the Director, within 30 days following
7receipt of a complete disclaimer, notifies the filing party
8that the disclaimer is disallowed. In the event of
9disallowance, the disclaiming party may request an
10administrative hearing, which shall be granted. The
11disclaiming party shall be relieved of its duty to register
12under this Section if approval of the disclaimer has been
13granted by the Director or if the disclaimer is deemed to have
14been approved. After a disclaimer is filed, the company is
15relieved of any duty to register or report under Section 131.13
16which may arise out of the company's relationship with the
17person unless and until the Director disallows the disclaimer.
18The Director may disallow such a disclaimer only after
19furnishing all parties in interest with notice and opportunity
20to be heard and after making specific findings of fact to
21support the disallowance.
22(Source: P.A. 84-805.)
 
23    (215 ILCS 5/131.20)  (from Ch. 73, par. 743.20)
24    Sec. 131.20. Standards for transactions with affiliates;
25adequacy of surplus.

 

 

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1    (1) Transactions Material transactions with their
2affiliates by companies subject to registration are subject to
3the following standards:
4        (a) the terms are fair and reasonable;
5        (a-5) agreements for cost sharing services and
6    management shall include such provisions as required by
7    rule by the Director;
8        (b) charges or fees for services performed are
9    reasonable;
10        (c) expenses incurred and payment received must be
11    allocated to the insurer in conformity with customary
12    insurance accounting practices consistently applied;
13        (d) the books, accounts, and records of each party must
14    be so maintained as to clearly and accurately disclose the
15    precise nature and details of the transactions, including
16    accounting information necessary to support the
17    reasonableness of the charges or fees to the respective
18    parties; and
19        (e) the company's surplus as regards policyholders
20    following any transactions with affiliates or dividends or
21    distributions to securityholders or affiliates must be
22    reasonable in relation to the company's outstanding
23    liabilities and adequate to meet its financial needs.
24    (2) For purposes of this Article, in determining whether a
25company's surplus as regards policyholders is reasonable in
26relation to the company's outstanding liabilities and adequate

 

 

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1to meet its needs, the following factors, among others, may be
2considered:
3        (a) the size of the company as measured by its assets,
4    capital and surplus, reserves, premium writings, insurance
5    in force and other appropriate criteria;
6        (b) the extent to which the company's business is
7    diversified among the several lines of insurance;
8        (c) the number and size of risks insured in each line
9    of business;
10        (d) the extent of the geographical dispersion of the
11    company's insured risks;
12        (e) the nature and extent of the company's reinsurance
13    program;
14        (f) the quality, diversification, and liquidity of the
15    company's investment portfolio;
16        (g) the recent past and projected future trend in the
17    size of the company's investment portfolio surplus as
18    regards policyholders;
19        (h) the surplus as regards policyholders maintained by
20    companies comparable to the registrant in respect of the
21    factors enumerated in this paragraph;
22        (i) the adequacy of the company's reserves;
23        (j) the quality of the company's earnings and the
24    extent to which the reported earnings include
25    extraordinary items; and
26        (k) the quality and liquidity of investments in

 

 

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1    affiliates subsidiaries made under Section 131.2 or 131.3.
2    The Director may discount any such investment or treat any
3    such investment as a non-admitted asset for purposes of
4    determining the adequacy of surplus as regards
5    policyholders whenever the investment so warrants.
6(Source: P.A. 88-364.)
 
7    (215 ILCS 5/131.20a)  (from Ch. 73, par. 743.20a)
8    Sec. 131.20a. Prior notification of transactions;
9dividends and distributions.
10    (1) (a) The following transactions involving between a
11domestic company and any person in its insurance holding
12company system, including amendments or modifications of
13affiliate agreements previously filed pursuant to this
14Section, which are subject to any materiality standards
15contained in this Section, may not be entered into unless the
16company has notified the Director in writing of its intention
17to enter into such transaction at least 30 days prior thereto,
18or such shorter period as the Director may permit, and the
19Director has not disapproved it within such period. The notice
20for amendments or modifications shall include the reasons for
21the change and the financial impact on the domestic company.
22Informal notice shall be reported, within 30 days after a
23termination of a previously filed agreement, to the Director
24for determination of the type of filing required, if any:
25        (i) Sales, purchases, exchanges of assets, loans or

