215 ILCS 5/ Illinois Insurance Code.

(215 ILCS 5/130.4)

Sec. 130.4. Disclosure requirement.

(a) An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the Director a corporate governance annual disclosure that contains the information described in subsection (b) of Section 130.5. Notwithstanding any request from the Director made pursuant to subsection (c), if the insurer is a member of an insurance group, the insurer shall submit the report required by this Section to the Director of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.

(b) The corporate governance annual disclosure must include a signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer has implemented the corporate governance practices and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee thereof.

(c) An insurer not required to submit a corporate governance annual disclosure under this Section shall do so upon the Director's request.

(d) For purposes of completing the corporate governance annual disclosure, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the corporate governance annual disclosure at the level at which the insurer's or insurance group's risk appetite is determined, the level at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors is coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the 3 criteria was used to determine the level of reporting and explain any subsequent changes in the level of reporting.

(e) The review of the corporate governance annual disclosure and any additional requests for information shall be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.

(f) Insurers providing information substantially similar to the information required by this Article in other documents provided to the Director, including proxy statements filed in conjunction with the requirements of Section 131.13 or other State or federal filings provided to the Department, are not required to duplicate that information in the corporate governance annual disclosure but are only required to cross-reference the document in which the information is included.

(Source: P.A. 101-600, eff. 12-6-19; 102-135, eff. 7-23-21.)

(215 ILCS 5/130.5)

Sec. 130.5. Contents of corporate governance annual disclosure.

(a) The insurer or insurance group has discretion over the responses to the corporate governance annual disclosure inquiries if the corporate governance annual disclosure contains the material information necessary to permit the Director to gain an understanding of the insurer's or insurance group's corporate governance structure, policies, and practices. The Director may request additional information that he or she deems material and necessary to provide the Director with a clear understanding of the corporate governance policies, the reporting or information system, or controls implementing those policies.

(b) Notwithstanding subsection (a), the corporate governance annual disclosure shall be prepared in a manner consistent with rules adopted by the Director. Documentation and supporting information shall be maintained and made available upon examination or upon the request of the Director.

(c) The Director may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Director's staff, as may be reasonably necessary to assist the Director in reviewing the corporate governance annual disclosure and related information or the insurer's compliance with this Article. Any persons retained shall be under the direction and control of the Director and shall act only in an advisory capacity.

(Source: P.A. 101-600, eff. 12-6-19.)

(215 ILCS 5/130.6)

Sec. 130.6. Confidentiality.

(a) Documents, materials, or other information, including the corporate governance annual disclosure, in the possession or control of the Department that are obtained by, created by, or disclosed to the Director or any other person under this Article are recognized by this State as being proprietary and to contain trade secrets. All such documents, materials, or other information shall be confidential by law and privileged, shall not be subject to the Freedom of Information Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Director is authorized to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as a part of the Director's official duties. The Director shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer.

(b) Neither the Director nor any person who received documents, materials, or other corporate governance annual disclosure-related information through examination or otherwise, while acting under the authority of the Director or with whom such documents, materials, or other information are shared pursuant to this Article, shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a).

(c) In order to assist in the performance of the Director's regulatory duties, the Director may:

(1) upon request, share documents, materials, or other corporate governance annual disclosure-related information, including the confidential and privileged documents, materials, and information subject to subsection (a), including proprietary and trade-secret documents and materials with other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection (c) of Section 131.20, with the National Association of Insurance Commissioners, and with third-party consultants, if the recipient agrees in writing to maintain the confidentiality and privileged status of the corporate governance annual disclosure-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality; and

(2) receive documents, materials, or other corporate governance annual disclosure-related information, including otherwise confidential and privileged documents, materials, and information, including proprietary and trade-secret information and documents from regulatory officials of other state, federal, and international financial regulatory agencies, including members of any supervisory college as defined in subsection (c) of Section 131.20, and from the National Association of Insurance Commissioners, and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.

(d) A written agreement with the National Association of Insurance Commissioners or a third-party consultant governing sharing and use of information provided pursuant to this Article shall:

(1) include specific procedures and protocols for maintaining the confidentiality and security of corporate governance annual disclosure-related information shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this Article, including procedures and protocols for sharing by the National Association of Insurance Commissioners only with other state regulators from states in which the insurance group has domiciled insurers; the agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the corporate governance annual disclosure-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;

(2) specify that ownership of the corporate governance annual disclosure-related information shared with the National Association of Insurance Commissioners or a third-party consultant remains with the Director and that the National Association of Insurance Commissioners' or third-party consultant's use of the information is subject to the direction of the Director;

(3) prohibit the National Association of Insurance Commissioners or a third-party consultant from storing the information shared pursuant to this Article in a permanent database after the underlying analysis is completed;

(4) require the National Association of Insurance Commissioners or a third-party consultant to provide prompt notice to the Director and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer's or insurance group's corporate governance annual disclosure-related information;

(5) require the National Association of Insurance Commissioners or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners or a third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners or a third-party consultant pursuant to this Article; and

(6) require the National Association of Insurance Commissioners or a third-party consultant to obtain written consent of the insurer before making any of the insurer's corporate governance annual disclosure-related information public.

(e) The sharing of information and documents by the Director pursuant to this Article shall not constitute a delegation of regulatory authority or rulemaking, and the Director is solely responsible for the administration, execution, and enforcement of this Article.

(f) No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other corporate governance annual disclosure-related information shall occur as a result of disclosure of such information or documents to the Director under this Section or as a result of sharing as authorized in this Article.

(g) Documents, materials, or other information in the possession or control of the National Association of Insurance Commissioners or any third-party consultants pursuant to this Article shall be confidential by law and privileged, shall not be subject to the Freedom of Information Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

(Source: P.A. 101-600, eff. 12-6-19.)

(215 ILCS 5/130.7)

Sec. 130.7. Sanctions. Any insurer failing, without just cause, to timely file the corporate governance annual disclosure as required in this Article shall be required, after notice and a hearing, to pay a penalty of $200 for each day's delay, to be recovered by the Director. Any penalty recovered shall be paid into the General Revenue Fund. The Director may reduce the penalty if the insurer demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the insurer.

(Source: P.A. 101-600, eff. 12-6-19.)

(215 ILCS 5/Art. VIII.5 heading) ARTICLE VIII 1/2. INSURANCE HOLDING COMPANY SYSTEMS

(215 ILCS 5/131.1)

Sec. 131.1. Definitions. As used in this Article, the following terms have the respective meanings set forth in this Section unless the context requires otherwise:

(a) An "affiliate" of, or person "affiliated" with, a specific person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(a-5) "Acquiring party" means such person by whom or on whose behalf the merger or other acquisition of control referred to in Section 131.4 is to be affected and any person that controls such person or persons.

(a-10) "Associated person" means, with respect to an acquiring party, (1) any beneficial owner of shares of the company to be acquired, owned, directly or indirectly, of record or beneficially by the acquiring party, (2) any affiliate of the acquiring party or beneficial owner, and (3) any other person acting in concert, directly or indirectly, pursuant to any agreement, arrangement, or understanding, whether written or oral, with the acquiring party or beneficial owner, or any of their respective affiliates, in connection with the merger, consolidation, or other acquisition of control referred to in Section 131.4 of this Code.

(a-15) "Company" has the same meaning as "company" as defined in Section 2 of this Code, except that it does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

(b) "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, the holding of shareholders' or policyholders' proxies by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is solely the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds shareholders' proxies representing 10% or more of the voting securities of any other person, or holds or controls sufficient policyholders' proxies to elect the majority of the board of directors of the domestic company. This presumption may be rebutted by a showing made in the manner as the Director may provide by rule. The Director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

(b-5) "Enterprise risk" means any activity, circumstance, event, or series of events involving one or more affiliates of a company that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the company or its insurance holding company system as a whole, including, but not limited to, anything that would cause the company's risk-based capital to fall into company action level as set forth in Article IIA of this Code or would cause the company to be in hazardous financial condition as set forth in Article XII 1/2 of this Code.

(b-10) "Exchange Act" means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

(b-12) "Group capital calculation instructions" means the group capital calculation instructions as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

(b-15) "Group-wide supervisor" means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the Director under Section 131.20d of this Code to have sufficient contacts with an internationally active insurance group.

(c) "Insurance holding company system" means two or more affiliated persons, one or more of which is an insurance company as defined in paragraph (e) of Section 2 of this Code.

(c-5) "Internationally active insurance group" means an insurance holding company system that:

(1) includes an insurer registered under Section 4 of this Code; and

(2) meets the following criteria:

(A) premiums written in at least 3 countries;

(B) the percentage of gross premiums written outside the United States is at least 10% of the insurance holding company system's total gross written premiums; and

(C) based on a 3-year rolling average, the total assets of the insurance holding company system are at least $50,000,000,000 or the total gross written premiums of the insurance holding company system are at least $10,000,000,000.

(d) (Blank).

(d-1) "NAIC" means the National Association of Insurance Commissioners.

(d-2) "NAIC Liquidity Stress Test Framework" is a separate NAIC publication which includes a history of the NAIC's development of regulatory liquidity stress testing, the scope criteria applicable for a specific data year, and the liquidity stress test instructions, and reporting templates for a specific data year, such scope criteria, instructions, and reporting template being as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

(d-5) "Non-operating holding company" is a general business corporation functioning solely for the purpose of forming, owning, acquiring, and managing subsidiary business entities and having no other business operations not related thereto.

(d-10) "Own", "owned," or "owning" means shares (1) with respect to which a person has title or to which a person's nominee, custodian, or other agent has title and which such nominee, custodian, or other agent is holding on behalf of the person or (2) with respect to which a person (A) has purchased or has entered into an unconditional contract, binding on both parties, to purchase the shares, but has not yet received the shares, (B) owns a security convertible into or exchangeable for the shares and has tendered the security for conversion or exchange, (C) has an option to purchase or acquire, or rights or warrants to subscribe to, the shares and has exercised such option, rights, or warrants, or (D) holds a securities futures contract to purchase the shares and has received notice that the position will be physically settled and is irrevocably bound to receive the underlying shares. To the extent that any affiliates of the stockholder or beneficial owner are acting in concert with the stockholder or beneficial owner, the determination of shares owned may include the effect of aggregating the shares owned by the affiliate or affiliates. Whether shares constitute shares owned shall be decided by the Director in his or her reasonable determination.

(e) "Person" means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but does not include any securities broker performing no more than the usual and customary broker's function or joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property other than capital stock.

(e-5) "Policyholders' proxies" are proxies that give the holder the right to vote for the election of the directors and other corporate actions not in the day to day operations of the company.

(f) (Blank).

(f-3) "Scope criteria", as detailed in the NAIC Liquidity Stress Test Framework, are the designated exposure bases along with minimum magnitudes thereof for the specified data year, used to establish a preliminary list of insurers considered scoped into the NAIC Liquidity Stress Test Framework for that data year.

(f-5) "Securityholder" of a specified person is one who owns any security of such person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.

(g) "Subsidiary" of a specified person is an affiliate controlled by such person directly, or indirectly through one or more intermediaries.

(h) "Voting Security" is a security which gives to the holder thereof the right to vote for the election of directors and includes any security convertible into or evidencing a right to acquire a voting security.

(Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578); 102-813, eff. 5-13-22.)

(215 ILCS 5/131.2) (from Ch. 73, par. 743.2)

Sec. 131.2. Subsidiaries. A domestic company, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries. The subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic company. In addition to investments in common stock, preferred stock, debt obligations and other securities of subsidiaries permitted under all other sections of this Code, a domestic company, other than a company subject to Articles XVIII or XIX, may also:

(a) invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of 10% of the company's assets or 50% of the company's surplus as regards policyholders, but after such investments the company's surplus as regards policyholders must be reasonable in relation to the company's outstanding liabilities and adequate to its financial needs. In calculating the amount of such investments, there must be included (i) total net monies or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities, and (ii) all amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities, and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation;

(b) invest any amount in common stock, preferred stock, debt obligations and other securities of one or more direct subsidiaries acting only as a non-operating holding company or engaged or organized exclusively for the ownership and management of assets authorized as investments for the company, provided that each subsidiary agrees to limit its investments in any asset so that such investments will not cause the amount of the total investment of the company to exceed the amount the company could have invested in such asset. For the purpose of this clause, "the total investment of the company" will include (i) any direct investment by the company in an asset and (ii) the company's proportionate share of any investment in such asset by any subsidiary of the company, which must be calculated by multiplying the amount of the subsidiary's investment by the percentage of the company's ownership of such subsidiary;

(c) invest in common stock of one or more insurance corporation subsidiaries any amount by which the investing company's capital and surplus exceeds the minimum capital and surplus required of a new company under Section 13 to qualify for a certificate of authority to write the kind or kinds of insurance which the company is authorized to write, if the company is a stock company, and if the company is other than a stock company, the company may invest the amount by which the company's surplus exceeds the minimum surplus required of a new company under Section 43 or 66 to qualify for a certificate of authority to write the kind or kinds of insurance which the company is authorized to write;

(d) with the approval of the Director, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries, but after such investment the company's surplus as regards policyholders must be reasonable in relation to the company's outstanding liabilities and adequate to its financial needs.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.3) (from Ch. 73, par. 743.3)

Sec. 131.3. (1) Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made under Section 131.2 of this Article are subject to Sections 126.3, 126.4, 126.5, 126.6, 126.7, and 133 of this Code but are not subject to any other of the otherwise applicable restrictions or prohibitions contained in this Code applicable to such investments of a domestic company subject to this Code.

(2) If a company ceases to control a subsidiary, it must dispose of any investment therein made under this section within 3 years from the time of the cessation of control or within such further time as the Director may prescribe, unless at any time after the investment is made, the investment meets the requirements for investment under any other section of this Code, and the company has notified the Director thereof.

(3) Whether any investment made pursuant to this Section meets the applicable requirements of this Section is to be determined before the investment is made by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.4) (from Ch. 73, par. 743.4)

Sec. 131.4. Acquisition of control of or merger with domestic company.

(a) No person other than the issuer may make a tender for or a request or invitation for tenders of, or enter into an agreement to exchange securities for, or seek to acquire or acquire shareholders' proxies to vote or seek to acquire or acquire in the open market, or otherwise, any voting security of a domestic company or acquire policyholders' proxies of a domestic company or any entity that controls a domestic company, for consideration if, after the consummation thereof, that person would, directly or indirectly, (or by conversion or by exercise of any right to acquire) be in control of the company, and no person may enter into an agreement to merge or consolidate with or otherwise to acquire control of a domestic company, unless the offer, request, invitation, or agreement is conditioned on receiving the approval of the Director based on Section 131.8 of this Article and no such acquisition of control or a merger with a domestic company may be consummated unless the person has filed with the Director and has sent to the company a statement containing the information required by Section 131.5 and the Director has approved the transaction or granted an exemption. Prior to the acquisition, the Director may conclude that a statement need not be filed by the acquiring party if the acquiring party demonstrates to the satisfaction of the Director that:

(1) such transaction will not result in the change of control of the domestic company; or

(2) (blank);

(3) the acquisition of, or attempt to acquire control of, such other person is subject to requirements in the jurisdiction of its domicile which are substantially similar to those contained in this Section and Sections 131.5 through 131.12; or

(4) the control of the policyholders' proxies is being acquired solely by virtue of the holders official office and not as the result of any agreement or for any consideration.

The purpose of this Section is to afford to the Director the opportunity to review acquisitions in order to determine whether or not the acquisition would be adverse to the interests of the existing and future policyholders of the company.

(b) For purposes of this Section, any controlling person of a domestic company seeking to divest its controlling interest in the domestic company in any manner shall file with the Director, with a copy to the company, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The Director shall determine those instances in which the party or parties seeking to divest or to acquire a controlling interest in a company shall be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the Director, in his or her discretion, determines that confidential treatment shall interfere with enforcement of this Section. If the statement referred to in subsection (a) of this Section is otherwise filed in connection with the proposed divestiture or related acquisition, this subsection (b) shall not apply.

(c) For purposes of this Section, a domestic company shall include any person controlling a domestic company unless the person, as determined by the Director, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this Section, "person" shall not include any securities broker holding, in the usual and customary broker's function, less than 20% of the voting securities of an insurance company or of any person that controls an insurance company.

(Source: P.A. 98-609, eff. 1-1-14; 99-642, eff. 7-28-16.)

(215 ILCS 5/131.5) (from Ch. 73, par. 743.5)

Sec. 131.5. Statement; contents. In order to seek the approval of the Director pursuant to Section 131.8, the applicant must file a statement with the Director under oath or affirmation which contains as a minimum the following information:

(1) The name and address of each acquiring party, and

(a) if such person is an individual, his principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes, other than minor traffic violations, during the past 10 years;

(b) if such person is not an individual, a report of the nature of its business operations during the past 5 years or for such lesser period as the person and any predecessors thereof has been in existence; an informative description of the business intended to be conducted by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list must include for each individual the information required by subsection (1)(a).

(2) The source, nature and amount of the consideration used or to be used in effecting the merger, consolidation or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, including any pledge of the company's own securities or the securities of any of its subsidiaries or affiliates, and the identity of persons furnishing such consideration. However, where a source of such consideration is a loan made in the lender's ordinary course of business, the identity of the lender must remain confidential, if the person filing the statement so requests.

(3) Financial information as to the earnings and financial condition of each acquiring party for the preceding 5 fiscal years of each acquiring party (or for such lesser period as the acquiring party and any predecessors thereof have been in existence) audited by an independent certified public accountant in accordance with generally accepted auditing standards and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement.

(4) Any plans or proposals which each acquiring party may have to liquidate such company, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management.

(5) The number of shares of any security referred to in Section 131.4 which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in Section 131.4, and a statement as to the method by which the fairness of the proposal was arrived.

(6) The amount of each class of any security referred to in Section 131.4 which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party.

(7) A full description of any existing contracts, arrangements or understandings with respect to any security referred to in Section 131.4 in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description must identify the persons with whom such contracts, arrangements or understandings have been entered into.

(8) A description of the acquisition of any security or policyholders' proxy referred to in Section 131.4 during the 12 calendar months preceding the filing of the statement, by any acquiring party, including the dates of acquisition, names of the acquiring parties, and consideration paid or agreed to be paid therefor.

(9) A description of any recommendations to acquire any security referred to in Section 131.4 made during the 12 calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of such acquiring party.

(10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in Section 131.4, and (if distributed) of additional soliciting material relating thereto.

(11) The terms of any agreement, contract or understanding made with, or proposed to be made with, any broker-dealer as to solicitation of securities referred to in Section 131.4 for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto.

(12) Beginning July 1, 2014, an agreement by the person required to file the statement referred to in this Section 131.5 that the person will provide the annual report specified in subsection (a) of Section 131.14b for so long as control exists.

(13) Beginning July 1, 2014, an acknowledgement by the person required to file the statement referred to in this Section 131.5 that the person and all subsidiaries within its control in the insurance holding company system shall provide information to the Director upon request as necessary to evaluate enterprise risk to the company.

(14) Any additional information as the Director may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders or in the public interest.

(15) With respect to each acquiring party, the following information:

(A) the name and address of all associated persons and a detailed description of every agreement, arrangement, and understanding between the acquiring party and all associated persons in connection with the merger, consolidation, or other acquisition of control;

(B) the class or series and number of shares of securities of the company that are directly or indirectly owned beneficially and of record by the acquiring party or the associated persons or both; and

(C) a detailed description of each proxy, contract, arrangement, understanding, or relationship pursuant to which the acquiring party or the associated persons, or both, have a right to vote, or cause or direct the vote of, any securities of the company.

(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578).)

(215 ILCS 5/131.6) (from Ch. 73, par. 743.6)

Sec. 131.6. (1) If the person required to file the statement referred to in Section 131.5 is a partnership, limited partnership, syndicate or other group, the Director may require that the information be given with respect to each partner of such partnership or limited partnership, each member of such syndicate or group, and each person who controls such partner or member. If any partner, member or person is a corporation or the person required to file the statement referred to in Section 131.5 is a corporation, the Director may require that the information be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of the corporation.

(2) If any material change occurs in the facts set forth in the statement filed with the Director and sent to the company under Section 131.5, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, must be filed with the Director and sent to the company within 2 business days after the person learns of the change.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.7) (from Ch. 73, par. 743.7)

Sec. 131.7. If any offer, request, invitation, agreement or acquisition referred to in Section 131.4 is proposed to be made by means of a registration statement under the Securities Act of 1933 or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in Section 131.4 may utilize such documents in furnishing the information called for by that statement.

(Source: P.A. 77-673.)

(215 ILCS 5/131.8) (from Ch. 73, par. 743.8)

Sec. 131.8. (1) After the statement required by Section 131.5 has been filed, the Director shall approve any merger, consolidation or other acquisition of control referred to in Section 131.4 unless the Director finds that:

(a) after the change of control, the domestic company referred to in Section 131.4 would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;

(b) the effect of the merger, consolidation or other acquisition of control would be substantially to lessen competition in insurance in this State or tend to create a monopoly therein. In applying the competitive standard in this paragraph:

(i) the informational requirements of subsection (3)(a) and the standards of subsection (4)(b) of Section 131.12a shall apply,

(ii) the merger or other acquisition shall not be found substantially to lessen competition in insurance in this State or tend to create a monopoly therein if the Director finds that any of the situations meeting the criteria provided by subsection (4)(c) of Section 131.12a exist, and

(iii) the Director may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;

(c) the financial condition of any acquiring party is such as might jeopardize the financial stability of the domestic company or jeopardize the interests of its policyholders;

(d) the plans or proposals which the acquiring party has to liquidate the domestic company, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of such company and not in the public interest; or

(e) the competence, experience and integrity of those persons who would control the operation of the domestic company are such that it would not be in the best interests of policyholders of such company and of the insurance buying public to permit the merger, consolidation or other acquisition of control.

(2) The Director may hold a public hearing on any merger, consolidation or other acquisition of control referred to in Section 131.4 if the Director determines that the statement filed as required by Section 131.5 does not demonstrate compliance with the standards referred to in subsection (1), of this Section, or if he determines that such acquisition of control is likely to be hazardous or prejudicial to the insurance buying public.

(3) The public hearing referred to in subsection (2) must be held within 60 days after the statement required by Section 131.5 is filed, and at least 20 days' notice thereof must be given by the Director to the person filing the statement and to the domestic company. Not less than 7 days' notice of such hearing must be given by the person filing the statement to such other persons as may be designated by the Director and by the company to its shareholders. The Director must make a determination within 60 days after the conclusion of the hearing. At the hearing, the person filing the statement, the domestic company, any person to whom notice of the hearing was sent, and any other person whose interests may be affected thereby has the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith is entitled to conduct discovery proceedings in the same manner as is presently allowed in the Circuit Courts of this State. All discovery proceedings must be concluded not later than 3 days prior to the commencement of the public hearing.

(4) If the proposed acquisition of control will require the approval of more than one state insurance commissioner, the public hearing referred to in subsection (2) of this Section may be held on a consolidated basis upon request of the person filing the statement referred to in Section 131.5 of this Code. Such person shall file the statement referred to in Section 131.5 of this Code with the National Association of Insurance Commissioners (NAIC) within 5 days after making the request for a public hearing. A commissioner may opt out of a consolidated hearing and shall provide notice to the applicant of the opt out within 10 days after the receipt of the statement referred to in Section 131.5 of this Code. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the companies are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend such hearing in person or by telecommunication.

(5) In connection with a change of control of a domestic company, any determination by the Director that the person acquiring control of the company shall be required to maintain or restore the capital of the company to the level required by the laws and regulations of this State shall be made not later than 60 days after the filing of the statement required by Section 131.5 of this Code.

(Source: P.A. 102-394, eff. 8-16-21.)

(215 ILCS 5/131.8a) (from Ch. 73, par. 743.8a)

Sec. 131.8a. The Director may retain at the applicant's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the Director's staff as may be reasonably necessary to assist in reviewing an acquisition proposed under Section 131.4.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.9) (from Ch. 73, par. 743.9)

Sec. 131.9. All statements, amendments or other material filed under Section 131.5 must be delivered to the domestic company within 10 business days after the acquiring party has made the filing with the Director. The domestic company shall then send to its securityholders the summary of the proposed acquisition within 5 business days of such delivery. The notice shall contain an address where a copy of the statement filed with the Director can be obtained upon request. The expenses of the mailing and any requests for the statement and the mailing of the notice of hearing by the company required under subsection (2) of Section 131.8 must be borne by the person making the filing. As security for the payment of the expenses, the person may be required to file with the Director an acceptable bond or other deposit in an amount to be determined by the Director.

(Source: P.A. 84-805.)

(215 ILCS 5/131.9a)

Sec. 131.9a. (Repealed).

(Source: P.A. 98-609, eff. 1-1-14. Repealed by P.A. 102-394, eff. 8-16-21.)

(215 ILCS 5/131.10) (from Ch. 73, par. 743.10)

Sec. 131.10. Sections 131.4 through 131.12 do not apply to:

(1) any transaction which is subject to Article X of this Code dealing with merger, consolidation or plans of exchange;

(2) any offer, request, invitation, agreement or acquisition which the Director by order exempts therefrom as (a) not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic company, or (b) as otherwise not comprehended within the purposes of Sections 131.4 through 131.12.

