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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. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
INSURANCE (215 ILCS 5/) Illinois Insurance Code. 215 ILCS 5/244.1
(215 ILCS 5/244.1) (from Ch. 73, par. 856.1)
Sec. 244.1.
Whenever the financial condition of any company transacting the kinds of
business authorized in Class 1 of Section 4, when reviewed in conjunction
with the kinds and nature of risks insured, the loss experience and
ownership of the company and the ratio of annual premium volume to the
incurred acquisition expenses, indicates a condition such that the
continued operation of the company might be hazardous to its policyholders,
creditors or the general public, then the Director may, after notice and
hearing, order the company to take such action as may be reasonably
necessary to rectify the existing condition, including but not necessarily
limited to one or more of the following steps:
(a) to reduce the loss exposure by reinsurance;
(b) to reduce the volume of new business being | |
(c) to reduce general or acquisition expenses by
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(d) to suspend the writing of new business for a
| | period not to exceed 3 months; or
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(e) to increase the company's surplus by a
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(Source: P.A. 77-1514 .)
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215 ILCS 5/245
(215 ILCS 5/245) (from Ch. 73, par. 857)
Sec. 245.
Salaries; pensions.
(1) No domestic life company shall directly or indirectly pay any
salary, compensation or emolument to any officer, trustee or director
thereof, or any salary, compensation or emolument amounting in any year
to more than $200,000 to any person, firm or corporation,
unless such
payment be first authorized by a vote of the board of directors of such
company, which vote shall be duly recorded in the records of the
company. No such domestic life company shall make any agreement with any
of its officers, trustees or salaried employees whereby it agrees that
for any services rendered or to be rendered he shall receive any salary,
compensation or emolument, directly or indirectly, that will extend
beyond a period of three years from the date of such agreement except
that payment of an amount not in excess of 20% of the salary of any of
its officers, trustees, or salaried employees may by written agreement
be deferred beyond such period of three years, which agreement may
include conditions to be met by such officer, trustee, or salaried
employee before payment will be made. The limitation as to time
contained herein shall not apply to a contract for renewal commissions
with any such officer, trustee or salaried employee who is also an agent
of the company nor shall such limitation be construed as preventing a
domestic company from entering into contracts with its agents for the
payment of renewal commissions.
(2) No such life company shall grant any pension to any officer,
director or trustee thereof or to any member of his family after his
death except that it may provide a pension pursuant to the terms of the
uniform retirement plan adopted by the board of directors and for any person
who is or has been a salaried officer or
employee of such company and who may retire by reason of age or
disability.
(3) No such company shall hereafter create or establish any account
or fund for the purpose of promoting the health or welfare of its
employees except from annual accretions to earned surplus computed in
the manner provided by this Code. Contributions to such fund by any
company in any calendar year shall not exceed 15% of the accretion to
earned surplus in such calendar year. Before such account or fund shall
be established, maintained or operated, the plan for such account or
fund and its method of operation shall be approved by the board of
directors of the company, and submitted to the shareholders in the case
of a stock company, or members in the case of a mutual company, at a
special meeting called for the purpose of considering such plan.
Contributions to the fund from sources other than the company may be
provided for in the operation of the plan. No amount held in such fund
or account whether contributed by the company or from any other source
shall be considered an admitted asset as defined in this Code, nor
considered in determining the solvency of such company, nor be subject to
the provisions of this Code.
(Source: P.A. 91-549, eff. 8-14-99.)
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215 ILCS 5/245.1
(215 ILCS 5/245.1) (from Ch. 73, par. 857.1)
Sec. 245.1. Assignability of life insurance.
