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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/Art. XLI

    (215 ILCS 5/Art. XLI heading)

215 ILCS 5/1101

    (215 ILCS 5/1101) (from Ch. 73, par. 1065.801)
    Sec. 1101. Scope of Article. This Article applies only to trusts sponsored by domestic banking associations and organized under this Article to provide casualty insurance authorized under Section 5 of the Illinois Banking Act, as now or hereafter amended, for association member banks.
(Source: P.A. 84-1431.)

215 ILCS 5/1102

    (215 ILCS 5/1102) (from Ch. 73, par. 1065.802)
    Sec. 1102. Definitions. As used in this Article, the following terms have the following meanings:
    (1) "Banking association" means any Illinois corporation, whether for-profit or not-for-profit, which functions as a professional or trade association of dues-paying member commercial banks. For purposes of this Article, "banking association" does not include any corporation which directly or indirectly (a) accepts deposits which the depositor has a right to withdraw on demand by check or negotiable order, or (b) engages in the business of making loans, or both.
    (2) "Trust sponsor" means a banking association which has created a risk retention trust under this Article.
    (3) "Pool retention fund" means a separate fund maintained for payment of first dollar claims, up to a specific amount per claim ("specific retention") and up to an aggregate amount for a 12-month period ("aggregate retention").
    (4) "Contingency reserve fund" means a separate fund maintained for payment of claims in excess of the pool retention fund amount.
    (5) "Coverage grant" means the document describing specific coverages and terms of coverage which are provided by a risk retention trust created under this Article.
    (6) "Licensed service company" means an entity licensed under Section 464a of the Illinois Insurance Code to perform claims adjusting, loss control and data processing.
(Source: P.A. 84-1431.)

215 ILCS 5/1103

    (215 ILCS 5/1103) (from Ch. 73, par. 1065.803)
    Sec. 1103. Name. The corporate name of any trust organized under this Article shall not be the same as or deceptively similar to the name of any domestic insurance company or of any foreign or alien insurance company authorized to transact business in this State.
(Source: P.A. 84-1431.)

215 ILCS 5/1104

    (215 ILCS 5/1104) (from Ch. 73, par. 1065.804)
    Sec. 1104. Principal Office and Place of Business. The principal office of any trust organized under this Article shall be located in this State.
(Source: P.A. 84-1431.)

215 ILCS 5/1105

    (215 ILCS 5/1105) (from Ch. 73, par. 1065.805)
    Sec. 1105. Risk Retention Trust. (1) Any banking association which has been in existence for a period of not less than 2 years may create a risk retention trust for the pooling of risks in order to provide casualty coverage authorized under Section 5 of the Illinois Banking Act, as now or hereafter amended, for its member banks. Such trust shall be administered by at least 3 trustees who are appointed by the trust sponsor and who represent association member banks which have agreed in writing to participate in the trust.
    (2) The trustees shall appoint a qualified administrator who shall administer the affairs of the risk retention trust.
    (3) The trustees shall retain a licensed service company to perform claims adjusting, loss control and data processing.
    (4) The trust sponsor, the trustees and the trust administrator shall be fiduciaries of the trust.
    (5) Any trust created under this Article shall be consummated by a written trust agreement and shall be subject to the laws of this State governing the creation and operation of trusts, to the extent not inconsistent with this Article.
(Source: P.A. 84-1431.)

215 ILCS 5/1106

    (215 ILCS 5/1106) (from Ch. 73, par. 1065.806)
    Sec. 1106. Trust - Participation. (1) A banking association and its member banks may participate in any trust created under this Article if it:
    (a) Meets the underwriting standards for acceptance into the trust;
    (b) Files a written application for coverage, agreeing to meet all of the membership conditions of the trust;
    (c) Is a member of the association sponsoring the trust;
    (d) Agrees to meet the ongoing loss control provisions and risk pooling arrangements set forth by the trustees;
    (e) Pays its premium contribution on a timely basis as required; and
    (f) Pays its predetermined annual required contribution into the contingency reserve fund.
    (2) Any bank accepted for trust membership and participating in the trust under this Article shall be liable for payment to the trust of the amount of its annual premium contribution and its annual predetermined contingency reserve fund contribution.
(Source: P.A. 84-1431.)