(Source: P.A. 80-545.)

(215 ILCS 5/131.11) (from Ch. 73, par. 743.11)

Sec. 131.11. The following are violations of Sections 131.4 through 131.12:

(1) the failure to file any statement, amendment, or other material required to be filed under Sections 131.4 or 131.5; or

(2) the effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger or consolidation with, a domestic company unless the Director has given his approval.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.12) (from Ch. 73, par. 743.12)

Sec. 131.12. The courts of this State are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this State who files a statement with the Director under Section 131.4, and over all actions involving such person arising out of violations of Sections 131.4, 131.5, 131.6, or 131.11, and each such person is deemed to have performed acts equivalent to and constituting an appointment by such a person of the Director to be his true and lawful attorney upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of Sections 131.4, 131.5, 131.6, or 131.11. Copies of all such lawful process must be served on the Director and transmitted by registered or certified mail by the Director to such person at his last known address.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.12a) (from Ch. 73, par. 743.12a)

Sec. 131.12a. Acquisitions involving companies not otherwise covered.

(1) Definitions. The following definitions shall apply for the purposes of this Section only:

(a) "Acquisition" means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly the control of another person or control of the insurance in force of another person, and includes but is not limited to the acquisition of voting securities, the acquisition of assets, the transaction of bulk reinsurance and the act of merging or consolidating.

(b) An "involved company" includes a company which either acquires or is acquired, is affiliated with an acquirer or acquired or is the result of a merger.

(2) Scope.

(a) Except as exempted in paragraph (b) of this subsection (2), this Section applies to any acquisition in which there is a change in control of a company authorized to do business in this State.

(b) This Section shall not apply to the following:

(i) an acquisition subject to approval or disapproval by the Director pursuant to Section 131.8;

(ii) a purchase of securities solely for investment purposes so long as such securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this State. If a purchase of securities results in a presumption of control under subsection (b) of Section 131.1, it is not solely for investment purposes unless the commissioner of the company's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and such disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the Director of this State;

(iii) the acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the Director in accordance with subsection (3)(a) of this Section, 30 days prior to the proposed effective date of the acquisition. However, such pre-acquisition notification is not required for exclusion from this Section if the acquisition would otherwise be excluded from this Section by any other subparagraph of subsection (2)(b);

(iv) the acquisition of already affiliated persons;

(v) an acquisition if, as an immediate result of the acquisition,

(A) in no market would the combined market share of the involved companies exceed 5% of the total market,

(B) there would be no increase in any market share, or

(C) in no market would the combined market share of the involved companies exceed 12% of the total market, and the market share increase by more than 2% of the total market.

For the purpose of this subparagraph (b)(v), "market" means direct written insurance premium in this State for a line of business as contained in the annual statement required to be filed by companies licensed to do business in this State;

(vi) an acquisition for which a pre-acquisition notification would be required pursuant to this Section due solely to the resulting effect on the ocean marine insurance line of business;

(vii) an acquisition of a company whose domiciliary commissioner affirmatively finds that such company is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving such company's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and such findings are communicated by the domiciliary commissioner to the Director of this State.

(3) Pre-acquisition Notification; Waiting Period. An acquisition covered by subsection (2) may be subject to an order pursuant to subsection (5) unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The Director shall give confidential treatment to information submitted under this subsection in the same manner as provided in Section 131.22 of this Article.

(a) The pre-acquisition notification shall be in such form and contain such information as prescribed by the Director, which shall conform substantially to the form of notification adopted by the National Association of Insurance Commissioners relating to those markets which, under subsection (b)(v) of Section (2), cause the acquisition not to be exempted from the provisions of this Section. The Director may require such additional material and information as he deems necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (4). The required information may include an opinion of an economist as to the competitive impact of the acquisition in this State accompanied by a summary of the education and experience of such person indicating his or her ability to render an informed opinion.

(b) The waiting period required shall begin on the date of the receipt by the Director of a pre-acquisition notification and shall end on the earlier of the 30th day after the date of such receipt, or termination of the waiting period by the Director. Prior to the end of the waiting period, the Director on a one time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the 30th day after the receipt of such additional information by the Director or termination of the waiting period by the Director.

(4) Competitive Standard.

(a) The Director may enter an order under subsection (5)(a) with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this State or tend to create a monopoly therein or if the company fails to file adequate information in compliance with subsection (3).

(b) In determining whether a proposed acquisition would violate the competitive standard of paragraph (a) of this subsection the Director shall consider the following:

(i) any acquisition covered under subsection (2) involving 2 or more companies competing in the same market is prima facie evidence of violation of the competitive standards:

(A) if the market is highly concentrated and the involved companies possess the following shares of the market:

Company A Company B

4% 4% or more

10% 2% or more

15% 1% or more

(B) if the market is not highly concentrated and the involved companies possess the following shares of the market:

Company A Company B

5% 5% or more

10% 4% or more

15% 3% or more

19% 1% or more

A highly concentrated market is one in which the share of the 4 largest companies is 75% or more of the market. Percentages not shown in the tables are to be interpolated proportionately to the percentages that are shown. If more than 2 companies are involved, exceeding the total of the 2 columns in the table is prima facie evidence of violation of the competitive standard in paragraph (a) of this subsection. For the purpose of this subparagraph, the company with the largest share of the market shall be deemed to be Company A.

(ii) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest companies in the market from the 2 largest to the 8 largest has increased by 7% or more of the market over a period of time extending from any base year 5-10 years prior to the acquisition up to the time of the acquisition. Any acquisition covered under subsection (2) involving 2 or more companies competing in the same market is prima facie evidence of violation of the competitive standard in paragraph (a) of this subsection if:

(A) there is a significant trend toward increased concentration in the market,

(B) one of the companies involved is one of the companies in a grouping of such large companies showing the requisite increase in the market share, and

(C) another involved company's market is 2% or more.

(iii) For the purpose of subsection (4)(b):

(A) The term "company" includes any company or group of companies under common management, ownership or control.

(B) The term "market" means the relevant product and geographic markets. In determining the relevant product and geographical markets, the Director shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the National Association of Insurance Commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business with such line being that used in the annual statement required to be filed by companies doing business in this State and the relevant geographical market is assumed to be this State.

(C) The burden of showing prima facie evidence of violation of the competitive standard rests upon the Director.

(iv) Even though an acquisition is not prima facie violative of the competitive standard under subparagraph (b)(i) and (b)(ii) of this subsection the Director may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under subparagraphs (b)(i) and (b)(ii) of this subsection (4), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this paragraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.

(c) An order may not be entered under subsection (5)(a) if:

(i) the acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or

(ii) the acquisition will substantially increase the availability of insurance, and the public benefits of such increase exceed the public benefits which would arise from not lessening competition.

(5) Orders and Penalties:

(a)(i) If an acquisition violates the standard of this Section, the Director may enter an order

(A) requiring an involved company to cease and desist from doing business in this State with respect to the line or lines of insurance involved in the violation, or

(B) denying the application of an acquired or acquiring company for a license to do business in this State.

(ii) Such an order shall not be entered unless there is a hearing, notice of such hearing is issued prior to the end of the waiting period and not less than 15 days prior to the hearing, and the hearing is concluded and the order is issued no later than 60 days after the end of the waiting period. Every order shall be accompanied by a written decision of the Director setting forth his findings of fact and conclusions of law.

(iii) (Blank).

(iv) An order pursuant to this paragraph shall not apply if the acquisition is not consummated.

(b) Any person who violates a cease and desist order of the Director under paragraph (a) and while such order is in effect may after notice and hearing and upon order of the Director be subject at the discretion of the Director to any one or more of the following:

(i) a monetary penalty of not more than $10,000 for every day of violation or

(ii) suspension or revocation of such person's license.

(c) Any company or other person who fails to make any filing required by this Section and who also fails to demonstrate a good faith effort to comply with any such filing requirement shall be subject to a civil penalty of not more than $50,000.

(6) Inapplicable Provisions. Subsections (2) and (3) of Section 131.23 and Section 131.25 do not apply to acquisitions covered under subsection (2).

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.13) (from Ch. 73, par. 743.13)

Sec. 131.13. Registration of companies. Every company which is authorized to do business in this State and which is a member of an insurance holding company system must register with the Director, except a foreign or alien company subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section and Sections 131.14 through 131.20a. Any company which is subject to registration under this section must register within 60 days after the effective date of this Article or 15 days after it becomes subject to registration, whichever is later, unless the Director for good cause shown extends the time for registration, and then within such extended time. The Director may require any authorized company which is a member of a holding company system which is not subject to registration under this section to furnish a copy of the registration statement or other information filed by such company with the insurance regulatory authority of its domiciliary jurisdiction.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.14) (from Ch. 73, par. 743.14)

Sec. 131.14. Every company subject to registration must file a registration statement on a form and in a format prescribed by the Director, which shall contain the following current information:

(1) the capital structure, general financial condition, ownership and management of the company and any person controlling the company;

(2) the identity and relationship of every member of the insurance holding company system;

(3) the following agreements in force, relationships subsisting, and transactions currently outstanding or that have occurred during the last calendar year between such company and its affiliates:

(a) loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the company or of the company by its affiliates;

(b) purchases, sales, or exchanges of assets;

(c) transactions not in the ordinary course of business;

(d) guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the company's assets to liability, other than insurance contracts entered into in the ordinary course of the company's business;

(e) all management agreements, service contracts, and cost-sharing arrangements;

(f) reinsurance agreements;

(f-5) dividends and other distributions to shareholders;

(g) any pledge of the company's own securities, securities of any subsidiary or controlling affiliate, to secure a loan made to any member of the insurance holding company system; and

(h) consolidated tax allocation agreements;

(4) (blank);

(5) financial statements of or within an insurance holding company system, including all affiliates, if requested by the Director; financial statements may include, but are not limited to, annual audited financial statements filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended; a company required to file financial statements pursuant to this paragraph (5) may satisfy the request by providing the Director with the most recently filed parent corporation financial statements that have been filed with the SEC;

(6) statements that the company's or its parent company's board of directors or a committee thereof oversees corporate governance and internal controls and that the company's officers or senior management have approved and implemented and continue to maintain and monitor corporate governance and internal controls; and

(7) other matters concerning transactions between registered companies and any affiliates as may be included from time to time in any registration forms adopted or approved by the Director.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.14a)

Sec. 131.14a. Summary filing. Every company subject to registration must file a summary outlining all items in the current registration statement representing changes from the prior registration statement.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.14b)

Sec. 131.14b. Enterprise risk filings.

(a) Annual enterprise risk report. The ultimate controlling person of every company subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the company. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.

(b) Group capital calculation. Except as provided in this subsection, the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation as directed by the lead state commissioner. The report shall be completed in accordance with the NAIC Group Capital Calculation Instructions, which may permit the lead state commissioner to allow a controlling person who is not the ultimate controlling person to file the group capital calculation. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the commissioner in accordance with the procedures within the Financial Analysis Handbook adopted by the NAIC. Insurance holding company systems described in the following are exempt from filing the group capital calculation:

(1) an insurance holding company system that has only one insurer within its holding company structure, that only writes business and is only licensed in Illinois, and that assumes no business from any other insurer;

(2) an insurance holding company system that is required to perform a group capital calculation specified by the United States Federal Reserve Board; the lead state commissioner shall request the calculation from the Federal Reserve Board under the terms of information sharing agreements in effect; if the Federal Reserve Board cannot share the calculation with the lead state commissioner, the insurance holding company system is not exempt from the group capital calculation filing;

(3) an insurance holding company system whose non-U.S. group-wide supervisor is located within a reciprocal jurisdiction as described in paragraph (C-10) of subsection (1) of Section 173.1 that recognizes the U.S. state regulatory approach to group supervision and group capital; and

(4) an insurance holding company system:

(i) that provides information to the lead state that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group-wide supervisor, who has determined such information is satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC Financial Analysis Handbook; and

(ii) whose non-U.S. group-wide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as specified by the commissioner in regulation, the group capital calculation as the world-wide group capital assessment for U.S. insurance groups who operate in that jurisdiction.

Notwithstanding the provisions of paragraphs (3) and (4) of this subsection, a lead state commissioner shall require the group capital calculation for U.S. operations of any non-U.S. based insurance holding company system where, after any necessary consultation with other supervisors or officials, it is deemed appropriate by the lead state commissioner for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.

Notwithstanding the exemptions from filing the group capital calculation stated in paragraphs (1) through (4) of this subsection, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing or report in accordance with criteria as specified by the Director in regulation.

(c) Liquidity stress test. The ultimate controlling person of every insurer subject to registration and also scoped into the NAIC Liquidity Stress Test Framework shall file the results of a specific year's liquidity stress test. The filing shall be made to the lead state insurance commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners:

(1) The NAIC Liquidity Stress Test Framework includes scope criteria applicable to a specific data year. These scope criteria are reviewed at least annually by the NAIC Financial Stability Task Force or its successor. Any change to the NAIC Liquidity Stress Test Framework or to the data year for which the scope criteria are to be measured shall be effective on January 1 of the year following the calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope criteria are considered scoped into the NAIC Liquidity Stress Test Framework for the specified data year unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should not be scoped into the Framework for that data year. Similarly, insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC Liquidity Stress Test Framework for the specified data year, unless the lead state insurance commissioner, in consultation with the NAIC Financial Stability Task Force or its successor, determines the insurer should be scoped into the Framework for that data year.

The lead state insurance commissioner, in consultation with the Financial Stability Task Force or its successor, shall assess the regulator's wish to avoid having insurers scoped in and out of the NAIC Liquidity Stress Test Framework on a frequent basis as part of the determination for an insurer.

(2) The performance of, and filing of the results from, a specific year's liquidity stress test shall comply with the NAIC Liquidity Stress Test Framework's instructions and reporting templates for that year and any lead state insurance commissioner determinations, in conjunction with the NAIC Financial Stability Task Force or its successor, provided within the Framework.

(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578); 102-813, eff. 5-13-22.)

(215 ILCS 5/131.14c)

Sec. 131.14c. Violations. The failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this Article within the time specified for filing shall be a violation of this Article.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.14d)

Sec. 131.14d. (Repealed).

(Source: P.A. 98-609, eff. 1-1-14. Repealed by P.A. 102-394, eff. 8-16-21.)

(215 ILCS 5/131.15) (from Ch. 73, par. 743.15)

Sec. 131.15. No information need be disclosed on the registration statement filed under Section 131.14 if the information is not material for the purposes of Sections 131.13 through 131.19. Unless the Director by rule, regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent or less of a company's admitted assets as of the 31st day of December next preceding, are not deemed material for purposes of Sections 131.13 through 131.19. The description of materiality provided in this Section shall not apply for purposes of subsections (b) and (c) of Section 131.14b.

(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578).)

(215 ILCS 5/131.16) (from Ch. 73, par. 743.16)

Sec. 131.16. Reporting material changes or additions; penalty for late registration statement.

(1) Each registered company must keep current the information required to be included in its registration statement by reporting all material changes or additions on amendment forms designated by the Director within 15 days after the end of the month in which it learns of each change or addition, or within a longer time thereafter as the Director may establish. Any transaction which has been submitted to the Director pursuant to Section 131.20a need not be reported to the Director under this subsection; except each registered company must report all dividends and other distributions to shareholders within 5 business days following the declaration, and no less than 10 business days prior to payment thereof.

(2) On or before May 1 each year, each company subject to registration under this Article shall file a statement in a format as designated by the Director. This statement shall include information previously included in an amendment under subsection (1) of this Section, transactions and agreements submitted under Section 131.20a, and any other material transactions which are required to be reported.

(2.5) Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to a company where the information is reasonably necessary to enable the company to comply with the provisions of this Article.

(3) Any company failing, without just cause, to file any registration statement, any summary of changes to a registration statement, or any Enterprise Risk Filing or any person within an insurance holding company system who fails to provide complete and accurate information to a company as required in this Code shall be required to pay a penalty of up to $1,000 for each day's delay, to be recovered by the Director of Insurance of the State of Illinois, using the notice and hearing procedure in subsection (2) of Section 403A of this Code, and the penalty so recovered shall be paid into the General Revenue Fund of the State of Illinois. The maximum penalty under this section is $50,000. The Director may reduce the penalty if the company demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the company.

(Source: P.A. 98-609, eff. 1-1-14; 98-910, eff. 7-1-15.)

(215 ILCS 5/131.17) (from Ch. 73, par. 743.17)

Sec. 131.17. (1) The Director must terminate the registration of any company which demonstrates that it no longer is a member of an insurance holding company system.

(2) The Director may require or allow 2 or more affiliated companies subject to registration to file a consolidated registration statement.

(3) A company which is authorized to do business in this State and which is part of an insurance holding company system may register on behalf of any affiliated company which is required to register under Section 131.13 and to file all information and material required to be filed under this Article unless the Director requires a separate registration by the affiliated company.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.18) (from Ch. 73, par. 743.18)

Sec. 131.18. Sections 131.13 through 131.19 do not apply to any company, information, or transaction if and to the extent that the Director by rule, regulation, or order may exempt the same from Sections 131.13 through 131.19.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.19) (from Ch. 73, par. 743.19)

Sec. 131.19. Disclaimer of affiliation. Any person may file with the Director a disclaimer of affiliation with any authorized company or a disclaimer may be filed by the company or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the company as well as the basis for disclaiming the affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the Director, within 30 days following receipt of a complete disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party shall be relieved of its duty to register under Section 131.13 of this Code if approval of the disclaimer has been granted by the Director or if the disclaimer is deemed to have been approved.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.20) (from Ch. 73, par. 743.20)

Sec. 131.20. Standards for transactions with affiliates; adequacy of surplus.

(1) Transactions with their affiliates by companies subject to registration are subject to the following standards:

(a) the terms are fair and reasonable;

(a-5) agreements for cost sharing services and management shall include such provisions as may be required by rules and regulations issued by the Director;

(b) charges or fees for services performed are reasonable;

(c) expenses incurred and payment received must be allocated to the company in conformity with customary insurance accounting practices consistently applied;

(d) the books, accounts, and records of each party must be so maintained as to clearly and accurately disclose the precise nature and details of the transactions, including accounting information necessary to support the reasonableness of the charges or fees to the respective parties; and

(e) the company's surplus as regards policyholders following any transactions with affiliates or dividends or distributions to securityholders or affiliates must be reasonable in relation to the company's outstanding liabilities and adequate to meet its financial needs.

(2) For purposes of this Article, in determining whether a company's surplus as regards policyholders is reasonable in relation to the company's outstanding liabilities and adequate to meet its needs, the following factors, among others, may be considered:

(a) the size of the company as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;

(b) the extent to which the company's business is diversified among several lines of insurance;

(c) the number and size of risks insured in each line of business;

(d) the extent of the geographical dispersion of the company's insured risks;

(e) the nature and extent of the company's reinsurance program;

(f) the quality, diversification, and liquidity of the company's investment portfolio;

(g) the recent past and projected future trend in the size of the company's investment portfolio;

(h) the surplus as regards policyholders maintained by companies comparable to the registrant in respect of the factors enumerated in this paragraph;

(i) the adequacy of the company's reserves;

(j) the quality of the company's earnings and the extent to which the reported earnings include extraordinary items; and

(k) the quality and liquidity of investments in affiliates. The Director may discount any such investment or treat any such investment as a non-admitted asset for purposes of determining the adequacy of surplus as regards policyholders whenever the investment so warrants.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.20a) (from Ch. 73, par. 743.20a)

Sec. 131.20a. Prior notification of transactions; dividends and distributions.

(1) (a) The following transactions listed in items (i) through (vii) involving a domestic company and any person in its insurance holding company system, including amendments or modifications (other than termination) of affiliate agreements previously filed pursuant to this Section, which are subject to any materiality standards contained in this Section, may not be entered into unless the company has notified the Director in writing of its intention to enter into such transaction at least 30 days prior thereto, or such period as the Director may permit, and the Director has not disapproved it within such period. The notice for amendments or modifications (other than termination) shall include the reasons for the change and the financial impact on the domestic company. Informal notice shall be reported, within 30 days after a termination of a previously filed agreement, to the Director for determination of the type of filing required, if any.

(i) Sales, purchases, exchanges of assets, loans or extensions of credit, guarantees, investments, or any other transaction, except dividends, that involves the transfer of assets from or liabilities to a company (A) equal to or exceeding the lesser of 3% of the company's admitted assets or 25% of its surplus as regards policyholders as of the 31st day of December next preceding or (B) that is proposed when the domestic company is not eligible to declare and pay a dividend or other distribution pursuant to the provisions of Section 27.

(ii) Loans or extensions of credit to any person that is not an affiliate (A) that involve the lesser of 3% of the company's admitted assets or 25% of the company's surplus, each as of the 31st day of December next preceding, made with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the company making such loans or extensions of credit or (B) that are proposed when the domestic company is not eligible to declare and pay a dividend or other distribution pursuant to the provisions of Section 27.

(iii) Reinsurance agreements or modifications thereto, including all reinsurance pooling agreements, reinsurance agreements in which the reinsurance premium or a change in the company's liabilities, or the projected reinsurance premium or a change in the company's liabilities in any of the next 3 years, equals or exceeds 5% of the company's surplus as regards policyholders, as of the 31st day of December next preceding, including those agreements that may require as consideration the transfer of assets from a company to a nonaffiliate, if an agreement or understanding exists between the company and nonaffiliate that any portion of those assets will be transferred to one or more affiliates of the company.

(iv) All management agreements; service contracts, other than agency contracts; tax allocation agreements; all reinsurance allocation agreements related to reinsurance agreements required to be filed under this Section; and all cost-sharing arrangements.

(v) Direct or indirect acquisitions or investments in a person that controls the company, or in an affiliate of the company, in an amount which, together with its present holdings in such investments, exceeds 2.5% of the company's surplus as regards policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to Section 131.2 of this Article (or authorized under any other Section of this Code), or in non-subsidiary insurance affiliates that are subject to the provisions of this Article, are exempt from this requirement.

(vi) Any series of the previously described transactions that are substantially similar to each other, that take place within any 180 day period, and that in total are equal to or exceed the lesser of 3% of the domestic company's admitted assets or 25% of its policyholders surplus, as of the 31st day of the December next preceding.

(vii) Any other material transaction that the Director by rule determines might render the company's surplus as regards policyholders unreasonable in relation to the company's outstanding liabilities and inadequate to its financial needs or may otherwise adversely affect the interests of the company's policyholders or shareholders.

Nothing herein contained shall be deemed to authorize or permit any transactions that, in the case of a company not a member of the same holding company system, would be otherwise contrary to law.

(b) Any transaction or contract otherwise described in paragraph (a) of this subsection that is between a domestic company and any person that is not its affiliate and that precedes or follows within 180 days or is concurrent with a similar transaction between that nonaffiliate and an affiliate of the domestic company and that involves amounts that are equal to or exceed the lesser of 3% of the domestic company's admitted assets or 25% of its surplus as regards policyholders at the end of the prior year may not be entered into unless the company has notified the Director in writing of its intention to enter into the transaction at least 30 days prior thereto or such shorter period as the Director may permit, and the Director has not disapproved it within such period.

(c) A company may not enter into transactions which are part of a plan or series of like transactions with any person within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the Director determines that such separate transactions were entered into for such purpose, he may exercise his authority under subsection (2) of Section 131.24.

(d) The Director, in reviewing transactions pursuant to paragraph (a), shall consider whether the transactions comply with the standards set forth in Section 131.20 and whether they may adversely affect the interests of policyholders.

(e) The Director shall be notified within 30 days of any investment of the domestic company in any one corporation if the total investment in that corporation by the insurance holding company system exceeds 10% of that corporation's voting securities.

(f) Except for those transactions subject to approval under other Sections of this Code, any such transaction or agreements which are not disapproved by the Director may be effective as of the date set forth in the notice required under this Section.

(g) If a domestic company enters into a transaction described in this subsection without having given the required notification, the Director, using the notice and hearing procedure in subsection (2) of Section 403A of this Code, may cause the company to pay a civil forfeiture of not more than $250,000. Each transaction so entered shall be considered a separate offense.

(2) No domestic company subject to registration under Section 131.13 may pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until: (a) 30 days after the Director has received notice of the declaration thereof and has not within such period disapproved the payment, or (b) the Director approves such payment within the 30-day period. For purposes of this subsection, an extraordinary dividend or distribution is any dividend or distribution of cash or other property whose fair market value, together with that of other dividends or distributions, made within the period of 12 consecutive months ending on the date on which the proposed dividend is scheduled for payment or distribution exceeds the greater of: (a) 10% of the company's surplus as regards policyholders as of the 31st day of December next preceding, or (b) the net income of the company for the 12-month period ending the 31st day of December next preceding, but does not include pro rata distributions of any class of the company's own securities.

Notwithstanding any other provision of law, the company may declare an extraordinary dividend or distribution which is conditional upon the Director's approval, and such a declaration confers no rights upon security holders until: (a) the Director has approved the payment of the dividend or distribution, or (b) the Director has not disapproved the payment within the 30-day period referred to above.

