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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.

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INSURANCE
(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/179E-15

    (215 ILCS 5/179E-15)
    Sec. 179E-15. Definitions. For purposes of this Article, the following terms have the indicated meanings:
    "Aggregate limit" means the maximum sum payable to the ceding insurer under an SPRV contract.
    "Ceding insurer" means one or more insurers or reinsurers under common control that enters into an SPRV contract with an SPRV.
    "Control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not, in fact, exist. Notwithstanding the foregoing, for purposes of this Article, the fact that an SPRV exclusively provides reinsurance to a ceding insurer under an SPRV contract shall not by itself be sufficient grounds for a finding that the SPRV or the SPRV organizer or owner is controlled by or under common control with the ceding insurer.
    "Fair Value" means:
        (1) as to cash, the amount thereof; and
        (2) as to an asset other than cash:
            (A) the amount at which that asset could be
        
bought or sold in a current transaction between arms-length, willing parties;
            (B) quoted market price for the asset in active
        
markets should be used if available; and
            (C) if quoted market prices are not available, a
        
value determined using the best information available considering values of like assets and other valuation methods, such as present value of future cash flows, historical value of the same or similar assets or comparison to values of other asset classes the value of which have been historically related to the subject asset.
    "Fully funded" means that, with respect to an SPRV contract, the fair value of the assets held in trust by or on behalf of the SPRV under the SPRV contract on the date on which the SPRV contract is effected, equals or exceeds the aggregate limit as defined in this Article.
    "Indemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer for losses covered by an SPRV contract is triggered by the ceding insurer incurring a specified level of losses.
    "Insolvency" or "insolvent" means that the SPRV is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute.
    "Non-indemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer under an SPRV contract arises from the occurrence or existence of some event or condition other than the ceding insurer incurring a specified level of losses under its insurance or reinsurance contracts.
    "Permitted investments" means those investments that meet the qualifications set forth in Section 179E-85.
    "Qualified U.S. financial institution" means, for purposes of meeting the requirements of a trustee under this Article, a financial institution that is eligible to act as a fiduciary of a trust, and that is:
        (1) organized or, in the case of a U.S. branch or
    
agency office of a foreign banking organization, licensed, under the laws of the United States or any state of the United States; and
        (2) regulated, supervised, and examined by federal or
    
state authorities having regulatory authority over banks and trust companies.
    "Special purpose reinsurance vehicle" or "SPRV" means an entity, domiciled in and organized under the laws of this State, that has received a limited certificate of authority from the Director under this Article exclusively for the limited purpose of entering into and effectuating SPRV insurance securitizations, SPRV contracts, and other related transactions permitted by this Article.
    "SPRV contract" means a contract between the SPRV and the ceding insurer pursuant to which the SPRV agrees to pay the ceding insurer an agreed amount upon the occurrence of a triggering event.
    "SPRV insurance securitization" means a package of related risk transfer instruments and facilitating administrative agreements by which proceeds are obtained by an SPRV through the issuance of securities, which proceeds are held in trust pursuant to the requirements of this Article to secure the obligations of the SPRV under an SPRV contract with one or more ceding insurers, wherein the SPRV's obligation to return the full initial investment to the holders of those securities, pursuant to the transaction terms, is contingent upon those funds not being used to pay the obligations of the SPRV to the ceding insurers under the SPRV Contract.
    "SPRV organizer" means one or more persons who have organized or intend to organize an SPRV under authority obtained pursuant to Section 179E-20.
    "SPRV securities" means the securities issued by an SPRV.
    "Triggering event" means an event or condition that, if and when it occurs or exists, obligates the SPRV to make a payment to the ceding insurer under the provisions of an SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-20

    (215 ILCS 5/179E-20)
    Sec. 179E-20. Limited certificate of authority.
    (a) Within 30 days after receipt by the Director of a complete filing by the prospective SPRV organizer for authority to form or acquire an SPRV, which SPRV shall exist and operate expressly for the limited purposes set forth in this Article, the application shall be deemed approved and a limited certificate of authority shall be issued, unless before the expiration of the 30-day period the Director approves or disapproves the application in writing. A limited certificate of authority may not be issued unless the country or state of domicile of each ceding insurer has notified the Director in writing that they have not disapproved the transaction. A complete filing of the application must include the following:
        (1) an affidavit verifying that each prospective SPRV
    
organizer the SPRV meets the requirements as set forth in this Article;
        (2) a representation that the prospective SPRV
    
organizer intends to form an SPRV to operate in accordance with the requirements set forth in this Article;
        (3) the proposed name of the subject SPRV;
        (4) biographical descriptions of each SPRV organizer
    
setting forth their legal names, any names under which they have or are conducting their affairs, and any affiliations with other persons as defined in Article VIII 1/2, together with such other biographical information as the Director may request;
        (5) the source and form of the minimum capital to be
    
contributed to the SPRV;
        (6) any persons with which the SPRV is or, upon
    
formation, will be affiliated as defined in Article VIII 1/2;
        (7) the names and biographical information of the
    
proposed members of the board of directors and principal officers of the SPRV, setting forth their legal names, any names under which they have or are conducting their affairs and any affiliations with other persons as defined in Article VIII 1/2, together with such other biographical information as the Director may request; and
        (8) a plan of operation, consisting of a description
    
of the contemplated insurance securitization, the SPRV contract, and related transactions, which plan of operation must include:
            (A) draft documentation or, at the discretion of
        
the Director, a written summary, of all material agreements that will be entered into to effectuate the insurance securitization and the related SPRV contract, including the names of the ceding insurers, the nature of the risks being assumed, and the maximum amounts, purpose, nature, and interrelationships of the various transactions required to effectuate the insurance securitization;
            (B) the investment strategy of the SPRV and a
        
representation that (i) the investment strategy complies with the investment requirements set forth in this Article and (ii) includes investment practices or other provisions to preserve asset values that will facilitate attainment of full funding during the term of the securitization with assets that can be monetized in response to a triggering event without a substantial loss in value;
            (C) a description of the method by which losses
        
covered by the SPRV contract that may develop after the termination of the contract period are to be addressed under the provisions of the SPRV contract; and
            (D) a representation that the trust agreement and
        
