Sen. Bill Cunningham

Filed: 3/28/2023

 

 


 

 


 
10300SB0762sam001LRB103 03216 BMS 60136 a

1
AMENDMENT TO SENATE BILL 762

2    AMENDMENT NO. ______. Amend Senate Bill 762 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 408 and 534.4 and by adding Article XLVII as
6follows:
 
7    (215 ILCS 5/408)  (from Ch. 73, par. 1020)
8    Sec. 408. Fees and charges.
9    (1) The Director shall charge, collect and give proper
10acquittances for the payment of the following fees and
11charges:
12        (a) For filing all documents submitted for the
13    incorporation or organization or certification of a
14    domestic company, except for a fraternal benefit society,
15    $2,000.
16        (b) For filing all documents submitted for the

 

 

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1    incorporation or organization of a fraternal benefit
2    society, $500.
3        (c) For filing amendments to articles of incorporation
4    and amendments to declaration of organization, except for
5    a fraternal benefit society, a mutual benefit association,
6    a burial society or a farm mutual, $200.
7        (d) For filing amendments to articles of incorporation
8    of a fraternal benefit society, a mutual benefit
9    association or a burial society, $100.
10        (e) For filing amendments to articles of incorporation
11    of a farm mutual, $50.
12        (f) For filing bylaws or amendments thereto, $50.
13        (g) For filing agreement of merger or consolidation:
14            (i) for a domestic company, except for a fraternal
15        benefit society, a mutual benefit association, a
16        burial society, or a farm mutual, $2,000.
17            (ii) for a foreign or alien company, except for a
18        fraternal benefit society, $600.
19            (iii) for a fraternal benefit society, a mutual
20        benefit association, a burial society, or a farm
21        mutual, $200.
22        (h) For filing agreements of reinsurance by a domestic
23    company, $200.
24        (i) For filing all documents submitted by a foreign or
25    alien company to be admitted to transact business or
26    accredited as a reinsurer in this State, except for a

 

 

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1    fraternal benefit society, $5,000.
2        (j) For filing all documents submitted by a foreign or
3    alien fraternal benefit society to be admitted to transact
4    business in this State, $500.
5        (k) For filing declaration of withdrawal of a foreign
6    or alien company, $50.
7        (l) For filing annual statement by a domestic company,
8    except a fraternal benefit society, a mutual benefit
9    association, a burial society, or a farm mutual, $200.
10        (m) For filing annual statement by a domestic
11    fraternal benefit society, $100.
12        (n) For filing annual statement by a farm mutual, a
13    mutual benefit association, or a burial society, $50.
14        (o) For issuing a certificate of authority or renewal
15    thereof except to a foreign fraternal benefit society,
16    $400.
17        (p) For issuing a certificate of authority or renewal
18    thereof to a foreign fraternal benefit society, $200.
19        (q) For issuing an amended certificate of authority,
20    $50.
21        (r) For each certified copy of certificate of
22    authority, $20.
23        (s) For each certificate of deposit, or valuation, or
24    compliance or surety certificate, $20.
25        (t) For copies of papers or records per page, $1.
26        (u) For each certification to copies of papers or

 

 

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1    records, $10.
2        (v) For multiple copies of documents or certificates
3    listed in subparagraphs (r), (s), and (u) of paragraph (1)
4    of this Section, $10 for the first copy of a certificate of
5    any type and $5 for each additional copy of the same
6    certificate requested at the same time, unless, pursuant
7    to paragraph (2) of this Section, the Director finds these
8    additional fees excessive.
9        (w) For issuing a permit to sell shares or increase
10    paid-up capital:
11            (i) in connection with a public stock offering,
12        $300;
13            (ii) in any other case, $100.
14        (x) For issuing any other certificate required or
15    permissible under the law, $50.
16        (y) For filing a plan of exchange of the stock of a
17    domestic stock insurance company, a plan of
18    demutualization of a domestic mutual company, or a plan of
19    reorganization under Article XII, $2,000.
20        (z) For filing a statement of acquisition of a
21    domestic company as defined in Section 131.4 of this Code,
22    $2,000.
23        (aa) For filing an agreement to purchase the business
24    of an organization authorized under the Dental Service
25    Plan Act or the Voluntary Health Services Plans Act or of a
26    health maintenance organization or a limited health

 

 

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1    service organization, $2,000.
2        (bb) For filing a statement of acquisition of a
3    foreign or alien insurance company as defined in Section
4    131.12a of this Code, $1,000.
5        (cc) For filing a registration statement as required
6    in Sections 131.13 and 131.14, the notification as
7    required by Sections 131.16, 131.20a, or 141.4, or an
8    agreement or transaction required by Sections 124.2(2),
9    141, 141a, or 141.1, $200.
10        (dd) For filing an application for licensing of:
11            (i) a religious or charitable risk pooling trust
12        or a workers' compensation pool, $1,000;
13            (ii) a workers' compensation service company,
14        $500;
15            (iii) a self-insured automobile fleet, $200; or
16            (iv) a renewal of or amendment of any license
17        issued pursuant to (i), (ii), or (iii) above, $100.
18        (ee) For filing articles of incorporation for a
19    syndicate to engage in the business of insurance through
20    the Illinois Insurance Exchange, $2,000.
21        (ff) For filing amended articles of incorporation for
22    a syndicate engaged in the business of insurance through
23    the Illinois Insurance Exchange, $100.
24        (gg) For filing articles of incorporation for a
25    limited syndicate to join with other subscribers or
26    limited syndicates to do business through the Illinois