(Source: P.A. 98-609, eff. 1-1-14; 98-910, eff. 7-1-15.)

(215 ILCS 5/131.20b)

Sec. 131.20b. Controlled companies; management; directors.

(1) Notwithstanding the control of a domestic company by any person, the officers and directors of the company shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the company shall be managed so as to assure its separate operating identity consistent with this Article.

(2) Nothing in this Section shall preclude a domestic company from having or sharing a common management or a cooperative or joint use of personnel, property, or services with one or more affiliated persons under arrangements meeting the standards and requirements of Sections 131.20 and 131.20a.

(3) Not less than one-third of the directors of a domestic company, and not less than one-third of the members of each committee of the board of directors of any domestic company, that is a member of an insurance holding company system shall be persons who are not officers or employees of the company or of any entity controlling, controlled by, or under common control with the company and who are not beneficial owners of a controlling interest in the voting stock of the company or any such entity. At least one such person shall be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof.

(3.5) The board of directors of a domestic company or ultimate controlling company shall establish one or more committees comprised solely of directors who are not officers or employees of the company or of any entity controlling, controlled by, or under common control with the company and who are not beneficial owners of a controlling interest in the voting stock of the company or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the company, and recommending to the board of directors the selection and compensation of the principal officers.

(4) Subsections (3) and (3.5) of this Section do not apply to a domestic company if the ultimate controlling company or the person controlling the company, such as a company, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees thereof that meet the requirements of subsections (3) and (3.5) with respect to such controlling entity or are subject to and meet the requirements of the corporate governance rules of a national securities exchange, such as the New York Stock Exchange, or an inter-dealer quotation system, such as the National Association of Securities Dealers Automatic Quotation.

(5) (Blank).

(6) A company may make application to the Director for a waiver from the requirements of this Section, if the company's annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than $300,000,000. A company may also make application to the Director for a waiver from the requirements of this Section based upon unique circumstances. The Director may consider various factors, including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.20c)

Sec. 131.20c. Supervisory colleges.

(a) With respect to any company registered under Section 131.13 of this Code, and in accordance with subsection (c) of this Section, the Director shall also have the power to participate in a supervisory college for any domestic company that is part of an insurance holding company system with international operations in order to determine compliance by the company with this Article. The powers of the Director with respect to supervisory colleges include, but are not limited to:

(1) initiating the establishment of a supervisory college;

(2) clarifying the membership and participation of other supervisors in the supervisory college;

(3) clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;

(4) coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and

(5) establishing a crisis management plan.

(b) Each registered company subject to this Section shall be liable for and shall pay the reasonable expenses of the Director's participation in a supervisory college in accordance with subsection (c) of this Section, including reasonable travel expenses. For purposes of this Section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the company or its affiliates, and the Director may establish a regular assessment to the company for the payment of these expenses.

(c) In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and as part of the examination of individual companies in accordance with Section 131.21 of this Code, the Director may participate in a supervisory college with other regulators charged with supervision of the company or its affiliates, including other state, federal, and international regulatory agencies. The Director may enter into agreements in accordance with Section 131.22 of this Code providing the basis for cooperation between the Director and the other regulatory agencies and the activities of the supervisory college. Nothing in this Section shall delegate to the supervisory college the authority of the Director to regulate or supervise the company or its affiliates within its jurisdiction.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.20d)

Sec. 131.20d. Group-wide supervision of internationally active insurance groups.

(a) The Director is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this Section.

(b) The Director may otherwise acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group:

(1) does not have substantial insurance operations in the United States;

(2) has substantial insurance operations in the United States, but not in this State; or

(3) has substantial insurance operations in the United States and this State, but the Director has determined pursuant to the factors set forth in subsections (d) and (h) that the other regulatory official is the appropriate group-wide supervisor.

(c) An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the Director make a determination or acknowledgment as to a group-wide supervisor pursuant to this Section.

(d) In cooperation with other state, federal, and international regulatory agencies, the Director will identify a single group-wide supervisor for an internationally active insurance group. The Director may determine that the Director is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this State. However, the Director may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. A regulatory official identified under this Section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in paragraphs (1) through (5) of this subsection, and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group. The Director shall consider the following factors when making a determination or acknowledgment under this subsection:

(1) the place of domicile of the insurance companies within the internationally active insurance group that hold the largest share of the group's written premiums, assets, or liabilities;

(2) the place of domicile of the top-tiered insurance company or companies in the insurance holding company system of the internationally active insurance group;

(3) the location of the executive offices or largest operational offices of the internationally active insurance group;

(4) whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the Director determines to be:

(A) substantially similar to the system of regulation provided under the laws of this State; or

(B) otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and

(5) whether another regulatory official acting or seeking to act as the group-wide supervisor provides the Director with reasonably reciprocal recognition and cooperation.

(e) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the Director shall acknowledge that regulatory official as the group-wide supervisor. However, in the event of a material change in the internationally active insurance group that results in:

(1) the internationally active insurance group's insurance companies domiciled in this State holding the largest share of the group's premiums, assets, or liabilities; or

(2) this State being the place of domicile of the top-tiered insurance company or companies in the insurance holding company system of the internationally active insurance group, the Director shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to subsection (d).

(f) The Director is authorized to collect from any company registered pursuant to Section 131.13 all information necessary to determine whether the Director may act as the group-wide supervisor of an internationally active insurance group or if the Director may acknowledge another regulatory official to act as the group-wide supervisor. Before issuing a determination that an internationally active insurance group is subject to group-wide supervision by the Director, the Director shall notify the company registered pursuant to Section 131.13 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than 30 days to provide the Director with additional information pertinent to the pending determination. The Department shall publish on its Internet website the identity of internationally active insurance groups that the Director has determined are subject to group-wide supervision by the Director.

(g) If the Director is the group-wide supervisor for an internationally active insurance group, the Director is authorized to engage in any of the following group-wide supervision activities:

(1) assess the enterprise risks within the internationally active insurance group to ensure that:

(A) the material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and

(B) reasonable and effective mitigation measures are in place;

(2) request, from any member of an internationally active insurance group subject to the Director's supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:

(A) governance, risk assessment, and management;

(B) capital adequacy; and

(C) material intercompany transactions;

(3) coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;

(4) communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of Section 131.22, through supervisory colleges as set forth in Section 131.20c or otherwise;

(5) enter into agreements with or obtain documentation from any company registered under Section 131.13, any member of the internationally active insurance group, and any other state, federal, and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the Director's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any company or person within an insurance holding company system not domiciled or incorporated in this State is doing business in this State or is otherwise subject to jurisdiction in this State; and

(6) other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the Director.

(h) If the Director acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the Director is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor, provided that:

(1) the Director's cooperation is in compliance with the laws of this State; and

(2) the regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the Director's activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the Director is authorized to refuse recognition and cooperation.

(i) The Director is authorized to enter into agreements with or obtain documentation from any company registered under Section 131.13, any affiliate of the company, and other state, federal, and international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.

(j) The Department may adopt regulations necessary for the administration of this Section.

(k) A registered company subject to this Section shall be liable for and shall pay the reasonable expenses of the Director's participation in the administration of this Section, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.

(Source: P.A. 102-394, eff. 8-16-21.)

(215 ILCS 5/131.21) (from Ch. 73, par. 743.21)

Sec. 131.21. Examination.

(1) Subject to the limitation contained in this section and in addition to the powers which the Director has under Sections 132 through 132.7 and 401 through 403 of this Code relating to the examination of companies, the Director shall have the power to examine any company registered under Section 131.13 of this Code and its affiliates to ascertain the financial condition of the company, including the enterprise risk to the company by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.

(1.5) The Director may order any company registered under Section 131.13 of this Code to produce such records, books, or other information papers in the possession of the company or its affiliates as are reasonably necessary to determine compliance with this Article. To determine compliance with this Article, the Director may order any company registered under Section 131.13 of this Code to produce information not in the possession of the company if the company can obtain access to such information pursuant to contractual relationships, statutory obligations, or other methods. In the event the company cannot obtain the information requested by the Director, the company shall provide the Director a detailed explanation of the reason that the company cannot obtain the information and the identity of the holder of the information. Whenever the Director determines that the detailed explanation is without merit, the Director may require, after notice and hearing, the company to pay a penalty of up to $1,000 for each day's delay, or may suspend or revoke the company's license.

(2) The Director may retain at the registered company's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the Director's staff as may be reasonably necessary to assist in the conduct of the examination under subsection (1). Any persons so retained are under the direction and control of the Director and may act in a purely advisory capacity.

(3) Each registered company producing for examination records, books and papers under subsection (1.5) is liable for and must pay the expense of the examination in accordance with Section 408 of this Code.

(4) The Director may retain at the registered company's expense any attorneys, actuaries, accountants, and other experts not otherwise a part of the Director's staff as may be reasonably necessary to assist in the conduct of the examination under subsection (1) of this Section. Any persons so retained are under the direction and control of the Director and may act in a purely advisory capacity.

(5) In the event the company fails to comply with an order, the Director shall have the power to examine the affiliates to obtain the information. The Director shall also have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this Section. Upon the failure or refusal of any person to obey a subpoena, the Director may petition a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. Every person shall be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the State. He or she shall be entitled to the same fees and mileage, if claimed, as a witness in the Circuit Court, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, shall be itemized and charged against, and be paid by, the company being examined.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.22)

Sec. 131.22. Confidential treatment.

(a) Documents, materials, or other information in the possession or control of the Department that are obtained by or disclosed to the Director or any other person in the course of an examination or investigation made pursuant to this Article and all information reported or provided to the Department pursuant to paragraphs (12) and (13) of Section 131.5 and Sections 131.13 through 131.21 are recognized by this State as being proprietary and to contain trade secrets, and shall be confidential by law and privileged, shall not be subject to the Illinois Freedom of Information Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Director is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Director's official duties. The Director shall not otherwise make the documents, materials, or other information public without the prior written consent of the company to which it pertains unless the Director, after giving the company and its affiliates who would be affected thereby prior written notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public shall be served by the publication thereof, in which event the Director may publish all or any part in such manner as may be deemed appropriate.

(b) Neither the Director nor any person who received documents, materials, or other information while acting under the authority of the Director or with whom such documents, materials, or other information are shared pursuant to this Article shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this Section.

(c) In order to assist in the performance of the Director's duties, the Director:

(1) may share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (a) of this Section, including proprietary and trade secret documents and materials, with other state, federal, and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, with third-party consultants, and with state, federal, and international law enforcement authorities and regulatory agencies, including members of any supervisory college allowed by this Article, provided that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information, and has verified in writing the legal authority to maintain confidentiality;

(1.5) notwithstanding paragraph (1) of this subsection (c), may only share confidential and privileged documents, material, or information reported pursuant to subsection (a) of Section 131.14b with commissioners of states having statutes or regulations substantially similar to subsection (a) of this Section and who have agreed in writing not to disclose such information;

(1.7) notwithstanding paragraph (1) of this subsection (c), may only share confidential and privileged documents, material, or information reported pursuant to Section 131.14b with the Illinois Insurance Guaranty Fund regarding any member company defined in Section 534.5 if the member company has an authorized control level event as defined in Section 35A-25; the Director may disclose the information described in this subsection so long as the Fund agrees in writing to hold that information confidential, in a manner consistent with this Code, and uses that information to prepare for the possible liquidation of the member company; access to the information disclosed by the Director to the Fund shall be limited to the Fund's staff and its counsel; the board of directors of the Fund may have access to the information disclosed by the Director to the Fund once the member company is subject to a delinquency proceeding under Article XIII subject to any terms and conditions established by the Director; and

(2) may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information, from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; any such documents, materials, or information, while in the Director's possession, shall not be subject to the Illinois Freedom of Information Act and shall not be subject to subpoena.

(c-5) Written agreements with the NAIC or third-party consultants governing sharing and use of information provided pursuant to this Article consistent with subsection (c) shall:

(1) specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries or third-party consultants pursuant to this Article, including procedures and protocols for sharing by the NAIC with other state, federal, or international regulators; the agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information and has verified in writing the legal authority to maintain such confidentiality;

(2) specify that ownership of information shared with the NAIC and its affiliates and subsidiaries or third-party consultants pursuant to this Article remains with the Director and the NAIC's or third-party consultant's use of the information is subject to the direction of the Director;

(3) require prompt notice to be given to a company whose confidential information in the possession of the NAIC or third-party consultant pursuant to this Article is subject to a request or subpoena for disclosure or production;

(4) require the NAIC and its affiliates and subsidiaries or third-party consultants to consent to intervention by a company in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries or third-party consultants may be required to disclose confidential information about the company shared with the NAIC and its affiliates and subsidiaries or third-party consultants pursuant to this Article; and

(5) excluding documents, material, or information reported pursuant to subsection (c) of Section 131.14b, prohibit the NAIC or third-party consultant from storing the information shared pursuant to this Code in a permanent database after the underlying analysis is completed.

(d) The sharing of documents, materials, or information by the Director pursuant to this Article shall not constitute a delegation of regulatory authority or rulemaking, and the Director is solely responsible for the administration, execution, and enforcement of the provisions of this Article.

(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Director under this Section or as a result of sharing as authorized in subsection (c) of this Section.

(f) Documents, materials, or other information in the possession or control of the NAIC or third-party consultant pursuant to this Article shall be confidential by law and privileged, shall not be subject to the Illinois Freedom of Information Act, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.

(Source: P.A. 102-394, eff. 8-16-21; 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578); 102-813, eff. 5-13-22; 102-929, eff. 5-27-22.)

(215 ILCS 5/131.22a)

Sec. 131.22a. Restrictions on insurer publishing. The group capital calculation and resulting group capital ratio required under subsection (b) of Section 131.14b and the liquidity stress test along with its results and supporting disclosures required under subsection (c) of Section 131.14b are regulatory tools for assessing group risks and capital adequacy and group liquidity risks, respectively, and are not intended as a means to rank insurers or insurance holding company systems generally. Therefore, except as otherwise may be required under the provisions of this Code, the making, publishing, disseminating, circulating, or placing before the public, or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station or any electronic means of communication available to the public, or in any other way as an advertisement, announcement, or statement containing a representation or statement with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group, or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; however, if any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer's or insurance group's group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer's or insurance group's liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the Director with substantial proof the falsity of such statement or the inappropriateness, as the case may be, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false statement.

(Source: P.A. 102-578, eff. 7-1-22 (See Section 5 of P.A. 102-672 for effective date of P.A. 102-578).)

(215 ILCS 5/131.23) (from Ch. 73, par. 743.23)

Sec. 131.23. Injunctions; prohibitions against voting securities; sequestration of voting securities.

(1) Whenever it appears to the Director that any company or any director, officer, employee or agent thereof has committed or is about to commit a violation of this Article or of any rule, regulation, or order issued by the Director hereunder, the Director may apply to the Circuit Court for the county in which the principal office of the company is located or to the Circuit Court for Sangamon County for an order enjoining the company or the director, officer, employee or agent thereof from violating or continuing to violate this Article or any rule, regulation or order, and for any other equitable relief as the nature of the case and the interests of the company's policyholders, creditors or the public may require. In any proceeding, the validity of the rule, regulation or order alleged to have been violated may be determined by the Court.

(2) No security or shareholder's or policyholder's proxy which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of this Article or of any rule, regulation or order issued by the Director hereunder may be voted at any shareholders' meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of securities shall be taken as though such securities (including securities that may be voted pursuant to such proxies) were not issued and outstanding; but no action taken at any such meeting may be invalidated by the voting of such securities or proxies, unless the action would materially affect control of the company or unless any court of this State has so ordered. If the Director has reason to believe that any security or shareholder's or policyholder's proxy of the company has been or is about to be acquired in contravention of this Article or of any rule, regulation or order issued by the Director hereunder the company or the Director may apply to the Circuit Court for Sangamon County or to the Circuit Court for the county in which the company has its principal place of business (a) to enjoin the further pursuit or use of any offer, request, invitation, agreement or acquisition made in contravention of Sections 131.4 through 131.12 or any rule, regulation, or order issued by the Director thereunder; (b) to enjoin the voting of any security or proxy so acquired; (c) to void any vote of such security or proxy already cast at any meeting of shareholders; and (d) for any other equitable relief as the nature of the case and the interests of the company's policyholders, creditors, or the public may require.

(3) In any case where a person has acquired or is proposing to acquire any voting securities or shareholder's or policyholder's proxy in violation of this Article or any rule, regulation or order issued by the Director hereunder, the Circuit Court for Sangamon County or the Circuit Court for the county in which the company has its principal place of business may, on such notice as the court deems appropriate, upon the application of the company or the Director seize or sequester any voting securities or shareholder's or policyholder's proxy of the company owned directly or indirectly by such person, and issue any orders with respect thereto as may be appropriate to effectuate this Article. Notwithstanding any other provisions of law, for the purposes of this Article, the situs of the ownership of the securities of domestic companies is deemed to be in this State.

(4) If the Director has reason to believe that any shareholders' or policyholders' proxies have been or are about to be acquired in contravention of this Article or of any rule, regulations or order issued by the Director hereunder, the Director may apply to the Circuit Court for Sangamon County or to the Circuit Court for the county in which the company has its principal place of business (a) to enjoin further pursuit or use of any offer, request, invitation, agreement or acquisition made in contravention of Section 131.4 through 131.12 and (b) for any other equitable relief as the nature of the case and the interests of the company's policyholders, creditors or the public may require.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.24) (from Ch. 73, par. 743.24)

Sec. 131.24. Sanctions.

(1) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the company to engage in transactions or make investments which have not been properly filed or approved or which violate this Article, shall pay, in their individual capacity, a civil forfeiture of not more than $100,000 per violation, after notice and hearing before the Director. In determining the amount of the civil forfeiture, the Director shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.

(2) Whenever the Director determines that any company subject to this Article or any director, officer, employee or agent thereof has engaged in any transaction or entered into a contract which is subject to Section 131.20, and any one of Sections 131.16, 131.20a, 141, 141.1, or 174 of this Code and which would not have been approved had such approval been requested or would have been disapproved had required notice been given, the Director may order the company to cease and desist immediately any further activity under that transaction or contract. After notice and hearing the Director may also order (a) the company to void any such contracts and restore the status quo if such action is in the best interest of the policyholders or the public, and (b) any affiliate of the company, which has received from the company dividends, distributions, assets, loans, extensions of credit, guarantees, or investments in violation of any such Section, to immediately repay, refund or restore to the company such dividends, distributions, assets, extensions of credit, guarantees or investments.

(3) Whenever the Director determines that any company or any director, officer, employee or agent thereof has committed a willful violation of this Article, the Director may cause criminal proceedings to be instituted in the Circuit Court for the county in which the principal office of the company is located or in the Circuit Court of Sangamon or Cook County against such company or the responsible director, officer, employee or agent thereof. Any company which willfully violates this Article commits a business offense and may be fined up to $500,000. Any individual who willfully violates this Article commits a Class 4 felony and may be fined in his individual capacity not more than $500,000 or be imprisoned for not less than one year nor more than 3 years, or both.

(4) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the Director in the performance of his duties under this Article, commits a Class 3 felony and upon conviction thereof, shall be imprisoned for not less than 2 years nor more than 5 years or fined $500,000 or both. Any fines imposed shall be paid by the officer, Director, or employee in his individual capacity.

(5) Whenever the Director determines that any person has committed a violation of Section 131.14b of this Code which prevents the full understanding of the enterprise risk to the company by affiliates or by the insurance holding company system, the violation may serve as an independent basis, after an opportunity for a hearing, for disapproving dividends or distributions and for placing the company under an order of supervision in accordance with Article XII 1/2 of this Code.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.25) (from Ch. 73, par. 743.25)

Sec. 131.25. Receivership. Whenever it appears to the Director that any person has committed a violation of this Article which so impairs the financial condition of a domestic company as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors or the public, then the Director may proceed against the company under Article XIII of this Code.

(Source: P.A. 83-749.)

(215 ILCS 5/131.25a) (from Ch. 73, par. 743.25a)

Sec. 131.25a. Recovery upon order of liquidation or rehabilitation of domestic insurer.

(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver shall have the right subject to the limitations set forth in subsections (b) and (c) of this Section to recover on behalf of the insurer any or all of the following made during the 3 years before the filing of the petition for liquidation, conservation, or rehabilitation:

(1) From any parent corporation, holding company, person, or affiliate who otherwise controlled the insurer, the amount of distributions, other than distributions of shares of the same class, paid by the insurer on its capital stock.

(2) From any director, officer, or employee, the amount of any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or a subsidiary.

(b) No distribution shall be recoverable if the parent or affiliate shows that the distribution or payment was lawful and reasonable when paid and that the insurer did not know and reasonably could not have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

(c) The maximum amount recoverable under this Section shall be the amount in excess of all other available assets of the impaired or insolvent insurer needed to pay the contractual obligations of that insurer and reimburse any guaranty funds.

(d) Any person who was a parent corporation, holding company, or who otherwise controlled the insurer or affiliate at the time the distributions were paid shall be liable up to the amount of distributions the person received. Any person who otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions the person would have received had the distributions been paid immediately. If 2 or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.

(e) To the extent any person liable under subsection (d) is insolvent or otherwise fails to pay claims due, its parent corporations, holding company, or person who otherwise controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered.

(Source: P.A. 87-1090.)

(215 ILCS 5/131.26) (from Ch. 73, par. 743.26)

Sec. 131.26. Revocation, suspension, or non-renewal of company's license. Whenever the Director determines that any person has committed a violation of this Article which makes the continued operation of a company contrary to the interests of policyholders or the public, the Director may, after notice and hearing suspend, revoke or refuse to renew the company's license or authority to do business in this State for such period as the Director finds is required for the protection of policyholders or the public. Any such determination must be accompanied by specific findings of fact and conclusions of law.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.27) (from Ch. 73, par. 743.27)

Sec. 131.27. Judicial review.

(1) Any order or decision made, issued or executed by the Director under this Article whereby any person or company is aggrieved is subject to review by the Circuit Court of Sangamon County or the Circuit Court of Cook County.

The Administrative Review Law, as now or hereafter amended, and the rules adopted pursuant thereto, applies to and governs all proceedings for review of final administrative decisions of the Director provided for in this Section. The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure.

(2) The filing of an appeal pursuant to this Section shall stay the application of any rule, regulation, order, or other action of the Director to the appealing party unless the court, after giving the party notice and an opportunity to be heard, determines that a stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public.

(3) Any person aggrieved by any failure of the Director to act or make a determination required by this Article may petition the circuit courts of Sangamon County or Cook County for a writ in the nature of a mandamus or a peremptory mandamus directing the Director to act or make a determination.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.28) (from Ch. 73, par. 743.28)

Sec. 131.28. Separability of provisions.

If any provisions of this Article or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this Article which can be given effect without the invalid provision or application, and for this purpose the provisions of this Article are separable.

(Source: P.A. 77-673.)

(215 ILCS 5/131.29)

Sec. 131.29. Rulemaking power. The Director may adopt such administrative rules as are necessary to implement the provisions of this Article.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/131.30)

Sec. 131.30. Conflict with other laws. This Article supersedes all laws and parts of laws of this State inconsistent with this Code with respect to matters covered by this Code.

(Source: P.A. 98-609, eff. 1-1-14.)

(215 ILCS 5/Art. IX heading) ARTICLE IX. PROVISIONS APPLICABLE TO ALL COMPANIES

(215 ILCS 5/132) (from Ch. 73, par. 744)

Sec. 132. Market conduct and non-financial examinations.

(1) The Director, for the purposes of ascertaining the non-financial business practices, performance, and operations of any company, may make examinations of:

(a) any company transacting or being organized to transact business in this State;

(b) any person engaged in or proposing to be engaged in the organization, promotion, or solicitation of shares or capital contributions to or aiding in the formation of a company;

(c) any person having a contract, written or oral, pertaining to the management or control of a company as general agent, managing agent, or attorney-in-fact;

(d) any licensed or registered producer, firm, or administrator, or any person, organization, or corporation making application for any licenses or registration;

(e) any person engaged in the business of adjusting losses or financing premiums; or

(f) any person, organization, trust, or corporation having custody or control of information reasonably related to the operation, performance, or conduct of a company or person subject to the jurisdiction of the Director.

(2) Every company or person being examined and its officers, directors, and agents must provide to the Director convenient and free access at all reasonable hours at its office or location to all books, records, documents, and any or all papers relating to the business, performance, operations, and affairs of the company. The officers, directors, and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so.

The Director and any authorized examiner have the power to administer oaths and examine under oath any person relative to the business of the company being examined.

(3) The examiners designated by the Director under Section 402 must make a full and true report of every examination made by them, which contains only facts ascertained from the books, papers, records, or documents, and other evidence obtained by investigation and examined by them or ascertained from the testimony of officers or agents or other persons examined under oath concerning the business, affairs, conduct, and performance of the company or person. The report of examination must be verified by the oath of the examiner in charge thereof, and when so verified is prima facie evidence in any action or proceeding in the name of the State against the company, its officers, or agents upon the facts stated therein.