the trusts holding assets that secure the obligations of the SPRV under the SPRV contract and the SPRV contract with the ceding insurers in connection with the contemplated insurance securitization will be structured in accordance with the requirements set forth in this Article.
    (b) The Director may not approve the application or issue a limited certificate of authority until he or she has found that the proposed plan of operation provides a reasonable expectation of a successful operation, based on the proposed SPRV organizer, directors, and officers being of known good character and that there is no good reason to believe that they are affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with any person or persons known to have been involved in the improper manipulation of assets, accounts or reinsurance.
    (c) Upon approval by the Director of the application and the issuance of a limited certificate of authority, the SPRV may be acquired or formed and, in accordance with the approved plan of operation, the SPRV may enter into contracts and conduct other activities within the parameters set forth in the filed plan of operation.
    (d) The limited certificate of authority so issued shall state that the SPRV's authorization to be involved in the business of reinsurance is limited to only the reinsurance activities that the SPRV is allowed to conduct under this Article.
    (e) The SPRV organizer must provide a complete set of the documentation of the insurance securitization to the Director upon closing of the transactions including, but not limited to, an opinion of legal counsel with respect to compliance with this and any other applicable laws as of the effective date of the transaction. Any material change of the SPRV's plan of operation described in items (1) through (8) of subsection (a) including, but not limited to, the issuance of new securities to continue the securitization activities of the SPRV under this Article after expiration and full satisfaction of the initial securitization transactions, requires prior approval of the Director, however, a change in the counterparty to swap transactions for an existing securitization as allowed under this Article shall not be deemed a material change. Any material change that is not disapproved by the Director in writing within 15 days after its submission shall be deemed approved.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-25

    (215 ILCS 5/179E-25)
    Sec. 179E-25. Limited purpose of SPRV. This Article authorizes SPRVs to be created for the limited purpose of entering into insurance securitization transactions with investors and into related agreements to pay one or more ceding insurers agreed upon amounts under an SPRV contract upon the occurrence of triggering events related to the insurance business of the ceding insurer. An SPRV may not issue a contract for assumption of risk or indemnification of loss other than an SPRV contract as defined herein.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-30

    (215 ILCS 5/179E-30)
    Sec. 179E-30. Approved transactions and operation of SPRVs.
    (a) SPRVs authorized under this Article may at any given time enter into and effectuate SPRV contracts with one or more ceding insurers, provided that the SPRV contracts obligate the SPRV to indemnify the ceding insurer for losses and that contingent obligations of the SPRV under the SPRV contracts are securitized in full through a single SPRV insurance securitization and are fully funded and secured with assets held in trust in accordance with the requirements of this Article pursuant to agreements contemplated by this Article and invested in a manner that meets the criteria set forth in Section 179E-85 of this Article.
    (b) An SPRV may enter into such agreements with third parties and conduct such business as is necessary to fulfill its obligations and administrative duties incident to the insurance securitization and the SPRV contract. The agreements may include entering into swap agreements or other transactions that have the objective of leveling timing differences in funding up-front or ongoing transaction expenses or managing credit or interest rate risk of the investments in trust to assure that the assets held in trust will be sufficient to satisfy (i) payment or repayment of the securities issued pursuant to an insurance securitization transaction or (ii) the obligations of the SPRV under the SPRV contract. In fulfilling its function, the SPRV shall adhere to the following requirements and shall, to the extent of its powers, ensure that contracts obligating other parties to perform certain functions incident to its operations are substantively and materially consistent with the following requirements and guidelines:
        (1) An SPRV shall have a distinct name, which shall
    
include the designation "SPRV". The name of the SPRV may not be deceptively similar to, or likely to be confused with or mistaken for, any other existing business name registered in this State.
        (2) Unless otherwise provided in the plan of
    
operation, the principal place of business and office of any SPRV organized under this Article must be located in this State.
        (3) The assets of an SPRV must be preserved and
    
administered by or on behalf of the SPRV to satisfy the liabilities and obligations of the SPRV incident to the insurance securitization and other related agreements, including the SPRV contract.
        (4) Assets of the SPRV that are pledged to secure
    
obligations of the SPRV to a ceding insurer under an SPRV contract must be held in trust and administered by a qualified U.S. financial institution. The qualified U.S. financial institution may not control, be controlled by, or be under common control with, the SPRV or the ceding insurers.
        (5) The agreement governing any trust must create
    
one or more trust accounts into which all pledged assets must be deposited and held until distributed in accordance with the trust agreement. The pledged assets must be held by the trustee at the trustee's office in the United States and may be held in certificated or electronic form.
        (6) The provisions for withdrawal by ceding insurers
    
of assets from the trust shall be clean and unconditional, subject only to the following requirements:
            (A) the ceding insurer shall have the right to
        
withdraw assets from the trust account at any time, without notice to the SPRV, subject only to written notice to the trustee from the ceding insurer that funds in the amount requested are due and payable by the SPRV;
            (B) no other statement or document need be
        
presented in order to withdraw assets, except the ceding insurer may be required to acknowledge receipt of withdrawn assets;
            (C) the trust agreement must indicate that it is
        
not subject to any conditions or qualifications outside of the trust agreement;
            (D) the trust agreement may not contain
        
references to any other agreements or documents; and
            (E) no reference may be made to the fact that the
        
funds may represent reinsurance premiums or that the funds have been deposited for any specific purpose.
        (7) The trust agreement must be established for the
    
sole use and benefit of the ceding insurer at least to the full extent of the SPRV's obligations to the ceding insurer under the SPRV contract. If there is more than one ceding insurer, a separate trust agreement must be entered with each ceding insurer and a separate trust account must be maintained for each ceding insurer.
        (8) The trust agreement must provide for the trustee
    
to:
            (A) receive assets and hold all assets in a safe
        
place;
            (B) determine that all assets are in a form so
        
that the ceding insurer or the trustee, upon direction by the ceding insurer may, whenever necessary, negotiate any the assets, without consent or signature from the SPRV or any other person or entity;
            (C) furnish to the SPRV, the Director, and the
        
ceding insurer a statement of all assets in the trust account reported at fair value upon its inception and at intervals no less frequent than the end of each calendar quarter;
            (D) notify the SPRV and the ceding insurer,
        
