215 ILCS 5/ Illinois Insurance Code.

(215 ILCS 5/110) (from Ch. 73, par. 722)

(Section scheduled to be repealed on January 1, 2027)

Sec. 110. Delivery to director of application and documents. There shall be delivered to the Director

(a) the application of the company for a certificate of authority;

(b) a copy of its articles of incorporation or articles of association as amended, duly certified by the proper officer of the state or country under whose laws the company is organized or incorporated, or if a reciprocal or Lloyds the power of attorney of the attorney-in-fact;

(c) if an alien company, a copy of the appointment and authority of its United States manager, certified by a proper officer of the company;

(d) a copy of its by-laws or regulations, and if a fraternal benefit society, a copy of its constitution, certified by its secretary or officer corresponding thereto;

(e) the instrument authorizing service of process on the Director required by section 112;

(f) a statement of its financial condition and business as of the end of the preceding calendar year complying as to form, content and verification with the requirements of this Code for annual statements, or a financial statement as of such later date as the Director may require;

(g) a copy of the last report of examination certified to by an insurance commissioner or other proper supervisory official; and

(h) a certificate from the proper official of the state or country wherein it is incorporated or organized that it is duly incorporated or organized and is authorized to write the kind or kinds of insurance which it proposes to write in this State.

(Source: Laws 1965, p. 422.)

(215 ILCS 5/111) (from Ch. 73, par. 723)

(Section scheduled to be repealed on January 1, 2027)

Sec. 111. Conditions of issuance of certificate of authority.

(1) Before a certificate of authority to transact business in this State is issued to a foreign or alien company, such company shall satisfy the Director that:

(a) the company is duly organized under the laws of the state or country under whose laws it professes to be organized and authorized to do the business it is transacting or proposes to transact;

(b) its name is not the same as, or deceptively similar to, the name of any domestic company, or of any foreign or alien company authorized to transact business in this State;

(c) if a company transacting business of the kind or kinds enumerated in Class 1 of Section 4, it is not engaging in practices in any state which if engaged in this State, would constitute a violation of Section 237; and it is not transacting any kinds of business other than those enumerated in Class 1 of Section 4;

(d) if a stock company, it has a paid up capital and surplus at least equal to the capital and original surplus required by this Code for a domestic company doing the same kind or kinds of business or, if a mutual company or reciprocal, it has a surplus and provision for contingent liability of policyholders, at least equal to the original surplus and provision for contingent liability of policyholders required for a similar domestic company doing the same kind or kinds of business, or, if a fraternal benefit society, it meets the requirements prescribed in this Code for the organization of a domestic company or society, or if a Lloyds it meets the requirements of Article V;

(e) its funds are invested in accordance with the laws of its domicile; and

(f) in the case of a stock company its minimum capital and surplus and required reserves, or in the case of a mutual company or a reciprocal proposing to issue policies without contingent liability, its minimum surplus and required reserves, or in the case of any other company, all its funds, are invested in securities or property which afford a degree of financial security equal to that required for similar domestic companies, provided that this clause shall not be construed as requiring the application of limitations relating either to the kind or amount of securities prescribed by this Code for the investments of domestic companies.

(2) In determining whether an alien company complies with the provisions of subsection (1) of this section the Director shall consider only business transacted in the United States, only the assets described in Section 60j and only liabilities in connection with its United States business.

(3) Before a certificate of authority is issued to a foreign or alien company, other than a Lloyds, it shall deposit with the Director securities which are authorized investments for similar domestic companies under Section 126.11A(1), 126.11A(2), 126.24A(1), or 126.24A(2) of the amount, if any, required of a domestic company similarly organized and doing the same kind or kinds of business; or in lieu of such deposit such foreign or alien company shall satisfy the Director that it has on deposit with an official of a state of the United States or a depositary designated or authorized for such purpose by such official, authorized by the law of such state to accept such deposit, securities of at least a like amount, for the benefit and security of all creditors, policyholders and policy obligations of such company.

(4) Before issuing a certificate of authority to a foreign or alien company, the Director may cause an examination to be made of the condition and affairs of such company.

(Source: P.A. 90-418, eff. 8-15-97; 90-794, eff. 8-14-98.)

(215 ILCS 5/112) (from Ch. 73, par. 724)

(Section scheduled to be repealed on January 1, 2027)

Sec. 112. Service of process - Director as attorney.

(1) Every foreign or alien company desiring to transact business in this State shall file with the Director a duly executed instrument whereby the company shall appoint and constitute the Director and his successor or successors in office the true and lawful attorney of such company upon whom all lawful process in any action or legal proceeding against it may be served and shall agree that any such lawful process against it which may be served upon its said attorney as provided in this section shall be of the same force and validity as if served upon the company and that the authority thereof shall continue in force irrevocably so long as any liability of the company in the State shall remain outstanding.