(4) The Director must notify the company or person made the subject of any examination hereunder of the contents of the verified examination report before filing it and making the report public of any matters relating thereto, and must afford the company or person an opportunity to demand a hearing with reference to the facts and other evidence therein contained.

The company or person may request a hearing within 10 days after receipt of the examination report by giving the Director written notice of that request, together with a statement of its objections. The Director must then conduct a hearing in accordance with Sections 402 and 403. He must issue a written order based upon the examination report and upon the hearing within 90 days after the report is filed or within 90 days after the hearing.

If the examination reveals that the company is operating in violation of any law, regulation, or prior order, the Director in the written order may require the company or person to take any action he considers necessary or appropriate in accordance with the report of examination or any hearing thereon. The order is subject to judicial review under the Administrative Review Law. The Director may withhold any report from public inspection for such time as he may deem proper and may, after filing the same, publish any part or all of the report as he considers to be in the interest of the public, in one or more newspapers in this State, without expense to the company.

(5) Any company which or person who violates or aids and abets any violation of a written order issued under this Section shall be guilty of a business offense and may be fined not more than $5,000. The penalty shall be paid into the General Revenue fund of the State of Illinois.

(Source: P.A. 87-108.)

(215 ILCS 5/132.1) (from Ch. 73, par. 744.1)

Sec. 132.1. Purpose. The purpose of Sections 132.1 through 132.7 of this Code is to provide an effective system for the financial examination of the activities, operations, financial condition, and affairs of all persons transacting the business of insurance in this State and all persons otherwise subject to the jurisdiction of the Director. The provisions are intended to enable the Director to adopt a flexible system of examinations that directs resources as may be deemed appropriate and necessary for the administration of the insurance and insurance related laws of this State.

(Source: P.A. 87-108.)

(215 ILCS 5/132.2) (from Ch. 73, par. 744.2)

Sec. 132.2. Definitions. As used in Sections 132.1 through 132.7, the terms set forth in this Section have the following meanings:

"Company" means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory, or taxing authority of the Director.

"Examiner" means any individual or firm having been authorized by the Director to conduct an examination under this Code.

"Insurer" means any company licensed or authorized by the Director to provide any insurance contracts, whether by indemnity, guaranty, suretyship, or otherwise; including, but not limited to, those companies licensed or authorized by the Director under the following Acts:

(1) The Voluntary Health Services Plans Act.

(2) (Blank).

(3) The Dental Service Plan Act.

(4) (Blank).

(5) The Farm Mutual Insurance Company Act of 1986.

(6) The Limited Health Service Organization Act.

(7) The Health Maintenance Organization Act.

"Person" means any individual, aggregation of individuals, trust, association, partnership, or corporation, or any affiliate thereof.

(Source: P.A. 90-372, eff. 7-1-98; 90-655, eff. 7-30-98.)

(215 ILCS 5/132.3) (from Ch. 73, par. 744.3)

Sec. 132.3. Authority, scope, and scheduling of examinations.

(a) The Director or any of his examiners may conduct an examination of any company as often as the Director, in his sole discretion, deems appropriate, but shall, at a minimum, conduct an examination of every insurer authorized or licensed in this State not less frequently than once every 5 years. In scheduling and determining the nature, scope, and frequency of the examinations, the Director shall consider the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners and in effect when the Director exercises discretion under this subsection.

(b) For purposes of completing an examination of any company, the Director may examine or investigate any person, or the business of any person, insofar as the examination or investigation is, in the sole discretion of the Director, necessary or material to the examination of the company.

(c) In lieu of an examination of any foreign or alien insurer authorized or licensed in this State, the Director may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port-of-entry state until January 1, 1994. Thereafter, those reports may only be accepted if (1) the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program, (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department, and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department, or (3) the Director otherwise determines that the examination was performed in a manner substantially similar to the standards and procedures required by Sections 132.1 through 132.6 of this Code.

(Source: P.A. 89-97, eff. 7-7-95.)

(215 ILCS 5/132.4) (from Ch. 73, par. 744.4)

Sec. 132.4. Conduct of examinations.

(a) Upon determining that an examination should be conducted, the Director or his designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners. The Director may also employ other guidelines or procedures as the Director may deem appropriate.

(b) Every company or person from whom information is sought and its officers, directors, and agents must provide to the examiners appointed under subsection (a) timely, convenient, and free access, at all reasonable hours at its offices, to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company or its officers, directors, employees, and agents to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, refusal, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the Director's jurisdiction. Any proceedings for suspension, revocation, or refusal of any license or authority shall be conducted under the procedures set forth in Section 401.1 of this Code. Evidence of refusal to submit to examination or to comply with reasonable written requests of examiners shall establish a rebuttable presumption that the conduct of the company's business and affairs is hazardous to its policyholders and the public and may cause irreparable loss and injury to others so long as the refusal to submit or to comply with the examination continues.

(c) The Director or any of his examiners shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. Subpoenas may be enforced under the provisions of Section 403 of this Code.

(d) When making an examination, the Director may retain, in consultation with the company being examined, attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the cost of which shall be borne by the company that is the subject of the examination.

(e) Nothing contained in this Act shall be construed to limit the Director's authority to terminate or suspend any examination in order to pursue other legal or regulatory action under the insurance laws of this State. Findings of fact and conclusions made in the course of any examination shall be prima facie evidence in any legal or regulatory action.

(f) Nothing contained in this Code shall be construed to limit the Director's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the Director may, in his sole discretion, deem appropriate.

(Source: P.A. 87-108.)

(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)

Sec. 132.5. Examination reports.

(a) General description. All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents, or other persons examined or as ascertained from the testimony of its officers, agents, or other persons examined concerning its affairs and the conclusions and recommendations as the examiners find reasonably warranted from those facts.

(b) Filing of examination report. No later than 60 days following completion of the examination, the examiner in charge shall file with the Department a verified written report of examination under oath. Upon receipt of the verified report, the Department shall transmit the report to the company examined, together with a notice that affords the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report.

(c) Adoption of the report on examination. Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Director shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiners work papers and enter an order:

(1) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the Director, the Director may order the company to take any action the Director considers necessary and appropriate to cure the violation.

(2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information and refiling under subsection (b).

(3) Calling for an investigatory hearing with no less than 20 days notice to the company for purposes of obtaining additional documentation, data, information, and testimony.

(d) Order and procedures. All orders entered under paragraph (1) of subsection (c) shall be accompanied by findings and conclusions resulting from the Director's consideration and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. The order shall be considered a final administrative decision and may be appealed in accordance with the Administrative Review Law. The order shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.

Any hearing conducted under paragraph (3) of subsection (c) by the Director or an authorized representative shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the Director's review of relevant work papers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of any hearing, the Director shall enter an order under paragraph (1) of subsection (c).

The Director shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to the examiner's work papers that tend to substantiate any assertions set forth in any written submission or rebuttal. The Director or his representative may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation, whether under the control of the Department, the company, or other persons. The documents produced shall be included in the record, and testimony taken by the Director or his representative shall be under oath and preserved for the record. Nothing contained in this Section shall require the Department to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency.

The hearing shall proceed with the Director or his representative posing questions to the persons subpoenaed. Thereafter the company and the Department may present testimony relevant to the investigation. Cross-examination shall be conducted only by the Director or his representative. The company and the Department shall be permitted to make closing statements and may be represented by counsel of their choice.

(e) Publication and use. Upon the adoption of the examination report under paragraph (1) of subsection (c), the Director shall continue to hold the content of the examination report as private and confidential information for a period of 35 days, except to the extent provided in subsection (b). Thereafter, the Director may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.

Nothing contained in this Code shall prevent or be construed as prohibiting the Director from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of any other state or country or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this Code.

In the event the Director determines that regulatory action is appropriate as a result of any examination, he may initiate any proceedings or actions as provided by law.

(f) Confidentiality of ancillary information. All working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the Director or any other person in the course of any examination must be given confidential treatment, are not subject to subpoena, and may not be made public by the Director or any other persons, except to the extent provided in subsection (e). Access may also be granted to the National Association of Insurance Commissioners. Those parties must agree in writing before receiving the information to provide to it the same confidential treatment as required by this Section, unless the prior written consent of the company to which it pertains has been obtained.

This subsection (f) applies to market conduct examinations described in Section 132 of this Code.

(g) Disclosure. Nothing contained in this Code shall prevent or be construed as prohibiting the Director from disclosing the information described in subsections (e) and (f) to the Illinois Insurance Guaranty Fund regarding any member company defined in Section 534.5 if the member company has an authorized control level event as defined in Section 35A-25. The Director may disclose the information described in this subsection so long as the Fund agrees in writing to hold that information confidential, in a manner consistent with this Code, and uses that information to prepare for the possible liquidation of the member company. Access to the information disclosed by the Director to the Fund shall be limited to the Fund's staff and its counsel. The Board of Directors of the Fund may have access to the information disclosed by the Director to the Fund once the member company is subject to a delinquency proceeding under Article XIII subject to any terms and conditions established by the Director.

(Source: P.A. 102-929, eff. 5-27-22.)

(215 ILCS 5/132.6) (from Ch. 73, par. 744.6)

Sec. 132.6. Conflict of interest.

(a) No examiner may be appointed by the Director if that examiner, either directly or indirectly, has a conflict of interest, is affiliated with the management of, or owns a pecuniary interest in any person subject to examination. This Section shall not be construed to automatically preclude an examiner from being:

(1) A policyholder or claimant under an insurance policy.

(2) A grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business.

(3) An investment owner in shares of regulated diversified investment companies.

(4) A settlor or beneficiary of a "blind trust" into which any otherwise impermissible holdings have been placed.

(b) Notwithstanding the provisions of this Section, the Director may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though those persons may from time to time be similarly employed or retained by persons subject to examination under this Code.

(Source: P.A. 87-108.)

(215 ILCS 5/132.7) (from Ch. 73, par. 744.7)

Sec. 132.7. Immunity from liability.

(a) No cause of action shall arise nor shall any liability be imposed against the Director, the Director's authorized representatives, or any examiner appointed by the Director for any statements made or conduct performed in good faith while carrying out the provisions of this Code.

(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Director or the Director's authorized representative or examiner in the course of an examination if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.

(c) This Section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a).

(d) Persons identified in subsection (a) shall be entitled to an award of attorney's fees and costs if they are a prevailing party in a civil action for libel, slander, or any other relevant tort arising out of their activities in carrying out the provisions of this Code and the party bringing the action was not substantially justified in doing so. For purposes of this Section a proceeding is "substantially justified" if it has a reasonable basis in law or fact at the time that it was initiated.

(Source: P.A. 87-108.)

(215 ILCS 5/133) (from Ch. 73, par. 745)

Sec. 133. Books, records, accounts and vouchers.

(1) Every domestic company shall keep its books, records, documents, accounts and vouchers in such manner that its financial condition, affairs and operations can be ascertained and so that its financial statements filed with the Director can be readily verified and its compliance with the law determined and may cause any or all such books, records, documents, accounts and vouchers to be photographed or reproduced on film. Any such photographs, microphotographs, optical imaging, or film reproductions of any original books, records, documents, accounts and vouchers shall for all purposes be considered the same as the originals thereof and a transcript, exemplification or certified copy of any such photograph, microphotograph, optical imaging, or film reproduction shall for all purposes be deemed to be a transcript, exemplification or certified copy of the original. Any original so reproduced may thereafter be disposed of or destroyed if provision is made for preserving and examining such reproductions.

(2) All such original books, records, documents, accounts and vouchers, or such reproductions thereof, of the home office of any domestic company or of any principal United States office of a foreign or alien company located in this State shall be preserved and kept available in this State for the purpose of examination and until authority to destroy or otherwise dispose of such records is secured from the Director. Such original records may, however, be kept and maintained outside this State if, according to a plan adopted by the company's board of directors and approved by the Director, it maintains suitable records in lieu thereof. Every domestic company shall keep its securities within the State of Illinois except where:

(a) on deposit with other states of the United States of America, or political subdivision thereof; or

(b) on deposit with foreign countries where the company is licensed to transact an insurance business; or

(c) where requisite for the normal transaction of the company's business and approved by the Director.

(3) Any domestic company may maintain with a corporation, qualified to administer trusts in this State under the Corporate Fiduciary Act and that has an office in this State at which the account is maintained, for its securities, a limited agency, custodial or depository account, or other type of account for the safekeeping of those securities, collecting the income from those securities and providing supportive accounting services relating to such safekeeping and collection, provided, the domestic company maintains full investment discretion over those securities. Such a corporation in safekeeping such securities shall have all the powers, rights, duties and responsibilities as it has for holding securities in its fiduciary accounts under the Securities in Fiduciary Accounts Act.

(4) Any director, officer, agent or employee of any company who destroys any such books, records or documents without the authority of the Director in violation of this section or who fails to keep the books, records, documents, accounts and vouchers required by this section shall be guilty of a business offense and shall be fined not more than $5000.00.

(Source: P.A. 88-364; 89-437, eff. 12-15-95.)

(215 ILCS 5/134) (from Ch. 73, par. 746)

Sec. 134. Falsification of Records-Sentence.

Any officer, director, agent or employee of any company who makes or causes to be made any false entry in any book, report or statement of such company with intent to injure or defraud such company, or any other company or person, or to deceive any officer of such company, or the Director or any agent or examiner appointed to examine the affairs of such company and any person who with like intent aids or abets any officer, director, agent or employee in any violation of this Section shall be guilty of a Class 4 felony.

(Source: P.A. 77-2830.)

(215 ILCS 5/136) (from Ch. 73, par. 748)

Sec. 136. Annual statement.

(1) Every company authorized to do business in this State or accredited by this State shall submit to the Director by March 1st in each year its financial statement for the year ending December 31st immediately preceding in such manner and in such form as prescribed by the Director, which shall conform substantially to the form of statement adopted by the National Association of Insurance Commissioners. Unless the Director provides otherwise, the annual statement is to be prepared in accordance with the annual statement instructions and the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners. The Director shall have power to make such modifications and additions in this form as he may deem desirable or necessary to ascertain the condition and affairs of the company. The Director shall have authority to extend the time for filing any statement by any company for reasons which he considers good and sufficient. In every statement the admitted assets shall be shown at the actual values as of the last day of the preceding year, in accordance with Section 126.7. The statement shall be verified by oaths of the president and secretary of the company or, in their absence, by 2 other principal officers. In addition, any company may be required by the Director, when he considers that action to be necessary and appropriate for the protection of policyholders, creditors, shareholders, or claimants, to file, within 60 days after mailing to the company a notice that such is required, a supplemental summary statement as of the last day of any calendar month occurring during the 100 days next preceding the mailing of such notice designated by him on forms prescribed and furnished by the Director. The Director may require supplemental summary statements to be certified by an independent actuary deemed competent by the Director or by an independent certified public accountant.

(2) The statement of an alien company shall embrace only its condition and transactions in the United States and shall be verified by the oaths of its resident manager or principal representative in the United States, except that in the case of any life company organized under the laws of Canada or any province thereof, the statement may be verified by the oaths of any of its principal officers designated for that purpose by its board of directors.

(3) For the information of the public generally the Director shall cause an abstract of the information contained in the annual statement to be made available to the public as soon as practicable after filing with the Department, by printing those abstracts in pamphlet tabular form for free general distribution by the Department, or by such other publication in the city of Springfield or in the city of Chicago as may be reasonably necessary more fully to inform the public of the financial condition of companies transacting business in this State.

(4) Each domestic, foreign, and alien insurer authorized to do business in this State or accredited by this State shall participate in the National Association of Insurance Commissioners' Insurance Regulatory Information System, including the payment of all fees and charges of the system. Each company shall, on or before March 1 of each year, file with the National Association of Insurance Commissioners a copy of its annual financial statement along with any additional filings prescribed by the Director for the preceding year. The statement filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by this Code and shall include a signed jurat page and actuarial certification. Any amendments and addendums to the annual statement shall also be filed with the National Association of Insurance Commissioners. Each company shall also file with the National Association of Insurance Commissioners annual and quarterly financial statement information in computer readable format as required by the Insurance Regulatory Information System. Failure of a company to file financial statement information in computer readable format shall subject the company to the provisions of Section 139.

(5) All financial analysis ratios and examination synopsis concerning insurance companies that are submitted to the Director by the National Association of Insurance Commissioners' Insurance Regulatory Information System are confidential and may not be disclosed by the Director.

(6) Every property and casualty insurance company doing business in this State, unless otherwise exempted by the Director, shall annually submit the opinion of an appointed actuary entitled "Statement of Actuarial Opinion". This opinion shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions.

(a) Every property and casualty insurance company domiciled in this State that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the company's appointed actuary. This Actuarial Opinion Summary shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be considered as a document supporting the Actuarial Opinion required in this subsection (6). Each foreign and alien property and casualty company authorized to do business in this State shall provide the Actuarial Opinion Summary upon request.

(b) An Actuarial Report and underlying workpapers as required by the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions shall be prepared to support each Actuarial Opinion. If the insurance company fails to provide a supporting Actuarial Report or workpapers at the request of the Director or the Director determines that the supporting Actuarial Report or workpapers provided by the insurance company is otherwise unacceptable to the Director, the Director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting Actuarial Report or workpapers.

(c) The appointed actuary shall not be liable for damages to any person (other than the insurance company and the Director) for any act, error, omission, decision, or conduct with respect to the actuary's opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.

(d) The Statement of Actuarial Opinion shall be provided with the Annual Statement in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be treated as a public document. Documents, materials, or other information in the possession or control of the Director that are considered an Actuarial Report, workpapers, or Actuarial Opinion Summary provided in support of the opinion, and any other material provided by the company to the Director in connection with the Actuarial Report, workpapers or Actuarial Opinion Summary, must be given confidential treatment, are not subject to subpoena, and may not be made public by the Director or any other persons. This paragraph (d) shall not be construed to limit the Director's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD), so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the Director for preserving the confidentiality of the documents, nor shall this paragraph (d) be construed to limit the Director's authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the Director's official duties. Neither the Director nor any person who received documents, materials, or other information while acting under the authority of the Director shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to this subsection (6). Except where another provision of this Code expressly prohibits a disclosure of confidential information to the specific officials or organizations described in this subsection, the Director may:

(i) share documents, materials, or other information, including the confidential and privileged documents, materials or information subject to this paragraph (d) with the insurance department of any other state or country or with law enforcement officials of this or any other state or agency of the federal government at any time, as long as the agency or office receiving the document, material, or other information agrees in writing to hold it confidential and in a manner consistent with this Code;

(ii) receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and

(iii) enter into agreements governing sharing and use of information consistent with paragraph (d).

(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the Director under this Section or as a result of sharing as authorized in subparagraphs (i), (ii), and (iii) of paragraph (d) of subsection (6) of this Section. All 2008 Annual Statements, which are filed in 2009, and all subsequent Annual Statement filings shall be done in accordance with subsection (6) of this Section.

(Source: P.A. 96-145, eff. 8-7-09; 97-486, eff. 1-1-12.)

(215 ILCS 5/137) (from Ch. 73, par. 749)

Sec. 137. Every Insurance Company doing business in this state which is required to file a statement or report with the Securities and Exchange Commission, shall at the request of the Director, file a copy of such statement or report with the Department.

(Source: P.A. 80-514.)

(215 ILCS 5/139) (from Ch. 73, par. 751)

Sec. 139. Penalties for late or false annual statement.

(1) Any company failing, without just cause, to file its financial statements as required in this Code shall be required, after notice and hearing, to pay a penalty of up to $1,000 for each day's delay, to be recovered by the Director of Insurance of the State of Illinois using the notice and hearing procedure in subsection (2) of Section 403A of this Code, and the penalty so recovered shall be paid into the General Revenue fund of the State of Illinois. The Director may reduce the penalty if the company demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the company.

Any statement which is not materially complete when filed shall not be considered to have been properly filed until those deficiencies which make the filing incomplete have been corrected and filed.

(2) Any director, officer, agent or employee of any company, who subscribes to, makes or concurs in making or publishing any annual or other statement required by law, knowing the same to contain any material statement which is false shall, after notice and hearing, be guilty of a business offense and shall be fined not more than $50,000.

The penalty shall be paid into the General Revenue fund of the State of Illinois.

(Source: P.A. 98-910, eff. 7-1-15.)

(215 ILCS 5/140) (from Ch. 73, par. 752)

Sec. 140. Vouchers for disbursements.

No domestic company shall make any disbursement of one hundred dollars or more unless the same be evidenced by a voucher or receipt signed or check endorsed by or on behalf of the person receiving the money and describing the consideration for the payment, and if the expenditure be in connection with any matter pending before any legislative or public body or before any department or officer of any state or government the voucher shall describe the nature of the matter and the interest of the company therein, or if such voucher cannot be obtained, the expenditure shall be evidenced by affidavit describing its character and object and stating the reasons for not obtaining such voucher, receipt or check.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/141) (from Ch. 73, par. 753)

Sec. 141. Agency contracts. (1) Any domestic company which contracts with any person (different legal entities, directly or indirectly owned or controlled by the same person shall be considered as a person within the meaning of this Section) whereby such person is granted the right or privilege to solicit, procure, write or produce a major part of the insurance business for such company and collect premiums therefor shall file such contract with the Director within 15 days from the execution of such contract or within 60 days following the end of any calendar quarter in which such person produces a major portion of the company's insurance business. For purposes of this Section, any person who produces in excess of five percent (5%) of a company's insurance premium volume during any one calendar quarter shall be deemed as having been granted the privilege of producing a major portion of such company's business. Failure of the Director to disapprove any such contract within thirty days after the same shall be filed with him, shall constitute his approval thereof. A company may continue to accept business from such person until such contract is disapproved by the Director. Such disapproval shall be in writing, stating the reasons therefor and a copy thereof delivered to the company.

(2) The Director shall not approve any such contract which

(a) subjects the company to excessive charges for expenses or commissions;

(b) vests in the agent or agency company any control over the management of the affairs of the insurance company to the exclusion of the board of directors of the insurance company;

(c) gives to such person, the right to solicit, procure, write or produce a major part of the insurance business for such insurance company and collect and hold the premiums for such unreasonable period as may jeopardize the security of policyholders; or

(d) fails to require such person to make available to the Director or his designees all books, records and documents pertaining to such person's insurance business.

(3) The Director shall not approve any contract with any person if such person or its officers and directors are of known bad character or have been affiliated directly or indirectly through ownership, control, management, reinsurance transactions or other insurance or business relationships with any person or persons known to have been involved in the improper manipulation of assets, accounts or reinsurance. (4) The Director, for the purpose of ascertaining the assets, conditions and affairs of any person having a contract as provided in subsection (1), may examine the books, records, documents and assets of such person.

(5) The Director may, after a hearing held pursuant to Section 401, withdraw his approval of any agency contract theretofore approved by him, if he finds that the basis of his original approval no longer exist, or that the contract has, in actual operation, shown itself to be subject to disapproval on any of the grounds referred to in subsections (2) and (3) above.

(Source: P.A. 84-714.)

(215 ILCS 5/141a) (from Ch. 73, par. 753a)

Sec. 141a. Managing general agents and retrospective compensation agreements.

(a) As used in this Section, the following terms have the following meanings:

"Actuary" means a person who is a member in good standing of the American Academy of Actuaries.

"Gross direct written premium" means direct premium including policy and membership fees, net of returns and cancellations, and prior to any cessions.

"Insurer" means any person duly licensed in this State as an insurance company pursuant to Articles II, III, III 1/2, IV, V, VI, and XVII of this Code.

"Managing general agent" means any person, firm, association, or corporation, either separately or together with affiliates, that:

(1) manages all or part of the insurance business of an insurer (including the management of a separate division, department, or underwriting office), and

(2) acts as an agent for the insurer whether known as a managing general agent, manager, or other similar term, and

(3) with or without the authority produces, directly or indirectly, and underwrites:

(A) within any one calendar quarter, an amount of gross direct written premium equal to or more than 5% of the policyholders' surplus as reported in the insurer's last annual statement, or

(B) within any one calendar year, an amount of gross direct written premium equal to or more than 8% of the policyholders' surplus as reported in the insurer's last annual statement, and either

(4) has the authority to bind the company in settlement of individual claims in amounts in excess of $500, or

(5) has the authority to negotiate reinsurance on behalf of the insurer.

Notwithstanding the provisions of items (1) through (5), the following persons shall not be considered to be managing general agents for the purposes of this Code:

(1) An employee of the insurer;

(2) A U.S. manager of the United States branch of an alien insurer;

(3) An underwriting manager who, pursuant to a contract meeting the standards of Section 141.1 manages all or part of the insurance operations of the insurer, is affiliated with the insurer, subject to Article VIII 1/2, and whose compensation is not based on the volume of premiums written;

(4) The attorney or the attorney in fact authorized and acting for or on behalf of the subscriber policyholders of a reciprocal or inter-insurance exchange, under the terms of the subscription agreement, power of attorney, or policy of insurance or the attorney in fact for any Lloyds organization licensed in this State.