215 ILCS 5/1107

    (215 ILCS 5/1107) (from Ch. 73, par. 1065.807)
    Sec. 1107. Trust - Coverage Grants - Payment of Claims. (1) No risk retention trust created under this Article may issue coverage grants until it has procured 100 bonafide applications for coverage with the first premium contribution in cash for each kind of coverage which the trust undertakes to write, and has a contingency reserve fund of at least $2,500,000. Every trust subject to this Article must have, and at all times maintain a pool retention fund at least equal to its unpaid liabilities and an unimpaired minimum contingency reserve fund of $1,500,000. The contingency reserve fund requirements shall be deemed satisfied if the required contribution into such fund by any participating member bank is obtained by a certificate of deposit redeemable by the trust in an amount not greater than the amount insured by the Federal Deposit Insurance Corporation.
    (2) Every coverage grant issued or delivered in this State by any trust subject to this Article shall provide for the liability of trust members to the extent that funds are needed to pay a member's share of the depleted contingency reserve fund needed to maintain the reserves required by this Section.
    (3) The Director may after notice and hearing suspend or revoke the license of any trust that fails to maintain the minimum reserves required by this Section.
    (4) All claims shall first be paid from the pool retention fund. If that fund becomes depleted, any additional claims shall be paid from the contingency reserve fund.
    (5) On the basis of an annual independent certified audit, the Director may require the risk retention trust to purchase insurance in amounts required to provide additional protection to member banks in excess of the contingency reserve fund.
(Source: P.A. 84-1431.)

215 ILCS 5/1108

    (215 ILCS 5/1108) (from Ch. 73, par. 1065.808)
    Sec. 1108. Trust; filing requirements; records.
    (1) Any risk retention trust created under this Article shall file with the Director:
        (a) A statement of intent to provide named coverages.
        (b) The trust agreement between the trust sponsor and
the trustees, detailing the organization and administration of the trust and fiduciary responsibilities.
        (c) Signed risk pooling agreements from each trust
member describing their intent to participate in the trust and maintain the contingency reserve fund.
        (d) By April 1 of each year a financial statement for
the preceding calendar year ending December 31, and a list of all beneficiaries during the year. The financial statement and report shall be in such form as the Director of Insurance may prescribe. The truth and accuracy of the financial statement shall be attested to by each trustee. Each Risk Retention Trust shall file with the Director by June 1 an opinion of an independent certified public accountant on the financial condition of the Risk Retention Trust for the most recent calendar year and the results of its operations, changes in financial position and changes in capital and surplus for the year then ended in conformity with accounting practices permitted or prescribed by the Illinois Department of Insurance.
        (e) The name of a bank or trust company with whom the
trust will enter into an escrow agreement which shall state that the contingency reserve fund will be maintained at the levels prescribed in this Article.
        (f) Copies of coverage grants it will issue.
    (2) The Director of Insurance shall charge, collect and give proper acquittances for the payment of the following fees and charges:
        (a) For filing trust instruments, amendments thereto
and financial statement and report of the trustees, $50.
        (b) For copies of papers or records per page, $2.
        (c) For certificate to copy of paper, $10.
        (d) For filing an application for the licensing of a
risk retention trust, $1,000.
    (3) The trust shall keep its books and records in accordance with the provisions of Section 133 of this Code. The Director may examine such books and records from time to time as provided in Sections 132 through 132.7 of this Code and may charge the expense of such examination to the trust as provided in subsection (3) of Section 408 of this Code.
    (4) Trust funds established under this Section and all persons interest therein or dealing therewith shall be subject to the provisions of Sections 133, 144.1, 149, 401, 401.1, 402, 403, 403A, 412, and all of the provisions of Articles VII, VIII, XII 1/2 and XIII of the Code, as amended. Except as otherwise provided in this Section, trust funds established under and which fully comply with this Section, shall not be subjected to any other provision of the Code.
    (5) The Director of Insurance may make reasonable rules and regulations pertaining to the standards of coverage and administration of the trust authorized by this Section. Such rules may include but need not be limited to reasonable standards for fiduciary duties of the trustees, standards for the investment of funds, limitation of risks assumed, minimum size, capital, surplus, reserves, and contingency reserves.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/1109

    (215 ILCS 5/1109) (from Ch. 73, par. 1065.809)
    Sec. 1109. Illinois Insurance Guaranty Fund - Inapplicability. The provisions of Article XXXIV of this Code shall not apply to any risk retention trust created under this Article.
(Source: P.A. 84-1431.)