| |
Illinois Compiled Statutes
Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
INSURANCE (215 ILCS 5/) Illinois Insurance Code. 215 ILCS 5/126.3
(215 ILCS 5/126.3)
Sec. 126.3.
General investment qualifications.
A. Insurers may acquire, hold or invest in investments or engage in
investment practices as set forth in this Article. Insurers may also acquire,
hold or invest in investments not conforming to the requirements of this
Article that are not otherwise prohibited by this Code. Investments not
conforming to this Article shall not be admitted assets unless they are
acquired under other authority of this Code.
B. Subject to subsection C of this Section, an insurer shall not acquire or
hold an
investment as an admitted asset unless at the time of acquisition it is:
(1) Eligible for the payment or accrual of interest | | or discount (whether in cash or other forms of income or securities), eligible to receive dividends or other distributions or is otherwise income producing; or
|
|
(2) Acquired under Section 126.15B, 126.15C, 126.16,
| | 126.18, 126.20, 126.28C, 126.29, 126.31, or 126.32 or under the authority of Sections of the Code other than this Article.
|
|
C. An insurer may acquire or hold as admitted assets investments that do not
otherwise qualify as provided in this Article if the insurer has not acquired
them for the purpose of circumventing any limitations contained in this
Article, if the insurer acquires the investments in the following circumstances
and the insurer complies with the provisions of Sections 126.5 and 126.7 as to
the investments:
(1) As payment on account of existing indebtedness or
| | in connection with the refinancing, restructuring or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;
|
|
(2) As realization on collateral for indebtedness;
(3) In connection with an otherwise qualified
| | investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;
|
|
(4) Under a lawful and bona fide agreement of
| | recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or
|
|
(5) Under a bulk reinsurance, merger or consolidation
| | transaction approved by the Director if the assets constitute admissible investments for the ceding, merged or consolidated companies.
|
|
D. An investment or portion of an investment acquired by an insurer under
subsection C of this Section shall become a nonadmitted asset 3 years
(or 5 years in the case of mortgage loans and real estate) from the date of
its acquisition, unless within that period the investment has become a
qualified investment under a Section of this Article other than subsection C of
this Section, but an investment acquired under an agreement of bulk
reinsurance, merger or consolidation may be qualified for a longer period if so
provided in the plan for reinsurance, merger or consolidation as approved by
the Director. Upon application by the insurer and a showing that the
nonadmission of an asset held under subsection C of this Section would injure
the interests of the insurer, the Director may extend the period for
admissibility for an additional reasonable period of time.
E. Except as provided in subsections F and H of this Section, an investment
shall qualify under this Article if, on the date the insurer committed to
acquire the investment or on the date of its acquisition, it would have
qualified under this Article. For the purposes of determining limitations
contained in this Article, an insurer shall give appropriate recognition to any
commitments to acquire investments.
F. (1) An investment held as an admitted asset by an
| | insurer on the effective date of this amendatory Act of 1997 which qualified immediately prior to the effective date of this amendatory Act of 1997 shall remain qualified as an admitted asset under this Article.
|
|
(2) Each specific transaction constituting an
| | investment practice of the type described in this Article immediately prior to the effective date of this amendatory Act of 1997 that was lawfully entered into by an insurer and was in effect on the effective date of this amendatory Act of 1997 shall continue to be permitted under this Article until its expiration or termination under its terms.
|
|
G. Unless otherwise specified, an investment limitation computed on the
basis of an
insurer's admitted assets or capital and surplus shall relate to the amount
required to be shown on the statutory balance sheet of the insurer most
recently required to be filed (annual or last quarter) with the Director.