"Retrospective compensation agreement" means any arrangement, agreement, or contract having as its purpose the actual or constructive retention by the insurer of a fixed proportion of the gross premiums, with the balance of the premiums, retained actually or constructively by the agent or the producer of the business, who assumes to pay therefrom all losses, all subordinate commission, loss adjustment expenses, and his profit, if any, with other provisions of the arrangement, agreement, or contract being auxiliary or incidental to that purpose.

"Underwrite" means to accept or reject risk on behalf of the insurer.

(b) Licensure of managing general agents.

(1) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in this State for an insurer licensed in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.

(2) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located outside this State for an insurer domiciled in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.

(3) The managing general agent must provide a surety bond for the benefit of the insurer in an amount equal to the greater of $100,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer. The bond shall provide for a discovery period and prior notification of cancellation in accordance with the rules of the Department unless otherwise approved in writing by the Director.

(4) The managing general agent must maintain an errors and omissions policy for the benefit of the insurer with coverage in an amount equal to the greater of $1,000,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer.

(5) Evidence of the existence of the bond and the errors and omissions policy must be made available to the Director upon his request.

(c) No person, firm, association, or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties that sets forth the responsibilities of each party, that, if both parties share responsibility for a particular function, specifies the division of responsibility, and that contains the following minimum provisions:

(1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination.

(2) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis.

(3) All funds collected for the account of an insurer shall be held by the managing general agent in a fiduciary capacity in a bank that is a federally or State chartered bank and that is a member of the Federal Deposit Insurance Corporation. This account shall be used for all payments on behalf of the insurer; however, the managing general agent shall not have authority to draw on any other accounts of the insurer. The managing general agent may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses.

(4) Separate records of business written by the managing general agent will be maintained. The insurer shall have access to and the right to copy all accounts and records related to its business in a form usable by the insurer, and the Director shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Director.

(5) The contract may not be assigned in whole or part by the managing general agent.

(6) The managing general agent shall provide to the company audited financial statements required under paragraph (1) of subsection (d).

(7) That appropriate underwriting guidelines be followed, which guidelines shall stipulate the following:

(A) the maximum annual premium volume;

(B) the basis of the rates to be charged;

(C) the types of risks that may be written;

(D) maximum limits of liability;

(E) applicable exclusions;

(F) territorial limitations;

(G) policy cancellation provisions; and

(H) the maximum policy period.

(8) The insurer shall have the right to: (i) cancel or nonrenew any policy of insurance subject to applicable laws and regulations concerning those actions; and (ii) require cancellation of any subproducer's contract after appropriate notice.

(9) If the contract permits the managing general agent to settle claims on behalf of the insurer:

(A) all claims must be reported to the company in a timely manner.

(B) a copy of the claim file must be sent to the insurer at its request or as soon as it becomes known that the claim:

(i) has the potential to exceed an amount determined by the company;

(ii) involves a coverage dispute;

(iii) may exceed the managing general agent's claims settlement authority;

(iv) is open for more than 6 months; or

(v) is closed by payment of an amount set by the company.

(C) all claim files will be the joint property of the insurer and the managing general agent. However, upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis.

(D) any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.

(10) Where electronic claims files are in existence, the contract must address the timely transmission of the data.

(11) If the contract provides for a sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments, or by any other manner, interim profits will not be paid to the managing general agent until one year after they are earned for property insurance business and until 5 years after they are earned on casualty business and in either case, not until the profits have been verified.

(12) The managing general agent shall not:

(A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts under obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules.

(B) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed.

(C) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, that shall not exceed 1% of the insurer's policyholders' surplus as of December 31 of the last completed calendar year.

(D) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer.

(E) Permit its subproducer to serve on its board of directors.

(F) Employ an individual who is also employed by the insurer.

(13) The contract may not be written for a term of greater than 5 years.

(d) Insurers shall have the following duties:

(1) The insurer shall have on file the managing general agent's audited financial statements as of the end of the most recent fiscal year prepared in accordance with Generally Accepted Accounting Principles. The insurer shall notify the Director if the auditor's opinion on those statements is other than an unqualified opinion. That notice shall be given to the Director within 10 days of receiving the audited financial statements or becoming aware that such opinion has been given.

(2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent, in addition to any other required loss reserve certification.

(3) The insurer shall periodically (at least semiannually) conduct an on-site review of the underwriting and claims processing operations of the managing general agent.

(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.

(5) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the Director. Notices of appointment of a managing general agent shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Director may request.

(6) An insurer shall review its books and records each quarter to determine if any producer has become a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Director of that determination, and the insurer and producer must fully comply with the provisions of this Section within 30 days of the notification.

(7) The insurer shall file any managing general agent contract for the Director's approval within 45 days after the contract becomes subject to this Section. Failure of the Director to disapprove the contract within 45 days shall constitute approval thereof. Upon expiration of the contract, the insurer shall submit the replacement contract for approval. Contracts filed under this Section shall be exempt from filing under Sections 141, 141.1 and 131.20a.

(8) An insurer shall not appoint to its board of directors an officer, director, employee, or controlling shareholder of its managing general agents. This provision shall not apply to relationships governed by Article VIII 1/2 of this Code.

(e) The acts of a managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined in the same manner as an insurer.

(f) Retrospective compensation agreements for business written under Section 4 of this Code in Illinois and outside of Illinois by an insurer domiciled in this State must be filed for approval. The standards for approval shall be as set forth under Section 141 of this Code.

(g) Unless specifically required by the Director, the provisions of this Section shall not apply to arrangements between a managing general agent not underwriting any risks located in Illinois and a foreign insurer domiciled in an NAIC accredited state that has adopted legislation substantially similar to the NAIC Managing General Agents Model Act. "NAIC accredited state" means a state or territory of the United States having an insurance regulatory agency that maintains an accredited status granted by the National Association of Insurance Commissioners.

(h) If the Director determines that a managing general agent has not materially complied with this Section or any regulation or order promulgated hereunder, after notice and opportunity to be heard, the Director may order a penalty in an amount not exceeding $100,000 for each separate violation and may order the revocation or suspension of the producer's license. If it is found that because of the material noncompliance the insurer has suffered any loss or damage, the Director may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors or other appropriate relief. This subsection (h) shall not be construed to prevent any other person from taking civil action against a managing general agent.

(i) If an Order of Rehabilitation or Liquidation is entered under Article XIII and the receiver appointed under that Order determines that the managing general agent or any other person has not materially complied with this Section or any regulation or Order promulgated hereunder and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.

Any decision, determination, or order of the Director under this subsection shall be subject to judicial review under the Administrative Review Law.

Nothing contained in this subsection shall affect the right of the Director to impose any other penalties provided for in this Code.

Nothing contained in this subsection is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, and auditors.

(j) A domestic company shall not during any calendar year write, through a managing general agent or managing general agents, premiums in an amount equal to or greater than its capital and surplus as of the preceding December 31st unless the domestic company requests in writing the Director's permission to do so and the Director has either approved the request or has not disapproved the request within 45 days after the Director received the request.

No domestic company with less than $5,000,000 of capital and surplus may write any business through a managing general agent unless the domestic company requests in writing the Director's permission to do so and the Director has either approved the request or has not disapproved the request within 45 days after the Director received the request.

(Source: P.A. 93-32, eff. 7-1-03.)

(215 ILCS 5/141b)

Sec. 141b. Third party access to files. Any contract with a third party ("administrator") to provide claim services for a property and casualty company must contain the following provisions:

(1) Upon liquidation or rehabilitation of the insurer, the files and any data related thereto become the sole property of the estate. The administrator shall have reasonable access and right to copy files at the administrator's expense.

(2) In the event electronic files are used, the administrator must keep all data in such a format that it is easily separated from other data maintained by the administrator and timely transferred to the liquidator upon the entry of an order or liquidation. "Timely transferred", in this context, means the claim file data must be transferred to the liquidator within 10 days after the entry of an order of liquidation.

The provisions of this Section shall apply to all contracts entered into after the effective date of this amendatory Act of the 100th General Assembly, and any existing contracts shall have one year to come into compliance with this Section.

(Source: P.A. 100-410, eff. 8-25-17.)

(215 ILCS 5/141.01) (from Ch. 73, par. 753.01)

Sec. 141.01. No company authorized to do business in Illinois shall cancel, terminate or refuse to renew any policy on the ground that the company's contract with the agent through whom such policy was obtained has been terminated. This provision shall not alter any contract between the agent and the company regarding ownership of expirations where the agent is able to place the policy with another insurer with similar coverage to the satisfaction of the insured.

(Source: P.A. 80-1374.)

(215 ILCS 5/141.02) (from Ch. 73, par. 753.02)

Sec. 141.02. (1) Definitions. For purposes of this Section an independent insurance agent is any licensed agent representing an insurance company on an independent contractor basis and not as an employee. This term shall include only those agents not obligated by contract to place insurance accounts with any insurance company or group of companies. This Section shall only apply to contracts which have been effective for more than one year between an independent insurance agent and any company authorized in this State for the purpose of transacting the kind or kinds of business enumerated in Class 2 or Class 3 of Section 4 of this Code, except accident and health insurance.

(2) Rehabilitation. In an effort to avoid termination, the company and agent may endeavor to reach mutual agreement on a written plan for rehabilitation for a period of time agreed by them. Any written plan agreed upon shall identify the problem areas and specify what the agent must do in an effort to avoid termination.

(3) Notice of Termination. Contracts between the independent insurance agent and any company shall not be terminated by the company except by signed mutual agreement at the time of written termination notice or unless the company provides 180 days written notice to the independent insurance agent prior to the effective date of termination. The effective date of termination shall be 180 days from the date of mailing of the termination notice. The company must maintain proof of mailing of the termination notice on a recognized U.S. Post Office form.

(4) Renewals following termination. A. During the 180 days notice or other mutually agreed time period the independent insurance agent shall not write or bind any new business on behalf of the terminating company without specific written approval.

B. The terminating company shall, following the date of termination, renew all policies written by the independent insurance agent for one policy term or for a period of one year if the policy period is longer than one year unless:

(a) the policies do not meet the insurer's underwriting standards; or

(b) the independent insurance agent notifies the insurer in writing that the policy has been placed with another insurer.

C. If a renewal policy does not meet the underwriting requirements, the terminating insurer must give the independent insurance agent 60 days notice of its intention not to renew.

D. The rate of commission and renewal terms shall be in accordance with those in effect immediately prior to termination. The commission must be paid only through the first renewal subsequent to the effective date of the termination.

(5) Paragraphs (1) through (4) of this Section shall not apply to terminations for abandonment, insolvency of the terminating company, gross and willful misconduct, refusal, suspension, revocation or termination of the agent's license by the Director of Insurance, sale or material change of ownership of agency, fraud, material misrepresentation or failure to pay such independent insurance agent's account less the independent insurance agent's commission and any disputed items within 30 days after written demand by the company.

(Source: P.A. 85-334.)

(215 ILCS 5/141.03) (from Ch. 73, par. 753.03)

Sec. 141.03. Insurance companies authorized to do business in this State shall not refuse to do business with an independent insurance agent representing an insurance company as an independent contractor and not as an employee solely on account of the volume of insurance written by that agent prior to affiliation with such company.

(Source: P.A. 84-742.)

(215 ILCS 5/141.1) (from Ch. 73, par. 753.1)

Sec. 141.1. Management contracts and service agreements. All agreements or contracts under which any person, organization or corporation is delegated management duties or control of any domestic company, or which transfer a substantial part of any major function of a domestic company such as adjustment of losses, production of business, investment of assets or general servicing of the company's business must be filed with the Department on or before the effective date of such contract or agreement. The Director may upon notice review these arrangements entered by foreign companies.

There shall be exempted from the filing requirement of this Section contracts by groups of affiliated companies on a "pooled" funds basis or service company management basis, where costs to the individual member companies are charged on an actually incurred or closely estimated basis. However, these contracts must be reduced to written form.

Sections 141.1, 141.2, and 141.3 shall not apply to any power of attorney or other authority authorized by Section 67 of this Code.

(Source: P.A. 91-357, eff. 7-29-99.)

(215 ILCS 5/141.2) (from Ch. 73, par. 753.2)

Sec. 141.2. Grounds for disapproval.

The Director must disapprove any such management contract or service agreement if, at any time, he finds:

(1) that the service or management charges are based upon criteria unrelated either to the managed company's profits or to the reasonable customary and usual charges for such services or are based on factors unrelated to the value of such services to the company; or

(2) that management personnel or other employees of the insurance company are to be performing management functions and receiving any remuneration therefor through the management or service contract in addition to the compensation by way of salary received directly from the insurance company for their services; or

(3) that the contract would transfer substantial control of the company or any of the powers vested in the board of directors, by statute, articles of incorporation or by-laws, or substantially all of the basic functions of the insurance company management; or

(4) that the contract contains provisions which would be clearly detrimental to the best interests of policyholders, stockholders or members of the company; or

(5) that the officers and directors of the management firm are of known bad character or have been 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.

If the Director disapproves of any management contract or service agreement, notice of such action shall be given to the company assigning the reasons therefor in writing. The Director shall grant any party to the contract a hearing upon request according to Article XXIV of this Code.

(Source: P.A. 77-1040.)

(215 ILCS 5/141.3) (from Ch. 73, par. 753.3)

Sec. 141.3. Supplement to annual statement.

Any company which has a management contract shall file with its annual statement a supplement on forms prescribed by the Director which discloses the following: Salaries, commissions, or any valuable consideration paid to each officer and director of the management company or to any shareholder who owns, directly or indirectly, 10% of the shares of either the managed insurance company or the management company.

Any changes in the officers or directors of the managing company are to be reported to the Director in accordance with Section 155.04.

(Source: Laws 1967, p. 1818.)

(215 ILCS 5/141.4)

Sec. 141.4. Disclosure of material transactions.

(a) An insurer domiciled in this State shall file a report with the Director disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or the material nonrenewals, cancellations, or revisions of ceded reinsurance agreements have been otherwise submitted to the Director for review, approval, or information purposes. The report must be filed no later than 15 days after the end of the calendar month in which a reportable transaction occurs. A copy of the report, including any exhibits or other attachments filed as a part of the report, shall be filed with the National Association of Insurance Commissioners. All reports obtained by or disclosed to the Director under this Section shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the Director, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the Director, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interests of policyholders, shareholders, or the public will be served by publication, in which event the Director may publish all or any part in the manner the Director may deem appropriate.

(b) Asset acquisitions or dispositions that are not material do not have to be reported under this Section. For purposes of this Section, a material acquisition (or the aggregate of any series of related acquisitions during any 30 day period) or disposition (or the aggregate of any series of related dispositions during any 30 day period) is one that is nonrecurring and not in the ordinary course of business and involves more than 5% of the reporting insurer's total admitted assets as reported in its most recent statutory financial statement filed with the Director. Asset acquisitions subject to this Section include, but are not limited to, every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for that purpose. Asset dispositions subject to this Section include, but are not limited to, every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction, or other disposition. All of the following information shall be disclosed in the report of a material acquisition or disposition of assets:

(1) Date of the transaction.

(2) Manner of acquisition or disposition.

(3) Description of the assets involved.

(4) Nature and amount of the consideration received or given.

(5) Purpose of, or reason for, the transaction.

(6) Manner by which the amount of consideration was determined.

(7) Gain or loss recognized or realized as a result of the transaction.

(8) Name of the person from whom the assets were acquired or to whom they were disposed.

Insurers shall report acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or a 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.

(c) Ceded reinsurance agreement nonrenewals, cancellations, or revisions that are not material do not have to be reported under this Section. For purposes of this Section, a material nonrenewal, cancellation, or revision is one that affects:

(1) For property and casualty business, including accident and health business written by a property and casualty insurer:

(A) more than 50% of the insurer's total ceded written premium; or

(B) more than 50% of the insurer's total ceded indemnity and loss adjustment reserves.

(2) For life, annuity, and accident and health business: more than 50% of the total reserve credit taken for business ceded, on an annual basis, as indicated in the insurer's most recent annual statement.

(3) Property and casualty or life, annuity, and accident and health business:

(A) an authorized reinsurer representing more than 10% of total cession is replaced by one or more unauthorized reinsurers; or

(B) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurer representing collectively more than 10% of a total cession.

With respect to property and casualty business, including accident and health business written by a property and casualty insurer, no filing shall be required if the insurer's total ceded written premium represents, on an annualized basis, less than 10% of its total written premium for direct and assumed business. With respect to life, annuity, and accident and health business, no filing shall be required if the total reserve credit taken for business ceded represents, on an annualized basis, less than 10% of the statutory reserve requirement prior to any cession.

All of the following information shall be disclosed in the report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:

(1) Effective date of the nonrenewal, cancellation or revision.

(2) The description of the transaction with an identification of the initiator thereof.

(3) Purpose of, or reason for, the transaction.

(4) The identity of the replacement insurers, if applicable.

Insurers shall report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 of total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.

(Source: P.A. 89-97, eff. 7-7-95.)

(215 ILCS 5/142) (from Ch. 73, par. 754)

Sec. 142. Notice of amendment or change in by-laws. Subject to the provisions of section 292.1 applicable to fraternal benefit societies, notice of any amendment or change in a company's by-laws setting forth such amendment or change, certified by its president, secretary, or officer corresponding thereto, shall be delivered to the Director within thirty days after such amendment or change.

(Source: P.A. 86-753.)

(215 ILCS 5/143) (from Ch. 73, par. 755)

Sec. 143. Policy forms.

(1) Life, accident and health. No company transacting the kind or kinds of business enumerated in Classes 1 (a), 1 (b) and 2 (a) of Section 4 shall issue or deliver in this State a policy or certificate of insurance or evidence of coverage, attach an endorsement or rider thereto, incorporate by reference bylaws or other matter therein or use an application blank in this State until the form and content of such policy, certificate, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank has been filed electronically with the Director, either through the System for Electronic Rate and Form Filing (SERFF) or as otherwise prescribed by the Director, and approved by the Director. Any such endorsement or rider that unilaterally reduces benefits and is to be attached to a policy subsequent to the date the policy is issued must be filed with, reviewed, and formally approved by the Director prior to the date it is attached to a policy issued or delivered in this State. It shall be the duty of the Director to disapprove or withdraw any such policy, certificate, endorsement, rider, bylaw or other matter incorporated by reference or application blank filed if it contains deficiencies, provisions which encourage misrepresentation or are unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or to the public policy of this State, or contains exceptions and conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the policy. In all cases the Director shall approve, withdraw, or disapprove any such form within 60 days after submission unless the Director extends by not more than an additional 30 days the period within which the form shall be approved, withdrawn, or disapproved by giving written notice to the insurer of such extension before expiration of the initial 60 days period. The Director shall withdraw approval of a policy, certificate, evidence of coverage, endorsement, rider, bylaw, or other matter incorporated by reference or application blank if it is subsequently determined that such policy, certificate, evidence of coverage, endorsement, rider, bylaw, other matter, or application blank is misrepresentative, unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or public policy of this State, or contains exceptions or conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the policy or evidence of coverage.

If a previously approved policy, certificate, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank is withdrawn for use, the Director shall serve upon the company an order of withdrawal of use, either personally or by mail, and if by mail, such service shall be completed if such notice be deposited in the post office, postage prepaid, addressed to the company's last known address specified in the records of the Department of Insurance. The order of withdrawal of use shall take effect 30 days from the date of mailing but shall be stayed if within the 30-day period a written request for hearing is filed with the Director. Such hearing shall be held at such time and place as designated in the order given by the Director. The hearing may be held either in the City of Springfield, the City of Chicago or in the county where the principal business address of the company is located. The action of the Director in disapproving or withdrawing such form shall be subject to judicial review under the Administrative Review Law.

This subsection shall not apply to riders or endorsements issued or made at the request of the individual policyholder relating to the manner of distribution of benefits or to the reservation of rights and benefits under his life insurance policy.

(2) Casualty, fire, and marine. The Director shall require the filing of all policy forms issued or delivered by any company transacting the kind or kinds of business enumerated in Classes 2 (except Class 2 (a)) and 3 of Section 4 in an electronic format either through the System for Electronic Rate and Form Filing (SERFF) or as otherwise prescribed and approved by the Director. In addition, he may require the filing of any generally used riders, endorsements, certificates, application blanks, and other matter incorporated by reference in any such policy or contract of insurance. Companies that are members of an organization, bureau, or association may have the same filed for them by the organization, bureau, or association. If the Director shall find from an examination of any such policy form, rider, endorsement, certificate, application blank, or other matter incorporated by reference in any such policy so filed that it (i) violates any provision of this Code, (ii) contains inconsistent, ambiguous, or misleading clauses, or (iii) contains exceptions and conditions that will unreasonably or deceptively affect the risks that are purported to be assumed by the policy, he shall order the company or companies issuing these forms to discontinue their use. Nothing in this subsection shall require a company transacting the kind or kinds of business enumerated in Classes 2 (except Class 2 (a)) and 3 of Section 4 to obtain approval of these forms before they are issued nor in any way affect the legality of any policy that has been issued and found to be in conflict with this subsection, but such policies shall be subject to the provisions of Section 442.

(3) This Section shall not apply (i) to surety contracts or fidelity bonds, (ii) to policies issued to an industrial insured as defined in Section 121-2.08 except for workers' compensation policies, nor (iii) to riders or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk.

(Source: P.A. 102-775, eff. 5-13-22.)

(215 ILCS 5/143.01) (from Ch. 73, par. 755.01)

Sec. 143.01. (a) A provision in a policy of vehicle insurance described in Section 4 excluding coverage for bodily injury to members of the family of the insured shall not be applicable when a third party acquires a right of contribution against a member of the injured person's family.

(b) A provision in a policy of vehicle insurance excluding coverage for bodily injury to members of the family of the insured shall not be applicable when any person not in the household of the insured was driving the vehicle of the insured involved in the crash which is the subject of the claim or lawsuit.

This subsection (b) applies to any action filed on or after its effective date.

(Source: P.A. 102-982, eff. 7-1-23.)

(215 ILCS 5/143.1) (from Ch. 73, par. 755.1)

Sec. 143.1. Periods of limitation tolled. Whenever any policy or contract for insurance, except life, accident and health, fidelity and surety, and ocean marine policies, contains a provision limiting the period within which the insured may bring suit, the running of such period is tolled from the date proof of loss is filed, in whatever form is required by the policy, until the date the claim is denied in whole or in part.

(Source: P.A. 82-352.)

(215 ILCS 5/143.10) (from Ch. 73, par. 755.10)

Sec. 143.10. No company shall cancel or refuse to issue or renew a policy on the sole basis that the insured or applicant for such policy was previously refused issuance or renewal of a policy by any insurer, or such insured's policy was cancelled on a prior date by any insurer.

(Source: P.A. 80-1374.)

(215 ILCS 5/143.10a) (from Ch. 73, par. 755.10a)

Sec. 143.10a. Loss Information.

(1) All companies issuing policies to which Section 143.11 of this Code applies, except for those defined in subsections (a), (b) and (c) of Section 143.13 of this Code and to which subsection (o) of Section 19 of the Workers' Compensation Act applies, shall on or after January 1, 1987, provide the following loss information for the 3 previous policy years to the first named insured within 30 days of the insured's request. At the written request of the insured, the company shall send the loss information directly to the insured's producer. In addition, the company shall also send the loss information at the same time as any notice of cancellation or nonrenewal, except where the policy has been cancelled for nonpayment of premium, material misrepresentations or fraud on the part of the insured:

(a) On closed claims, date and description of occurrence, and total amounts of payments;

(b) On open claims, date and description of occurrence, total amount of payments and total reserves, if any; and

(c) For any occurrence not included in (a) or (b) of this subsection (1), the date and description of occurrence and total reserves, if any.

(2) Should a named insured be required by a prospective insurer to provide detailed loss information in addition to that required under subsection (1) of this Section, the named insured may mail or deliver a written request to the insurer for such additional information, including specific loss reserves. No prospective insurer shall request, however, more detailed information than required by it to underwrite the same line or class of insurance. The insurer shall provide such information to the first named insured as soon as possible, but in no event later than 20 days of receipt of such request. Coverage under the existing policy shall automatically be extended at the same terms and conditions by the same number of days it takes the insurer to provide the insured with this additional information.

(3) The Director may promulgate regulations to exclude the automatic providing of the loss information at the time of cancellation or renewal as outlined in subsection (1) of this Section for any line or class of insurance where it can be shown that the information is not needed for that line or class of insurance.

(4) If a company fails to provide the information as required by this Section with such frequency so as to indicate a practice of refusing to provide such information, such failure shall constitute an unfair trade practice as defined in Section 424 and subject to those hearing and penalty provisions as set forth in Sections 425 through 434.

(5) Information provided under subsection (2) of this Section shall not be subject to discovery by any party other than the insured, the insurer, and the prospective insurer.

(Source: P.A. 93-155, eff. 7-10-03.)

(215 ILCS 5/143.10b) (from Ch. 73, par. 755.10b)

Sec. 143.10b. Loss information, private passenger automobile.