No provision of the Illinois Insurance Code, or any other law prohibits
an insured under any policy of life insurance, or any other person who may
be the owner of any rights under such policy, from making an assignment of
all or any part of his rights and privileges under the policy including but
not limited to the right to designate a beneficiary thereunder and to have
an individual policy issued in accordance with paragraphs (G), (H), and (K) of Section 231.1 of the Illinois Insurance Code. Subject to the terms of the
policy or any contract relating thereto, an assignment by an insured or by
any other owner of rights under the policy, made before or after the
effective date of this amendatory Act of 1969 is valid for the purpose of
vesting in the assignee, in accordance with any provisions included therein
as to the time at which it is effective, all rights and privileges so
assigned. However, such assignment is without prejudice to the company on
account of any payment it makes or individual policy it issues in
accordance with paragraphs (d) and (g) of Section 231 before receipt of
notice of the assignment. This amendatory Act of 1969 acknowledges,
declares and codifies the existing right of assignment of interests under
life insurance policies.
(Source: P.A. 98-969, eff. 1-1-15 .)
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215 ILCS 5/245.2
(215 ILCS 5/245.2) (from Ch. 73, par. 857.2)
Sec. 245.2.
Not-for-profit organizations; beneficiary of insurance on
member's life. Members of not-for-profit organizations that are exempt
from taxation as described in paragraph (3), (4), (5), (9), or (10) of
subsection (c) of Section 501 of the Internal Revenue Code or either past
or present individual or family donors to a not-for-profit organization
may obtain life insurance policies naming the not-for-profit organization
as the irrevocable sole beneficiary of the policy. The not-for-profit
organization, as the sole beneficiary of the policy, may continue to pay
the premiums to the issuing insurance company where the donor discontinues
the premium payments and continuance of the policy is a prudent investment.
(Source: P.A. 87-770.)
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215 ILCS 5/245.3 (215 ILCS 5/245.3) Sec. 245.3. Irrevocable assignment of life insurance to a funeral home. An insured or any other person who may be the owner of rights under a policy of life insurance may make an irrevocable assignment of all or a part of his or her rights under the policy to a funeral home in accordance with Section 2b of the Illinois Funeral or Burial Funds Act. Subject to the terms of the policy or a contract relating to the policy, including, but not limited to, a prepaid funeral or burial contract, an irrevocable assignment by an insured or other owner of rights under a policy made before or after the effective date of this amendatory Act of the 102nd General Assembly is valid for the purpose of vesting in the assignee, in accordance with the policy or contract as to the time at which it is effective, all rights assigned. That irrevocable assignment is, however, without prejudice to the company on account of any payment it makes. The insurance company shall within 15 business days notify the funeral home and owner of the policy of its receipt of the form. A policy owner who executes a designation of beneficiary form pursuant to Section 2b of the Illinois Funeral or Burial Funds Act also irrevocably waives and cannot exercise the following rights: (1) The right to collect from the insurance company | | the net proceeds of the policy when it becomes a claim by death.
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| (2) The right to surrender the policy and receive the
| | cash surrender value of the policy.
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| (3) The right to obtain a policy loan.
(4) The right to designate as primary beneficiary of
| | the policy anyone other than as provided in that Act.
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| (5) The right to collect or receive income,
| | distributions, or shares of surplus, dividend deposits, refunds of premium, or additions to the policy.
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| This amendatory Act of the 102nd General Assembly acknowledges, declares, and codifies the existing right of assignment of interests under life insurance policies.
(Source: P.A. 102-959, eff. 5-27-22.)
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215 ILCS 5/Art. XIV.5
(215 ILCS 5/Art. XIV.5 heading)
ARTICLE XIV 1/2.
SEPARATE ACCOUNTS
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215 ILCS 5/245.21
(215 ILCS 5/245.21) (from Ch. 73, par. 857.21)
Sec. 245.21. Establishment of separate accounts by domestic companies
organized to do a life, annuity, or accident and health insurance business. A
domestic company, including for the purposes of this
Article all domestic fraternal benefit
societies, may, for authorized
classes of insurance, establish one or more
separate accounts, and may allocate thereto amounts (including without
limitation proceeds applied under optional modes of settlement or under
dividend options) to provide for life, annuity, or accident and health
insurance (and benefits
incidental thereto), payable in fixed or variable amounts or both, subject
to the following:
(1) The income, gains and losses, realized or | | unrealized, from assets allocated to a separate account must be credited to or charged against the account, without regard to other income, gains or losses of the company.