(2) Process authorized by such instrument or by any similar instrument heretofore executed shall be served by delivering to and leaving with the Director duplicate copies of such process with payment of the fee prescribed by this Code, and the service thereof upon such attorney shall be deemed service upon the company. The Director shall forthwith forward one copy of each such process by certified or registered mail prepaid to the company, or in the case of an alien company, to the United States Manager or last appointed United States general agent of the company, giving the day and the hour of such service. Service of such process shall not be complete until the copy thereof has been so mailed and received by the company, and the certified receipt or registry receipt shall be prima facie evidence of the completion of such service. Service of process on a reciprocal or Lloyds shall be governed by sections 77 and 105 respectively.

(Source: P.A. 83-598.)

(215 ILCS 5/113) (from Ch. 73, par. 725)

(Section scheduled to be repealed on January 1, 2027)

Sec. 113. When certificate of authority to issue. When a foreign or alien company has complied with the requirements of this Article and all other requirements imposed on such company by existing laws and has paid the taxes, fees and charges imposed by law, and the operational history of the company when reviewed in conjunction with its loss experience, the kinds and nature of risks insured, the financial condition of the company and its ownership and the ratio of annual premium volume to incurred acquisition expenses and to its policyholders' surplus indicates a condition such that the expanded operation of the company in this State will not create a condition which might be hazardous to its policyholders, creditors or the general public, the Director must file in his office the documents delivered to him and must issue to the company a certificate of authority to transact in this State the kind or kinds of business specified therein. Such certificate shall expire on the 30th day of June of the calendar year succeeding the calendar year in which such certificate is issued.

(Source: P.A. 77-1513.)

(215 ILCS 5/113.1) (from Ch. 73, par. 725.1)

(Section scheduled to be repealed on January 1, 2027)

Sec. 113.1. Effect of acceptance of certificate of authority.

(1) No foreign or alien company which accepts a certificate of authority or renewal certificate of authority to transact in this State any insurance business as described in Section 4 of this Code shall transfer by sale, contribution, merger, consolidation, reinsurance or otherwise, its direct policy obligations under insurance contracts with Illinois policyholders unless:

a. the transfer is made to a company authorized to transact in this State the type of insurance business transferred; or

b. the transferring company gives 30 days prior written notice to each policyholder to be transferred stating that the insurance contract and the company's liabilities thereunder are to be transferred to a specified insurer which is not subject to regulation by the Illinois Insurance Department or the administrative requirements of the Illinois Insurance Code; and

c. the unauthorized company to which the insurance business is to be transferred makes and maintains a special deposit with the Director for the protection and benefit of all Illinois policyholders of such unauthorized company, in assets acceptable to the Director and having a fair market value not less than the required statutory reserves for the Illinois insurance business to be transferred.

(2) Any and all transfers resulting in the violation of this Section shall be construed as a violation of all applicable provisions of Article VII of this Code; including, but not limited to, Section 121-4 providing for liability to insureds for claims or insured losses not honored by the unauthorized insurer.

(3) Unless permitted by and obtained in compliance with this Section, or specifically authorized by another provision of this Code, it shall be unlawful for any unauthorized company to obtain as direct insurer any insurance contracts written in this State.

(Source: P.A. 86-753.)

(215 ILCS 5/114) (from Ch. 73, par. 726)

(Section scheduled to be repealed on January 1, 2027)

Sec. 114. Renewal of certificate of authority.

(1) The Director shall renew for one year the certificate of authority of a foreign or alien company on the first day of July of the calendar year following the calendar year in which it is admitted to transact business in this State and annually thereafter, without application by the company, upon payment of the annual privilege tax imposed by this Code, if any, provided the Director is satisfied that

(a) none of the facts specified in this article as grounds for revoking a certificate of authority exists; and

(b) the company is complying with the conditions for admission in respect to capital, contingent liability, the investment of its assets or the maintenance of deposits in this or another state and maintains the surplus which similar domestic companies transacting the same kind or kinds of business are required to maintain.

(2) Except in case of nonpayment of taxes, the Director shall give notice of his intention to refuse to renew the certificate of authority of a foreign or alien company and the grounds therefor at least twenty days before the end of the term for which the existing certificate was issued, and, the company shall be given an opportunity for a hearing before the end of such term.

(3) In the event that a company admitted to transact business in this State prior to the effective date of this Code has been and is transacting in this State or in any other state or country the kind or kinds of business enumerated in Class 1 of Section 4 and in addition thereto any of the kinds of business not enumerated in such class, the Director may for a period of three years renew annually its certificate of authority to transact such kinds of business. At the end of such three year period or at the end of any extended period as herein provided for, the Director may extend the period during which the certificate of authority of such company may be renewed annually, upon a showing by the company at a hearing before the Director that

(a) it has made reasonable progress in the discontinuance of kinds of business other than those enumerated in Class 1 of Section 4; and

(b) complete and immediate discontinuance of such kinds of business would result in undue loss to the company and the policyholders would suffer materially thereby; or

(c) there are other reasons for such extension deemed by the Director to be good and sufficient. The extension herein provided for shall be for such period as the Director may deem proper on the showing made, but the total of such extended periods shall not exceed three years.