(1) All companies issuing a "policy of automobile insurance" as defined in paragraph (a) of Section 143.13 of this Code shall, on or after January 1, 1990, provide the following loss information for the 5 previous policy years to the named insured within 30 days of the insured's written request:

(a) on closed claims, date and description of occurrence, and total amount of payments;

(b) on open claims, date and description of occurrence and total amount of payments;

(c) for any occurrence not included in (a) or (b) of this subsection, the date and description of occurrence.

(2) If a company fails to provide the information as required by this Section with such frequency so as to indicate a practice of refusing to provide such information, such failure shall constitute an unfair trade practice as defined in Section 424 and subject to those hearing and penalty provisions as set forth in Sections 425 through 434 of this Code.

(Source: P.A. 90-196, eff. 1-1-98.)

(215 ILCS 5/143.10c) (from Ch. 73, par. 755.10c)

Sec. 143.10c. No insurance company that is authorized to do business in this State and which issues policies for personal multiperil property coverage, commonly known as homeowners insurance, may refuse to issue or renew a homeowners insurance policy to the owner or tenant of any single family dwelling, or to any owner of or tenant residing in a multi-unit residential dwelling which contains from 2 to 4 units in a single building, solely on the grounds that a space heater is being used inside the dwelling.

For purposes of this Section space heater means a heat radiating device used to warm rooms of a house or apartment and which is approved by Underwriters' Laboratories and uses gas, electricity or oil as its primary source of energy.

(Source: P.A. 86-174; 86-1028.)

(215 ILCS 5/143.10d)

Sec. 143.10d. (Repealed).

(Source: P.A. 102-328, eff. 1-1-22. Repealed by P.A. 103-11, eff. 6-9-23.)

(215 ILCS 5/143.10e)

Sec. 143.10e. Home property insurance; dog breeds.

(a) With respect to homeowner's insurance policies and renter's insurance policies issued, renewed, modified, altered, or amended on or after the effective date of this amendatory Act of the 103rd General Assembly, no insurer shall refuse to issue or renew, cancel, charge or impose an increased premium or rate for a policy or contract, or exclude, limit, restrict, or reduce coverage under a policy or contract based solely upon harboring or owning any dog of a specific breed or mixture of breeds.

(b) Notwithstanding the provisions of subsection (a), an insurer may cancel or refuse to issue or renew any homeowner's or renter's insurance policy or impose a reasonably increased premium for such policy based on the determination of an individual dog as a dangerous or vicious dog under the Animal Control Act, as determined by underwriting and actuarial principles reasonably derived from actual loss experience of such insurer with that individual dog and any anticipated loss given such loss exposure.

(Source: P.A. 103-11, eff. 12-9-23.)

(215 ILCS 5/143.11) (from Ch. 73, par. 755.11)

Sec. 143.11. Cancellation Provisions. All companies authorized to transact in this State the kinds of business enumerated in Section 4 of the "Illinois Insurance Code" shall include in their policies, except life, accident and health, fidelity and surety, and ocean marine policies, a cancellation provision setting out the manner in which such policies may be cancelled. However, nothing contained in Section 143.12 through Section 143.24 shall apply to contracts of reinsurance or to contracts procured by agents under the authority of Section 445.

(Source: P.A. 80-1365.)

(215 ILCS 5/143.11a) (from Ch. 73, par. 755.11a)

Sec. 143.11a. Termination of Lines of Business. No company authorized to transact, in this State, the kinds of business enumerated in Section 4 of this Code, except life, accident and health, fidelity and surety, and ocean marine policies, may terminate any line of insurance without notifying the Director of the action as well as reasons for the action, 90 days before termination of any policy is effective. The notice shall include all data relied upon by the company as the basis for such action and shall disclose whether the company offers and will continue to offer such kinds of insurance in any other State. For the purposes of this Section, termination of a line of insurance shall mean cancellation or non-renewal of a substantial portion of any type of business for the purpose of withdrawing from the market.

(Source: P.A. 84-1431.)

(215 ILCS 5/143.11b)

Sec. 143.11b. Assignment or transfer of property and casualty policies. An assignment or transfer of a policy of insurance to which Section 143.11 applies among or between insurers within an insurance holding company system or insurers under common management or control, or as a result of a merger, acquisition, or restructuring of an insurance company, is not a nonrenewal for purposes of the notification requirements under Sections 143.12 through 143.24. However, in the event of an increase in the renewal premium of 30% or more, change in deductibles or change in coverage that materially alters any policy to which subsection b of Section 143.17a applies, the company shall adhere to the provisions set forth in subsection b of Section 143.17a. A company making an assignment or transfer of a policy among or between insurers within an insurance holding company system or insurers under common management or control, or as a result of a merger, acquisition, or restructuring of an insurance company, shall have delivered to the named insured notice of such assignment or transfer at least 60 days prior to the renewal date. An exact and unaltered copy of the notice shall also be sent to the insured's producer, if known, and agent of record. The assignment or transfer of a policy or policies of insurance among or between insurers shall not occur without the producer or agent of record, or both, having a signed agency contract with the entity to which the policy or policies are to be assigned or transferred. If there is not a signed agency contract, all of the notice requirements of Sections 143.17 and 143.17a shall apply. Nothing in this Section shall contravene any existing producer and company contract rights. For purposes of this Section, the insured's producer, if known, and agent of record may opt to accept notification of assignment or transfer of policies electronically.

(Source: P.A. 93-713, eff. 1-1-05.)

(215 ILCS 5/143.12) (from Ch. 73, par. 755.12)

Sec. 143.12. "Short rate" cancellation. Notice required. No agent, broker or other representative or employee of any insurance company shall recommend, advise, suggest or require the cancellation of any insurance policy of the insurer which he represents, or of any other insurer at any time other than the policy anniversary or expiration date, unless he informs the insured in writing of the additional cost of such cancellation before the insured is requested or required to take action to cancel or terminate the policy which is then in force.

(Source: P.A. 79-686.)

(215 ILCS 5/143.12a) (from Ch. 73, par. 755.12a)

Sec. 143.12a. Automobile insurance; pro rata refund of unearned premium.

(a) In the event of the cancellation of a policy of automobile insurance, as defined in Section 143.13, by either the company or the policyholder, the company shall refund the unearned premium pro rated to the date of cancellation. In no event may the refund of unearned premium be computed by use of a short rate table. Refund of the premium shall be without prejudice to any claim arising prior to the cancellation.

(b) The refund shall be made by the company within 30 days from the following:

(1) the date of the notice of cancellation by the company; or

(2) the date the company receives the request for cancellation from the policyholder.

(Source: P.A. 86-1408.)

(215 ILCS 5/143.13) (from Ch. 73, par. 755.13)

Sec. 143.13. Definition of terms used in Sections 143.11 through 143.24.

(a) "Policy of automobile insurance" means a policy delivered or issued for delivery in this State, insuring a natural person as named insured or one or more related individuals resident of the same household and under which the insured vehicles therein designated are motor vehicles of the private passenger, station wagon, or any other 4-wheeled motor vehicle with a load capacity of 1500 pounds or less which is not used in the occupation, profession or business of the insured or not used as a public or livery conveyance for passengers nor rented to others. Policy of automobile insurance shall also mean a named non-owner's automobile policy.

Policy of automobile insurance does not apply to policies of automobile insurance issued under the Illinois Automobile Insurance Plan, to any policy covering garages, automobile sales agencies, repair shops, service stations or public parking place operation hazards. "Policy of automobile insurance" does not include a policy, binder, or application for which the applicant gives or has given for the initial premium a check or credit card charge that is subsequently dishonored for payment, unless the check or credit card charge was dishonored through no fault of the payor.

(b) "Policy of fire and extended coverage insurance" means a policy delivered or issued for delivery in this State, that includes but is not limited to, the perils of fire and extended coverage, and covers real property used principally for residential purposes up to and including a 4 family dwelling or any household or personal property that is usual or incidental to the occupancy to any premises used for residential purposes.

(c) "All other policies of personal lines" means any other policy of insurance issued to a natural person for personal or family protection.

(d) "Renewal" or "to renew" means (1) any change to an entire line of business in accordance with subsection b-5 of Section 143.17 and (2) the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term; however, any successive policies issued by the same insurer to the same insured, for the same or similar coverage, shall be considered a renewal policy.

Any policy with a policy period or term of less than 6 months or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of 6 months for the purpose of "renewal" or "to renew" as defined in this paragraph (d) and for the purpose of any non-renewal notice required by Section 143.17 of this Code.

(e) "Nonpayment of premium" means failure of the named insured to discharge, when due, any of his obligations in connection with the payment of premiums or any installment of such premium that is payable directly to the insurer or to its agent. Premium shall mean the premium that is due for an individual policy which shall not include any membership dues or other consideration required to be a member of any organization in order to be eligible for such policy. The term "nonpayment of premium" does not include a check, credit card charge, or money order that an applicant gives or has given to any person for the initial premium payment for a policy, binder, or application and that is subsequently dishonored for payment, and any policy, binder, or application in connection therewith is void and of no effect and not subject to the cancellation provisions of this Code.

(f) "A policy delivered or issued for delivery in this State" shall include but not be limited to all binders of insurance, whether written or oral, and all applications bound for future delivery by a duly licensed resident agent. A written binder of insurance issued for a term of 60 days or less, which contains on its face a specific inception and expiration date and which a copy has been furnished to the insured, shall not be subject to the non-renewal requirements of Section 143.17 of this Code.

(g) "Cancellation" or "cancelled" means the termination of a policy by an insurer prior to the expiration date of the policy. A policy of automobile or fire and extended coverage insurance which expires by its own terms on the policy expiration date unless advance premiums are received by the insurer for succeeding policy periods shall not be considered "cancelled" or a "cancellation" effected by the insurer in the event such premiums are not paid on or before the policy expiration date.

(h) "Commercial excess and umbrella liability policy" means a policy written over one or more underlying policies for an insured:

(1) that has at least 25 full-time employees at the time the commercial excess and umbrella liability policy is written and procures the insurance of any risk or risks, other than life, accident and health, and annuity contracts, as described in clauses (a) and (b) of Class 1 of Section 4 and clause (a) of Class 2 of Section 4, by use of the services of a full-time employee acting as an insurance manager or buyer; or

(2) whose aggregate annual premiums for all property and casualty insurance on all risks is at least $50,000.

(Source: P.A. 91-552, eff. 8-14-99; 91-597, eff. 1-1-00; 92-16, eff. 6-28-01.)

(215 ILCS 5/143.13a)

Sec. 143.13a. Coverage for permissive drivers. Any policy of private passenger automobile insurance must provide the same limits of bodily injury liability, property damage liability, uninsured and underinsured motorist bodily injury, and medical payments coverage to all persons insured under that policy, whether or not an insured person is a named insured or permissive user under the policy. If the policy insures more than one private passenger automobile, the limits available to the permissive user shall be the limits associated with the vehicle used by the permissive user when the loss occurs.

(Source: P.A. 95-395, eff. 1-1-08.)

(215 ILCS 5/143.14) (from Ch. 73, par. 755.14)

Sec. 143.14. Notice of cancellation.

(a) No notice of cancellation of any policy of insurance, to which Section 143.11 applies, shall be effective unless mailed by the company to the named insured at the last mailing address known by the company. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U.S. Post Office or other commercial mail delivery service. Notification shall also be sent to the insured's broker if known, or the agent of record, if known, and to the mortgagee or lien holder listed on the policy. For purposes of this Section, the mortgage or lien holder, insured's broker, if known, or the agent of record may opt to accept notification electronically.

(b) Whenever a financed insurance contract is cancelled, the insurer shall return whatever gross unearned premiums are due under the insurance contract or contracts not to exceed the unpaid balance due the premium finance company directly to the premium finance company effecting the cancellation for the account of the named insured. The return premium must be mailed to the premium finance company within 60 days. The request for the unearned premium by the premium finance company shall be in the manner of a monthly account, current accounting by producer, policy number, unpaid balance and name of insured for each cancelled amount. In the event the insurance contract or contracts are subject to audit, the insurer shall retain the right to withhold the return of the portion of premium that can be identified to the contract or contracts until the audit is completed. Within 30 days of the completion of the audit, if a premium retained by the insurer after crediting the earned premium would result in a surplus, the insurer shall return the surplus directly to the premium finance company. If the audit should result in an additional premium due the insurer, the obligation for the collection of this premium shall fall upon the insurer and not affect any other contract or contracts currently being financed by the premium finance company for the named insured.

(c) Whenever a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts in the agreement, the insurer shall honor the date of cancellation as set forth in the request from the premium finance company without requiring the return of the insurance contract or contracts. The insurer may mail to the named insured an acknowledgment of the notice of cancellation from the premium finance company but the named insured shall not incur any additional premium charge for any extension of coverage. The insurer need not maintain proof of mailing of this notice.

(d) All statutory regulatory and contractual restrictions providing that the insurance contract may not be cancelled unless the required notice is mailed to a governmental agency, mortgagee, lienholder, or other third party shall apply where cancellation is effected under a power of attorney under a premium finance agreement. The insurer shall have the right for a premium charge for this extension of coverage.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.15) (from Ch. 73, par. 755.15)

Sec. 143.15. Mailing of cancellation notice. All notices of cancellation of insurance as defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation to the named insured; however, if cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation to the last mailing address known to the company. All notices of cancellation to the named insured shall include a specific explanation of the reason or reasons for cancellation. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)

Sec. 143.16. Mailing of cancellation notice. All notices of cancellation of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation during the first 60 days of coverage. After the coverage has been effective for 61 days or more, all notices must be mailed at least 60 days prior to the effective date of cancellation. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation. All such notices shall include a specific explanation of the reason or reasons for cancellation and shall be mailed to the named insured at the last mailing address known to the company. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.16a) (from Ch. 73, par. 755.16a)

Sec. 143.16a. Cancellation of Casualty policies. No policy to which Section 143.11 applies, except for those defined in subsection (a) or (b) of Section 143.13, that has been in effect for 60 days may be cancelled except for one of the following reasons:

(a) Nonpayment of premium;

(b) The policy was obtained through a material misrepresentation;

(c) Any insured violated any of the terms and conditions of the policy;

(d) The risk originally accepted has measurably increased;

(e) Certification to the Director of the loss of reinsurance by the insurer which provided coverage to the insurer for all or a substantial part of the underlying risk insured; or

(f) A determination by the Director that the continuation of the policy could place the insurer in violation of the insurance laws of this State.

(Source: P.A. 84-1005.)

(215 ILCS 5/143.16b) (from Ch. 73, par. 755.16b)

Sec. 143.16b. Premium Refunds for Drought Insurance. Whenever a person has submitted payment of premium for the purchase of drought insurance described in clause (b) of Class 3 of Section 4 of this Code to an insurer or one of its subsidiaries, employees, agents, or producers, the insurer shall have a duty, within 10 business days of receipt of such premium payment, to either:

(a) refund the premium payment in full; or

(b) accept the premium payment, and provide to the person who has offered such payment policy coverage in full conformity with representations of any application, declaration, binder, or contract of policy coverage issued by the insurer or one of its subsidiaries, employees, agents or producers.

This Section shall not apply to insurance provided, guaranteed or reinsured pursuant to the Federal Crop Insurance Program.

(Source: P.A. 86-285.)

(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)

Sec. 143.17. Notice of intention not to renew.

a. No company shall fail to renew any policy of insurance, as defined in subsections (a), (b), (c), and (h) of Section 143.13, to which Section 143.11 applies, unless it shall send by mail to the named insured at least 30 days advance notice of its intention not to renew. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U. S. Post Office or other commercial mail delivery service. The nonrenewal shall not become effective until at least 30 days from the proof of mailing date of the notice to the name insured. Notification shall also be sent to the insured's broker, if known, or the agent of record, if known, and to the last known mortgagee or lien holder. For purposes of this Section, the mortgagee or lien holder, insured's broker, or the agent of record may opt to accept notification electronically. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation.

b. This Section does not apply if the company has manifested its willingness to renew directly to the named insured. Such written notice shall specify the premium amount payable, including any premium payment plan available, and the name of any person or persons, if any, authorized to receive payment on behalf of the company. If no person is so authorized, the premium notice shall so state.

b-5. This Section does not apply if the company manifested its willingness to renew directly to the named insured. However, no company may impose changes in deductibles or coverage for any policy forms applicable to an entire line of business enumerated in subsections (a), (b), (c), and (h) of Section 143.13 to which Section 143.11 applies unless the company mails to the named insured written notice of the change in deductible or coverage at least 60 days prior to the renewal or anniversary date. Notice shall also be sent to the insured's broker, if known, or the agent of record.

c. Should a company fail to comply with (a) or (b) of this Section, the policy shall terminate only on the effective date of any similar insurance procured by the insured with respect to the same subject or location designated in both policies.

d. Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.

e. In all notices of intention not to renew any policy of insurance, as defined in Section 143.11 the company shall provide the named insured a specific explanation of the reasons for nonrenewal.

f. For purposes of this Section, the insured's broker, if known, or the agent of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)

Sec. 143.17a. Notice of intention not to renew.

(a) A company intending to nonrenew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, must mail written notice to the named insured at least 60 days prior to the expiration date of the current policy. The notice to the named insured shall provide a specific explanation of the reasons for nonrenewal. A company may not extend the current policy period for purposes of providing notice of its intention not to renew required under this subsection (a).

(b) A company intending to renew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, with an increase in premium of 30% or more or with changes in deductibles or coverage that materially alter the policy must mail or deliver to the named insured written notice of such increase or change in deductible or coverage at least 60 days prior to the renewal or anniversary date. If a company has failed to provide notice of intention to renew required under this subsection (b) at least 60 days prior to the renewal or anniversary date, but does so no less than 31 days prior to the renewal or anniversary date, the company may extend the current policy at the current terms and conditions for the period of time needed to equal the 60 day time period required to provide notice of intention to renew by this subsection (b). The increase in premium shall be the renewal premium based on the known exposure as of the date of the quotation compared to the premium as of the last day of coverage for the current year's policy, annualized. The premium on the renewal policy may be subsequently amended to reflect any change in exposure or reinsurance costs not considered in the quotation.

(c) A company that has failed to provide notice of intention to nonrenew under subsection (a) of this Section and has failed to provide notice of intention to renew as prescribed under subsection (b) of this Section must renew the expiring policy under the same terms and conditions for an additional year or until the effective date of any similar insurance is procured by the insured, whichever is earlier. The company may increase the renewal premium. However, such increase must be less than 30% of the expiring term's premium and notice of such increase must be delivered to the named insured on or before the date of expiration of the current policy period.

(d) Under subsection (a), the company shall maintain proof of mailing of the notice of intention not to renew to the named insured on one of the following forms: a recognized U.S. Post Office form or a form acceptable to the U.S. Post Office or other commercial mail delivery service. Under subsections (b) and (c), proof of mailing or proof of receipt of the notice of intention to renew to the named insured may be proven by a sworn affidavit by the company as to the usual and customary business practices of mailing notice pursuant to this Section or may be proven consistent with Illinois Supreme Court Rule 236. For all notice requirements under this Section, notice shall also be sent to the named insured's producer, if known, or the producer of record. Notification shall also be sent to the mortgagee or lien holder listed on the policy.

(e) Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation that existed before the effective date of such renewal.

(f) For purposes of this Section, the named insured's producer, if known, or the producer of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

(215 ILCS 5/143.18) (from Ch. 73, par. 755.18)

Sec. 143.18. Liability of Company or Agents Regarding Statements Made In Notices Or Information. There shall be no liability on the part of and no cause of action of any nature shall arise against any company, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the company information as to reasons for cancellation, or nonrenewal, for any statement made by any of them in any written notice of cancellation or nonrenewal, or any other communications, oral or written, specifying the reasons for cancellation or nonrenewal, or for the providing of information pertaining thereto.

(Source: P.A. 79-686.)

(215 ILCS 5/143.19) (from Ch. 73, par. 755.19)

Sec. 143.19. Cancellation of automobile insurance policy; grounds. After a policy of automobile insurance as defined in Section 143.13(a) has been effective for 60 days, or if such policy is a renewal policy, the insurer shall not exercise its option to cancel such policy except for one or more of the following reasons:

a. Nonpayment of premium;

b. The policy was obtained through a material misrepresentation;

c. Any insured violated any of the terms and conditions of the policy;

d. The named insured failed to disclose fully his motor vehicle crashes and moving traffic violations for the preceding 36 months if called for in the application;

e. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim;

f. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such policy:

1. has, within the 12 months prior to the notice of cancellation, had his driver's license under suspension or revocation;

2. is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely;

3. has a crash record, conviction record (criminal or traffic), physical, or mental condition which is such that his operation of an automobile might endanger the public safety;

4. has, within the 36 months prior to the notice of cancellation, been addicted to the use of narcotics or other drugs; or

5. has been convicted, or had pretrial release revoked, during the 36 months immediately preceding the notice of cancellation, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in, or about, an automobile or while having custody of an automobile, leaving the scene of a crash without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operator's or chauffeur's license or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of cancellation, of any law, ordinance, or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses;

g. The insured automobile is:

1. so mechanically defective that its operation might endanger public safety;

2. used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation);

3. used in the business of transportation of flammables or explosives;

4. an authorized emergency vehicle;

5. changed in shape or condition during the policy period so as to increase the risk substantially; or

6. subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.

Nothing in this Section shall apply to nonrenewal.

(Source: P.A. 101-652, eff. 1-1-23; 102-982, eff. 7-1-23; 102-1104, eff. 1-1-23.)

(215 ILCS 5/143.19.1) (from Ch. 73, par. 755.19.1)

Sec. 143.19.1. Limits on exercise of right of nonrenewal. After a policy of automobile insurance, as defined in Section 143.13, has been effective or renewed for 5 or more years, the company shall not exercise its right of non-renewal unless:

a. The policy was obtained through a material misrepresentation; or

b. Any insured violated any of the terms and conditions of the policy; or

c. The named insured failed to disclose fully his motor vehicle crashes and moving traffic violations for the preceding 36 months, if such information is called for in the application; or

d. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim; or

e. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such a policy:

1. Has, within the 12 months prior to the notice of non-renewal had his drivers license under suspension or revocation; or

2. Is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely; or

3. Has a crash record, conviction record (criminal or traffic), or a physical or mental condition which is such that his operation of an automobile might endanger the public safety; or

4. Has, within the 36 months prior to the notice of non-renewal, been addicted to the use of narcotics or other drugs; or

5. Has been convicted or pretrial release has been revoked, during the 36 months immediately preceding the notice of non-renewal, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in or about an automobile or while having custody of an automobile, leaving the scene of a crash without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operators or chauffeurs license, or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of non-renewal, of any law, ordinance or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses; or

f. The insured automobile is:

1. So mechanically defective that its operation might endanger public safety; or

2. Used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation); or

3. Used in the business of transportation of flammables or explosives; or

4. An authorized emergency vehicle; or

5. Changed in shape or condition during the policy period so as to increase the risk substantially; or

6. Subject to an inspection law and it has not been inspected or, if inspected, has failed to qualify; or

g. The notice of the intention not to renew is mailed to the insured at least 60 days before the date of nonrenewal as provided in Section 143.17.

(Source: P.A. 101-652, eff. 1-1-23; 102-982, eff. 7-1-23.)

(215 ILCS 5/143.19.2)

Sec. 143.19.2. Volunteer driver protection.

(a) For the purpose of this Section, "volunteer driver" means a person who transports by vehicle individuals or goods without compensation above reimbursement for expenses, where the driving services are performed for a nationally affiliated charitable nonprofit organization operating in Area Agencies on Aging areas number 3 or 12, as designated by the Department on Aging, that allows older individuals to transfer their automobiles to the organization in exchange for personal transportation services.

(b) An insurer may not refuse to issue vehicle insurance to a person solely because the applicant is a volunteer driver. An insurer may not impose a surcharge or otherwise increase the rate for a vehicle policy solely on the basis that the named insured or any member of the insured's household or a person who customarily operates the insured's vehicle is a volunteer driver. This Section shall not prohibit an insurer from taking any actions upon factors other than the volunteer status of the insured driver.

(Source: P.A. 97-285, eff. 8-9-11.)

(215 ILCS 5/143.19.3)

Sec. 143.19.3. Prohibition of rate increase for persons involved in emergency use of vehicles.

(a) No insurer authorized to transact or transacting business in this State, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this State, that sells a personal policy of automobile insurance in this State shall increase the policy premium, cancel the policy, or refuse to renew the policy solely because the insured or any other person who customarily operates an automobile covered by the policy has been involved in a crash while operating an automobile in response to an emergency when the insured was responding to a call to duty as a volunteer EMS provider, as defined in Section 1-220 of the Illinois Vehicle Code.

(b) The provisions of subsection (a) also apply to all personal umbrella policies.

(Source: P.A. 102-982, eff. 7-1-23.)

(215 ILCS 5/143.19a) (from Ch. 73, par. 755.19a)

Sec. 143.19a. No policy of insurance as defined in subsection a. of Section 143.13 of this Act may be cancelled where the sole basis for such cancellation is the payment by the insurance company of a claim or claims against such policy.

(Source: P.A. 80-1127.)

