SB2577 97TH GENERAL ASSEMBLY

LRB097 14508 RPM 59363 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2577

Introduced 1/18/2012, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

215 ILCS 5/188.2 new

Amends the Illinois Insurance Code to set forth provisions concerning the rehabilitation or liquidation of a domestic company that is a covered financial company under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act. Sets forth the grounds upon which the Director of Insurance may file a complaint for an order of rehabilitation or liquidation pursuant to the provisions of the Code concerning the grounds for rehabilitation and liquidation. Provides that after notice to the insurance company, the receivership court may grant an order on the complaint for rehabilitation or liquidation within 24 hours after its filing and that if the court does not make a determination on a complaint for rehabilitation or liquidation filed by the Director within 24 hours after its filing, then it shall be deemed granted by operation of law upon the expiration of the 24-hour period. Sets forth provisions concerning the court order and the Director's powers and authority. Effective immediately.

A BILL FOR

AN ACT concerning insurance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Insurance Code is amended by adding Section 188.2 as follows:

(215 ILCS 5/188.2 new)

Sec. 188.2. Grounds for and provisions applicable to rehabilitation or liquidation of a domestic company that is a covered financial company under the federal Dodd-Frank Wall Street Reform and Consumer Protection Act.

(a) The provisions of this Section apply in accordance with Title II of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203 with respect to an insurance company that is a covered financial company, as that term is defined under 12 U.S.C. 5381.

(b) The Director may file a complaint for an order of rehabilitation or liquidation pursuant to Section 188 of this Code on any of the following grounds:

(1) upon a determination and notification given by the Secretary of the Treasury of the United States (in consultation with the President of the United States) that the insurance company is a financial company satisfying the requirements of 12 U.S.C. 5383(b), and the board of directors (or body performing similar functions) of the insurance company acquiesces or consents to the appointment of a receiver pursuant to 12 U.S.C. 5382(a)(l)(A)(i), with such consent to be considered as consent to an order of rehabilitation or liquidation;

(2) upon an order of the United States District Court for the District of Columbia under 12 U.S.C. 5382(a)(l)(A)(iv)(I) granting the petition of the Secretary of the Treasury of the United States concerning the insurance company under 12 U.S.C. 5382(a)(l)(A)(i); or

(3) a petition by the Secretary of the Treasury of the United States concerning the insurance company is granted by operation of law under 12 U.S.C. 5382(a)(l)(A)(v).

(c) Notwithstanding any other provision in this Article, this Code, or any other law, after notice to the insurance company, the receivership court may grant an order on the complaint for rehabilitation or liquidation within 24 hours after the filing of a complaint pursuant to this Section.

(d) If the receivership court does not make a determination on a complaint for rehabilitation or liquidation filed by the Director pursuant to this Section within 24 hours after its filing, then it shall be deemed granted by operation of law upon the expiration of the 24-hour period. At the time that an order is deemed granted under this Section, the provisions of Article XIII of this Code shall be deemed to be in effect, and the Director shall be deemed to be affirmed as receiver and have all of the applicable powers provided by this Code, regardless of whether an order has been entered. The receivership court shall expeditiously enter an order of rehabilitation or liquidation that:

(1) is effective as of the date that it is deemed granted by operation of law; and

(2) conforms to the provisions for rehabilitation or liquidation contained in Article XIII of this Code, as applicable.

(e) Any order of rehabilitation or liquidation made pursuant to this Section shall not be subject to any stay or injunction pending appeal.

(f) Nothing in this Section shall be construed to supersede or impair any other power or authority of the Director or the court under this Article or Code.

Section 99. Effective date. This Act takes effect upon becoming law.