(Source: P.A. 82-498.)

(215 ILCS 5/115) (from Ch. 73, par. 727)

(Section scheduled to be repealed on January 1, 2027)

Sec. 115. Amended certificate of authority.

(1) In the event that a foreign or alien company authorized to transact business in this State changes its name or desires to transact in this State a kind or kinds of business other than those it is then authorized to transact, it shall file with the Director an application for an amended certificate of authority.

(2) Such application shall comply as to form and manner of execution with the requirements of this Article for an original application and shall set forth the name of the company, the respects in which the company desires its certificate of authority amended, and such other information as is necessary or appropriate to enable the Director to determine whether such an amended certificate of authority should be issued.

(3) The Director shall issue such amended certificate if he is satisfied that

(a) the company might lawfully be authorized to transact the kind or kinds of business it desires to transact if application for such authority were made in an original application; and

(b) the conditions provided for in Section 111 are complied with.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/116) (from Ch. 73, par. 728)

(Section scheduled to be repealed on January 1, 2027)

Sec. 116. Amendments to articles of incorporation. Whenever the articles of incorporation or articles of association of a foreign or alien company authorized to transact business in this State shall be amended, such company shall, within thirty days after the effective date of such amendment, file with the Director a copy thereof duly authenticated by the proper officer of the state or country under the laws of which such company is organized. The filing of such copy shall not of itself enlarge the authority of the company in the transaction of business in this State, nor authorize such company to transact business in this State under any other name than the name set forth in its certificate of authority.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/117) (from Ch. 73, par. 729)

(Section scheduled to be repealed on January 1, 2027)

Sec. 117. Merger or consolidation.

(1) Whenever a foreign or alien company authorized to transact business in this State shall be the surviving company of a statutory merger permitted by the laws of the state or country under which it is organized, and such merger is not subject to the provisions of Article X; it shall forthwith file with the Director

(a) copies of the agreement and certificate of merger duly authenticated by the proper officer of the state or country under the laws of which such statutory merger was effected; and

(b) if any of the companies party to such merger were not admitted to transact business in this State, a statement of the financial condition and business of each of such companies, as of the end of the preceding calendar year complying as to form, content and verification with the requirements of this Code for annual statements, or a financial statement as of such later date as the Director may require.

(2) It shall not be necessary for such surviving company to procure a new certificate of authority to transact business in this State nor an amended certificate unless the name of such company be changed thereby or unless the company desires to transact in this State a kind or kinds of business other than those which it is then authorized to transact.

(3) Whenever a foreign or alien company authorized to transact business in this State shall be a party to a statutory merger and such company shall not be the surviving company, or if such foreign or alien company shall be a party to a consolidation, then the certificate of authority of such foreign or alien company shall terminate upon such merger or consolidation, and the surviving company, if not previously authorized to transact business in this State, or the new company, in the case of consolidation, shall be subject to the same requirements for admission to transact business in this State as any other foreign or alien company.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/118) (from Ch. 73, par. 730)

(Section scheduled to be repealed on January 1, 2027)

Sec. 118. Withdrawal from the State.

(1) Any foreign or alien company admitted to do business in this State may withdraw from this State by filing with the Director a statement of withdrawal, signed and verified by a president, vice-president or an executive officer corresponding thereto, or in the case of a reciprocal or Lloyds, by the attorney-in-fact, and setting forth

(a) that the company surrenders its authority to transact business in this State and returns for cancellation its certificate of authority;

(b) except in the case of a reciprocal or Lloyds, that the withdrawal of the company from this State has been duly authorized by the board of directors, trustees or other governing body of such company; and

(c) a postoffice address to which the Director may mail a copy of any process against the withdrawing company that may be served upon him.

(2) Upon the filing of such statement together with its certificate of authority with the Director and payment of any taxes or charges that may be due, the Director shall cancel the certificate of authority and return the cancelled certificate to the company. The authority of the company to transact business in this State shall thereupon cease.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/119) (from Ch. 73, par. 731)

(Section scheduled to be repealed on January 1, 2027)

Sec. 119. Revocation and suspension of certificate of authority.