within 10 days, of any deposits to or withdrawals from the trust account;
            (E) upon written demand of the ceding insurer,
        
immediately take any and all steps necessary to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the ceding insurer and deliver physical custody of the assets to the ceding insurer; and
            (F) allow no substitutions or withdrawals of
        
assets from the trust account, except on written instructions from the ceding insurer.
        (9) The trust agreement must provide that at least 30
    
days, but not more than 45 days, before termination of the trust account, written notification of termination shall be delivered by the trustee to the ceding insurer.
        (10) The trust agreement may be made subject to and
    
governed by the laws of any state, in addition to the requirements for the trust as provided in this Article, provided that the state is disclosed in the plan of operation filed with and approved, or deemed approved, by the Director under Section 179E-20.
        (11) The trust agreement must prohibit invasion of
    
the trust corpus for the purpose of paying compensation to, or reimbursing the expenses of, the trustee.
        (12) The trust agreement must provide that the
    
trustee shall be liable for its own negligence, willful misconduct, or lack of good faith.
        (13) Notwithstanding the provisions of items (6)(C),
    
(6)(D), and (6)(E) of this subsection or item (14)(E) of this subsection, when a trust agreement is established in conjunction with an SPRV contract, then the trust agreement may provide that the ceding insurer must undertake to use and apply any amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the SPRV, for the following purposes:
            (A) to pay or reimburse the ceding insurer
        
amounts due to the ceding insurer under the specific SPRV contract including, but not limited to, unearned premiums due to the ceding insurer, if not otherwise paid by the SPRV in accordance with the terms of the agreement; or
            (B) when the ceding insurer has received
        
notification of termination of the trust account, and when the SPRV's entire "obligations" under the specific SPRV contract remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to those obligations and deposit those amounts in a separate account, in the name of the ceding insurer, in any qualified U.S. financial institution, apart from its general assets, in trust for those uses and purposes specified in item (13)(A) of this subsection as may remain executory after the withdrawal and for any period after the termination date. "Obligations" within the meaning of this subsection may, without duplication, include:
                (i) losses and loss expenses paid by the
            
ceding insurer, but not recovered from the SPRV;
                (ii) reserves for losses reported and
            
outstanding;
                (iii) reserves for losses incurred but not
            
reported;
                (iv) reserves for loss expenses;
                (v) reserves for unearned premiums; and
                (vi) any other amounts that, together with
            
(iv), represent the aggregate limit remaining under the SPRV contract if the period of coverage or the agreed upon period of loss development has yet to expire.
    The provisions to be included in the trust agreement pursuant to this item (13) may, in lieu thereof, be included in the underlying SPRV contract.
        (14) An SPRV contract must contain provisions that:
            (A) require the SPRV to enter into a trust
        
agreement specifying what recoverables or reserves, or both, the agreement is to cover and to establish a trust account for the benefit of the ceding insurer;
            (B) stipulate that assets deposited in the trust
        
account must be valued according to their current fair value, and may consist only of permitted investments;
            (C) require the SPRV, before depositing assets
        
with the trustee, to execute assignments, endorsements in blank, or transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may whenever necessary negotiate the assets without consent or signature from the SPRV or any other entity;
            (D) require that all settlements of account
        
between the ceding insurer and the SPRV be made in cash or its equivalent; and
            (E) stipulate that the SPRV and the ceding
        
insurer agree that the assets in the trust account, established under the provisions of the SPRV contract, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the SPRV contract, and shall be utilized and applied by the ceding insurer or any successor by operation of law of the ceding insurer, including (subject to the provisions of Section 179E-80), but without further limitation, any liquidator, rehabilitator, receiver, or conservator of the ceding insurer, without diminution because of insolvency on the part of the ceding insurer or the SPRV, only for the following purposes:
                (i) to transfer all of those assets into the
            
trust account for the benefit of the ceding insurer under the terms of the SPRV contract and in compliance with this Article; and
                (ii) to pay any other amounts the ceding
            
insurer claims are due under the SPRV contract.
        (15) The SPRV contract entered into by the SPRV may
    
contain provisions that give the SPRV the right to seek approval from the ceding insurer to withdraw from the trust all or part of the assets contained in it and transfer the assets to the SPRV, provided that:
            (A) at the time of the withdrawal, the SPRV
        
replaces the withdrawn assets with other qualified assets having a fair value equal to the fair value of the assets withdrawn and that meet the requirements of Section 179E-85; and
            (B) after the withdrawals and transfer, the fair
        
value of the assets in trust securing the obligations of the SPRV under the SPRV contract is no less than an amount needed to satisfy the fully funded requirement of the SPRV contract. The ceding insurer shall be the sole judge as to the application of these provisions, but shall not unreasonably nor arbitrarily withhold its approval.
        (16) The investors in the SPRV must agree, and be
    
contractually obligated to so do, that any obligation to repay principal, interest, or dividends on the securities issued by the SPRV shall be reduced upon the occurrence of a triggering event, to the extent that the assets of the SPRV held in trust for the benefit of the ceding insurer are remitted to the ceding insurer in fulfillment of the obligations of the SPRV under the SPRV contract.
        (17) Assets held by an SPRV in trust must be valued
    
at their fair value.
        (18) The proceeds from the sale of securities by the
    