 

 

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1    extensions of credit, guarantees, investments, or any
2    other transaction, except dividends, (A) that involves the
3    transfer of assets from or liabilities to a company (A)
4    equal to or exceeding the lesser of 3% of the company's
5    admitted assets or 25% of its surplus as regards
6    policyholders as of the 31st day of December next preceding
7    or (B) that is proposed when the domestic company is not
8    eligible to declare and pay a dividend or other
9    distribution pursuant to the provisions of Section 27.
10        (ii) Loans or extensions of credit to any person that
11    is not an affiliate (A) that involve the lesser of 3% of
12    the company's admitted assets or 25% of the company's
13    surplus, each as of the 31st day of December next
14    preceding, made with the agreement or understanding that
15    the proceeds of such transactions, in whole or in
16    substantial part, are to be used to make loans or
17    extensions of credit to, to purchase assets of, or to make
18    investments in, any affiliate of the company making such
19    loans or extensions of credit or (B) that are proposed when
20    the domestic company is not eligible to declare and pay a
21    dividend or other distribution pursuant to the provisions
22    of Section 27.
23        (iii) Reinsurance agreements or modifications thereto,
24    including all reinsurance pooling agreements, reinsurance
25    agreements in which the reinsurance premium or a change in
26    the company's liabilities, or the projected reinsurance

 

 

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1    premium or a change in the company's liabilities in any of
2    the next 3 years, equals or exceeds 5% of the company's
3    surplus as regards policyholders, as of the 31st day of
4    December next preceding, including those agreements that
5    may require as consideration the transfer of assets from an
6    insurer to a nonaffiliate, if an agreement or understanding
7    exists between the insurer and nonaffiliate that any
8    portion of those assets will be transferred to one or more
9    affiliates of the insurer.
10        (iv) All management agreements, service contracts,
11    other than agency contracts, tax allocation agreements,
12    reinsurance allocation agreements related to reinsurance
13    agreements required to be filed under this Section, and
14    cost-sharing arrangements, and any other contracts
15    providing for the rendering of services on a regular
16    systematic basis.
17        (v) Guarantees when made by a domestic insurer;
18    provided, however, that a guarantee that is quantifiable as
19    to amount is not subject to the notice requirements of this
20    paragraph (v) unless it exceeds the lesser of 0.5% of the
21    insurer's admitted assets or 10% of surplus as regards
22    policyholders as of the 31st day of December next
23    preceding. Further, all guarantees that are not
24    quantifiable as to amount are subject to the notice
25    requirements of this paragraph (v);
26        (vi) Direct or indirect acquisitions or investments in

 

 

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1    a person that controls the insurer, or in an affiliate of
2    the insurer, in an amount which, together with its present
3    holdings in such investments, exceeds 2.5% of the insurer's
4    surplus as regards policyholders. Direct or indirect
5    acquisitions or investments in subsidiaries acquired
6    pursuant to Section 131.2 of this Article (or authorized
7    under any other Section of this Code), or in non-subsidiary
8    insurance affiliates that are subject to the provisions of
9    this Article, are exempt from this requirement.
10        (vii) Any series of the previously described
11    transactions that are substantially similar to each other,
12    that take place within any 180 day period, and that in
13    total are equal to or exceed the lesser of 3% of the
14    domestic insurer's admitted assets or 25% of its
15    policyholders surplus, as of the 31st day of the December
16    next preceding.
17        viii (vi) Any other material transaction that the
18    Director by rule determines might render the company's
19    surplus as regards policyholders unreasonable in relation
20    to the company's outstanding liabilities and inadequate to
21    its financial needs or may otherwise adversely affect the
22    interests of the company's policyholders or shareholders.
23    Nothing herein contained shall be deemed to authorize or
24permit any transactions that, in the case of an insurer not a
25member of the same holding company system, would be otherwise
26contrary to law.