(215 ILCS 5/143.19b) (from Ch. 73, par. 755.19b)

Sec. 143.19b. No policy of insurance as defined in subsection (a) of Section 143.13 of this Code may be nonrenewed where the sole basis for nonrenewal was the reporting of a claim or claims against such policy and such claim or claims were closed without payment.

(Source: P.A. 86-437.)

(215 ILCS 5/143.20) (from Ch. 73, par. 755.20)

Sec. 143.20. Notice to Insured as to Eligibility of Illinois Automobile Insurance Plan.

When a policy of automobile insurance is cancelled other than for nonpayment of premium or in the event of the renewal of a policy of automobile insurance to which Section 143.17 applies, the company shall notify the named insured of his possible eligibility for insurance through the Illinois Automobile Insurance Plan. Such notice shall accompany or be included in the notice of cancellation or in the notice of intent not to renew.

(Source: P.A. 80-1136.)

(215 ILCS 5/143.20a) (from Ch. 73, par. 755.20a)

Sec. 143.20a. Cancellation of Fire and Marine Policies. (1) Policies covering property, except policies described in subsection (b) of Section 143.13, of this Code, issued for the kinds of business enumerated in Class 3 of Section 4 of this Code may be cancelled 10 days following receipt of written notice by the named insureds if the insured property is found to consist of one or more of the following:

(a) Buildings to which, following a fire loss, permanent repairs have not commenced within 60 days after satisfactory adjustment of loss, unless such delay is a direct result of a labor dispute or weather conditions.

(b) Buildings which have been unoccupied 60 consecutive days, except buildings which have a seasonal occupancy and buildings which are undergoing construction, repair or reconstruction and are properly secured against unauthorized entry.

(c) Buildings on which, because of their physical condition, there is an outstanding order to vacate, an outstanding demolition order, or which have been declared unsafe in accordance with applicable law.

(d) Buildings on which heat, water, sewer service or public lighting have not been connected for 30 consecutive days or more.

(2) All notices of cancellation under this Section shall be sent by certified mail and regular mail to the address of record of the named insureds.

(3) All cancellations made pursuant to this Section shall be on a pro rata basis.

(Source: P.A. 103-426, eff. 8-4-23.)

(215 ILCS 5/143.21) (from Ch. 73, par. 755.21)

Sec. 143.21. Cancellation of Fire and Extended Coverage Policy - Grounds. After a policy of fire and extended coverage insurance, as defined in paragraph (b) of Section 143.13, has been effective for 60 days, or if such policy is a renewal policy, the company shall not exercise its right to cancel except for one or more of the following reasons:

a. For nonpayment of premium;

b. When a policy was obtained by misrepresentation or fraud; or

c. For any act which measurably increases the risk originally accepted.

(Source: P.A. 86-437.)

(215 ILCS 5/143.21.1) (from Ch. 73, par. 755.21.1)

Sec. 143.21.1. After a policy of fire and extended coverage, as defined in Section 143.13, has been effective or renewed for 5 or more years, the company shall not exercise its right of non-renewal unless:

1. The policy was obtained by misrepresentation or fraud; or

2. The risk originally accepted has measurably increased; or

3. The insured has received 60 days notice of the intention of the company not to renew as provided in Section 143.17.

(Source: P.A. 80-1126.)

(215 ILCS 5/143.21a) (from Ch. 73, par. 755.21a)

Sec. 143.21a. Nonrenewal of Fire and Extended Coverage Policy - Grounds. A policy of fire and extended coverage insurance, as defined in subsection (b) of Section 143.13, may not be nonrenewed for any of the following reasons:

(a) age of property,

(b) location of property,

(c) age, sex, race, color, ancestry, marital status, or occupation of occupants.

(Source: P.A. 91-357, eff. 7-29-99.)

(215 ILCS 5/143.21b) (from Ch. 73, par. 755.21b)

Sec. 143.21b. No policy of insurance as defined in subsection b. of Section 143.13 of this Act may be cancelled where the sole basis for such cancellation is the payment by the insurance company of a claim or claims against such policy.

(Source: P.A. 80-1364.)

(215 ILCS 5/143.21c) (from Ch. 73, par. 755.21c)

Sec. 143.21c. Earthquake insurance; notice. In response to all applications for homeowners insurance, pursuant to subsection (b) of Section 143.13 of this Act, received by the insurance company for coverage on property located in the New Madrid Seismic Zone, as defined by the United States Geological Survey in Illinois, susceptible to Modified Mercalli intensity VII or greater damage, information shall be provided by the insurance company to the applicant regarding the availability of insurance for loss caused by earthquake.

(Source: P.A. 86-1197; 87-322.)

(215 ILCS 5/143.21d)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 143.21d. Sewer backup and sump pump overflow coverage; notice.

(a) In response to all applications for homeowners insurance, as defined in paragraph (2) of Section 523, received by an insurance company, the insurance company shall provide the applicant information regarding the availability of coverage for loss caused by a sewer backup or overflow from a sump pump, including the coverage limits and costs thereof.

(b) At least 30 days prior to each renewal of any policy of homeowners insurance, as defined in paragraph (2) of Section 523, the insurance company shall provide the insured with information regarding the insured's existing coverage and available coverage for loss caused by a sewer backup or overflow from a sump pump, including the coverage limits and costs thereof.

(Source: P.A. 103-858, eff. 1-1-25.)

(215 ILCS 5/143.22) (from Ch. 73, par. 755.22)

Sec. 143.22. Notice to Insured as to Eligibility of Illinois Fair Plan Association. When a policy containing fire and extended coverage insurance is cancelled or nonrenewed other than for nonpayment of premium or evidence of incendiarism and if the location of the insured property is within the State of Illinois the company shall notify the named insured of his eligibility for the FAIR Plan and shall explain the procedure to make application to the FAIR Plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew.

(Source: P.A. 86-437.)

(215 ILCS 5/143.23) (from Ch. 73, par. 755.23)

Sec. 143.23. Cancellation and Nonrenewal Policies - Hearing. A named insured who wishes to appeal the reasons for cancellation or nonrenewal pursuant to Sections 143.16a and 143.19 through 143.24, shall at least 20 days prior to the effective date of cancellation or nonrenewal, mail or deliver to the Director of Insurance a written request for a hearing which shall clearly state the basis for the appeal. This Section does not apply to cancellation in the case of nonpayment of premium. The notice of cancellation or nonrenewal to which this Section applies shall advise the named insured of his right to appeal and the procedure to follow for such appeal.

Within 10 days after receipt of request for a hearing and upon 10 days notice to the parties, the Director shall call a hearing. Within 20 days of conclusion of the hearing, the Director shall issue his written findings to the parties. The policy will remain in force until such time as the Director has given his findings. If the Director finds for the named insured, he shall order the insurer to rescind its notice of cancellation, or in the case of a nonrenewal order the notice of nonrenewal withdrawn. If the Director finds for the Company he shall order that the cancellation or nonrenewal be effective at least 30 days from the date of his order. The company is entitled to a premium for any extension of coverage and such extension may be contingent upon the payment of the premium.

Costs of the hearing may be assessed against the losing party but shall not exceed $100.

(Source: P.A. 86-437; 87-757.)

(215 ILCS 5/143.23a) (from Ch. 73, par. 755.23a)

Sec. 143.23a. When any person has filed a complaint with the Director alleging cancellation, non-renewal or refusal to issue a fire and extended coverage policy, as defined in Section 143.13 of this Code, by any insurer, such person, upon written request to the insurer, to which the insurer shall respond within 21 days, shall have access to the complete file of such insurer pertaining to such person's application or policy. There shall be no liability on the part of, and no cause of action shall rise against, any insurer or authorized representative, or its agents or employees, or the director or his authorized representative for any statement made by them or any information contained in the files revealed in compliance with the provisions of this Section.

(Source: P.A. 80-1374.)

(215 ILCS 5/143.24) (from Ch. 73, par. 755.24)

Sec. 143.24. Limited Nonrenewal of Automobile Insurance Policy. A policy of automobile insurance, as defined in subsection (a) of Section 143.13, may not be nonrenewed for any of the following reasons:

a. Age;

b. Sex;

c. Race;

d. Color;

e. Creed;

f. Ancestry;

g. Occupation;

h. Marital Status;

i. Employer of the insured;

j. Physical disability as defined in Section 143.24a of this Act.

(Source: P.A. 99-143, eff. 7-27-15.)

(215 ILCS 5/143.24a) (from Ch. 73, par. 755.24a)

Sec. 143.24a. (a) No insurer, licensed to issue a policy of automobile insurance, as defined in subsection (a) of Section 143.13, shall fail or refuse to accept an application from a person with a physical disability for such insurance, refuse to issue such insurance to an applicant with a physical disability therefor solely because of a physical disability, or issue or cancel such insurance under conditions less favorable to persons with physical disabilities than persons without physical disabilities; nor shall a physical disability itself constitute a condition or risk for which a higher premium may be required of a person with a physical disability for such insurance.

(b) As used in this Section, "physical disability" refers only to an impairment of physical ability because of amputation or loss of function which impairment has been compensated for, when necessary, by vehicle equipment adaptation or modification; or an impairment of hearing which impairment has been compensated for, when necessary, either by sensory equipment adaptation or modification, or an impairment of speech; provided, that the insurer may require an applicant with a physical disability for such insurance on the renewal of such insurance to furnish proof that he or she has qualified for a new or renewed drivers license since the occurrence of the disabling condition.

(Source: P.A. 99-143, eff. 7-27-15.)

(215 ILCS 5/143.24b) (from Ch. 73, par. 755.24b)

Sec. 143.24b. Any insurer insuring any person or entity against damages arising out of a vehicular crash shall disclose the dollar amount of liability coverage under the insured's personal private passenger automobile liability insurance policy upon receipt of the following: (a) a certified letter from a claimant or any attorney purporting to represent any claimant which requests such disclosure and (b) a brief description of the nature and extent of the injuries, accompanied by a statement of the amount of medical bills incurred to date and copies of medical records. The disclosure shall be confidential and available only to the claimant, his attorney and personnel in the office of the attorney entitled to access to the claimant's files. The insurer shall forward the information to the party requesting it by certified mail, return receipt requested, within 30 days of receipt of the request.

(Source: P.A. 102-982, eff. 7-1-23.)

(215 ILCS 5/143.24c)

Sec. 143.24c. Hate crimes; coverage refusal.

(a) This Section applies to policies of insurance if the insured or proposed insured is (1) an individual, (2) a religious organization described in clause (i) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, (3) an educational organization described in clause (ii) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, or (4) any other nonprofit organization described in clause (vi) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.

(b) An insurer issuing policies subject to this Section may not cancel, refuse to issue, or refuse to renew the policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

(c) As it relates to this Section, if determined by a law enforcement agency, a "hate crime" may include any of the following:

(1) By force or threat of force, willfully injuring, intimidating, interfering with, oppressing, or threatening any other person in the free exercise or enjoyment of any right or privilege secured to him or her by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person's race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics. This offense, however, does not include speech alone, except upon a showing that the speech itself threatened violence against a specific person or group of persons and that the defendant had the apparent ability to carry out the threat.

(2) Knowingly defacing, damaging, or destroying the real or personal property of any other person for the purpose of intimidating or interfering with the free exercise or enjoyment of any right or privilege secured to the other person by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person's race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics.

(d) Nothing in this Section prevents an insurer subject to this Section from taking any of the actions specified in subsection (b) on the basis of criteria not otherwise made invalid by this Section or any other law or rule.

(Source: P.A. 92-669, eff. 1-1-03.)

(215 ILCS 5/143.24d)

Sec. 143.24d. (Repealed).

(Source: P.A. 98-864, eff. 1-1-15. Repealed by P.A. 100-439, eff. 8-25-17.)

(215 ILCS 5/143.25) (from Ch. 73, par. 755.25)

Sec. 143.25. The Director of insurance may order any of the following if it is determined to be in the public interest:

(a) Some or all companies issuing policies of insurance as defined in subsections (a) and (b) of Section 143.13 annually disclose by postal zip code area the number of policies applied for, the number of policies issued including renewals, the number of policies cancelled or nonrenewed for some or all areas of the State, and loss data.

(b) The Illinois FAIR Plan created by Article XXXIII of the Code annually disclose by postal zip code area the number of policies it has written including renewals and cancellations for some or all areas of the State.

(c) The Illinois FAIR Plan created by Article XXXIII annually disclose by classification the earned premiums and losses of the Plan.

(Source: P.A. 81-217.)

(215 ILCS 5/143.25a) (from Ch. 73, par. 755.25a)

Sec. 143.25a. Prior to the first renewal of any policy of automobile insurance as defined in subsection (a) of Section 143.13 of this Code, an insurance company shall notify an individual planning to purchase such renewal policy of the availability of higher deductibles for collision and comprehensive coverage and that a premium savings could result if the higher deductibles were purchased.

(Source: P.A. 86-783.)

(215 ILCS 5/143.26) (from Ch. 73, par. 755.26)

Sec. 143.26. No company issuing policies of automobile insurance, as defined in Section 143.13 of this Code, in this State, and no officer, director, agent, clerk, employee or broker of such company shall cancel or refuse to issue or renew a policy of automobile insurance to any applicant for such insurance solely on the grounds that an agent or broker for such company is not located in geographical proximity to the residence of the applicant.

(Source: P.A. 80-1369.)

(215 ILCS 5/143.26a) (from Ch. 73, par. 755.26a)

Sec. 143.26a. Automobile insurance sales requirements.

(a) Every company authorized to issue policies of automobile insurance as defined in Section 143.13 must, upon request, provide the names and addresses of its authorized producers reasonably determined to be located nearest to the residence of the person making the request.

(b) No company or authorized licensed producer may refuse to accept an application for automobile insurance from any applicant solely on the grounds that the applicant is eligible for placement only under the Illinois Automobile Insurance Plan.

(Source: P.A. 86-1408.)

(215 ILCS 5/143.27) (from Ch. 73, par. 755.27)

Sec. 143.27. No insurance company may give to any named insured any notice of cancellation or nonrenewal of a policy of fire and extended coverage insurance, as defined in subsection (b) of Section 143.13, covering property which is capable of being rehabilitated, without allowing the named insured a reasonable period of time in which to repair defects in the insured property or relevant portion thereof, to an extent reasonably sufficient to facilitate continued coverage thereon. The time reasonably allowable therefor (which in no event shall exceed ninety days) and the degree of sufficiency of such rehabilitative efforts which insurance companies shall accept, may be determined by a certificate from a licensed contractor or architect and such rehabilitative efforts shall be in compliance with local municipal building codes. The notice of need for repair shall be from the insurance company, which may be sent to the insured at any time during the policy term, and which notice shall commence the time period established under this Section.

(Source: P.A. 81-857.)

(215 ILCS 5/143.28) (from Ch. 73, par. 755.28)

Sec. 143.28. The rates and premium charges for all policies of automobile insurance, as described in sub-section (a) of Section 143.13 of this Code, shall include appropriate reductions for insured automobiles which are equipped with anti-theft mechanisms or devices approved by the Director. To implement the provisions of this Section, the Director shall promulgate rules and regulations.

(Source: P.A. 91-798, eff. 7-9-00; 92-125, eff. 7-20-01.)

(215 ILCS 5/143.29) (from Ch. 73, par. 755.29)

Sec. 143.29. (a) The rates and premium charges for every policy of automobile liability insurance shall include appropriate reductions as determined by the insurer for any insured over age 55 upon successful completion of the National Safety Council's Defensive Driving Course or a motor vehicle crash prevention course, including an eLearning course, that is found by the Secretary of State to meet or exceed the standards of the National Safety Council's Defensive Driving Course's 8 hour classroom safety instruction program.

(b) The premium reduction shall remain in effect for the qualifying insured for a period of 3 years from the date of successful completion of the crash prevention course, except that the insurer may elect to apply the premium reduction beginning either with the last effective date of the policy or the next renewal date of the policy if the reduction will result in a savings as though applied over a full 3 year period. An insured who has completed the course of instruction prior to July 1, 1982 shall receive the insurance premium reduction for only the period remaining within the 3 years from course completion. The period of premium reduction for an insured who has repeated the crash prevention course shall be based upon the last such course the insured has successfully completed.

(c) Any crash prevention course approved by the Secretary of State under this Section shall be taught by an instructor approved by the Secretary of State, shall consist of at least 8 hours of classroom or eLearning equivalent instruction and shall provide for a certificate of completion. Records of certification of course completion shall be maintained in a manner acceptable to the Secretary of State.

(d) Any person claiming eligibility for a rate or premium reduction shall be responsible for providing to his insurance company the information necessary to determine eligibility.

(e) This Section shall not apply to:

(1) any motor vehicle which is a part of a fleet or is used for commercial purposes unless there is a regularly assigned principal operator.

(2) any motor vehicle subject to a higher premium rate because of the insured's previous motor vehicle claim experience or to any motor vehicle whose principal operator has been convicted of violating any of the motor vehicle laws of this State, until that operator shall have maintained a driving record free of crashes and moving violations for a continuous one year period, in which case such driver shall be eligible for a reduction the remaining 2 years of the 3 year period.

(3) any motor vehicle whose principal operator has had his drivers license revoked or suspended for any reason by the Secretary of State within the previous 36 months.

(4) any policy of group automobile insurance under which premiums are broadly averaged for the group rather than determined individually.

(Source: P.A. 102-397, eff. 1-1-22; 102-982, eff. 7-1-23.)

(215 ILCS 5/143.30) (from Ch. 73, par. 755.30)

Sec. 143.30. Selection of glass replacement or glass repair companies.

With reference to every policy of automobile insurance as defined in Section 143.13(a):

(a) An automobile insurer authorized to do business in this State shall not unreasonably restrict access to automobile glass repair or replacement facilities by its policyholders.

(b) An automobile insurer may enter into an agreement or agreements with automobile glass repair or replacement facilities for the purpose of containing the cost of automobile glass repair or replacement claims.

(c) An insurer, or a producer acting on its behalf, shall disclose to an insured, either orally or in writing, that the insured may freely choose an automobile glass repair or replacement facility.

(d) No such insurance company, producer, or adjuster may engage in any act or practice of intimidation, coercion, or threat against any insured person to use a particular facility to provide such services.

(e) If a policyholder selects an automobile glass repair or replacement facility, the insurer shall provide payment to the facility based on a competitive price, as established by that insurer through competitive bids or market surveys to determine a fair and reasonable market price for similar services. Reasonable deviation from this market price is allowed based on the facts in each case.

(Source: P.A. 87-1110.)

(215 ILCS 5/143.31)

(Text of Section before amendment by P.A. 103-656)

Sec. 143.31. Uniform medical claim and billing forms.

(a) The Director shall prescribe by rule, after consultation with providers of health care or treatment, insurers, hospital, medical, and dental service corporations, and other prepayment organizations, insurance claim and billing forms that the Director determines will provide for uniformity and simplicity in insurance claims handling. The claim forms shall include, but need not be limited to, information regarding the medical diagnosis, treatment, and prognosis of the patient, together with the details of charges incident to the providing of care, treatment, or services, sufficient for the purpose of meeting the proof requirements of an insurance policy or a hospital, medical, or dental service contract.

(b) An insurer or a provider of health care treatment may not refuse to accept a claim or bill submitted on duly promulgated uniform claim and billing forms. An insurer, however, may accept claims and bills submitted on any other form.

(c) Accident and health insurer explanation of benefits paid statements or claims summary statements sent to an insured by the accident and health insurer shall be in a format and written in a manner that promotes understanding by the insured by setting forth all of the following:

(1) The total dollar amount submitted to the insurer for payment.

(2) Any reduction in the amount paid due to the application of any co-payment or deductible, along with an explanation of the amount of the co-payment or deductible applied under the insured's policy.

(3) Any reduction in the amount paid due to the application of any other policy limitation or exclusion set forth in the insured's policy, along with an explanation thereof.

(4) The total dollar amount paid.

(5) The total dollar amount remaining unpaid.

(d) The Director may issue an order directing an accident and health insurer to comply with subsection (c).

(e) An accident and health insurer does not violate subsection (c) by using a document that the accident and health insurer is required to use by the federal government or the State.

(f) The adoption of uniform claim forms and uniform billing forms by the Director under this Section does not preclude an insurer, hospital, medical, or dental service corporation, or other prepayment organization from obtaining any necessary additional information regarding a claim from the claimant, provider of health care or treatment, or certifier of coverage, as may be required.

(g) On and after January 1, 1996 when billing insurers or otherwise filing insurance claims with insurers subject to this Section, providers of health care or treatment, medical services, dental services, pharmaceutical services, or medical equipment must use the uniform claim and billing forms adopted by the Director under this Section.

(Source: P.A. 91-357, eff. 7-29-99.)

(Text of Section after amendment by P.A. 103-656)

Sec. 143.31. Uniform medical claim and billing forms.

(a) The Director shall prescribe by rule, after consultation with providers of health care or treatment, insurers, hospital, medical, and dental service corporations, and other prepayment organizations, insurance claim and billing forms that the Director determines will provide for uniformity and simplicity in insurance claims handling. The claim forms shall include, but need not be limited to, information regarding the medical diagnosis, treatment, and prognosis of the patient, together with the details of charges incident to the providing of care, treatment, or services, sufficient for the purpose of meeting the proof requirements of an insurance policy or a hospital, medical, or dental service contract.

(b) An insurer or a provider of health care treatment may not refuse to accept a claim or bill submitted on duly promulgated uniform claim and billing forms. An insurer, however, may accept claims and bills submitted on any other form.

(c) After receipt and adjudication or readjudication of any claim or bill with all required documentation from an insured or provider, or a notification under 42 U.S.C. 300gg-136, an accident and health insurer shall send explanation of benefits paid statements or claims summary statements to an insured in a format and written in a manner that promotes understanding by the insured by setting forth all of the following:

(1) The total dollar amount submitted to the insurer for payment.

(2) Any reduction in the amount paid due to the application of any co-payment, coinsurance, or deductible, along with an explanation of the amount of the co-payment, coinsurance, or deductible applied under the insured's policy.

(3) Any reduction in the amount paid due to the application of any other policy limitation, penalty, or exclusion set forth in the insured's policy, along with an explanation thereof.

(4) The total dollar amount paid.

(5) The total dollar amount remaining unpaid.

(6) If applicable under 42 U.S.C. 300gg-111 or 42 U.S.C. 300gg-115, other information required for any explanation of benefits described in either of those Sections.

(d) The Director may issue an order directing an accident and health insurer to comply with subsection (c).

(e) An accident and health insurer does not violate subsection (c) by using a document that the accident and health insurer is required to use by the federal government or the State.

(f) The adoption of uniform claim forms and uniform billing forms by the Director under this Section does not preclude an insurer, hospital, medical, or dental service corporation, or other prepayment organization from obtaining any necessary additional information regarding a claim from the claimant, provider of health care or treatment, or certifier of coverage, as may be required.

(g) On and after January 1, 1996 when billing insurers or otherwise filing insurance claims with insurers subject to this Section, providers of health care or treatment, medical services, dental services, pharmaceutical services, or medical equipment must use the uniform claim and billing forms adopted by the Director under this Section.

(Source: P.A. 103-656, eff. 1-1-25.)

(215 ILCS 5/143.32)

Sec. 143.32. Replacement of child restraint systems. A policy of automobile insurance, as defined in Section 143.13, that is amended, delivered, issued, or renewed after the effective date of this amendatory Act of the 91st General Assembly must include coverage for replacement of a child restraint system that was in use by a child during a crash to which coverage is applicable. As used in this Section, "child restraint system" has the meaning given that term in the Child Passenger Restraint Act.

(Source: P.A. 102-982, eff. 7-1-23.)

(215 ILCS 5/143.33)

Sec. 143.33. Electronic posting of policies.

(a) Policies and endorsements used by a company for transacting insurance as classified in Class 2 and Class 3 of Section 4 of this Code that do not contain personally identifiable information may be mailed, issued, delivered, or posted on the insurer's Internet website. If the insurer elects to post the insurance policies and endorsements on its Internet website in lieu of mailing, issuing, or delivering them to the insured, then the insurer must comply with all of the following conditions:

(1) The policy and endorsements must be easily accessible to the insured and the producer of record and remain that way for as long as the policy is in force;

(2) After the expiration of the policy, the insurer must archive its expired policies and endorsements for the longer of 5 years or other period required by law, and make them available upon request;

(3) The policies and endorsements must be posted in a manner that enables the insured and the producer of record to print and save the policy and endorsements using programs or applications that are widely available on the Internet and free to use;

(4) At the time of issuance of the original policy and any renewals of that policy, the insurer provides to the insured in the manner it customarily provides declarations pages to the insured, and to the producer of record, the following information clearly displayed in or simultaneously with a declarations page:

(A) a description of the exact policy and endorsement forms purchased by the insured;

(B) a method by which the insured may obtain from the insurer, upon request and without charge, a paper copy of their policy and endorsements; and

(C) the Internet address where their policy and endorsements are posted.

(5) The insurer provides to the insured in the manner it customarily provides declarations pages to the insured, and to the producer of record, notice of any changes to the forms or endorsements; the insured's right to obtain from the insurer, upon request and without charge, a paper copy of these forms or endorsements; and the Internet address where these forms or endorsements are posted.