SPRV to investors must be deposited with the trustee as contemplated by this Article, and must be held or invested by the trustee in accordance with the requirements of Section 179E-85.
        (19) An SPRV organized under this Article, may engage
    
only in fully funded indemnity triggered SPRV contracts to support in full the ceding insurers' exposures assumed by the SPRV, except that an SPRV may engage in an SPRV contract that is non-indemnity triggered after the Director, in accordance with the authority granted under Section 179E-100 of this Article, adopts rules addressing the treatment of the portion of the risk that is not indemnity based, including accounting, disclosure, risk-based capital treatment, and the manner in which risks associated with the non-indemnity based SPRV contract may be evaluated and managed. An SPRV may not at any time enter into an SPRV contract that is not fully funded, whether indemnity triggered or non-indemnity triggered. Assets of the SPRV may be used to pay interest or other consideration on any outstanding debt or other obligation of the SPRV, and nothing in this item shall be construed or interpreted to prevent an SPRV from entering into a swap agreement or other transaction that has the effect of guaranteeing interest or other consideration.
        (20) The contracts or other documentation relating to
    
an SPRV insurance securitization must contain provisions identifying the SPRV that will enter into the special purpose reinsurance securitization. The contracts or other documentation must clearly disclose that the assets of the SPRV, and only those assets, are available to pay the obligations of that SPRV. Notwithstanding the foregoing, and subject to the provisions of this Article and any other applicable law or rule, the failure to include this language in the contracts or other documentation may not be used as the sole basis by creditors, reinsurers, or other claimants to circumvent the provisions of this Article.
        (21) Under no circumstances may an SPRV be authorized
    
to:
            (A) issue or otherwise administer primary
        
insurance policies;
            (B) have any obligation to the policyholders or
        
reinsureds of the ceding insurer;
            (C) enter into an SPRV contract with a person
        
that is not licensed or otherwise authorized to conduct the business of insurance or reinsurance in at least its state or country of domicile; or
            (D) assume or retain exposure to insurance or
        
reinsurance losses for its own account that is not initially fully funded by proceeds from an SPRV securitization that meets the requirements of this Article.
        (22) At the cessation of business of an SPRV the
    
limited certificate of authority granted by the Director shall expire and the SPRV shall no longer be authorized to conduct activities under this Article unless and until a new certificate of authority is issued pursuant to a new filing in accordance with Section 179E-20.
        (23) It is unlawful for an SPRV to loan or otherwise
    
invest, or place any of its assets in custody, trust, or under management with, or to borrow money or receive a loan from (other than by issuance of the securities pursuant to an SPRV insurance securitization), or advance from, anyone convicted of a felony, anyone who is untrustworthy or of known bad character, or anyone convicted of a criminal offense involving the conversion or misappropriation of fiduciary funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-35

    (215 ILCS 5/179E-35)
    Sec. 179E-35. Powers.
    (a) An SPRV authorized under this Article shall have the necessary powers to enter into contracts and to conduct such other commercial activities as are necessary to fulfill the purposes of this Article. Those activities may include, but are not limited to, entering into SPRV contracts, issuing securities of the SPRV and complying with the terms thereof, entering into trust, swap, and other agreements as may be necessary to effectuate an insurance securitization in compliance with the limitations and pursuant to the authorities granted to the SPRV under this Article or the plan of operation approved or deemed approved by the Director.
    (b) An SPRV organized or doing business under this Article shall, by the name adopted by the SPRV, in law, be capable of suing or being sued, and may make or enforce contracts in relation to the business of the SPRV; may have and use a common seal, and in the name of the SPRV or by a trustee chosen by the board of directors, shall, in law, be capable of taking, purchasing, holding and disposing of real and personal property for carrying into effect the purposes of its organization; and may by its board of directors, trustees, officers, or managers, make by-laws and amendments thereto not inconsistent with the laws or the constitution of this State or of the United States, which by-laws shall define the manner of electing directors, trustees, or managers and officers of the SPRV, together with their qualifications and duties and fixing their term of office.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-40

    (215 ILCS 5/179E-40)
    Sec. 179E-40. Affiliation. Notwithstanding the provisions of Article VIII 1/2, the SPRV, the SPRV organizer, and subsequent debt or equity investors in SPRV securities shall not be deemed affiliates of the ceding insurer by virtue of the SPRV contract between the ceding insurer and the SPRV, the securities of the SPRV, or related agreements necessary to implement the SPRV insurance securitization. An SPRV may not be controlled by, may not control, and may not be under common control with any ceding insurer that is a party to an SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-45

    (215 ILCS 5/179E-45)
    Sec. 179E-45. Capitalization. An SPRV must have minimum initial capital of not less than $5,000. All of the initial capital must be received by the SPRV in cash. The minimum initial capital required and all other funds of the SPRV in excess of its minimum initial capital, including funds held in trust to secure the obligations of the SPRV pursuant to its obligations under the SPRV contracts, shall be invested as provided in Section 179E-85.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-50

    (215 ILCS 5/179E-50)
    Sec. 179E-50. Dividends. An SPRV may not declare or pay dividends in any form to its owners unless the dividends do not decrease the capital of the SPRV below $5,000, and after giving effect to the dividends, the assets of the SPRV, including assets held in trust pursuant to the terms of the insurance securitization, are sufficient to meet its obligations. Dividends may be declared by the board of directors of the SPRV if the declaration of dividends would not violate the provisions of this Article or jeopardize the fulfillment of the obligations of the SPRV or the trustee pursuant to the SPRV insurance securitization, the SPRV contract or any related transaction.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-55

    (215 ILCS 5/179E-55)
    Sec. 179E-55. Records and financial reports.
    (a) The records of the SPRV must be maintained in this State and must be available for examination by the Department. The Director shall have the right to examine the records of an SPRV at any time. No later than 5 months after the fiscal year end of the SPRV, the SPRV must file with the Director an audit by a certified public accounting firm of the financial statements of the SPRV and the trust accounts.
    (b) No later than March 1 of each year, an SPRV organized under this Article must file with the Director a statement of operations, including, but not limited to, a statement of income, a balance sheet, and a detailed listing of invested assets, including identification of assets held in trust to secure the SPRV's obligations under the SPRV contract, for the year ending the previous December 31. The statements shall be prepared in accordance with Section 136 of this Code on such forms and shall reveal such information as shall be required by the Director.
    (c) An SPRV must keep its books and records in a manner so that its financial condition, affairs, and operations can be ascertained, its financial statements filed with the Director can be readily verified, and its compliance with the provisions of this Article can be determined. An SPRV may cause any or all of the books or records to be photographed, reproduced on film, or stored and reproduced electronically.
    (d) All original books, records, documents, accounts, and vouchers, or reproductions of those items, must be preserved and kept available in this State for the purpose of examination and until authority to destroy or otherwise dispose of the records is secured from the Director. The original records may, however, be kept and maintained outside this State if, according to a plan adopted by the SPRV's board of directors and approved by the Director, it maintains other suitable records.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-60