 

 

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1    (b) Any transaction or contract otherwise described in
2paragraph (a) of this subsection that is between a domestic
3insurer and any person that is not its affiliate and that
4precedes or follows within 180 days or is concurrent with a
5similar transaction between that nonaffiliate and an affiliate
6of the domestic company and that involves amounts that are
7equal to or exceed the lesser of 3% of the domestic insurer's
8admitted assets or 25% of its surplus as regards policyholders
9at the end of the prior year may not be entered into unless the
10company has notified the Director in writing of its intention
11to enter into the transaction at least 30 days prior thereto or
12such shorter period as the Director may permit, and the
13Director has not disapproved it within such period.
14    (c) A company may not enter into transactions which are
15part of a plan or series of like transactions with any person
16within the holding company system if the purpose of those
17separate transactions is to avoid the statutory threshold
18amount and thus avoid the review that would occur otherwise. If
19the Director determines that such separate transactions were
20entered into for such purpose, he may exercise his authority
21under subsection (2) of Section 131.24.
22    (d) The Director, in reviewing transactions pursuant to
23paragraph (a), shall consider whether the transactions comply
24with the standards set forth in Section 131.20 and whether they
25may adversely affect the interests of policyholders.
26    (e) The Director shall be notified within 30 days of any

 

 

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1investment of the domestic insurer in any one corporation if
2the total investment in that corporation by the insurance
3holding company system exceeds 10% of that corporation's voting
4securities.
5    (f) Except for those transactions subject to approval under
6other Sections of this Code, any such transaction or agreements
7which are not disapproved by the Director may be effective as
8of the date set forth in the notice required under this
9Section.
10    (g) If a domestic insurer enters into a transaction
11described in this subsection without having given the required
12notification, the Director may cause the insurer to pay a civil
13forfeiture of not more than $250,000. Each transaction so
14entered shall be considered a separate offense.
15    (2) No domestic company subject to registration under
16Section 131.13 may pay any extraordinary dividend or make any
17other extraordinary distribution to its shareholders
18securityholders until: (a) 30 days after the Director has
19received notice of the declaration thereof and has not within
20such period disapproved the payment, or (b) the Director
21approves such payment within the 30-day period. For purposes of
22this subsection, an extraordinary dividend or distribution is
23any dividend or distribution of cash or other property whose
24fair market value, together with that of other dividends or
25distributions, made within the period of 12 consecutive months
26ending on the date on which the proposed dividend is scheduled

 

 

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1for payment or distribution exceeds the greater of: (a) 10% of
2the company's surplus as regards policyholders as of the 31st
3day of December next preceding, or (b) the net income of the
4company for the 12-month period ending the 31st day of December
5next preceding, but does not include pro rata distributions of
6any class of the company's own securities.
7    Notwithstanding any other provision of law, the company may
8declare an extraordinary dividend or distribution which is
9conditional upon the Director's approval, and such a
10declaration confers no rights upon security holders until: (a)
11the Director has approved the payment of the dividend or
12distribution, or (b) the Director has not disapproved the
13payment within the 30-day period referred to above.
14(Source: P.A. 92-140, eff. 7-24-01.)
 
15    (215 ILCS 5/131.20b)
16    Sec. 131.20b. Controlled insurers; management; directors.
17    (1) Notwithstanding the control of a domestic insurer by
18any person, the officers and directors of the insurer shall not
19thereby be relieved of any obligation or liability to which
20they would otherwise be subject by law, and the insurer shall
21be managed so as to assure its separate operating identity
22consistent with this Article VIII 1/2 of this Code.
23    (2) Nothing in this Section shall preclude a domestic
24insurer from having or sharing a common management or a
25cooperative or joint use of personnel, property, or services

 

 