Solely for purposes of
computing any limitation under this Article based upon admitted assets, the
insurer shall deduct from the amount of its admitted assets the amount of the
liability recorded on such statutory balance sheet for:
(1) The return of acceptable collateral received in a
| | reverse repurchase transaction or a securities lending transaction;
|
|
(2) Cash received in a dollar roll transaction; and
(3) The amount reported as borrowed money in such
| | statutory balance sheet to the extent not included in paragraphs (1) and (2) of this subsection.
|
|
H. An investment qualified, in whole or in part, for acquisition or holding
as an admitted asset may be qualified or requalified at the time of acquisition
or a later date, in whole or in part, under any other Section, if the relevant
conditions contained in the other Section are satisfied at the time of
qualification or requalification.
I. An insurer shall maintain documentation demonstrating that investments
were acquired in accordance with this Article, and specifying the Section of
this Article under which they were acquired.
J. An insurer shall not enter into an agreement to purchase securities in
advance of their issuance for resale to the public as part of a distribution of
the securities by
the issuer or otherwise guarantee the distribution, except that an insurer may
acquire privately placed securities with registration rights.
K. Notwithstanding the provisions of this Article, the Director, for good
cause, may
order an insurer to nonadmit, limit, dispose of, withdraw from or discontinue
an investment or investment practice in accordance with Article XXIV. The
authority of the Director under this subsection is in addition to any other
authority of the Director.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.4
(215 ILCS 5/126.4)
Sec. 126.4.
Authorization of investments by the board of directors.
A. Within 3 months after the effective date of this amendatory Act of 1997,
an insurer's board of directors shall adopt a written plan for acquiring
and holding investments and for engaging in investment practices that specifies
guidelines as to the quality, maturity and diversification of investments and
other specifications including investment strategies intended to assure that
the investments and investment practices are appropriate for the business
conducted by the insurer, its liquidity needs and its capital and surplus. The
board shall review and assess the insurer's technical investment and
administrative capabilities and expertise before
adopting a written plan concerning an investment strategy or investment
practice.
B. Investments acquired and held under this Article shall be acquired and
held under the supervision and direction of the board of directors of the
insurer. The board of directors shall evidence by formal resolution, at least
annually, that it has determined whether all investments have been made in
accordance with delegations, standards, limitations and investment objectives
prescribed by the board or a committee of the board charged with the
responsibility to direct its investments.
C. On no less than a quarterly basis, and more often if deemed appropriate,
an insurer's board of directors or committee of the board of directors shall:
(1) Receive and review a summary report on the | | insurer's investment portfolio, its investment activities and investment practices engaged in under delegated authority, in order to determine whether the investment activity of the insurer is consistent with its written plan; and
|
|
(2) Review and revise, as appropriate, the written
| |
D. In discharging its duties under this Section, the board of directors
shall require that records of any authorizations or approvals, other
documentation as the board may require and reports of any action taken under
authority delegated under the plan referred to in subsection A of this Section
shall be made available on a regular basis to the board of directors.
E. In discharging their duties under this Section, the directors of an
insurer shall perform their duties in good faith and with that degree of care
that ordinarily prudent individuals in like positions would use under similar
circumstances.
F. If an insurer does not have a board of directors, all references to the
board of directors in this Article shall be deemed to be references to the
governing body of the insurer having authority equivalent to that of a board of
directors.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.5
(215 ILCS 5/126.5)
Sec. 126.5.
Prohibited investments.
