(215 ILCS 110/35) (from Ch. 32, par. 690.35)
Sec. 35.
Investments; reserves; deficiencies.
(a) The funds of any dental service plan corporation may be invested only in
accordance with the requirements provided by law for the investment of funds of
life insurance companies.
(b) As an allocation of net worth, each dental service plan corporation
shall maintain a special contingent reserve. The special contingent reserve
for a corporation that is beginning operations shall be equal to 5% of its
net earned subscription revenue for dental care services through December
31st of the year in which it is certified, but in no event less than $100,000. In subsequent years, unless waived by the Director, the
corporation shall accumulate additions to the contingent reserve in an amount
which is equal to 2% of its net earned subscription revenue for each calendar
year. For purposes of this Section, "net earned subscription revenue"
means premium minus reinsurance expenses. Maintenance of the contingent
reserve requires that net worth equals or exceeds the contingent reserve at any
balance sheet date. The special contingent reserve shall be provided in cash
and securities in combination and form acceptable to the Director.
(c) Additional accumulations under Section 35(b) will no longer be required
when the total special contingent reserve required by
Section 35(b) is equal to or greater than 5% of the corporation's average
annual net earned subscription revenue for the corporation's preceding 2 calendar years.
Additional accumulations under subsection (b) of this Section shall no
longer
be required when
the total special contingent reserve required by subsection (b)
of this Section is equal to $1,500,000.
(d) A deficiency in meeting amounts required in subsection (b) or (c) of this Section will
require, upon notice from the Director, (1) filing of a plan for correction
of the deficiency, acceptable to the Director, within 20 days from receipt
of notice, and (2) correction of the deficiency within a reasonable time,
not to exceed 60 days from receipt of notice unless an extension of time
is granted by the Director. Such a deficiency will be deemed an
impairment, and failure to correct the deficiency in the prescribed time
shall be grounds for rehabilitation, liquidation, conservation, or
dissolution pursuant to Section 38.
(Source: P.A. 90-794, eff. 8-14-98.)
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