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1with one or more affiliated persons under arrangements meeting
2the standards and requirements of Sections 131.20 and 131.20a.
3    (3) Not After June 30, 2002, not less than one-third of the
4directors of a domestic company, and not less than one-third of
5the members of each committee of the board of directors of any
6domestic company, insurer that is a member of an insurance
7holding company system shall be persons who are not officers or
8employees of the insurer or of any entity controlling,
9controlled by, or under common control with the insurer and who
10are not beneficial owners of a controlling interest in the
11voting stock of the insurer or any such entity. At least one
12such person shall be included in any quorum for the transaction
13of business at any meeting of the board of directors or any
14committee thereof.
15    (3.5) The board of directors of a domestic company shall
16establish one or more committees comprised solely of directors
17who are not officers or employees of the company or of any
18entity controlling, controlled by, or under common control with
19the company and who are not beneficial owners of a controlling
20interest in the voting stock of the company or any such entity.
21The committee or committees shall have responsibility for
22nominating candidates for director for election by
23shareholders or policyholders, evaluating the performance of
24officers deemed to be principal officers of the company, and
25recommending to the board of directors the selection and
26compensation of the principal officers.

 

 

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1    (4) Subsections Subsection (3) and (3.5) of this Section do
2does not apply to a domestic company insurer if the person
3entity controlling the company, such as a company, a mutual
4insurance holding company, or a publicly held corporation, has
5a board of directors and committees thereof that meet the
6requirements of subsections (3) and (4) with respect to such
7controlling entity the insurer, whether directly or through an
8intermediate subsidiary, has a board of directors composed in
9accordance with that subsection.
10    (5) (Blank). Subsection (3) of this Section does not apply
11to a domestic insurer if the ultimate controlling party of the
12domestic insurer is a corporation whose equity securities or
13equivalent instruments are listed on the New York Stock
14Exchange.
15    (6) A company may make application to the Director for a
16waiver from the requirements of this Section, if the company's
17annual direct written and assumed premium, excluding premiums
18reinsured with the Federal Crop Insurance Corporation and
19Federal Flood Program, is less than $300,000,000. A company may
20also make application to the Director for a waiver from the
21requirements of this subsection (6) based upon unique
22circumstances. The Director may consider various factors,
23including, but not limited to, the type of business entity,
24volume of business written, availability of qualified board
25members, or the ownership or organizational structure of the
26entity.

 

 

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1(Source: P.A. 92-140, eff. 7-24-01.)
 
2    (215 ILCS 5/131.20c new)
3    Sec. 131.20c. Supervisory colleges.
4    (a) With respect to any company registered under Section
5131.4 of this Code, and in accordance with subsection (c) of
6this Section, the Director shall also have the power to
7participate in a supervisory college for any domestic company
8that is part of an insurance holding company system with
9international operations in order to determine compliance by
10the company with this Article. The powers of the Director with
11respect to supervisory colleges include, but are not limited
12to:
13        (1) initiating the establishment of a supervisory
14    college;
15        (2) clarifying the membership and participation of
16    other supervisors in the supervisory college;
17        (3) clarifying the functions of the supervisory
18    college and the role of other regulators, including the
19    establishment of a group-wide supervisor;
20        (4) coordinating the ongoing activities of the
21    supervisory college, including planning meetings,
22    supervisory activities, and processes for information
23    sharing; and
24        (5) establishing a crisis management plan.
25    (b) Each registered company subject to this Section shall

 

 

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1be liable for and shall pay the reasonable expenses of the
2Director's participation in a supervisory college in
3accordance with subsection (c) of this Section, including
4reasonable travel expenses. For purposes of this Section, a
5supervisory college may be convened as either a temporary or
6permanent forum for communication and cooperation between the
7regulators charged with the supervision of the company or its
8affiliates, and the Director may establish a regular assessment
9to the insurer for the payment of these expenses.
10    (c) In order to assess the business strategy, financial
11position, legal and regulatory position, risk exposure, risk
12management, and governance processes, and as part of the
13examination of individual companies, the Director may
14participate in a supervisory college with other regulators
15charged with supervision of the company or its affiliates,
16including other state, federal, and international regulatory
17agencies. The Director may enter into agreements providing the
18basis for cooperation between the Director and the other
19regulatory agencies and the activities of the supervisory
20college. Nothing in this Section shall delegate to the
21supervisory college the authority of the Director to regulate
22or supervise the company or its affiliates within its
23jurisdiction.
 