    (215 ILCS 5/179E-60)
    Sec. 179E-60. Officers and directors.
    (a) The directors of an SPRV shall elect such officers they deem necessary to carry out the purposes of the SPRV pursuant to this Article. The provisions of Section 10 of this Code relating to the indemnification of officers and directors apply to and govern SPRVs organized under this Article.
    (b) An SPRV authorized to do business in this State must notify the Director of the appointment or election of any new officers or directors within 30 days after the appointment or election.
    (c) If, after notice and hearing afforded to the officer or director, and after a finding that the officer or director is incompetent or untrustworthy or of known bad character, the Director shall order the removal of the person. If the SPRV does not comply with a removal order within 30 days, the Director may suspend that SPRV's limited certificate of authority until such time as the order is complied with.
    (d) An SPRV may not make loans to any SPRV organizer, owner, director, officer, manager, or affiliate.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-65

    (215 ILCS 5/179E-65)
    Sec. 179E-65. Fees and taxes. The Director may charge fees to reimburse the Director for expenses and costs incurred by the Department incident to the examination of financial statements and review of the plan of operation and to reimburse other such activities of the Director related to the formation and ongoing operation of an SPRV. An SPRV is not be subject to State premium or other State taxes incidental to the operation of its business as long as the business remains within the limitations of this Article.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-70

    (215 ILCS 5/179E-70)
    Sec. 179E-70. Dissolution. An SPRV operating under this Article may be dissolved by a vote of its board of directors at any time after the Director has approved that action. A voluntary dissolution may not be effected or allowed until and unless all of the obligations of the SPRV pursuant to the insurance securitization have been fully and finally satisfied pursuant to their terms. In the case of voluntary dissolution, the disposition of the affairs of the SPRV (including the settlement of all outstanding obligations) shall be made by the officers or directors of the SPRV, and when the liquidation has been completed and a final statement, in acceptable form, filed with and approved, or deemed approved, by the Director, the provisions for voluntary dissolution under the laws of this State shall be followed to dissolve the SPRV.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-75

    (215 ILCS 5/179E-75)
    Sec. 179E-75. Conservation, rehabilitation, or liquidation.
    (a) The provisions of Articles XIII and XIII 1/2 apply to an SPRV, except to the extent modified in this Section.
    (b) Notwithstanding the provisions of Section 188 of this Code, the Director may apply by petition to the Circuit Court of Cook County, the Circuit Court of Sangamon County, or the circuit court of the county in which an SPRV has or last had its principal office for an order authorizing the Director to conserve, rehabilitate or liquidate an SPRV domiciled in this State solely on one or more of the following grounds:
        (1) there has been embezzlement, wrongful
    
sequestration, dissipation, or diversion of the assets of the SPRV intended to be used to pay amounts owed to the ceding insurer or the holders of SPRV securities; or
        (2) the SPRV is insolvent and the holders of a
    
majority in outstanding principal amount of each class of SPRV securities request or consent to conservation, rehabilitation, or liquidation under this Article.
    The court shall not grant relief under item (1) of this subsection unless, after notice and a hearing, the Director, who has the burden of proof, establishes by clear and convincing evidence that the relief should be granted.
    (c) Notwithstanding any contrary provision in this Code, the rules promulgated under this Code, or any other applicable law or rule, upon any order of conservation, rehabilitation, or liquidation of the SPRV, the receiver shall be bound to deal with the SPRV's assets and liabilities, in accordance with the requirements set forth in this Article.
    (d) With respect to amounts recoverable under an SPRV contract, the amount recoverable by the receiver may not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the ceding insurer notwithstanding any provisions to the contrary in the contracts or other documentation governing the SPRV insurance securitization.
    (e) Notwithstanding the provisions of Article XIII and XIII 1/2 of this Code, any application, petition, or temporary restraining order or injunction issued under those Articles, with respect to a ceding insurer shall not prohibit the transaction of any business by an SPRV, including any payment by an SPRV made pursuant to an SPRV security, or any action or proceeding against an SPRV or its assets.
    (f) Notwithstanding the provisions of Articles XIII and XIII 1/2 of this Code, the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to an SPRV, and any order issued by the court thereunder, shall not prohibit:
        (1) the payment by an SPRV made pursuant to an SPRV
    
security or SPRV contract; or
        (2) the SPRV from taking any action required to make
    
the payment.
    (g) Notwithstanding any other provision of Articles XIII and XIII 1/2 of this Code or other State law:
        (1) a receiver of a ceding insurer may not avoid a
    
non-fraudulent transfer by a ceding insurer to an SPRV of money or other property made pursuant to an SPRV contract; and
        (2) a receiver of an SPRV may not void a
    
non-fraudulent transfer by the SPRV of money or other property made to a ceding insurer pursuant to an SPRV contract or made to or for the benefit of any holder of an SPRV security on account of the SPRV security.
    (h) With the exception of the fulfillment of the obligations under an SPRV contract, and notwithstanding any other provisions of this Article or other law of this State to the contrary, the assets of an SPRV, including assets held in trust, may not be consolidated with or included in the estate of a ceding insurer in any delinquency proceeding against the ceding insurer under this Article for any purpose, including, without limitation, distribution to creditors of the ceding insurer.
    (i) Notwithstanding any other provision of this Article:
        (1) A domiciliary receiver of an SPRV domiciled in
    
another state shall be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, and all of the books, accounts, and other records of the SPRV located in this State. The domiciliary receiver shall have the immediate right to recover all of the vested property, assets, and causes of action of the SPRV located in this State.
        (2) An ancillary proceeding may not be commenced or
    
prosecuted in this State against an SPRV domiciled in another state.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-80

    (215 ILCS 5/179E-80)
    Sec. 179E-80. SPRV not subject to guaranty funds, residual market, or similar arrangements.
    (a) An SPRV or the activities, assets, and obligations relating to the SPRV are not subject to the provisions of Articles XXXIII 1/2 and XXXIV of this Code, and an SPRV may not be assessed by or otherwise be required to contribute to any guaranty fund or guaranty association in this State with respect to the activities, assets, or obligations of an SPRV or the ceding insurer.
    (b) An SPRV may not be required to participate in residual market, FAIR plan, or other similar plans to provide insurance coverage, take out policies, assume risks, make capital contributions, pay or be otherwise obligated for assessments, surcharges, or fees, or otherwise support or participate in such plans or arrangements.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-85