(1) The Director may revoke or suspend the certificate of authority of a foreign or alien company or may by order require such insurance company to pay to the people of the State of Illinois a penalty in a sum not exceeding $500, and upon the failure of such insurance company to pay such penalty within 20 days after the mailing of such order, postage prepaid, certified or registered, and addressed to the last known place of business of such insurance company, unless such order is stayed by an order of a court of competent jurisdiction, the Director of Insurance may revoke or suspend the license of such insurance company for any period of time up to, but not exceeding a period of, 2 years whenever he finds that such company

(a) is insolvent;

(b) fails to comply with the requirements for admission in respect to capital, contingent liability, the investment of its assets or the maintenance of deposits in this or another state or fails to maintain the surplus which similar domestic companies transacting the same kind or kinds of business are required to maintain;

(c) is in such a financial condition that its further transaction of business in this State would be hazardous to policyholders and creditors in this State and to the public;

(d) has refused or neglected to pay a valid final judgment against such company within 30 days after the rendition of such judgment;

(e) has violated any law of this State or has in this State violated its charter or exceeded its corporate powers;

(f) has refused to submit its books, papers, accounts, records, or affairs to the reasonable inspection or examination of the Director, his actuaries, deputies or examiners;

(g) has an officer who has refused upon reasonable demand to be examined under oath touching its affairs;

(h) fails to file its annual statement within 30 days after the date when it is required by law to file such statement;

(i) fails to file with the Director a copy of an amendment to its charter or articles of association within 30 days after the effective date of such amendment;

(j) fails to file with the Director copies of the agreement and certificate of merger and the financial statements of the merged companies, if required, within 30 days after the effective date of the merger;

(k) fails to pay any fees, taxes or charges prescribed by this Code within 30 days after they are due and payable; provided, however, that in case of objection or legal contest the company shall not be required to pay the tax until 30 days after final disposition of the objection or legal contest.

(l) fails to file any report or reports for the purpose of enabling the Director to compute the taxes to be paid by such company within 30 days after the date when it is required by law to file such report or reports;

(m) has had its corporate existence dissolved or its certificate of authority revoked in the state in which it was organized; or

(n) has had all its risks reinsured in their entirety in another company.

(2) Except for the grounds stated in clauses (a), (c) or (k) of subsection (1) of this section the Director shall not revoke or suspend the certificate of authority of a foreign or alien company until he has given the company at least twenty days' notice of the revocation or suspension and of the grounds therefor and has afforded the company an opportunity for a hearing.

(Source: P.A. 83-598.)

(215 ILCS 5/120) (from Ch. 73, par. 732)

(Section scheduled to be repealed on January 1, 2027)

Sec. 120. Withdrawal of deposits. When a foreign or alien company has withdrawn from this State or has had its certificate of authority to transact business in this State revoked and such company desires to withdraw any deposit made in this State pursuant to this Code, the Director shall upon the application of the company and at its expense, give notice of such intention to the insurance commissioner or other proper supervisory official of each state or country where it appears from information on file with the Director, the company is authorized to transact business, and shall publish notice of such intention in a newspaper of general circulation in this State once a week for four consecutive weeks. After such notice and publication the Director shall deliver to such company or its assigns the securities so deposited when he is satisfied upon examination and investigation made by him, or under his authority, and upon the oaths of the president and secretary or other chief officers of the company that all debts and liabilities of every kind due and to become due which the deposit was made to secure have been paid or otherwise extinguished.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/Art. VII heading) ARTICLE VII. UNAUTHORIZED COMPANIES

(215 ILCS 5/121) (from Ch. 73, par. 733)

Sec. 121. Transacting business without certificate of authority prohibited.

(1) It shall be unlawful for any company to enter into a contract of insurance as an insurer or to transact insurance business in this State, without a certificate of authority from the Director; provided that this subsection shall not apply to contracts procured by agents under the authority of section 445, nor to contracts of reinsurance.

(2) The following acts, if performed in this State, shall be included among those deemed to constitute transacting insurance business in this State:

(a) maintaining an agency or office where contracts are executed which are or purport to be contracts of insurance with citizens of this or any other State;

(b) maintaining files or records of contracts of insurance; or

(c) receiving payment of premiums for contracts of insurance.

(3) Any company that violates any of the provisions of subsections (1) and (2) of this section shall be guilty of a business offense and shall be required to pay a penalty of not less than $100 nor more than $1000 for each offense, to be recovered in the name of the People of the State of Illinois by the State's Attorney of the county in which the violation occurs and the penalty so recovered shall be paid into the county treasury. Each day in which a violation occurs shall constitute a separate offense.

(4) The failure of a company to obtain a certificate of authority shall not impair the validity of any act or contract of such company and shall not prevent such company from defending any action in any court of this State, but no company transacting insurance business in this State without a certificate of authority shall be permitted to maintain an action in any court of this State to enforce any right, claim or demand arising out of the transaction of such business until such company shall have obtained a certificate of authority. Nor shall an action be maintained in any court of this State by any successor or assignee of such company on any such right, claim or demand originally held by such company until a certificate of authority shall have been obtained by such company or by a company which has acquired all or substantially all of its assets.

(Source: P.A. 83-345.)