24    (215 ILCS 5/131.21)  (from Ch. 73, par. 743.21)
25    Sec. 131.21. Examination.

 

 

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1    (1) Subject to the limitation contained in this section and
2in addition to the powers which the Director has under Sections
3132 through 132.7 and 401 through 403 of this Code relating to
4the examination of companies, the Director shall have the power
5to examine any insurer registered under Section 131.13 of this
6Code and its affiliates to ascertain the financial condition of
7the company, including the enterprise risk to the company by
8the ultimate controlling party, or by any entity or combination
9of entities within the insurance holding company system, or by
10the insurance holding company system on a consolidated basis.
11also has the power to order any company registered under
12Section 131.13 to produce such records, books, or other
13information papers in the possession of the company or its
14affiliates as are reasonably necessary to ascertain the
15financial condition of such company or to determine compliance
16with this Article. In the event the company fails to comply
17with the order, the Director has the power to examine the
18affiliates to obtain such information.
19    (1.5) The Director may order any company registered under
20Section 131.13 of this Code to produce such records, books, or
21other information papers in the possession of the company or
22its affiliates as are reasonably necessary to determine
23compliance with this Article. To determine compliance with this
24Article, the Director may order any company registered under
25Section 131.13 of this Code to produce information not in the
26possession of the company if the company can obtain access to

 

 

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1such information pursuant to contractual relationships,
2statutory obligations, or other methods. In the event the
3company cannot obtain the information requested by the
4Director, the company shall provide the Director a detailed
5explanation of the reason that the company cannot obtain the
6information and the identity of the holder of the information.
7Whenever it appears to the Director that the detailed
8explanation is without merit, the Director may require, after
9notice and hearing, the company to pay a penalty of up to
10$1,000 for each day's delay, or may suspend or revoke the
11company's license.
12    (2) The Director may retain at the registered company's
13expense any attorneys, actuaries, accountants and other
14experts not otherwise a part of the Director's staff as may be
15reasonably necessary to assist in the conduct of the
16examination under subsection (1). Any persons so retained are
17under the direction and control of the Director and may act in
18a purely advisory capacity.
19    (3) Each registered company producing for examination
20records, books and papers under subsection (1.5) (1) is liable
21for and must pay the expense of the examination in accordance
22with Section 408 of this Code.
23    (4) In the event the company fails to comply with an order,
24the Director shall have the power to examine the affiliates to
25obtain the information. The Director shall also have the power
26to issue subpoenas, to administer oaths, and to examine under

 

 

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1oath any person for purposes of determining compliance with
2this Section. Upon the failure or refusal of any person to obey
3a subpoena, the Director may petition a court of competent
4jurisdiction and, upon proper showing, the court may enter an
5order compelling the witness to appear and testify or produce
6documentary evidence. Failure to obey the court order shall be
7punishable as contempt of court. Every person shall be obliged
8to attend as a witness at the place specified in the subpoena,
9when subpoenaed, anywhere within the State. He or she shall be
10entitled to the same fees and mileage, if claimed, as a witness
11in the Circuit Court, which fees, mileage, and actual expense,
12if any, necessarily incurred in securing the attendance of
13witnesses, and their testimony, shall be itemized and charged
14against, and be paid by, the company being examined.
15(Source: P.A. 89-97, eff. 7-7-95.)
 