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(2) Except as may be provided with respect to
| | reserves for guaranteed benefits and funds referred to in paragraph (3) of this Section (i) amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations of Part 2 or Part 3 of Article VIII of this Code and (ii) the investments in any separate account or accounts may not be taken into account in applying the investment limitations otherwise applicable to the investments of the company.
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(3) Except with the approval of the Director and
| | under the conditions as to investments and other matters as the Director may prescribe, that must recognize the guaranteed nature of the benefits provided, reserves for (i) benefits guaranteed as to dollar amount and duration and (ii) funds guaranteed as to principal amount or stated rate of interest may not be maintained in a separate account.
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(4) Unless otherwise approved by the Director, assets
| | allocated to a separate account must be valued at their market value on the date of valuation, or if there is no readily available market, then as provided in the contract or the rules or other written agreement applicable to the separate account. Unless otherwise approved by the Director, the portion, if any, of the assets of the separate account equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in paragraph (3) of this Section must be valued in accordance with the rules otherwise applicable to the company's assets.
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(5) Amounts allocated to a separate account under
| | this Article are owned by the company, and the company may not be, nor hold itself out to be, a trustee with respect to those amounts. The assets of any separate account equal to the reserves and other contract liabilities with respect to the account may not be charged with liabilities arising out of any other business the company may conduct, unless the separate account is subject to guarantees, in which case the assets shall be charged with liabilities arising out of other business of the company, unless the contract specifies that the assets are insulated.
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(6) No sale, exchange or other transfer of assets may
| | be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, the transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless the transfer, whether into or from a separate account, is made (i) by a transfer of cash, or (ii) by a transfer of securities having a readily determinable market value, if the transfer of securities is approved by the Director. The Director may approve other transfers among those accounts if, in his or her opinion, the transfers would not be inequitable.
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(7) To the extent a company considers it necessary to
| | comply with any applicable federal or state laws, the company, with respect to any separate account, including without limitation any separate account which is a management investment company or a unit investment trust, may provide for persons having an interest therein appropriate voting and other rights and special procedures for the conduct of the business of the account, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of independent public accountants, and the selection of a committee, the members of which need not be otherwise affiliated with the company, to manage the business of the account.
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(Source: P.A. 98-39, eff. 6-28-13.)
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215 ILCS 5/245.22
(215 ILCS 5/245.22) (from Ch. 73, par. 857.22)
Sec. 245.22.
Any contract providing benefits payable in variable amounts delivered or
issued for delivery in this State must contain a statement of the essential
features of the procedures to be followed by the insurance company in
determining the dollar amount of the variable benefits. Any such contract
under which the benefits vary to reflect investment experience, including a
group contract and any certificate in evidence of variable benefits issued
thereunder, must state that such dollar amount will so vary and must
contain on its first page a statement to the effect that the benefits
thereunder are on a variable basis.
(Source: P.A. 77-1572 .)
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215 ILCS 5/245.23
(215 ILCS 5/245.23) (from Ch. 73, par. 857.23)
Sec. 245.23.
No company may deliver or issue for delivery within this State variable
contracts unless it is authorized or organized to do a
life, annuity, or accident and health insurance business in this State, and the Director is satisfied that its
condition or method of operation in connection with the issuance of such
contracts will not render its operation hazardous to the public or its
policyholders in this State. In this connection, the Director may consider
among other things:
(a) The history and financial condition of the company;
(b) The character, responsibility and fitness of the officers and
directors of the company; and
(c) The law and regulation under which the company is authorized in its
state of domicile to issue variable contracts.
If the company is a subsidiary of an authorized insurance
company, or
affiliated with such a company through common management or ownership, it
may be deemed by the Director to have met the requirements of this Section
if either it or the parent or the affiliated company meets the requirements
of this Section.
(Source: P.A. 90-381, eff. 8-14-97.)
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