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


Sen. William R. Haine

Filed: 3/10/2015





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2    AMENDMENT NO. ______. Amend Senate Bill 1573 by replacing
3everything after the enacting clause with the following:
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



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1financial company by this State, any other state, or any other
2jurisdiction) or special purpose financial captive insurance
3company formed to insure the operational risks of the company's
4parent or affiliates, risks of a controlled unaffiliated
5business, or other risks approved by the captive insurance
6company's board or other regulatory body.
7    "Exempt commercial purchaser" means exempt commercial
8purchaser as the term is defined in subsection (1) of Section
9445 of this Code.
10    "Home state" means home state as the term is defined in
11subsection (1) of Section 445 of this Code.
12    "Industrial insured" means an insured:
13        (i) that procures the insurance of any risk or risks of
14    the kinds specified in Classes 2 and 3 of Section 4 of this
15    Code by use of the services of a full-time employee who is
16    a qualified risk manager or the services of a regularly and
17    continuously retained consultant who is a qualified risk
18    manager;
19        (ii) that procures the insurance directly from an
20    unauthorized insurer without the services of an
21    intermediary insurance producer; and
22        (iii) that is an exempt commercial purchaser whose home
23    state is Illinois.
24    "Insurance producer" means insurance producer as the term
25is defined in Section 500-10 of this Code.
26    "Qualified risk manager" means qualified risk manager as



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1the term is defined in subsection (1) of Section 445 of this
3    "Unauthorized insurer" means unauthorized insurer as the
4term is defined in subsection (1) of Section 445 of this Code.
5    (b) For contracts of insurance effective January 1, 2015 or
6later, within 90 days after the effective date of each contract
7of insurance issued under this Section, the insured shall file
8a report with the Director by submitting the report to the
9Surplus Line Association of Illinois in writing or in a
10computer readable format and provide information as designated
11by the Surplus Line Association of Illinois. The information in
12the report shall be substantially similar to that required for
13surplus line submissions as described in subsection (5) of
14Section 445 of this Code. Where applicable, the report shall
15satisfy, with respect to the subject insurance, the reporting
16requirement of Section 12 of the Fire Investigation Act.
17    (c) For contracts of insurance effective January 1, 2015 or
18later, within 30 days after filing the report, the insured
19shall pay to the Director for the use and benefit of the State
20a sum equal to the gross premium of the contract of insurance
21multiplied by the surplus line tax rate, as described in
22paragraph (3) of subsection (a) of Section 445 of this Code,
23and shall pay the fire marshal tax that would otherwise be due
24annually in March for insurance subject to tax under Section 12
25of the Fire Investigation Act. For contracts of insurance
26effective January 1, 2015 or later, within 30 days after filing



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1the report, the insured shall pay to the Surplus Line
2Association of Illinois a countersigning fee that shall be
3assessed at the same rate charged to members pursuant to
4subsection (4) of Section 445.1 of this Code.
5    (d) For contracts of insurance effective January 1, 2015 or
6later, the insured shall withhold the amount of the taxes and
7countersignature fee from the amount of premium charged by and
8otherwise payable to the insurer for the insurance. If the
9insured fails to withhold the tax and countersignature fee from
10the premium, then the insured shall be liable for the amounts
11thereof and shall pay the amounts as prescribed in subsection
12(c) of this Section.
13    (e) Contracts of insurance with a captive insurance company
14shall not be subject to subsections (b) through (d) of this
16(Source: P.A. 98-978, eff. 1-1-15.)
17    Section 99. Effective date. This Act takes effect January
181, 2016.".