16    (215 ILCS 5/131.22)  (from Ch. 73, par. 743.22)
17    Sec. 131.22. Confidential treatment.
18    (a) Documents, materials, or other information in the
19possession or control of the Department that are obtained by or
20disclosed to the Director or any other person in the course of
21an examination or investigation made pursuant to this Article
22and all information reported pursuant to this Article shall be
23confidential by law and privileged, shall not be subject to the
24Illinois Freedom of Information Act, shall not be subject to
25subpoena, and shall not be subject to discovery or admissible

 

 

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1in evidence in any private civil action. However, the Director
2is authorized to use the documents, materials, or other
3information in the furtherance of any regulatory or legal
4action brought as a part of the Director's official duties. The
5Director shall not otherwise make the documents, materials, or
6other information public without the prior written consent of
7the company to which it pertains unless the Director, after
8giving the company and its affiliates who would be affected
9thereby notice and opportunity to be heard, determines that the
10interest of policyholders, shareholders, or the public shall be
11served by the publication thereof, in which event the Director
12may publish all or any part in such manner as may be deemed
13appropriate.
14    (b) Neither the Director nor any person who received
15documents, materials, or other information while acting under
16the authority of the Director or with whom such documents,
17materials, or other information are shared pursuant to this
18Code shall be permitted or required to testify in any private
19civil action concerning any confidential documents, materials,
20or information subject to subsection (a) of this Section.
21    (c) In order to assist in the performance of the Director's
22duties, the Director:
23        (1) may share documents, materials, or other
24    information, including the confidential and privileged
25    documents, materials, or information subject to subsection
26    (a) of this Section, with other state, federal, and

 

 

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1    international regulatory agencies, with the NAIC and its
2    affiliates and subsidiaries, and with state, federal, and
3    international law enforcement authorities, including
4    members of any supervisory college allowed by this Article,
5    provided that the recipient agrees in writing to maintain
6    the confidentiality and privileged status of the document,
7    material, or other information, and has verified in writing
8    the legal authority to maintain confidentiality;
9    notwithstanding this paragraph (1), the Director may only
10    share confidential and privileged documents, material, or
11    information reported pursuant to Section 131.20c with
12    commissioners of states having statutes or regulations
13    substantially similar to subsection (a) of this Section and
14    who have agreed in writing not to disclose such
15    information;
16        (2) may receive documents, materials, or information,
17    including otherwise confidential and privileged documents,
18    materials, or information from the NAIC and its affiliates
19    and subsidiaries and from regulatory and law enforcement
20    officials of other foreign or domestic jurisdictions, and
21    shall maintain as confidential or privileged any document,
22    material, or information received with notice or the
23    understanding that it is confidential or privileged under
24    the laws of the jurisdiction that is the source of the
25    document, material, or information; and
26        (3) shall enter into written agreements with the NAIC

 

 

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1    governing sharing and use of information provided pursuant
2    to this Code consistent with this subsection (c) that shall
3    (i) specify procedures and protocols regarding the
4    confidentiality and security of information shared with
5    the NAIC and its affiliates and subsidiaries pursuant to
6    this Code, including procedures and protocols for sharing
7    by the NAIC with other state, federal, or international
8    regulators; (ii) specify that ownership of information
9    shared with the NAIC and its affiliates and subsidiaries
10    pursuant to this Code remains with the Director and the
11    NAIC's use of the information is subject to the direction
12    of the Director; (iii) require prompt notice to be given to
13    an insurer whose confidential information in the
14    possession of the NAIC pursuant to this Code is subject to
15    a request or subpoena to the NAIC for disclosure or
16    production; and (iv) require the NAIC and its affiliates
17    and subsidiaries to consent to intervention by an insurer
18    in any judicial or administrative action in which the NAIC
19    and its affiliates and subsidiaries may be required to
20    disclose confidential information about the insurer shared
21    with the NAIC and its affiliates and subsidiaries pursuant
22    to this Code.
23    (d) The sharing of information by the Director pursuant to
24this Code shall not constitute a delegation of regulatory
25authority or rulemaking, and the Director is solely responsible
26for the administration, execution, and enforcement of the

 

 