(215 ILCS 5/121-1) (from Ch. 73, par. 733-1)

Sec. 121-1. Purpose of Article. The purpose of this Article is to subject certain insurers to the jurisdiction of the Director of Insurance and the courts of this State in suits by or on behalf of the State. The General Assembly declares that it is concerned with the protection of residents of this State against acts by insurers not authorized to do an insurance business in this State, by the maintenance of fair and honest insurance markets, by protecting authorized insurers which are subject to regulation from unfair competition by unauthorized insurers, and by protecting against the evasion of the insurance regulatory laws of this State. In furtherance of this State interest, the General Assembly in this Article provides methods for substituted service of process upon such insurers in any proceeding, suit or action in any court and substituted service of any notice, order, pleading or process upon such insurers in any proceeding by the Director of Insurance to enforce or effect full compliance with the insurance laws of this State. In so doing, the State exercises its powers to protect its residents and to define what constitutes transacting an insurance business in this State, and also exercises powers and privileges available to this State under Public Law 79-15, 79th Congress of the United States, Chapter 20, 1st Sess., S. 340, 59 Stat. 33; 15 U.S.C. 1011 through 1015, as amended, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2) (from Ch. 73, par. 733-2)

Sec. 121-2. Transacting business without certificate of authority prohibited - Exempt transactions. It is unlawful for any insurer to transact insurance business in this State, (as described in Section 121-3,) without a certificate of authority from the Director. This Section does not however, apply to any transaction described in Sections 121-2.01 through 121-2.10.

(Source: P.A. 89-124, eff. 7-7-95.)

(215 ILCS 5/121-2.01) (from Ch. 73, par. 733-2.01)

Sec. 121-2.01. The lawful transaction of business under Section 445.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.02) (from Ch. 73, par. 733-2.02)

Sec. 121-2.02. The lawful transaction of reinsurance by insurers.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.03) (from Ch. 73, par. 733-2.03)

Sec. 121-2.03. Transactions in this State involving a policy lawfully solicited, written, and delivered outside of this State covering only subjects of insurance not resident, located, or expressly to be performed in this State at the time of issuance, and which transactions are subsequent to the issuance of such policy.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.04) (from Ch. 73, par. 733-2.04)

Sec. 121-2.04. Attorneys acting in the ordinary relation of attorney and client in the adjustment of claims or losses.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.05) (from Ch. 73, par. 733-2.05)

Sec. 121-2.05. Group insurance policies issued and delivered in other State-Transactions in this State. With the exception of insurance transactions authorized under Sections 230.2 or 367.3 of this Code, transactions in this State involving group legal, group life and group accident and health or blanket accident and health insurance or group annuities where the master policy of such groups was lawfully issued and delivered in, and under the laws of, a State in which the insurer was authorized to do an insurance business, to a group properly established pursuant to law or regulation, and where the policyholder is domiciled or otherwise has a bona fide situs.

(Source: P.A. 86-753.)

(215 ILCS 5/121-2.06) (from Ch. 73, par. 733-2.06)

Sec. 121-2.06. Transactions in this State involving any policy of insurance or annuity contract issued before the effective date of this amendatory Act of 1971.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.07) (from Ch. 73, par. 733-2.07)

Sec. 121-2.07. Transactions in this State relative to a policy issued or to be issued outside this State involving insurance on vessels, craft or hulls, cargos, marine builder's risk, marine protection and indemnity or other risk, including strikes and war risks commonly insured under ocean or wet marine forms of policy.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-2.08) (from Ch. 73, par. 733-2.08)

Sec. 121-2.08. Transactions in this State involving contracts of insurance independently procured directly from an unauthorized insurer by industrial insureds.

(a) As used in this Section:

"Exempt commercial purchaser" means exempt commercial purchaser as the term is defined in subsection (1) of Section 445 of this Code.

"Home state" means home state as the term is defined in subsection (1) of Section 445 of this Code.

"Industrial insured" means an insured:

(i) that procures the insurance of any risk or risks of the kinds specified in Classes 2 and 3 of Section 4 of this Code by use of the services of a full-time employee who is a qualified risk manager or the services of a regularly and continuously retained consultant who is a qualified risk manager;

(ii) that procures the insurance directly from an unauthorized insurer without the services of an intermediary insurance producer; and

(iii) that is an exempt commercial purchaser whose home state is Illinois.

"Insurance producer" means insurance producer as the term is defined in Section 500-10 of this Code.

"Qualified risk manager" means qualified risk manager as the term is defined in subsection (1) of Section 445 of this Code.

"Safety-Net Hospital" means an Illinois hospital that qualifies as a Safety-Net Hospital under Section 5-5e.1 of the Illinois Public Aid Code.

"Unauthorized insurer" means unauthorized insurer as the term is defined in subsection (1) of Section 445 of this Code.