 

 

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1    Insurance Exchange, $1,000.
2        (hh) For filing amended articles of incorporation for
3    a limited syndicate to do business through the Illinois
4    Insurance Exchange, $100.
5        (ii) For a permit to solicit subscriptions to a
6    syndicate or limited syndicate, $100.
7        (jj) For the filing of each form as required in
8    Section 143 of this Code, $50 per form. Informational and
9    advertising filings shall be $25 per filing. The fee for
10    advisory and rating organizations shall be $200 per form.
11            (i) For the purposes of the form filing fee,
12        filings made on insert page basis will be considered
13        one form at the time of its original submission.
14        Changes made to a form subsequent to its approval
15        shall be considered a new filing.
16            (ii) Only one fee shall be charged for a form,
17        regardless of the number of other forms or policies
18        with which it will be used.
19            (iii) Fees charged for a policy filed as it will be
20        issued regardless of the number of forms comprising
21        that policy shall not exceed $1,500. For advisory or
22        rating organizations, fees charged for a policy filed
23        as it will be issued regardless of the number of forms
24        comprising that policy shall not exceed $2,500.
25            (iv) The Director may by rule exempt forms from
26        such fees.

 

 

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1        (kk) For filing an application for licensing of a
2    reinsurance intermediary, $500.
3        (ll) For filing an application for renewal of a
4    license of a reinsurance intermediary, $200.
5        (mm) For filing a plan of division of a domestic stock
6    company under Article IIB, $10,000.
7        (nn) For filing all documents submitted by a foreign
8    or alien company to be a certified reinsurer in this
9    State, except for a fraternal benefit society, $1,000.
10        (oo) For filing a renewal by a foreign or alien
11    company to be a certified reinsurer in this State, except
12    for a fraternal benefit society, $400.
13        (pp) For filing all documents submitted by a reinsurer
14    domiciled in a reciprocal jurisdiction, $1,000.
15        (qq) For filing a renewal by a reinsurer domiciled in
16    a reciprocal jurisdiction, $400.
17        (rr) For registering a captive management company or
18    renewal thereof, $50.
19        (ss) For filing an insurance business transfer plan
20    under Article XLVII, $25,000.
21    (2) When printed copies or numerous copies of the same
22paper or records are furnished or certified, the Director may
23reduce such fees for copies if he finds them excessive. He may,
24when he considers it in the public interest, furnish without
25charge to state insurance departments and persons other than
26companies, copies or certified copies of reports of

 

 

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1examinations and of other papers and records.
2    (3) The expenses incurred in any performance examination
3authorized by law shall be paid by the company or person being
4examined. The charge shall be reasonably related to the cost
5of the examination including but not limited to compensation
6of examiners, electronic data processing costs, supervision
7and preparation of an examination report and lodging and
8travel expenses. All lodging and travel expenses shall be in
9accord with the applicable travel regulations as published by
10the Department of Central Management Services and approved by
11the Governor's Travel Control Board, except that out-of-state
12lodging and travel expenses related to examinations authorized
13under Section 132 shall be in accordance with travel rates
14prescribed under paragraph 301-7.2 of the Federal Travel
15Regulations, 41 C.F.R. 301-7.2, for reimbursement of
16subsistence expenses incurred during official travel. All
17lodging and travel expenses may be reimbursed directly upon
18authorization of the Director. With the exception of the
19direct reimbursements authorized by the Director, all
20performance examination charges collected by the Department
21shall be paid to the Insurance Producer Administration Fund,
22however, the electronic data processing costs incurred by the
23Department in the performance of any examination shall be
24billed directly to the company being examined for payment to
25the Technology Management Revolving Fund.
26    (4) At the time of any service of process on the Director

 

 

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1as attorney for such service, the Director shall charge and
2collect the sum of $40, which may be recovered as taxable costs
3by the party to the suit or action causing such service to be
4made if he prevails in such suit or action.
5    (5) (a) The costs incurred by the Department of Insurance
6in conducting any hearing authorized by law shall be assessed
7against the parties to the hearing in such proportion as the
8Director of Insurance may determine upon consideration of all
9relevant circumstances including: (1) the nature of the
10hearing; (2) whether the hearing was instigated by, or for the
11benefit of a particular party or parties; (3) whether there is
12a successful party on the merits of the proceeding; and (4) the
13relative levels of participation by the parties.
14    (b) For purposes of this subsection (5) costs incurred
15shall mean the hearing officer fees, court reporter fees, and
16travel expenses of Department of Insurance officers and
17employees; provided however, that costs incurred shall not
18include hearing officer fees or court reporter fees unless the
19Department has retained the services of independent
20contractors or outside experts to perform such functions.
21    (c) The Director shall make the assessment of costs
22incurred as part of the final order or decision arising out of
23the proceeding; provided, however, that such order or decision
24shall include findings and conclusions in support of the
25assessment of costs. This subsection (5) shall not be
26construed as permitting the payment of travel expenses unless