An insurer shall not, directly or indirectly:
A. Invest in an obligation or security or make a guarantee for the benefit
of or in favor of an officer or director of the insurer, except as provided in
Section 126.6;
B. Invest in an obligation or security, make a guarantee for the benefit of
or in favor of, or make other investments in a business entity of which 10% or
more of the voting securities or equity interests are owned
directly or indirectly by
or for the benefit of one or more officers or directors of the insurer, except
pursuant to a transaction entered into in compliance with Section 131.20a of
this Code or provided in Section 126.6;
C. Engage on its own behalf or through one or more affiliates in a
transaction or
series of transactions designed to evade the prohibitions of this Article;
D. (1) Invest in a partnership as a general partner, | | except that an insurer may make an investment as a general partner:
|
|
(a) If all other partners in the partnership are
| | subsidiaries of the insurer or other insurance company affiliates of the insurer;
|
|
(b) For the purpose of:
(i) Meeting cash calls committed to prior to
| | the effective date of this amendatory Act of 1997;
|
|
(ii) Completing those specific projects or
| | activities of the partnership in which the insurer was a general partner as of the effective date of this amendatory Act of 1997 that had been undertaken as of that date; or
|
|
(iii) Making capital improvements to property
| | owned by the partnership on the effective date of this amendatory Act of 1997 if the insurer was a general partner as of that date; or
|
|
(c) In accordance with Section 126.3C;
(2) This subsection shall not prohibit a subsidiary
| | or other affiliate of the insurer from becoming a general partner; or
|
|
E. Invest in or lend its funds upon the security of shares of its own stock,
except as authorized by other provisions of this Code. However, no such shares
shall be admitted assets of the insurer.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.6
(215 ILCS 5/126.6)
Sec. 126.6.
Loans to officers and directors.
A. (1) Except as provided in Section 126.6B, an insurer shall not directly
or indirectly, unless it has notified the Director in writing of its intention
to enter into the transaction at least 30 days prior thereto, or any shorter
period as the Director may permit, and the Director has not disapproved it
within that period:
(a) Make a loan to or other investment in an officer | | or director of the insurer or a person in which the officer or director has any direct or indirect financial interest;
|
|
(b) Make a guarantee for the benefit of or in favor
| | of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or
|
|
(c) Enter into an agreement for the purchase or sale
| | of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest.
|
|
(2) For purposes of this Section, an officer or director shall not be
deemed to have a financial interest by reason of an interest that is held
directly or indirectly through the ownership of equity interests representing
less than 2% of all outstanding equity interests issued by a person that is a
party to the transaction, or solely by reason of that individual's position as
a director or officer of a person that is a party to the transaction.
(3) This subsection does not permit an investment that is prohibited by
Section 126.5.
(4) This subsection does not apply to a transaction between an insurer and
any of its subsidiaries or affiliates that is entered into in compliance with
Section 131.20a of this Code, other than a transaction between an insurer
and its officer or director.
B. An insurer may make, without the prior written approval of the Director:
(1) Policy loans in accordance with the terms of the
| | policy or contract and Section 126.19;
|
|
(2) Advances to officers or directors for expenses
| | reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses;
|
|
(3) Loans secured by the principal residence of an
| | existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans comply with the requirements of Section 126.15 or 126.28 and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties;
|
|
(4) Secured loans to an existing or new officer of
| | the insurer made in connection with the officer's relocation at the insurer's request, if the loans:
|
|
(a) Do not have a term exceeding 2 years;
(b) Are required to finance mortgage loans
| | outstanding at the same time on the prior and new residences of the officer;
|
|
(c) Do not exceed an amount equal to the equity
| | of the officer in the prior residence; and
|
|
(d) Are required to be fully repaid upon the
| | earlier of the end of the 2 year period or the sale of the prior residence; and
|
|
(5) Loans and advances to officers or directors made
| | in compliance with state or federal law specifically related to the loans and advances by a regulated non-insurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity.
|
|
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.7
(215 ILCS 5/126.7)
Sec. 126.7.
Valuation of investments.
For the purposes of this Article, the value or amount of an investment acquired
or held, or an investment practice engaged in, under this Article, unless
otherwise specified in this Code, shall be the value at which assets of an
insurer are required to be reported for statutory accounting purposes as
determined in accordance with procedures prescribed in published accounting and
valuation standards of the NAIC, including the Purposes and Procedures of the
Securities
Valuation Office, the Valuation of Securities manual, the Accounting Practices
and Procedures
manual, the Annual Statement Instructions or any successor valuation procedures
officially adopted by the
NAIC. The Director shall promulgate rules for determining and calculating
values to be used in financial statements submitted to the Department for
investments not subject to published National Association of Insurance
Commissioners valuation standards.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.8
(215 ILCS 5/126.8)
Sec. 126.8.