(b) For contracts of insurance effective January 1, 2015 or later, within 90 days after the effective date of each contract of insurance issued under this Section, the insured shall file a report with the Director by submitting the report to the Surplus Line Association of Illinois in writing or in a computer readable format and provide information as designated by the Surplus Line Association of Illinois. The information in the report shall be substantially similar to that required for surplus line submissions as described in subsection (5) of Section 445 of this Code. Where applicable, the report shall satisfy, with respect to the subject insurance, the reporting requirement of Section 12 of the Fire Investigation Act.

(c) For contracts of insurance effective January 1, 2015 through December 31, 2017, within 30 days after filing the report, the insured shall pay to the Director for the use and benefit of the State a sum equal to the gross premium of the contract of insurance multiplied by the surplus line tax rate, as described in paragraph (3) of subsection (a) of Section 445 of this Code, and shall pay the fire marshal tax that would otherwise be due annually in March for insurance subject to tax under Section 12 of the Fire Investigation Act. For contracts of insurance effective January 1, 2018 or later, within 30 days after filing the report, the insured shall pay to the Director for the use and benefit of the State a sum equal to 0.5% of the gross premium of the contract of insurance, and shall pay the fire marshal tax that would otherwise be due annually in March for insurance subject to tax under Section 12 of the Fire Investigation Act. For contracts of insurance effective January 1, 2015 or later, within 30 days after filing the report, the insured shall pay to the Surplus Line Association of Illinois a countersigning fee that shall be assessed at the same rate charged to members pursuant to subsection (4) of Section 445.1 of this Code.

(d) For contracts of insurance effective January 1, 2015 or later, the insured shall withhold the amount of the taxes and countersignature fee from the amount of premium charged by and otherwise payable to the insurer for the insurance. If the insured fails to withhold the tax and countersignature fee from the premium, then the insured shall be liable for the amounts thereof and shall pay the amounts as prescribed in subsection (c) of this Section.

(e) Contracts of insurance with an industrial insured that qualifies as a Safety-Net Hospital are not subject to subsections (b) through (d) of this Section.

(Source: P.A. 100-535, eff. 9-22-17; 100-1118, eff. 11-27-18.)

(215 ILCS 5/121-2.09) (from Ch. 73, par. 733-2.09)

Sec. 121-2.09. Transactions in this State involving bankers' blanket bonds or directors' and officers' liability insurance issued by a captive insurance company, formed exclusively for the purpose of providing directors' and officers' liability and bankers' blanket bond insurance to a bank or bank holding company, as such terms are defined in Section 2 of "The Illinois Bank Holding Company Act of 1957", as amended, if the aggregate annual premiums for each bank or bank holding company for insurance on all of its property and liability risks total at least $25,000, and such insurance is procured by a full-time employee acting as an insurance manager or buyer or through the services of a regularly and continuously retained qualified insurance consultant.

(Source: P.A. 84-1431.)

(215 ILCS 5/121-2.10)

Sec. 121-2.10. Exempt charitable gift annuities. The insurance laws of this State, including this Code, do not apply to any charitable gift annuity, as defined in Section 501(m)(5) of the Internal Revenue Code, issued by an organization that is described in Section 170(c) of the Internal Revenue Code, if either (i) an insurer authorized to transact business in this State is directly obligated to the annuitant or (ii) the organization has been in active operation for not less than 20 years before the date the annuity is issued and has an unrestricted fund balance of not less than $2,000,000 on the date the annuity is issued. For purposes of this Section, "Internal Revenue Code" refers to the Internal Revenue Code of 1986, as amended, and corresponding provisions of subsequent federal tax laws.

(Source: P.A. 89-124, eff. 7-7-95; 89-485, eff. 6-21-96.)

(215 ILCS 5/121-3) (from Ch. 73, par. 733-3)

Sec. 121-3. Transaction of insurance business defined. Any of the following acts in this State, effected by mail or otherwise by or on behalf of an unauthorized insurer, constitutes the transaction of an insurance business in this State.

(a) The making of or proposing to make, as an insurer, an insurance contract.

(b) The making of or proposing to make, as guarantor or surety, any contract of guaranty or suretyship as a vocation and not merely incidental to any other legitimate business or activity of the guarantor or surety.

(c) The taking or receiving of any application for insurance.

(d) The receiving or collection of any premium, commission, membership fees, assessments, dues or other consideration for any insurance or any part thereof.

(e) The issuance or delivery of contracts of insurance to residents of this State or to persons authorized to do business in this State.

