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INSURANCE215 ILCS 5/Art. XII.5
(215 ILCS 5/) Illinois Insurance Code.
(215 ILCS 5/Art. XII.5 heading)
ARTICLE XII 1/2.
215 ILCS 5/186.1
(215 ILCS 5/186.1)
(from Ch. 73, par. 798.1)
Supervision by the Director.
(1)If the Director
determines that any domestic insurance company is operating in a manner,
that could lead to, or is in, a financial condition, which if continued
would make it hazardous to the public, and its policyholders, the Director
may issue an order:
(a) notifying the company and its Board of Directors of his
determination and setting forth the specific deficiencies leading to the determination;
(b) setting forth the specific action required or prohibited to correct
the cited deficiencies; and
(c) ordering the company to comply with the Director's order within such
reasonable time as the Director shall prescribe.
(2) Operation or financial condition deficiencies supporting the
Director's determination under subsection (1) may include, but are not
limited to, the following:
(a) The company has failed to maintain a relationship of policyholder
surplus to premium writings or policyholder surplus to claim and unearned
premium reserves which provides a reasonable margin of safety for the
policyholders considering the classes of insurance the company is writing.
(b) The company's asset liquidity is not adequate to provide orderly
payment of its obligations.
(c) The company's current or projected net income is inadequate to meet
its present or projected obligations.
(d) The company has a history of claim reserve inadequacy which affects
the reliability of its financial statements.
(e) The company has failed to maintain adequate books and records or has
otherwise conducted its insurance operation in a manner which impairs the
Director's ability to determine its true financial condition.
(3) If a company fails to comply with the Director's order issued
pursuant to subsection (1) within the time prescribed for such compliance
the Director may institute proceedings for the conservation, rehabilitation
or liquidation of the company under Article XIII of this Code.
(4)(a) The Director may require that the company prepare and file a plan
to correct the deficiencies cited by the Director in his order within such
time as the Director may prescribe. A corrective order may require,
prohibit or permit certain acts subject to conditions including the
Director's prior approval. The scope of a corrective order may relate to
but shall not be limited to:
(i) the disposition, recovery or mix of assets;
(ii) the assumption or cession of reinsurance, including reinsurance of
(iii) lending and borrowing;
(v) restricting underwriting and marketing activities.
(b) The Director may require that any company under such corrective
order direct any certified public accountants, consulting actuary or
financial consultant retained by the company to prepare for the Director
such reports, accounting data and such other reports as the Director may
reasonably require to assist in carrying out the responsibilities of the
Director under this Section.
(5)(a) Any company subject to an order under subsections (1) or (4) may
request a hearing before the Director to review that order. Such request
shall be made in writing within 10 days of the receipt of such order, shall
state the company's objections to the order, and shall be addressed to the
Director. Such hearing shall be convened not less than 10 days nor more
than 20 days after receipt of the written request for hearing unless
otherwise agreed to by the company. The Director shall make a final
determination within 10 days after the conclusion of the hearing. The
Director shall hold all hearings under this subsection privately in
accordance with subsection (6) of this Section. The pendency of a hearing
or pendency of the Director's final determination shall not stay the effect
of the Director's order.
(b) After the Director's final determination pursuant to any hearing
under this subsection, any party to the proceedings whose interests are
affected by the Director's final determination shall be entitled to
judicial review of such final determination pursuant to the provisions of
the "Administrative Review Law".
Notwithstanding the availability of administrative remedies or judicial
review under the "Administrative Review Law", a company which is subject to
an order of the Director under this Section shall be entitled to immediate
judicial review and injunctive relief in the Circuit Court of Cook County
or the Circuit Court of Sangamon County upon satisfying the court:
(i) that accepting the facts set forth in the order as true, the order
is arbitrary or capricious;
(ii) that the company's interests are substantially impaired by the order; and
(iii) that the company will suffer permanent injury in the absence of
immediate injunctive relief.
(6) All administrative and judicial proceedings arising under this Article
shall be held privately unless a public hearing is requested by the
company, and all records of the company, and all records of the Department
concerning the company, so far as they pertain to or are a
part of the record of the proceedings, shall be and remain confidential,
unless the company requests otherwise. Such records shall not be subject
to public disclosure under "The Illinois Freedom of Information Act", certified
December 27, 1983, as amended, or otherwise, nor shall such records be
subject to subpoena by third parties, unless the company and Director
consent to such disclosure or release under subpoena.
(7) The powers vested in the Director by this Section are additional to
any and all other powers and remedies vested in the Director by law, and
nothing herein contained shall prohibit the Director from proceeding under
any other applicable law or under this Section in conjunction with any other law.
(Source: P.A. 84-715.)
215 ILCS 5/186.2
(215 ILCS 5/186.2)
(from Ch. 73, par. 798.2)
(1) Any officer, manager, director, trustee, owner,
employee, or agent of any insurer, or any other person with authority over
or in charge of any segment of the company's affairs, shall cooperate with
the Director in any proceeding under this Article or any investigation
preliminary to the proceeding. The term "person" as used in this Section
shall include any person who exercises control directly or indirectly over
activities of the company through any holding company or other affiliate
of the company. To "cooperate" shall include, but shall not be limited to, the following:
(a) to reply promptly in writing to any inquiry from the Director of
Insurance requesting such a reply; and
(b) to make available to the Director any books, accounts, documents, or
other records or information or property of or pertaining to the company
and in such person's possession, custody or control.
(2) No person shall obstruct or interfere with the Director in the
conduct of any proceeding under Sections 186.1 and 186.2 or any
investigation preliminary or incidental thereto.
(3) This Section shall not be construed to abridge otherwise existing
legal rights, including the right to contest any order issued under this Code.
(4) Any person who obstructs or interferes with the Director in the
conduct of any proceeding or investigation under this Article, or who
violates any valid order issued under this Article shall be subject to
civil forfeitures, fines or penalties pursuant to Sections 134, 149, 403A
and 505.1 of this Code.
(Source: P.A. 84-715.)