Rules.
The Director may, in accordance with Section 401 of this Code, promulgate
rules implementing the provisions of this Article.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/Art. VIII Pt. 2
(215 ILCS 5/Art. VIII Pt. 2 heading)
2.
LIFE AND HEALTH INSURERS
|
215 ILCS 5/126.9
(215 ILCS 5/126.9)
Sec. 126.9.
Applicability.
This Part shall apply to the investments and investment practices of
companies authorized to transact business under Class 1 of Section 4 of this
Code and other companies whose investments and investment practices are
regulated as life insurers under this Code, subject to the provisions of
Section 126.1B.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.10
(215 ILCS 5/126.10)
Sec. 126.10.
General 3% diversification, medium and lower grade
investments, and Canadian investments.
A. General 3% diversification.
(1) Except as otherwise specified in this Article, an | | insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under this Article if, as a result of and after giving effect to the investment, the insurer would hold more than 3% of its admitted assets in investments of all kinds issued, assumed, accepted, guaranteed, or insured by a single person.
|
|
(2) This 3% limitation shall not apply to the
| | aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization.
|
|
(3) Asset-backed securities shall not be subject to
| | the limitations of paragraph (1) of this subsection, however, except as permitted by subsection A(4) of this Section, an insurer shall not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity, then held by the insurer would exceed 3% of its admitted assets.
|
|
(4) A company's investments in mortgage related
| | securities, as defined by the Secondary Mortgage Market Enhancement Act of 1984 (United States Public Law 98-440) [12 U.S.C. 24, 1451, 1454 et seq.], that are backed by any single pool of mortgages and made pursuant to the authority of that Act, shall not exceed 5% of its admitted assets.
|
|
B. Medium and lower grade investments.
(1) An insurer shall not acquire, directly or
| | indirectly through an investment subsidiary, an investment under Sections 126.11, 126.14, and 126.17 or counterparty exposure under Section 126.18D if, as a result of and after giving effect to the investment:
|
|
(a) The aggregate amount of medium and lower
| | grade investments then held by the insurer would exceed 20% of its admitted assets;
|
|
(b) The aggregate amount of lower grade
| | investments then held by the insurer would exceed 10% of its admitted assets;
|
|
(c) The aggregate amount of investments rated 5
| | or 6 by the SVO then held by the insurer would exceed 3% of its admitted assets;
|
|
(d) The aggregate amount of investments rated 6
| | by the SVO then held by the insurer would exceed 1% of its admitted assets; or
|
|
(e) The aggregate amount of lower grade
| | investments then held by the insurer that receive as cash income less than the equivalent yield for Treasury issues with a comparative average life, would exceed 1% of its admitted assets.
|
|
(2) An insurer shall not acquire, directly or
| | indirectly through an investment subsidiary, an investment under Sections 126.11, 126.14, and 126.17 or counterparty exposure under Section 126.18D if, as a result of and after giving effect to the investment:
|
|
(a) The aggregate amount of medium and lower
| | grade investments issued, assumed, accepted, guaranteed, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 1% of its admitted assets; or
|
|
(b) The aggregate amount of lower grade
| | investments issued, assumed, accepted, guaranteed, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 0.5% of its admitted assets.
|
|
(3) If an insurer attains or exceeds the limit of any
| | one rating category referred to in this subsection, the insurer shall not thereby be precluded from acquiring investments in other rating categories subject to the specific and multi-category limits applicable to those investments.
|
|
C. Canadian investments.
(1) An insurer shall not acquire, directly or
| | indirectly through an investment subsidiary, a Canadian investment authorized by this Article, if as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed 40% of its admitted assets, or if the aggregate amount of Canadian investments not acquired under Section 126.11B then held by the insurer would exceed 25% of its admitted assets.
|
|
(2) However, as to an insurer that is authorized to
| | do business in Canada or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of paragraph (1) of this subsection shall be increased by the greater of:
|
|
(a) The amount the insurer is required by
| | Canadian law to invest in Canada or to be denominated in Canadian currency; or
|
|
(b) 115% of the amount of its reserves and other
| | obligations under contracts on lives or risks resident or located in Canada.
|
|
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.11
(215 ILCS 5/126.11)
Sec. 126.11.