(f) Directly or indirectly acting as an agent for or otherwise representing or aiding on behalf of another any person or insurer in the solicitation, negotiation, procurement or effectuation of insurance or renewals thereof or in the dissemination of information as to coverage or rates, or forwarding of applications, or delivery of policies or contracts, or inspection of risks, a fixing of rates or investigation or adjustment of claims or losses or in the transaction of matters subsequent to effectuation of the contract and arising out of that contract, or in any other manner representing or assisting a person or insurer in the transaction of insurance with respect to subjects of insurance resident, located or to be performed in this State. This paragraph does not prohibit full-time salaried employees of a corporate insured from acting in the capacity of an insurance manager or buyer in placing insurance in behalf of that employer.

(g) The transaction of any kind of insurance business specifically recognized as transacting an insurance business within the meaning of this Act.

(h) The transacting or proposing to transact any insurance business in substance equivalent to any of the foregoing in a manner designed to evade this Act.

The venue of an act committed by mail is at the point where the matter transmitted by mail is delivered and takes effect. Unless otherwise indicated, the term "insurer" as used in this Article includes all corporations, associations, partnerships and individuals, engaged as principals in the business of insurance and also includes interinsurance exchanges and mutual benefit societies.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-4) (from Ch. 73, par. 733-4)

Sec. 121-4. Validity of contracts - court actions.) The failure of an insurer transacting insurance business in this State to obtain a certificate of authority does not impair the validity of any act or contract of that insurer nor does it prevent that insurer from defending any action in any court of this State. However, no insurer transacting insurance business in this State without a certificate of authority may maintain an action in any court of this State to enforce any right, claim or demand arising out of the transaction of that business until the insurer has obtained a certificate of authority.

If any such unauthorized insurer fails to pay any claim or loss within the provisions of such an insurance contract, any person who assisted or in any manner aided directly or indirectly in the procurement of the insurance contract shall be liable to the insured for the full amount of the claim or loss as provided in that insurance contract.

(Source: P.A. 79-1362.)

(215 ILCS 5/121-5) (from Ch. 73, par. 733-5)

Sec. 121-5. Injunctive proceedings. Whenever the Director believes, from evidence satisfactory to him that any insurer is violating or about to violate Section 121-2 of this Act, the Director may, through the Illinois Attorney General, cause a complaint to be filed in the Circuit Court of Cook County, or the Circuit Court of Sangamon County, to enjoin and restrain that insurer from continuing such violation or engaging therein or doing any act in furtherance thereof. The court shall have jurisdiction of the proceeding and may make and enter an order or judgment awarding such preliminary or final injunctive relief as, in its judgment, is proper.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-6) (from Ch. 73, par. 733-6)

Sec. 121-6. Acts constituting Secretary of State as agent for process. Any act of transacting an insurance business, as set forth in Section 121-3; by any unauthorized insurer constitutes an irrevocable appointment by that insurer, binding upon him, his executor or administrator, or successor in interest if a corporation, of the Secretary of State, to be the true and lawful attorney of such insurer upon whom may be served all lawful process in any action, suit, or proceeding in any court by the Director or by the State and upon whom may be served any notice, order, pleading or process in any proceeding before the Director which arises out of transacting an insurance business in this State by that insurer. Any act of transacting an insurance business in this State by any unauthorized insurer signifies its agreement that any lawful process in such a court action, suit, or proceeding and any such notice, order, pleading, or process in an administrative proceeding before the Director so served shall be of the same legal force and validity as personal service of process in this State upon that insurer.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-7) (from Ch. 73, par. 733-7)

Sec. 121-7. Service of process - notice. Service of process in an action described in Section 121-6 shall be made by delivering to and leaving with the Secretary of State, or some person in apparent charge of his office, 2 copies thereof and by payment to the Secretary of State of the fee prescribed by law. Service upon the Secretary of State as such attorney shall be service upon the principal.

The Secretary of State shall forthwith forward by certified mail one of the copies of the process or notice, order, pleading, or process in proceedings before the Director to the defendant in such court proceeding or to whom the notice, order, pleading, or process in such administrative proceeding is addressed or directed at its last known principal place of business and shall keep a record of all process so served on him which shall show the day and hour of service. Such service is sufficient if:

(a) Notice of such service and a copy of the court process or the notice, order, pleading, or process in such administrative proceeding are sent within 10 days thereafter by certified mail by the plaintiff or the plaintiff's attorney in the court proceeding, or by the Director of Insurance in the administrative proceeding, to the defendant in the court proceeding or to whom the notice, order, pleading, or process in such administrative proceeding is addressed or directed at the last known principal place of business of the defendant in the court or administrative proceeding.