    (215 ILCS 5/179E-85)
    Sec. 179E-85. Asset and investment limitations.
    (a) Assets of the SPRV held in trust to secure obligations under the SPRV contract must at all times be held in:
        (1) cash and cash equivalents;
        (2) securities listed by the Securities Valuation
    
Office of the NAIC and qualifying as admitted assets under statutory accounting convention in its state of domicile; and
        (3) any other form of security acceptable to the
    
Director.
    (b) An SPRV may enter into swap agreements or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing credit or interest rate risk of the investments in the trust to ensure that the investments are sufficient to assure payment or repayment of:
        (1) the securities (and related interest or principal
    
payments) issued pursuant to an SPRV insurance securitization transaction; or
        (2) the SPRV's obligations under the SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-90

    (215 ILCS 5/179E-90)
    Sec. 179E-90. Credit for reinsurance for the SPRV contract. An SPRV contract meeting the requirements under this Article shall be granted credit for reinsurance treatment or shall otherwise qualify as an asset or a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer under Section 173.1 of this Code for the benefit of the ceding insurer, provided and only to the extent that (i) the fair value of the assets held in trust for the benefit of the ceding insurer equal or exceed the obligations due and payable to the ceding insurer by the SPRV under the SPRV contract, (ii) the assets are held in trust in accordance with the requirements set forth in this Article, (iii) the assets are administered in the manner and pursuant to arrangements as set forth in this Article, and (iv) the assets are held or invested in one or more of the forms allowed in Section 179E-85.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-95

    (215 ILCS 5/179E-95)
    Sec. 179E-95. Insurance securitization deemed not to be transaction of insurance business. The securities issued by the SPRV under an SPRV insurance securitization shall not be deemed to be insurance or reinsurance contracts. An investor in securities issued pursuant to an SPRV insurance securitization or any holder of those securities shall not, by sole means of the investment or holding, be deemed to be transacting an insurance business in this State. The underwriters or selling agents (and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors) involved in an SPRV insurance securitization shall not be deemed to be conducting an insurance or reinsurance agency, brokerage, intermediary, advisory, or consulting business by virtue of their activities in connection therewith.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-100

    (215 ILCS 5/179E-100)
    Sec. 179E-100. Authority to adopt rules. The Director may promulgate rules necessary to effectuate the purposes of this Article. Any rules so promulgated will not affect any existing SPRV insurance securitization in effect at the time of the promulgation.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/Art. XII

 
    (215 ILCS 5/Art. XII heading)
ARTICLE XII. DOMESTICATION OF
FOREIGN AND ALIEN COMPANIES

215 ILCS 5/180

    (215 ILCS 5/180) (from Ch. 73, par. 792)
    Sec. 180. Companies that may domesticate.
    (1) Any domestic, foreign, or alien stock company, mutual company, assessment legal reserve company, reciprocal, or fraternal benefit society, authorized or which may be authorized to do business in this State, may reorganize under the laws of this State (including a reorganization as a captive insurance company under the laws of this State), by complying with the provisions of this Article.
    (2) As used in this Article: "reorganize" means reorganize, reincorporate, or domesticate as an Illinois insurer; "reorganization" means reorganization, reincorporation, or domestication as an Illinois insurer; "reorganized company" means any company that has availed itself of the provisions of this Article, and the reorganization of which has been effected as in this Article provided; and "similar domestic company" means, in the case of an application for reorganization as a domestic captive insurance company, a domestic captive insurance company organized under Article VIIC.
(Source: P.A. 87-1216.)

215 ILCS 5/181

    (215 ILCS 5/181) (from Ch. 73, par. 793)
    Sec. 181. Articles of reorganization. (1) The board of directors, trustees or other governing body of any such company desiring to reorganize under this Article shall comply with all laws and requirements of its domiciliary state or country with reference to reorganization under the laws of another state or country.
    (2) Such board of directors, trustees or other governing body shall adopt a resolution approving articles of reorganization setting forth:
    (a) the name of the company; and if the name of the company upon reorganization is to be changed, the proposed name of the reorganized company;
    (b) the title of the act under which it was organized or incorporated;
    (c) the matters required to be set forth in original articles of incorporation of a similar domestic company;
    (d) that it shall be bound by all the terms and provisions of this Code, applicable to similar domestic companies organized or incorporated thereunder; and
    (e) such other particulars as are deemed necessary or advisable.
(Source: P.A. 86-632; 86-634; 86-1028.)

215 ILCS 5/182

    (215 ILCS 5/182) (from Ch. 73, par. 794)
    Sec. 182. Execution of articles.
    The articles of reorganization shall be executed in duplicate by the president or vice-president, and secretary or assistant secretary of the company, or the executive officers corresponding thereto, and shall be acknowledged and sworn to.
(Source: Laws 1937, p. 696.)

215 ILCS 5/183

    (215 ILCS 5/183) (from Ch. 73, par. 795)
    Sec. 183. Certificate of Reorganization - Date Reorganization Effected. (1) Upon the execution of the articles of reorganization there shall be delivered to the Director
    (a) two duplicate originals of the articles;
    (b) a copy of the resolution of the board of directors, trustees or other governing body, adopting said articles, duly certified by the secretary of the company or officer corresponding thereto;
    (c) information satisfactory to the Director that the company has complied with all the laws and requirements of the domiciliary state or country with reference to the proposed reorganization and the protection of policyholders; and
    (d) securities of the kind and amount, if any, required as a deposit of a similar domestic company doing the same kind or kinds of business proposed to be done by the reorganized company.
    (2) If the Director finds that the articles of reorganization are in accordance with the provisions of this Article, and that the company has complied with all provisions of this Code applicable to similar domestic companies, he shall approve the articles of reorganization and shall forthwith file one of the duplicate originals of the articles, together with the resolution and certificate of reorganization and certificate of authority, in his office, endorse upon the other duplicate original, his approval thereof, and deliver it together with a certificate of reorganization and a certificate of authority to the reorganized company. Upon such filing, the reorganization of the company shall be effected.
(Source: P.A. 85-131.)