Rated credit instruments.
Subject to the limitations of subsection F of this Section, an insurer may
acquire rated credit instruments:
A. Subject to the limitations of Section 126.10B, but not to the limitations
of Section 126.10A, except for that of subsection (4) of Section 126.10A, an
insurer may acquire rated credit instruments issued, assumed, guaranteed, or
insured by:
(1) The United States; or
(2) A government sponsored enterprise of the United | | States, if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States.
|
|
B. (1) Subject to the limitations of Section 126.10B,
| | but not to the limitations of Section 126.10A, an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:
|
|
(a) Canada; or
(b) A government sponsored enterprise of Canada,
| | if the instruments of the government sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada;
|
|
(2) However, an insurer shall not acquire an
| | instrument under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subsection would exceed 40% of its admitted assets.
|
|
C. (1) Subject to the limitations of Section 126.10B,
| | but not to the limitations of Section 126.10A, an insurer may acquire rated credit instruments, excluding asset-backed securities:
|
|
(a) Issued by a government money market mutual
| | fund, a class one money market mutual fund or a class one bond mutual fund;
|
|
(b) Issued, assumed, guaranteed, or insured by a
| | government sponsored enterprise of the United States other than those eligible under subsection A of this Section;
|
|
(c) Issued, assumed, guaranteed, or insured by a
| | state, if the instruments are general obligations of the state; or
|
|
(d) Issued by a multilateral development bank;
(2) However, an insurer shall not acquire an
| | instrument of any one fund, any one enterprise or entity or any one state under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer in any one fund, enterprise, entity, or state under this subsection would exceed 10% of its admitted assets.
|
|
D. Subject to the limitations of Section 126.10, an insurer may acquire
preferred stocks that are not foreign investments and that meet the
requirements of rated credit instruments if, as a result of and after giving
effect to the investment:
(1) The aggregate amount of preferred stocks then
| | held by the insurer under this subsection does not exceed 33 1/3% of its admitted assets; and
|
|
(2) The aggregate amount of preferred stocks then
| | held by the insurer under this subsection which are not sinking fund stocks or rated P1 or P2 by the SVO does not exceed 15% of its admitted assets.
|
|
E. Subject to the limitations of Section 126.10, in addition to those
investments eligible under subsections A, B, C and D of this Section, an
insurer may acquire rated credit instruments that are not foreign investments.
F. An insurer shall not acquire special rated credit instruments under this
Section if, as a result of and after giving effect to the investment, the
aggregate amount of special rated credit instruments then held by the insurer
would exceed 5% of its admitted assets. The Director may, by
rule, identify certain special rated credit instruments that will be
exempt from the limitation imposed by this subsection.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.12
(215 ILCS 5/126.12)
Sec. 126.12. Insurer investment pools.
A. An insurer may acquire investments in investment pools that:
(1) Invest only in:
(a) Obligations that are rated 1 or 2 by the SVO | | or have an equivalent of an SVO 1 or 2 rating (or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating) by a nationally recognized statistical rating organization recognized by the SVO and have:
|
|
(i) A remaining maturity of 397 days or less
| | or a put that entitles the holder to receive the principal amount of the obligation which put may be exercised through maturity at specified intervals not exceeding 397 days; or
|
|
(ii) A remaining maturity of 3 years or less
| | and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, London InterBank Offered Rate (LIBOR) or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;
|
|
(b) Government money market mutual funds or class
| | one money market mutual funds; or
|
|
(c) Securities lending, repurchase, and reverse
| | repurchase transactions that meet all the requirements of Section 126.16, except the quantitative limitations of Section 126.16D; or
|
|
(2) Invest only in investments which an insurer may
| | acquire under this Article, if the insurer's proportionate interest in the amount invested in these investments when combined with amount of such investments made directly or indirectly through an investment subsidiary or other insurer investment pool permitted under this subsection A(2) does not exceed the applicable limits of this Article for such investments.