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1provisions of this Code.
2    (e) No waiver of any applicable privilege or claim of
3confidentiality in the documents, materials, or information
4shall occur as a result of disclosure to the Director under
5this Section or as a result of sharing as authorized in
6subsection (c) of this Section.
7    (f) Documents, materials, or other information in the
8possession or control of the NAIC pursuant to this Code shall
9be confidential by law and privileged, shall not be subject to
10the Illinois Freedom of Information Act, shall not be subject
11to subpoena, and shall not be subject to discovery or
12admissible in evidence in any private civil action. All
13information, documents, and copies thereof obtained by or
14disclosed to the Director or any other person in the course of
15an examination or investigation made under Section 131.21 and
16all information submitted under Sections 131.13 or 131.20a and
17all personal financial statement information submitted under
18Section 131.5 must be given confidential treatment and is not
19subject to subpoena and may not be made public by the Director
20or any other person, without the prior written consent of the
21company to which it pertains unless the Director, after giving
22the company and its affiliates who would be affected thereby
23notice and opportunity to be heard, determines that the
24interests of policyholders, shareholders or the public will be
25served by the publication thereof in which event he may publish
26all or any part thereof in such manner as he may deem

 

 

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1appropriate.
2    Nothing contained in this Section shall prevent or be
3construed as prohibiting the Director from disclosing such
4information to the insurance department of any other state or
5county or to law enforcement officials of this or any other
6state or agency of the federal government at any time upon the
7written agreement of the entity receiving the information to
8hold that information confidential and in a manner consistent
9with this Code.
10(Source: P.A. 88-364.)
 
11    (215 ILCS 5/131.24)  (from Ch. 73, par. 743.24)
12    Sec. 131.24. Sanctions.
13    (1) Every director or officer of an insurance holding
14company system who knowingly violates, participates in, or
15assents to, or who knowingly permits any of the officers or
16agents of the company to engage in transactions or make
17investments which have not been properly filed or approved or
18which violate this Article, shall pay, in their individual
19capacity, a civil forfeiture of not more than $100,000 per
20violation, after notice and hearing before the Director. In
21determining the amount of the civil forfeiture, the Director
22shall take into account the appropriateness of the forfeiture
23with respect to the gravity of the violation, the history of
24previous violations, and such other matters as justice may
25require.

 

 

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1    (2) Whenever it appears to the Director that any company
2subject to this Article or any director, officer, employee or
3agent thereof has engaged in any transaction or entered into a
4contract which is subject to Section 131.20, and any one of
5Sections 131.16, 131.20a, 141, 141.1, or 174 of this Code and
6which would not have been approved had such approval been
7requested or would have been disapproved had required notice
8been given, the Director may order the company to cease and
9desist immediately any further activity under that transaction
10or contract. After notice and hearing the Director may also
11order (a) the company to void any such contracts and restore
12the status quo if such action is in the best interest of the
13policyholders or the public, and (b) any affiliate of the
14company, which has received from the company dividends,
15distributions, assets, loans, extensions of credit,
16guarantees, or investments in violation of any such Section, to
17immediately repay, refund or restore to the company such
18dividends, distributions, assets, extensions of credit,
19guarantees or investments.
20    (3) Whenever it appears to the Director that any company or
21any director, officer, employee or agent thereof has committed
22a willful violation of this Article, the Director may cause
23criminal proceedings to be instituted in the Circuit Court for
24the county in which the principal office of the company is
25located or in the Circuit Court of Sangamon or Cook County
26against such company or the responsible director, officer,

 

 

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1employee or agent thereof. Any company which willfully violates
2this Article commits a business offense and may be fined up to
3$500,000. Any individual who willfully violates this Article
4commits a Class 4 felony and may be fined in his individual
5capacity not more than $500,000 or be imprisoned for not less
6than one year nor more than 3 years, or both.
7    (4) Any officer, director, or employee of an insurance
8holding company system who willfully and knowingly subscribes
9to or makes or causes to be made any false statements or false
10reports or false filings with the intent to deceive the
11Director in the performance of his duties under this Article,
12commits a Class 3 felony and upon conviction thereof, shall be
13imprisoned for not less than 2 years nor more than 5 years or
14fined $500,000 or both. Any fines imposed shall be paid by the
15officer, Director, or employee in his individual capacity.
16    (5) Whenever it appears to the Director that any person has
17committed a violation of Section 131.20c of this Code which
18prevents the full understanding of the enterprise risk to the
19insurer by affiliates or by the insurance holding company
20system, the violation may serve as an independent basis for
21disapproving dividends or distributions and for placing the
22insurer under an order of supervision.
23(Source: P.A. 93-32, eff. 7-1-03.)
 
