Illinois General Assembly - Full Text of SB1573
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Full Text of SB1573  99th General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 121-2.08 as follows:
6    (215 ILCS 5/121-2.08)  (from Ch. 73, par. 733-2.08)
7    Sec. 121-2.08. Transactions in this State involving
8contracts of insurance independently procured directly from an
9unauthorized insurer by industrial insureds.
10    (a) As used in this Section:
11    "Captive insurance company" means any affiliated insurance
12company (including, but not limited to, any pure captive
13insurance company, association captive insurance company,
14sponsored captive insurance company, cell captive insurance
15company, industrial insured captive insurance company, risk
16retention group, or company approved and regulated as a captive
17financial company by this State, any other state, or any other
18jurisdiction) or special purpose financial captive insurance
19company formed to insure the operational risks of the company's
20parent or affiliates, risks of a controlled unaffiliated
21business, or other risks approved by the captive insurance
22company's board or other regulatory body.
23    "Exempt commercial purchaser" means exempt commercial



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1purchaser as the term is defined in subsection (1) of Section
2445 of this Code.
3    "Home state" means home state as the term is defined in
4subsection (1) of Section 445 of this Code.
5    "Industrial insured" means an insured:
6        (i) that procures the insurance of any risk or risks of
7    the kinds specified in Classes 2 and 3 of Section 4 of this
8    Code by use of the services of a full-time employee who is
9    a qualified risk manager or the services of a regularly and
10    continuously retained consultant who is a qualified risk
11    manager;
12        (ii) that procures the insurance directly from an
13    unauthorized insurer without the services of an
14    intermediary insurance producer; and
15        (iii) that is an exempt commercial purchaser whose home
16    state is Illinois.
17    "Insurance producer" means insurance producer as the term
18is defined in Section 500-10 of this Code.
19    "Qualified risk manager" means qualified risk manager as
20the term is defined in subsection (1) of Section 445 of this
22    "Unauthorized insurer" means unauthorized insurer as the
23term is defined in subsection (1) of Section 445 of this Code.
24    (b) For contracts of insurance effective January 1, 2015 or
25later, within 90 days after the effective date of each contract
26of insurance issued under this Section, the insured shall file



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1a report with the Director by submitting the report to the
2Surplus Line Association of Illinois in writing or in a
3computer readable format and provide information as designated
4by the Surplus Line Association of Illinois. The information in
5the report shall be substantially similar to that required for
6surplus line submissions as described in subsection (5) of
7Section 445 of this Code. Where applicable, the report shall
8satisfy, with respect to the subject insurance, the reporting
9requirement of Section 12 of the Fire Investigation Act.
10    (c) For contracts of insurance effective January 1, 2015 or
11later, within 30 days after filing the report, the insured
12shall pay to the Director for the use and benefit of the State
13a sum equal to the gross premium of the contract of insurance
14multiplied by the surplus line tax rate, as described in
15paragraph (3) of subsection (a) of Section 445 of this Code,
16and shall pay the fire marshal tax that would otherwise be due
17annually in March for insurance subject to tax under Section 12
18of the Fire Investigation Act. For contracts of insurance
19effective January 1, 2015 or later, within 30 days after filing
20the report, the insured shall pay to the Surplus Line
21Association of Illinois a countersigning fee that shall be
22assessed at the same rate charged to members pursuant to
23subsection (4) of Section 445.1 of this Code.
24    (d) For contracts of insurance effective January 1, 2015 or
25later, the insured shall withhold the amount of the taxes and
26countersignature fee from the amount of premium charged by and



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1otherwise payable to the insurer for the insurance. If the
2insured fails to withhold the tax and countersignature fee from
3the premium, then the insured shall be liable for the amounts
4thereof and shall pay the amounts as prescribed in subsection
5(c) of this Section.
6    (e) Contracts of insurance with a captive insurance company
7shall not be subject to subsections (b) through (d) of this
9(Source: P.A. 98-978, eff. 1-1-15.)
10    Section 99. Effective date. This Act takes effect January
111, 2016.