|
|
B. For an investment in an investment pool to be qualified under this
Article, the investment pool shall not:
(1) Acquire securities issued, assumed, guaranteed or
| | insured by the insurer or an affiliate of the insurer;
|
|
(2) Borrow or incur any indebtedness for borrowed
| | money, except for securities lending and reverse repurchase transactions that meet the requirements of Section 126.16 except the quantitative limitations of Section 126.16D; or
|
|
(3) Acquire an investment if, as a result of such
| | transaction, the aggregate value of securities then loaned or sold to, purchased from or invested in any one business entity under this Section would exceed 10% of the total assets of the investment pool.
|
|
C. The limitations of Section 126.10A shall not apply to an insurer's
investment in an investment pool, however an insurer shall not acquire an
investment in an investment pool under this Section if, as a result of and
after giving effect to the investment, the aggregate amount of investments then
held by the insurer under this Section:
(1) In all investment pools investing in investments
| | permitted under subsection A(2) of this Section would exceed 25% of its admitted assets; or
|
|
(2) In all investment pools would exceed 35% of its
| |
D. For an investment in an investment pool to be qualified under this
Article, the manager of the investment pool shall:
(1) Be organized under the laws of the United States
| | or a state and designated as the pool manager in a pooling agreement;
|
|
(2) Be the insurer, an affiliated insurer or a
| | business entity affiliated with the insurer, a qualified bank, a business entity registered under the Investment Advisers Act of 1940 (15 U.S.C. 80a-1 et seq.), as amended or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact, or in the case of a United States branch of an alien insurer, its United States manager or an affiliate or subsidiary of its United States manager;
|
|
(3) Be responsible for the compilation and
| | maintenance of detailed accounting records setting forth:
|
|
(a) The cash receipts and disbursements
| | reflecting each participant's proportionate investment in the investment pool;
|
|
(b) A complete description of all underlying
| | assets of the investment pool (including amount, interest rate, maturity date (if any) and other appropriate designations); and
|
|
(c) Other records which, on a daily basis, allow
| | third parties to verify each participant's investment in the investment pool; and
|
|
(4) Maintain the assets of the investment pool in one
| | or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank. The custody agreement shall:
|
|
(a) State and recognize the claims and rights of
| |
(b) Acknowledge that the underlying assets of the
| | investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and
|
|
(c) Contain an agreement that the underlying
| | assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person.
|
|
E. The pooling agreement for each investment pool shall be in writing and
shall provide that:
(1) An insurer and its affiliated insurers or, in the
| | case of an investment pool investing solely in investments permitted under subsection A(1) of this Section, the insurer and its subsidiaries, affiliates or any pension or profit sharing plan of the insurer, its subsidiaries and affiliates or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold 100% of the interests in the investment pool;
|
|
(2) The underlying assets of the investment pool
| | shall not be commingled with the general assets of the pool manager or any other person;
|
|
(3) In proportion to the aggregate amount of each
| | pool participant's interest in the investment pool:
|
|
(a) Each participant owns an undivided interest
| | in the underlying assets of the investment pool; and
|
|
(b) The underlying assets of the investment pool
| | are held solely for the benefit of each participant;
|
|
(4) A participant, or in the event of the
| | participant's insolvency, bankruptcy or receivership, its trustee, receiver or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;
|
|
(5) Withdrawals may be made on demand without penalty
| | or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter not to exceed 10 business days. Distributions under this paragraph shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:
|
|
(a) In cash, the then fair market value of the
| | participant's pro rata share of each underlying asset of the investment pool;
|
|
(b) In kind, a pro rata share of each underlying
| |
(c) In a combination of cash and in kind
| | distributions, a pro rata share in each underlying asset; and
|
|
(6) The pool manager shall make the records of the
| | investment pool available for inspection by the Director.
|
|
F. Except for
the
formation of the investment pool, transactions and
between a domestic insurer and an affiliated insurer
investment pool shall not be subject to the requirements of Section
131.20a of this Code.