24    (215 ILCS 5/131.27)  (from Ch. 73, par. 743.27)
25    Sec. 131.27. Judicial review.

 

 

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1    (1) Any order or decision made, issued or executed by the
2Director under this Article whereby any person or company is
3aggrieved is subject to review by the Circuit Court of Sangamon
4County.
5    The Administrative Review Law, as now or hereafter amended,
6and the rules adopted pursuant thereto, applies to and governs
7all proceedings for review of final administrative decisions of
8the Director provided for in this Section. The term
9"administrative decision" is defined as in Section 3-101 of the
10Code of Civil Procedure.
11    (2) The filing of an appeal pursuant to this Section shall
12stay the application of any rule, regulation, order, or other
13action of the Director to the appealing party unless the court,
14after giving the party notice and an opportunity to be heard,
15determines that a stay would be detrimental to the interest of
16policyholders, shareholders, creditors, or the public.
17    (3) Any person aggrieved by any failure of the Director to
18act or make a determination required by this Code may petition
19for a writ in the nature of a mandamus or a peremptory mandamus
20directing the Director to act or make a determination.
21(Source: P.A. 82-783.)
 
22    (215 ILCS 5/131.9 rep.)
23    Section 10. The Illinois Insurance Code is amended by
24repealing Section 131.9.
 

 

 

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1    Section 97. Severability. The provisions of this Act are
2severable under Section 1.31 of the Statute on Statutes.
 
3    Section 99. Effective date. This Act takes effect January
41, 2013.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    215 ILCS 5/131.1from Ch. 73, par. 743.1
4    215 ILCS 5/131.2from Ch. 73, par. 743.2
5    215 ILCS 5/131.3from Ch. 73, par. 743.3
6    215 ILCS 5/131.4from Ch. 73, par. 743.4
7    215 ILCS 5/131.5from Ch. 73, par. 743.5
8    215 ILCS 5/131.6from Ch. 73, par. 743.6
9    215 ILCS 5/131.8from Ch. 73, par. 743.8
10    215 ILCS 5/131.8afrom Ch. 73, par. 743.8a
11    215 ILCS 5/131.11from Ch. 73, par. 743.11
12    215 ILCS 5/131.12from Ch. 73, par. 743.12
13    215 ILCS 5/131.12afrom Ch. 73, par. 743.12a
14    215 ILCS 5/131.13from Ch. 73, par. 743.13
15    215 ILCS 5/131.14from Ch. 73, par. 743.14
16    215 ILCS 5/131.14a new
17    215 ILCS 5/131.14b new
18    215 ILCS 5/131.14c new
19    215 ILCS 5/131.16from Ch. 73, par. 743.16
20    215 ILCS 5/131.17from Ch. 73, par. 743.17
21    215 ILCS 5/131.18from Ch. 73, par. 743.18
22    215 ILCS 5/131.19from Ch. 73, par. 743.19
23    215 ILCS 5/131.20from Ch. 73, par. 743.20
24    215 ILCS 5/131.20afrom Ch. 73, par. 743.20a
25    215 ILCS 5/131.20b

 

 

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1    215 ILCS 5/131.20c new
2    215 ILCS 5/131.21from Ch. 73, par. 743.21
3    215 ILCS 5/131.22from Ch. 73, par. 743.22
4    215 ILCS 5/131.24from Ch. 73, par. 743.24
5    215 ILCS 5/131.27from Ch. 73, par. 743.27
6    215 ILCS 5/131.9 rep.