(b) Nothing in this Section shall prevent an insurer that posts its policies and endorsements electronically in accordance with this Section from offering a discount to an insured who elects to receive notices and documents electronically in accordance with the provisions of the federal Electronic Signatures in Global and National Commerce Act.

(c) Nothing in this Section affects the timing or content of any disclosure or other document required to be provided or made available to any insured under any statute, rule, regulation, or rule of law.

(Source: P.A. 98-521, eff. 8-23-13.)

(215 ILCS 5/143.34)

Sec. 143.34. Electronic notices and documents.

(a) As used in this Section:

"Delivered by electronic means" includes:

(1) delivery to an electronic mail address at which a party has consented to receive notices or documents; or

(2) posting on an electronic network or site accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting, which shall be provided by electronic mail to the address at which the party has consented to receive notice or by any other delivery method that has been consented to by the party.

"Party" means any recipient of any notice or document required as part of an insurance transaction, including, but not limited to, an applicant, an insured, a policyholder, or an annuity contract holder.

(b) Subject to the requirements of this Section, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means so long as it meets the requirements of the Uniform Electronic Transactions Act.

(c) Delivery of a notice or document in accordance with this Section shall be considered equivalent to any delivery method required under applicable law, including delivery by first class mail; first class mail, postage prepaid; certified mail; certificate of mail; or certificate of mailing.

(d) A notice or document may be delivered by electronic means by an insurer to a party under this Section if:

(1) the party has affirmatively consented to that method of delivery and has not withdrawn the consent;

(2) the party, before giving consent, is provided with a clear and conspicuous statement informing the party of:

(A) the right of the party to withdraw consent to have a notice or document delivered by electronic means, at any time, and any conditions or consequences imposed in the event consent is withdrawn;

(B) the types of notices and documents to which the party's consent would apply;

(C) the right of a party to have a notice or document delivered in paper form; and

(D) the procedures a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update the party's electronic mail address;

(3) the party:

(A) before giving consent, is provided with a statement of the hardware and software requirements for access to, and retention of, a notice or document delivered by electronic means; and

(B) consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent; and

(4) after consent of the party is given, the insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document to which the consent applies:

(A) provides the party with a statement that describes:

(i) the revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means; and

(ii) the right of the party to withdraw consent without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and

(B) complies with paragraph (2) of this subsection (d).

(e) Delivery of a notice or document in accordance with this Section does not affect requirements related to content or timing of any notice or document required under applicable law.

(f) If a provision of this Section or applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt.

(g) The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subparagraph (B) of paragraph (3) of subsection (d) of this Section.

(h) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective.

A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer.

Failure by an insurer to comply with paragraph (4) of subsection (d) of this Section and subsection (j) of this Section may be treated, at the election of the party, as a withdrawal of consent for purposes of this Section.

(i) This Section does not apply to a notice or document delivered by an insurer in an electronic form before the effective date of this amendatory Act of the 99th General Assembly to a party who, before that date, has consented to receive notice or document in an electronic form otherwise allowed by law.

(j) If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before the effective date of this amendatory Act of the 99th General Assembly and, pursuant to this Section, an insurer intends to deliver additional notices or documents to the party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall:

(1) provide the party with a statement that describes:

(A) the notices or documents that shall be delivered by electronic means under this Section that were not previously delivered electronically; and

(B) the party's right to withdraw consent to have notices or documents delivered by electronic means without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and

(2) comply with paragraph (2) of subsection (d) of this Section.

(k) An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if:

(1) the insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party; or

(2) the insurer becomes aware that the electronic mail address provided by the party is no longer valid.

(l) A producer shall not be subject to civil liability for any harm or injury that occurs as a result of a party's election to receive any notice or document by electronic means or by an insurer's failure to deliver a notice or document by electronic means unless the harm or injury is caused by the willful and wanton misconduct of the producer.

(m) This Section shall not be construed to modify, limit, or supersede the provisions of the federal Electronic Signatures in Global and National Commerce Act, as amended.

(n) Nothing in this Section shall prevent an insurer from posting on the insurer's Internet site any standard policy and any endorsements to such a policy that does not contain personally identifiable information, in accordance with Section 143.33 of this Code, in lieu of delivery to a policyholder, insured, or applicant for insurance by any other method.

(Source: P.A. 102-38, eff. 6-25-21.)

(215 ILCS 5/143a)

Sec. 143a. Uninsured and hit-and-run motor vehicle coverage.

(1) No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle that is designed for use on public highways and that is either required to be registered in this State or is principally garaged in this State shall be renewed, delivered, or issued for delivery in this State unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in Section 7-203 of the Illinois Vehicle Code for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. Uninsured motor vehicle coverage does not apply to bodily injury, sickness, disease, or death resulting therefrom, of an insured while occupying a motor vehicle owned by, or furnished or available for the regular use of the insured, a resident spouse or resident relative, if that motor vehicle is not described in the policy under which a claim is made or is not a newly acquired or replacement motor vehicle covered under the terms of the policy. The limits for any coverage for any vehicle under the policy may not be aggregated with the limits for any similar coverage, whether provided by the same insurer or another insurer, applying to other motor vehicles, for purposes of determining the total limit of insurance coverage available for bodily injury or death suffered by a person in any one crash. No policy shall be renewed, delivered, or issued for delivery in this State unless it is provided therein that any dispute with respect to the coverage and the amount of damages shall be submitted for arbitration to the American Arbitration Association and be subject to its rules for the conduct of arbitration hearings as to all matters except medical opinions. As to medical opinions, if the amount of damages being sought is equal to or less than the amount provided for in Section 7-203 of the Illinois Vehicle Code, then the current American Arbitration Association Rules shall apply. If the amount being sought in an American Arbitration Association case exceeds that amount as set forth in Section 7-203 of the Illinois Vehicle Code, then the Rules of Evidence that apply in the circuit court for placing medical opinions into evidence shall govern. Alternatively, disputes with respect to damages and the coverage shall be determined in the following manner: Upon the insured requesting arbitration, each party to the dispute shall select an arbitrator and the 2 arbitrators so named shall select a third arbitrator. If such arbitrators are not selected within 45 days from such request, either party may request that the arbitration be submitted to the American Arbitration Association. Any decision made by the arbitrators shall be binding for the amount of damages not exceeding $75,000 for bodily injury to or death of any one person, $150,000 for bodily injury to or death of 2 or more persons in any one motor vehicle crash, or the corresponding policy limits for bodily injury or death, whichever is less. All 3-person arbitration cases proceeding in accordance with any uninsured motorist coverage conducted in this State in which the claimant is only seeking monetary damages up to the limits set forth in Section 7-203 of the Illinois Vehicle Code shall be subject to the following rules:

(A) If at least 60 days' written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:

(1) bills, records, and reports of hospitals, doctors, dentists, registered nurses, licensed practical nurses, physical therapists, and other healthcare providers;

(2) bills for drugs, medical appliances, and prostheses;

(3) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;

(4) a report of the rate of earnings and time lost from work or lost compensation prepared by an employer;

(5) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;

(6) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.

Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.

(B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness's conclusions, and his or her opinion.

(C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party's expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.

(D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(2) No policy insuring against loss resulting from liability imposed by law for property damage arising out of the ownership, maintenance, or use of a motor vehicle shall be renewed, delivered, or issued for delivery in this State with respect to any private passenger or recreational motor vehicle that is designed for use on public highways and that is either required to be registered in this State or is principally garaged in this State, unless coverage is made available in the amount of the actual cash value of the motor vehicle described in the policy or the corresponding policy limit for uninsured motor vehicle property damage coverage, whichever is less, subject to a maximum $250 deductible, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of property damage to the motor vehicle described in the policy.

There shall be no liability imposed under the uninsured motorist property damage coverage required by this subsection if the owner or operator of the at-fault uninsured motor vehicle or hit-and-run motor vehicle cannot be identified. This subsection shall not apply to any policy which does not provide primary motor vehicle liability insurance for liabilities arising from the maintenance, operation, or use of a specifically insured motor vehicle.

Each insurance company providing motor vehicle property damage liability insurance shall advise applicants of the availability of uninsured motor vehicle property damage coverage, the premium therefor, and provide a brief description of the coverage. That information need be given only once and shall not be required in any subsequent renewal, reinstatement or reissuance, substitute, amended, replacement or supplementary policy. No written rejection shall be required, and the absence of a premium payment for uninsured motor vehicle property damage shall constitute conclusive proof that the applicant or policyholder has elected not to accept uninsured motorist property damage coverage.

An insurance company issuing uninsured motor vehicle property damage coverage may provide that:

(i) Property damage losses recoverable thereunder shall be limited to damages caused by the actual physical contact of an uninsured motor vehicle with the insured motor vehicle.

(ii) There shall be no coverage for loss of use of the insured motor vehicle and no coverage for loss or damage to personal property located in the insured motor vehicle.

(iii) Any claim submitted shall include the name and address of the owner of the at-fault uninsured motor vehicle, or a registration number and description of the vehicle, or any other available information to establish that there is no applicable motor vehicle property damage liability insurance.

Any dispute with respect to the coverage and the amount of damages shall be submitted for arbitration to the American Arbitration Association and be subject to its rules for the conduct of arbitration hearings or for determination in the following manner: Upon the insured requesting arbitration, each party to the dispute shall select an arbitrator and the 2 arbitrators so named shall select a third arbitrator. If such arbitrators are not selected within 45 days from such request, either party may request that the arbitration be submitted to the American Arbitration Association. Any arbitration proceeding under this subsection seeking recovery for property damages shall be subject to the following rules:

(A) If at least 60 days' written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:

(1) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;

(2) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;

(3) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.

Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.

(B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness's conclusions, and his or her opinion.

(C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party's expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.

(D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(3) For the purpose of the coverage, the term "uninsured motor vehicle" includes, subject to the terms and conditions of the coverage, a motor vehicle where on, before, or after the date of the crash the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified in the policy because of the entry by a court of competent jurisdiction of an order of rehabilitation or liquidation by reason of insolvency on or after the date of the crash. An insurer's extension of coverage, as provided in this subsection, shall be applicable to all crashes occurring after July 1, 1967 during a policy period in which its insured's uninsured motor vehicle coverage is in effect. Nothing in this Section may be construed to prevent any insurer from extending coverage under terms and conditions more favorable to its insureds than is required by this Section.

(4) In the event of payment to any person under the coverage required by this Section and subject to the terms and conditions of the coverage, the insurer making the payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of the person against any person or organization legally responsible for the property damage, bodily injury or death for which the payment is made, including the proceeds recoverable from the assets of the insolvent insurer. With respect to payments made by reason of the coverage described in subsection (3), the insurer making such payment shall not be entitled to any right of recovery against the tortfeasor in excess of the proceeds recovered from the assets of the insolvent insurer of the tortfeasor.

(5) This amendatory Act of 1967 (Laws of Illinois 1967, page 875) shall not be construed to terminate or reduce any insurance coverage or any right of any party under this Code in effect before July 1, 1967. Public Act 86-1155 shall not be construed to terminate or reduce any insurance coverage or any right of any party under this Code in effect before its effective date.

(6) Failure of the motorist from whom the claimant is legally entitled to recover damages to file the appropriate forms with the Safety Responsibility Section of the Department of Transportation within 120 days of the date of the crash shall create a rebuttable presumption that the motorist was uninsured at the time of the injurious occurrence.

(7) An insurance carrier may upon good cause require the insured to commence a legal action against the owner or operator of an uninsured motor vehicle before good faith negotiation with the carrier. If the action is commenced at the request of the insurance carrier, the carrier shall pay to the insured, before the action is commenced, all court costs, jury fees and sheriff's fees arising from the action.

The changes made by Public Act 90-451 apply to all policies of insurance amended, delivered, issued, or renewed on and after January 1, 1998 (the effective date of Public Act 90-451).

(8) The changes made by Public Act 98-927 apply to all policies of insurance amended, delivered, issued, or renewed on and after January 1, 2015 (the effective date of Public Act 98-927).

(Source: P.A. 102-775, eff. 5-13-22; 102-982, eff. 7-1-23; 103-154, eff. 6-30-23.)

(215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2)

Sec. 143a-2. (1) Additional uninsured motor vehicle coverage. No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless uninsured motorist coverage as required in Section 143a of this Code is included in an amount equal to the insured's bodily injury liability limits unless specifically rejected by the insured as provided in paragraph (2) of this Section. Each insurance company providing the coverage must provide applicants with a brief description of the coverage and advise them of their right to reject the coverage in excess of the limits set forth in Section 7-203 of the Illinois Vehicle Code. The provisions of this amendatory Act of 1990 apply to policies of insurance applied for after June 30, 1991.

(2) Right of rejection of additional uninsured motorist coverage. Any named insured or applicant may reject additional uninsured motorist coverage in excess of the limits set forth in Section 7-203 of the Illinois Vehicle Code by making a written request for limits of uninsured motorist coverage which are less than bodily injury liability limits or a written rejection of limits in excess of those required by law. This election or rejection shall be binding on all persons insured under the policy. In those cases where the insured has elected to purchase limits of uninsured motorist coverage which are less than bodily injury liability limits or to reject limits in excess of those required by law, the insurer need not provide in any renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued to such insured by the same insurer unless the insured subsequently makes a written request for such coverage.

(3) The original document indicating the applicant's selection of uninsured motorist coverage limits shall constitute sufficient evidence of the applicant's selection of uninsured motorist coverage limits. For purposes of this Section any reproduction of the document by means of photograph, photostat, microfiche, computerized optical imaging process, or other similar process or means of reproduction shall be deemed the equivalent of the original document.

(4) For the purpose of this Code the term "underinsured motor vehicle" means a motor vehicle whose ownership, maintenance or use has resulted in bodily injury or death of the insured, as defined in the policy, and for which the sum of the limits of liability under all bodily injury liability insurance policies or under bonds or other security required to be maintained under Illinois law applicable to the driver or to the person or organization legally responsible for such vehicle and applicable to the vehicle, is less than the limits for underinsured coverage provided the insured as defined in the policy at the time of the crash. The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle.

On or after July 1, 1983, no policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless underinsured motorist coverage is included in such policy in an amount equal to the total amount of uninsured motorist coverage provided in that policy where such uninsured motorist coverage exceeds the limits set forth in Section 7-203 of the Illinois Vehicle Code.

The changes made to this subsection (4) by this amendatory Act of the 93rd General Assembly apply to policies issued or renewed on or after December 1, 2004.

(5) Scope. Nothing herein shall prohibit an insurer from setting forth policy terms and conditions which provide that if the insured has coverage available under this Section under more than one policy or provision of coverage, any recovery or benefits may be equal to, but may not exceed, the higher of the applicable limits of the respective coverage, and the limits of liability under this Section shall not be increased because of multiple motor vehicles covered under the same policy of insurance. Insurers providing liability coverage on an excess or umbrella basis are neither required to provide, nor are they prohibited from offering or making available coverages conforming to this Section on a supplemental basis. Notwithstanding the provisions of this Section, an insurer shall not be prohibited from solely providing a combination of uninsured and underinsured motorist coverages where the limits of liability under each coverage is in the same amount.

(6) Subrogation against underinsured motorists. No insurer shall exercise any right of subrogation under a policy providing additional uninsured motorist coverage against an underinsured motorist where the insurer has been provided with written notice in advance of a settlement between its insured and the underinsured motorist and the insurer fails to advance a payment to the insured, in an amount equal to the tentative settlement, within 30 days following receipt of such notice.

(7) A policy which provides underinsured motor vehicle coverage may include a clause which denies payment until the limits of liability or portion thereof under all bodily injury liability insurance policies applicable to the underinsured motor vehicle and its operators have been partially or fully exhausted by payment of judgment or settlement. A judgment or settlement of the bodily injury claim in an amount less than the limits of liability of the bodily injury coverages applicable to the claim shall not preclude the claimant from making an underinsured motorist claim against the underinsured motorist coverage. Any such provision in a policy of insurance shall be inapplicable if the insured, or the legal representative of the insured, and the insurer providing underinsured motor vehicle coverage agree that the insured has suffered bodily injury or death as the result of the negligent operation, maintenance, or use of an underinsured motor vehicle and, without arbitration, agree also on the amount of damages that the insured is legally entitled to collect. The maximum amount payable pursuant to such an underinsured motor vehicle insurance settlement agreement shall not exceed the amount by which the limits of the underinsured motorist coverage exceed the limits of the bodily injury liability insurance of the owner or operator of the underinsured motor vehicle. Any such agreement shall be final as to the amount due and shall be binding upon both the insured and the underinsured motorist insurer regardless of the amount of any judgment, or any settlement reached between any insured and the person or persons responsible for the crash. No such settlement agreement shall be concluded unless: (i) the insured has complied with all other applicable policy terms and conditions; and (ii) before the conclusion of the settlement agreement, the insured has filed suit against the underinsured motor vehicle owner or operator and has not abandoned the suit, or settled the suit without preserving the rights of the insurer providing underinsured motor vehicle coverage in the manner described in paragraph (6) of this Section.

(Source: P.A. 102-982, eff. 7-1-23.)

(215 ILCS 5/143b) (from Ch. 73, par. 755b)

Sec. 143b. Any insurance carrier whose payment to its insured is reduced by a deductible amount under a policy providing collision coverage is subrogated to its insured's entire collision loss claim including the deductible amount unless the deductible amount has been otherwise recovered by the insured, but if the deductible amount has been otherwise recovered by the insured it shall not be included in the subrogated loss claim and shall be excluded from the amount of loss pleaded. If the deductible amount is included in the subrogated loss claim the insurance carrier shall pay the full pro rata deductible share to its insured out of the net recovery on the subrogated claim. Administrative expenses of the insurance carrier cannot be deducted from the gross recovery, and only incurred expenses of the carrier, such as attorney's fees, collection fees and adjuster's fees, may be deducted therefrom to determine the net recovery. When the insurance carrier is recovering directly from a third party a claim by means of installments, the insured shall receive his full pro rata deductible share as soon as such amount is collected and before any part of such recovery is applied to any other use.

(Source: P.A. 83-588.)

(215 ILCS 5/143c) (from Ch. 73, par. 755c)

Sec. 143c. No insurance policy authorized under Class 1, 2 or 3 of Section 4 of this Code shall be delivered in this State unless the policyholder or certificate holder is provided written notice of:

(1) the address of the complaint department of the insurance company; and

(2) the address of the Public Service Division of the Department of Insurance or its successor.

The Director may, by rule, exempt certain types of insurance policies from the provisions of this Section whenever the application of this Section in such cases would be unwarranted or unduly burdensome in view of any benefit to the public.

(Source: P.A. 80-823.)

(215 ILCS 5/143d) (from Ch. 73, par. 755d)

Sec. 143d. Customer affairs and information department.

(a) Every company licensed to issue policies of insurance as defined in subsections (a) and (b) of Section 143.13 shall establish a customer affairs and information department to respond to policyholder inquiries and complaints. The department shall be staffed by an employee or employees generally knowledgeable in the affairs and operations of the company. The department shall be located in either the home, regional, or branch office of the company and must, during regular business hours, either maintain a toll free telephone number or permit policyholders to call a designated telephone number at the company's expense. The telephone numbers shall be made available to policyholders in accordance with Section 143(c).

(b) The customer affairs and information department shall provide information and services that may reasonably be requested by policyholders who are residents of this State and must respond promptly to complaints made by policyholder. Companies must provide a written response to written inquiries and complaints within 21 days of receipt.

(c) Records of the customer affairs and information department shall be maintained in compliance with Department of Insurance regulations.

(Source: P.A. 86-1407.)

(215 ILCS 5/144) (from Ch. 73, par. 756)

Sec. 144. Limitation of risk.

(1) No company authorized to transact any of the kind of business enumerated in Classes 2 and 3 of Section 4 in this State may expose itself to any loss on any one risk or hazard to an amount exceeding 10% of its admitted assets in excess of its liabilities excluding, in the case of a stock company, its capital stock liability. No portion of any such risk or hazard which has been reinsured in a domestic or an approved foreign or alien company, in accordance with this Code, shall be included in determining the limitation of risk prescribed herein.

(2) Any company transacting the kind of business enumerated in clause (g) of Class 2 of Section 4 may expose itself to a risk or hazard in excess of the amount prescribed in subsection (1) if it is protected in excess of that amount by the following:

(a) The co-suretyship of such a company similarly authorized; or

(b) By deposit with it in pledge or conveyance to it in trust for its protection of property; or

(c) By conveyance or mortgage for its protection; or

(d) In case a suretyship obligation was made on behalf or on account of a fiduciary holding property in a trust capacity, by deposit or other disposition of a portion of the property so held in trust that no future sale, mortgage, pledge or other disposition can be made thereof without the consent of such company except by a judgment or order of a court of competent jurisdiction.

(3) A company designated in subsection (2) may also execute transportation or warehouse bonds for United States Internal Revenue taxes to an amount equal to 50% of its capital and surplus. When the penalty of the suretyship obligation exceeds the amount of a judgment described therein as appealed from and thereby secured, or exceeds the amount of the subject matter in controversy or of the estate in the custody of the fiduciary for the performance of whose duties it is conditioned, the bond may be executed if the actual amount of the judgment or the subject matter in controversy or estate not subject to supervision or control of the surety is not in excess of such limitation. When the penalty of the suretyship obligation executed for the performance of a contract exceeds the contract price, the latter shall be taken as the basis for estimating the limit of risk within the meaning of this Section.

(4) Whenever the ratio of the annual premium volume in proportion to the policyholder surplus of any company transacting the kinds of business authorized in Class 2 and Class 3 of Section 4 when reviewed in conjunction with the kinds and nature of risks insured, the financial condition of the company and its ownership including but not limited to the liquidity of assets, relationship of surplus to liabilities and adequacy of outstanding loss reserves, creates a condition such that the further assumption of risks might be hazardous to policyholders, creditors or the general public, then the Director may order such company to take one or more of the following steps:

(a) to reduce the loss exposure by reinsurance;

(b) to reduce the volume of new business being accepted;

(c) to suspend the writing of new business for a period not to exceed 3 months;

(d) to increase and maintain the company's surplus by a contribution to surplus which will raise the surplus for such a period of time and by such an amount as the Director may deem necessary and essential; or

(e) to reduce general or acquisition expenses by specified methods.

(f) (Blank).

(5) The provisions of this Section do not apply to domestic, foreign, and alien Lloyds.

The company may, within 10 days after receipt of an Order of the Director under this Section, request that the Director hold a hearing to determine whether the Order of the Director should be modified in any way. A request for a hearing by a company under this Section stays any Order of the Director entered under this Section until such time as the Director has entered an Order pursuant to the hearing.

(Source: P.A. 89-97, eff. 7-7-95; 90-794, eff. 8-14-98.)

(215 ILCS 5/144.1) (from Ch. 73, par. 756.1)

Sec. 144.1. Insurance Sales by Insolvent or Impaired Companies Prohibited.) (1) Unless allowed by the Director, no foreign or alien company officer, director, trustee, agent, or employee of such company may renew, issue or deliver or cause to be renewed, issued or delivered, any policy, contract or certificate of insurance in this State, nor may any domestic company, officer, director, trustee, agent or employee of such company renew, issue or deliver or cause to be renewed, issued or delivered, any policy, contract or certificate of insurance, for which a premium is charged or collected, when the company writing such insurance is insolvent or impaired and the fact of such insolvency or impairment is known to the company officer, director, trustee, agent or employee of such company. A company is impaired when its assets are less than its capital, minimum required surplus and all liabilities.

However, the existence of an impairment does not prevent the issuance or renewal of a policy when an insured or owner exercises an option granted to him under an existing policy to obtain new, renewed or converted insurance coverage.

(2) Any company officer, director, trustee, agent, or employee of such company violating this Section shall be guilty of a Class A misdemeanor.

(Source: P.A. 82-498.)

(215 ILCS 5/144.2) (from Ch. 73, par. 756.2)

Sec. 144.2. Notification of insurance business.

(a) Upon notice by the Director, a company having direct premium income must file with the Director supplemental information regarding its insurance business. The Director shall by rule establish standards to determine the companies to be given notice.

(b) The notice prescribed by this Section may require the company to provide information concerning, but not limited to, the following:

(1) adequacy of rates;

(2) marketing methodology and acquisition expenses;

(3) underwriting standards;

(4) recordkeeping and statistical systems;

(5) claim systems and claim reserving systems;

(6) reinsurance; and

(7) the general financial condition of the company.

(Source: P.A. 90-381, eff. 8-14-97.)

(215 ILCS 5/145) (from Ch. 73, par. 757)

Sec. 145. Deposits.

When any company is required by the laws of this State or of any state or country, or by other competent authority, to make a deposit with an insurance supervising official or other financial officer and the company desires to make such deposit in this State the Director shall accept such deposit, if made in securities authorized for investment by Article VIII of this Code. So long as the company continues solvent and complies with the laws of this State it may collect the income on such securities. The company may substitute therefor other like securities as prescribed by this Code for deposit. If the value of securities deposited by any company shall decline below the amount so required, the company shall make a further deposit.

(Source: Laws 1959, p. 1431.)