(Source: P.A. 100-201, eff. 8-18-17.)
|
215 ILCS 5/126.13
(215 ILCS 5/126.13)
Sec. 126.13.
Equity interests.
A. Subject to the limitations of Section 126.10, an insurer may acquire
directly
or indirectly through an investment subsidiary, equity interests in business
entities organized under the laws of any domestic jurisdiction.
B. An insurer shall not acquire directly or indirectly through an investment
subsidiary an investment under this Section if, as a result of and after giving
effect
to the investment, the aggregate amount of investments then held by the insurer
under this Section would exceed 20% of its admitted assets or, except for
mutual
funds, the amount of equity interests then held by the insurer that are not
listed on
a qualified exchange would exceed 5% of its admitted assets. An
accident and health insurer shall not be subject to this Section but shall be
subject to the same aggregate limitation on equity interests as a property and
casualty insurer under Section 126.26 and also to the provisions of Section
126.22 of this Article.
C. An insurer shall not acquire under this Section any investments that the
insurer may acquire under Section 126.15.
D. An insurer shall not short sell equity interests unless the insurer
covers the short sale by owning the equity interest or an unrestricted right to
the equity interest exercisable within 6 months of the short sale.
(Source: P.A. 90-418, eff. 8-15-97.)
|
215 ILCS 5/126.14
(215 ILCS 5/126.14)
Sec. 126.14.
Tangible personal property under lease.
A. (1) Subject to the limitations of Section 126.10, an insurer may acquire
tangible personal property or
equity interests therein located or used wholly or in part within a domestic
jurisdiction either directly or indirectly through limited partnership
interests and general partnership interests not otherwise prohibited by
Section 126.5D, joint ventures, stock of an investment subsidiary or
membership interests in a limited liability company, trust certificates, or
other similar instruments.
(2) Investments acquired under paragraph (1) of this subsection shall be
eligible only if:
(a) The property is subject to a lease or other | | agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire under Section 126.11; and
|
|
(b) The lease or other agreement provides the insurer
| | the right to receive rental, purchase or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, shall be adequate to return the cost of the insurer's investment in the property, plus a return deemed adequate by the insurer.
|
|
B. The insurer shall compute the amount of each investment under this
Section on the basis of the out of pocket purchase price and applicable related
expenses paid by the insurer for the investment, net of each borrowing made to
finance the purchase price and expenses, to the extent the borrowing is without
recourse to the insurer.
C. An insurer shall not acquire directly or indirectly through an investment
subsidiary an investment under this Section if, as a result of and after giving
effect to the investment, the aggregate amount of all investments then held by
the insurer under this Section would exceed:
(1) 2% of its admitted assets; or
(2) 0.5% of its admitted assets as to any single item
| | of tangible personal property.
|
|
D. For purposes of determining compliance with the limitations of Section
126.10, investments acquired by an insurer under this Section shall be
aggregated with those acquired under Section 126.11, and each lessee of the
property under a lease referred to in this Section shall be deemed the issuer
of an obligation in the amount of the investment of the insurer in the property
determined as provided in subsection B of this Section.
E. Nothing in this Section is applicable to tangible personal property lease
arrangements between an insurer and its subsidiaries and affiliates under a
cost sharing arrangement or agreement permitted under Section
131.20a(1)(a)(iv).
(Source: P.A. 90-418, eff. 8-15-97.)
|
|
|
|