Rep. Thaddeus Jones

Filed: 5/14/2019

 

 


 

 


 
10100SB1377ham001LRB101 05283 RPS 60611 a

1
AMENDMENT TO SENATE BILL 1377

2    AMENDMENT NO. ______. Amend Senate Bill 1377 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Section 35B-25 as follows:
 
6    (215 ILCS 5/35B-25)
7    Sec. 35B-25. Plan of division approval.
8    (a) A division shall not become effective until it is
9approved by the Director after reasonable notice and a public
10hearing, if the notice and hearing are deemed by the Director
11to be in the public interest. The Director shall hold a public
12hearing if one is requested by the dividing company. A hearing
13conducted under this Section shall be conducted in accordance
14with Article 10 of the Illinois Administrative Procedure Act.
15    (b) The Director shall approve a plan of division unless
16the Director finds that:

 

 

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1        (1) the interest of any class of policyholder or
2    shareholder of the dividing company will not be properly
3    protected;
4        (2) each new company created by the proposed division,
5    except a new company that is a nonsurviving party to a
6    merger pursuant to subsection (b) of Section 156, would be
7    ineligible to receive a license to do insurance business in
8    this State pursuant to Section 5;
9        (2.5) each new company created by the proposed
10    division, except a new company that is a nonsurviving party
11    to a merger pursuant to subsection (b) of Section 156, that
12    will be a member insurer of the Illinois Life and Health
13    Insurance Guaranty Association and that will have policy
14    liabilities allocated to it will not be licensed to do
15    insurance business in each state where such policies were
16    written by the dividing company;
17        (3) the proposed division violates a provision of the
18    Uniform Fraudulent Transfer Act;
19        (4) the division is being made for purposes of
20    hindering, delaying, or defrauding any policyholders or
21    other creditors of the dividing company;
22        (5) one or more resulting companies will not be solvent
23    upon the consummation of the division; or
24        (6) the remaining assets of one or more resulting
25    companies will be, upon consummation of a division,
26    unreasonably small in relation to the business and

 

 

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1    transactions in which the resulting company was engaged or
2    is about to engage.
3    (c) In determining whether the standards set forth in
4paragraph (3) of subsection (b) have been satisfied, the
5Director shall only apply the Uniform Fraudulent Transfer Act
6to a dividing company in its capacity as a resulting company
7and shall not apply the Uniform Fraudulent Transfer Act to any
8dividing company that is not proposed to survive the division.
9    (d) In determining whether the standards set forth in
10paragraphs (3), (4), (5), and (6) of subsection (b) have been
11satisfied, the Director may consider all proposed assets of the
12resulting company, including, without limitation, reinsurance
13agreements, parental guarantees, support or keep well
14agreements, or capital maintenance or contingent capital
15agreements, in each case, regardless of whether the same would
16qualify as an admitted asset as defined in Section 3.1.
17    (e) In determining whether the standards set forth in
18paragraph (3) of subsection (b) have been satisfied, with
19respect to each resulting company, the Director shall, in
20applying the Uniform Fraudulent Transfer Act, treat:
21        (1) the resulting company as a debtor;
22        (2) liabilities allocated to the resulting company as
23    obligations incurred by a debtor;
24        (3) the resulting company as not having received
25    reasonably equivalent value in exchange for incurring the
26    obligations; and

 

 

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1        (4) assets allocated to the resulting company as
2    remaining property.
3    (f) All information, documents, materials, and copies
4thereof submitted to, obtained by, or disclosed to the Director
5in connection with a plan of division or in contemplation
6thereof, including any information, documents, materials, or
7copies provided by or on behalf of a domestic stock company in
8advance of its adoption or submission of a plan of division,
9shall be confidential and shall be subject to the same
10protection and treatment in accordance with Section 131.14d as
11documents and reports disclosed to or filed with the Director
12pursuant to Section 131.14b until such time, if any, as a
13notice of the hearing contemplated by subsection (a) is issued.
14    (g) From and after the issuance of a notice of the hearing
15contemplated by subsection (a), all business, financial, and
16actuarial information that the domestic stock company requests
17confidential treatment, other than the plan of division, shall
18continue to be confidential and shall not be available for
19public inspection and shall be subject to the same protection
20and treatment in accordance with Section 131.14d as documents
21and reports disclosed to or filed with the Director pursuant to
22Section 131.14b.
23    (h) All expenses incurred by the Director in connection
24with proceedings under this Section, including expenses for the
25services of any attorneys, actuaries, accountants, and other
26experts as may be reasonably necessary to assist the Director

 

 

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1in reviewing the proposed division, shall be paid by the
2dividing company filing the plan of division. A dividing
3company may allocate expenses described in this subsection in a
4plan of division in the same manner as any other liability.
5    (i) If the Director approves a plan of division, the
6Director shall issue an order that shall be accompanied by
7findings of fact and conclusions of law.
8    (j) The conditions in this Section for freeing one or more
9of the resulting companies from the liabilities of the dividing
10company and for allocating some or all of the liabilities of
11the dividing company shall be conclusively deemed to have been
12satisfied if the plan of division has been approved by the
13Director in a final order that is not subject to further
14appeal.
15(Source: P.A. 100-1118, eff. 11-27-18.)".