(b) The defendant's receipt or receipts issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person or insurer to whom the letter is addressed, and an affidavit of the plaintiff or the plaintiff's attorney in a court proceeding or of the Director in an administrative proceeding, showing compliance therewith are filed with the clerk of the court in which such action, suit, or proceeding is pending or with the Director in administrative proceedings, by the date the defendant in the court or administrative proceeding is required to appear or respond thereto, or within such further time as the court or Director, as the case may be, may allow.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-8) (from Ch. 73, par. 733-8)

Sec. 121-8. Judgment or default - time limitation. No plaintiff is entitled to a judgment or to a determination by default in any court or administrative proceeding in which court process or notice, order, pleading, or process in proceedings before the Director is served under Section 121-7 until the expiration of 45 days from the date of filing of the affidavit of compliance under that Section.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-9) (from Ch. 73, par. 733-9)

Sec. 121-9. Other proceedings not barred. Nothing in this Article limits or affects the right to serve any process, notice, order, or demand upon any person or insurer in any other manner now or hereafter permitted by law.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-10) (from Ch. 73, par. 733-10)

Sec. 121-10. Pleadings by unauthorized insurer - bond or certificate of authority. Before any unauthorized insurer files or causes to be filed any pleading in any court action, suit or proceeding or any notice, order, pleading, or process in an administrative proceeding before the Director instituted against such person or insurer, by services made as provided in Section 121-7, such insurer must either:

(a) Deposit with the clerk of the court in which such action, suit, or proceeding is pending, or with the Director in administrative proceedings before him, cash or securities, or file with such clerk or Director a bond with good and sufficient sureties, to be approved by the clerk or Director in an amount to be fixed by the court or Director sufficient to secure the payment of any final judgment which may be rendered in such action or administrative proceeding; or

(b) Procure a certificate of authority to transact the business of insurance in this State. In considering the application of an insurer for a certificate of authority, for the purposes of this paragraph, the Director need not assert the provisions of Section 444 against such insurer with respect to its application if he determines that such company would otherwise comply with the requirements for a certificate of authority.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-11) (from Ch. 73, par. 733-11)

Sec. 121-11. Postponement of proceedings - Motions by unauthorized insurer. The Director, in any administrative proceeding in which service is made under Section 121-7, may order such postponement as may be necessary to afford the defendant reasonable opportunity to comply with Section 121-10 and to defend such action.

Nothing in this Article prevents an unauthorized insurer from filing a motion to quash process or to set aside service thereof made under Section 121-7, on the ground that the unauthorized insurer has not done any of the acts enumerated in Section 121-3.

(Source: P.A. 83-346.)

(215 ILCS 5/121-12) (from Ch. 73, par. 733-12)

Sec. 121-12. Enforcement by Attorney General. The Attorney General, upon request of the Director, may proceed in the courts of this State or any reciprocal State to enforce an order or decision in any court proceeding or in any administrative proceeding before the Director.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-13) (from Ch. 73, par. 733-13)

Sec. 121-13. Definitions.) As used in this Article:

(a) "Reciprocal state" means any State or territory of the United States and the laws of which contain procedures substantially similar to those specified in this Article for the enforcement of judgments or orders issued by courts located in other States or territories of the United States, against an insurer incorporated or authorized to do business in that State or territory.

(b) "Foreign judgment" means any judgment or order relating to fraudulent claims practices, false and deceptive advertising, unfair methods of transacting business, or payment of taxes, of a court located in a "reciprocal state", including a court of the United States located therein, against any insurer incorporated or authorized to do business in this State.

(c) "Qualified party" means a state regulatory agency acting in its capacity to enforce the insurance laws of this State.

(Source: P.A. 79-1362.)

(215 ILCS 5/121-14) (from Ch. 73, par. 733-14)

Sec. 121-14. List of reciprocal states. The Director shall determine which States and territories qualify as reciprocal States and shall maintain at all times an up-to-date list of those States.

(Source: P.A. 77-1565.)

(215 ILCS 5/121-15) (from Ch. 73, par. 733-15)

Sec. 121-15. Filing and status of foreign judgments.) A copy of any foreign judgment authenticated in accordance with the statutes of this State may be filed in the office of the clerk of any circuit court of this State. The clerk, upon verifying with the Director that the judgment or order qualifies as a "foreign judgment", shall treat the foreign judgment in the same manner as a judgment of any circuit court of this State. A foreign judgment so filed has the same effect, is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying and may be enforced or satisfied in like manner as a judgment of any circuit court of this State.

(Source: P.A. 79-1362.)

(215 ILCS 5/121-16) (from Ch. 73, par. 733-16)

Sec. 121-16. Notice of filing.) At the time of the filing of a foreign judgment, the Attorney General shall make and file with the clerk of the court an affidavit setting forth the name and last known post office address of the defendant.

Promptly upon the filing of the foreign judgment and the affidavit, the clerk shall mail notice of the filing of the foreign judgment to the defendant at the address given and to the Director and shall note that mailing in the docket. In addition, the Attorney General may mail a notice of the filing of the foreign judgment to the defendant and to the Director and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk does not affect the enforcement proceedings if proof of mailing by the Attorney General has been filed.

No process for enforcement of a foreign judgment filed under this Article may issue until 30 days after the date the judgment is filed.

(Source: P.A. 84-546.)