215 ILCS 5/184

    (215 ILCS 5/184) (from Ch. 73, par. 796)
    Sec. 184. Recording Articles of Reorganization. The articles of reorganization, approved by the Director and returned to the reorganized company, shall be recorded in the office of the recorder in the county where the principal office of the reorganized company is to be located.
(Source: P.A. 85-131.)

215 ILCS 5/185

    (215 ILCS 5/185) (from Ch. 73, par. 797)
    Sec. 185. Board of directors, trustees, etc. to continue.
    The directors, trustees, or members of any other governing body of the company so reorganized, shall become the directors, trustees or members of the governing body of the reorganized company and shall hold office until their successors are elected or chosen in the manner provided therefor by the articles of reorganization.
(Source: Laws 1937, p. 696.)

215 ILCS 5/185.1

    (215 ILCS 5/185.1) (from Ch. 73, par. 797.1)
    Sec. 185.1. Effect of Reorganization.
    When the reorganization has been effected:
    (a) The articles of reorganization shall be the articles of incorporation of the reorganized company and said company shall continue in existence as, and thereafter be, a company of this State.
    (b) The reorganized company shall make its reports in accordance with the laws of this State and shall be subject to the exclusive regulation and supervision by the Department of Insurance of this State and shall be subject to regulation and supervision by the Insurance Departments of other states and countries as a foreign or alien company.
    (c) The reorganized company shall have all of the rights, privileges, immunities and powers and shall be subject to all of the duties and liabilities granted or imposed by this Code (except in the case of a domestic captive insurance company, which shall have all of the rights, privileges, immunities and powers and shall be subject to all of the duties and liabilities granted or imposed by Article VIIC of this Code).
    (d) The reorganized company shall thereupon and thereafter possess all the rights, privileges, immunities, powers and franchises of a public as well as a private nature, theretofore possessed by the company so reorganized. Without limiting the generality of the foregoing, (i) the agency appointments, licenses, certificates of authority and rates which are in existence at the time of the reorganization of such reorganized company takes effect shall continue in full force and effect; (ii) all property, real, personal and mixed, and all debts due on whatever account, including subscriptions to shares, assessments payable from members or policyholders, and all other choses in action, and all and every other interest of, or belonging to or due to the company so reorganized, shall be deemed to be transferred to and vested in the reorganized company without further act or deed; and (iii) the title to any real estate or any interest therein theretofore vested in the company so reorganized, shall not revert or be in any way impaired by reason of such reorganization.
    (e) The reorganized company shall thenceforth be responsible and liable for all the liabilities and obligations of the company so reorganized. Any claim existing, or action or proceeding pending by or against the company so reorganized, may be prosecuted to judgment as if such reorganization had not taken place, or such reorganized company may be substituted in its place. Neither the rights of creditors nor any liens upon the property of the company so reorganized, shall be impaired by such reorganization, but such liens shall be limited to the property upon which they were liens immediately prior to the reorganization, unless otherwise provided in the articles of reorganization.
(Source: P.A. 85-131.)

215 ILCS 5/185.2

    (215 ILCS 5/185.2) (from Ch. 73, par. 797.2)
    Sec. 185.2. Conversion to Foreign Insurer. Any domestic insurer may, upon the approval of the Director, transfer its domicile to any other state in which it is admitted to transact the business of insurance, and upon such a transfer shall cease to be a domestic insurer. The Director shall approve any such proposed transfer unless he shall determine such transfer is not in the interest of the policyholders of this State.
(Source: P.A. 85-131.)

215 ILCS 5/Art. XII.5

 
    (215 ILCS 5/Art. XII.5 heading)
ARTICLE XII 1/2. CORRECTIVE ORDERS

215 ILCS 5/186.1

    (215 ILCS 5/186.1) (from Ch. 73, par. 798.1)
    Sec. 186.1. 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 outstanding risks;
    (iii) lending and borrowing;
    (iv) investments;
    (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)
    Sec. 186.2. (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.)

215 ILCS 5/Art. XIII

 
    (215 ILCS 5/Art. XIII heading)
ARTICLE XIII. REHABILITATION, LIQUIDATION, CONSERVATION AND DISSOLUTION OF
COMPANIES

215 ILCS 5/187

    (215 ILCS 5/187) (from Ch. 73, par. 799)
    Sec. 187. Scope of Article.
    (1) This Article shall apply to every corporation, association, society, order, firm, company, partnership, individual, and aggregation of individuals to which any Article of this Code is applicable, or which is subject to examination, visitation or supervision by the Director under any provision of this Code or under any law of this State, or which is engaging in or proposing or attempting to engage in or is representing that it is doing an insurance or surety business, or is undertaking or proposing or attempting to undertake to provide or arrange for health care services as a health care plan as defined in subsection (7) of Section 1-2 of the Health Maintenance Organization Act, including the exchanging of reciprocal or inter-insurance contracts between individuals, partnerships and corporations in this State, or which is in the process of organization for the purpose of doing or attempting or intending to do such business, anything as to any such corporation, association, society, order, firm, company, partnership, individual or aggregation of individuals provided in this Code or elsewhere in the laws of this State to the contrary notwithstanding.
    (2) The word "company" as used in this Article includes all of the corporations, associations, societies, orders, firms, companies, partnerships, and individuals specified in subsections (1), (4), and (5) of this Section and agents, managing general agents, brokers, premium finance companies, insurance holding companies, and all other non-risk bearing entities or persons engaged in any aspect of the business of insurance on behalf of an insurer against which a receivership proceeding has been or is being filed under this Article, including, but not limited to, entities or persons that provide management, administrative, accounting, data processing, marketing, underwriting, claims handling, or any other similar services to that insurer, whether or not those entities are licensed to engage in the business of insurance in Illinois, if the entity or person is an affiliate of that insurer.
    (3) The word "court" shall mean the court before which the conservation, rehabilitation, or liquidation proceeding of the company is pending, or the judge presiding in such proceedings.
    (4) The word "affiliate" as used in this Article means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified.
    (5) The word "person" as used in this Article means an individual, an aggregation of individuals, a partnership, or a corporation.
    (6) The word "assets" as used in this Article includes all deposits and funds of a special or trust nature.
    (7) The words "receivership proceedings" mean any conservation, rehabilitation, liquidation, or ancillary receivership.
    (8) "Netting agreement", as used in this Article, means (a) a contract or agreement (including terms and conditions incorporated by reference therein), including a master agreement (which master agreement, together with all schedules, confirmations, definitions, and addenda thereto and transactions under any thereof, shall be treated as one netting agreement), that documents one or more transactions between the parties to the agreement for or involving one or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close out under or in connection with one or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements thereunder (including liquidation or close-out values relating to such obligations or entitlements) among the parties to the netting agreement; (b) any master agreement or bridge agreement for one or more master agreements described in paragraph (a) of this subsection (8); or (c) any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in paragraph (a) or (b) of this subsection (8); provided that any contract or agreement described in paragraphs (a) or (b) of this subsection (8) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts.
    (9) "Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, or any similar agreement that the Director determines by regulation, resolution, or order to be a qualified financial contract for the purposes of this Act.
        (a) "Commodity contract" means:
            (1) a contract for the purchase or sale of a
        
commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the federal Commodity Exchange Act or a board of trade outside the United States;
            (2) an agreement that is subject to regulation
        
under Section 19 of the federal Commodity Exchange Act and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract;
            (3) an agreement or transaction that is subject
        
to regulation under Section 4c(b) of the federal Commodity Exchange Act and that is commonly known to the commodities trade as a commodity option;
            (4) any combination of the agreements or
        
transactions referred to in this paragraph (a); or
            (5) any option to enter into an agreement or
        
transaction referred to in this paragraph (a).
        (b) "Forward contract", "repurchase agreement",
    
"securities contract", and "swap agreement" shall have the meanings set forth in the Federal Deposit Insurance Act, 12 U.S.C. 1821(e)(8)(D), as amended from time to time.
(Source: P.A. 96-1450, eff. 8-20-10.)

215 ILCS 5/188

    (215 ILCS 5/188) (from Ch. 73, par. 800)
    Sec. 188. Grounds for rehabilitation and liquidation of a domestic company or an unauthorized foreign or alien company. Whenever any domestic company or any unauthorized foreign or alien company:
        1. is insolvent;
        2. has failed or refused to submit its books, papers,
    
accounts, records or affairs to the reasonable inspection or examination of the Director or his actuaries, supervisors, deputies, or examiners;
        3. has concealed, removed, altered, destroyed or
    
failed to establish and maintain books, records, documents, accounts, vouchers and other pertinent material adequate for the determination of its financial condition by examination under Sections 132 through 132.7 or has failed to properly administer claims and to maintain claims records which are adequate for the determination of its outstanding claims liability;
        4. has failed or refused to observe an order of the
    
Director to make good within the time prescribed by law any deficiency, whenever its capital and minimum required surplus, if a stock company, or its required surplus, if a company other than stock, has become impaired;
        5. has, by articles of consolidation, contract of
    
reinsurance or otherwise, transferred or attempted to transfer its entire property or business not in conformity with this Code, or entered into any transaction the effect of which is to merge substantially its entire property or business in any other company without having first obtained the written approval of the Director under this Code;
        6. is found to be in such condition that its further
    
transaction of business would be hazardous to its policyholders, or to its creditors, or to the public;
        7. has violated its charter or any law of this State
    
or has exceeded or is exceeding its corporate powers;
        8. has an officer who has refused upon reasonable
    
demand to be examined under oath touching its affairs;
        9. is found to be in such condition that it could not
    
meet the requirements for organization and authorization as required by law, except as to the amount of the original surplus required of a stock company in Section 13, and except as to the amount of the surplus required of a mutual company in excess of the minimum surplus required by this Code to be maintained, or either an authorized control level event or a mandatory control level event as set forth in Article IIA exists;
        10. has ceased for the period of one year to transact
    
insurance business;
        11. has commenced, or has attempted to commence, any
    
voluntary liquidation or dissolution proceeding, or any proceeding to procure the appointment of a receiver, liquidator, rehabilitator, sequestrator, or a similar officer for itself;
        12. is a party, whether plaintiff or defendant in any
    
proceeding in which an application is made for the appointment of a receiver, custodian, liquidator, rehabilitator, sequestrator, or similar officer for such company or its property, or a receiver, custodian, liquidator, rehabilitator, sequestrator or similar officer, for such company or its property is appointed by any court, or such appointment is imminent;
        13. consents by a majority of its directors,
    
stockholders or members;
        14. has not organized and obtained a certificate
    
authorizing it to commence the transaction of its business within the period of time prescribed by the sections of this Code under which it is or proposes to be organized; or
        15. has failed or refused to pay any valid final
    
judgment within 30 days after the rendition thereof, or whenever it appears to the Director that any person has committed a violation of Article VIII 1/2 with the result described in Section 131.26,
sufficient grounds shall be deemed to exist for the commencement of rehabilitation or liquidation proceedings.
    With respect to a domestic company, the Director must report, and with respect to an unauthorized foreign or alien company, the Director may report any such case to the Attorney General of this State whose duty it shall be to apply forthwith by complaint on relation of the Director in the name of the People of the State of Illinois, as plaintiff, to the Circuit Court of Cook County, the Circuit Court of Sangamon County, or the circuit court of the county in which such company has, or last had its principal office, for an order to rehabilitate or liquidate the defendant company as provided in this Article, and for such other relief as the nature of the case and the interests of its policyholders, creditors, members, stockholders or the public may require.
    When, upon investigation, the Director finds that a company is engaged in any aspect of the business of insurance on behalf of or in association with any domestic insurance company, against which a receivership proceeding has been or is being filed under this Article, in a manner that appears to be detrimental to policyholders, creditors, members, shareholders, or the public, the Director may report such case to the Attorney General of this State, whose duty it is to apply forthwith by complaint on relation of the Director in the name of the People of the State of Illinois, as plaintiff, to the court in which the receivership proceeding is pending for an order to appoint the Director as receiver to assume control of the assets and operation of the company pending a complete investigation and determination of the rights of the policyholders, creditors, members, shareholders, and the general public.
(Source: P.A. 92-140, eff. 7-24-01.)