 

 

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1calculated in accordance with the applicable travel
2regulations of the Department of Central Management Services,
3as approved by the Governor's Travel Control Board. The
4Director as part of such order or decision shall require all
5assessments for hearing officer fees and court reporter fees,
6if any, to be paid directly to the hearing officer or court
7reporter by the party(s) assessed for such costs. The
8assessments for travel expenses of Department officers and
9employees shall be reimbursable to the Director of Insurance
10for deposit to the fund out of which those expenses had been
11paid.
12    (d) The provisions of this subsection (5) shall apply in
13the case of any hearing conducted by the Director of Insurance
14not otherwise specifically provided for by law.
15    (6) The Director shall charge and collect an annual
16financial regulation fee from every domestic company for
17examination and analysis of its financial condition and to
18fund the internal costs and expenses of the Interstate
19Insurance Receivership Commission as may be allocated to the
20State of Illinois and companies doing an insurance business in
21this State pursuant to Article X of the Interstate Insurance
22Receivership Compact. The fee shall be the greater fixed
23amount based upon the combination of nationwide direct premium
24income and nationwide reinsurance assumed premium income or
25upon admitted assets calculated under this subsection as
26follows:

 

 

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1        (a) Combination of nationwide direct premium income
2    and nationwide reinsurance assumed premium.
3            (i) $150, if the premium is less than $500,000 and
4        there is no reinsurance assumed premium;
5            (ii) $750, if the premium is $500,000 or more, but
6        less than $5,000,000 and there is no reinsurance
7        assumed premium; or if the premium is less than
8        $5,000,000 and the reinsurance assumed premium is less
9        than $10,000,000;
10            (iii) $3,750, if the premium is less than
11        $5,000,000 and the reinsurance assumed premium is
12        $10,000,000 or more;
13            (iv) $7,500, if the premium is $5,000,000 or more,
14        but less than $10,000,000;
15            (v) $18,000, if the premium is $10,000,000 or
16        more, but less than $25,000,000;
17            (vi) $22,500, if the premium is $25,000,000 or
18        more, but less than $50,000,000;
19            (vii) $30,000, if the premium is $50,000,000 or
20        more, but less than $100,000,000;
21            (viii) $37,500, if the premium is $100,000,000 or
22        more.
23        (b) Admitted assets.
24            (i) $150, if admitted assets are less than
25        $1,000,000;
26            (ii) $750, if admitted assets are $1,000,000 or

 

 

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1        more, but less than $5,000,000;
2            (iii) $3,750, if admitted assets are $5,000,000 or
3        more, but less than $25,000,000;
4            (iv) $7,500, if admitted assets are $25,000,000 or
5        more, but less than $50,000,000;
6            (v) $18,000, if admitted assets are $50,000,000 or
7        more, but less than $100,000,000;
8            (vi) $22,500, if admitted assets are $100,000,000
9        or more, but less than $500,000,000;
10            (vii) $30,000, if admitted assets are $500,000,000
11        or more, but less than $1,000,000,000;
12            (viii) $37,500, if admitted assets are
13        $1,000,000,000 or more.
14        (c) The sum of financial regulation fees charged to
15    the domestic companies of the same affiliated group shall
16    not exceed $250,000 in the aggregate in any single year
17    and shall be billed by the Director to the member company
18    designated by the group.
19    (7) The Director shall charge and collect an annual
20financial regulation fee from every foreign or alien company,
21except fraternal benefit societies, for the examination and
22analysis of its financial condition and to fund the internal
23costs and expenses of the Interstate Insurance Receivership
24Commission as may be allocated to the State of Illinois and
25companies doing an insurance business in this State pursuant
26to Article X of the Interstate Insurance Receivership Compact.

 

 

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1The fee shall be a fixed amount based upon Illinois direct
2premium income and nationwide reinsurance assumed premium
3income in accordance with the following schedule:
4        (a) $150, if the premium is less than $500,000 and
5    there is no reinsurance assumed premium;
6        (b) $750, if the premium is $500,000 or more, but less
7    than $5,000,000 and there is no reinsurance assumed
8    premium; or if the premium is less than $5,000,000 and the
9    reinsurance assumed premium is less than $10,000,000;
10        (c) $3,750, if the premium is less than $5,000,000 and
11    the reinsurance assumed premium is $10,000,000 or more;
12        (d) $7,500, if the premium is $5,000,000 or more, but
13    less than $10,000,000;
14        (e) $18,000, if the premium is $10,000,000 or more,
15    but less than $25,000,000;
16        (f) $22,500, if the premium is $25,000,000 or more,
17    but less than $50,000,000;
18        (g) $30,000, if the premium is $50,000,000 or more,
19    but less than $100,000,000;
20        (h) $37,500, if the premium is $100,000,000 or more.
21    The sum of financial regulation fees under this subsection
22(7) charged to the foreign or alien companies within the same
23affiliated group shall not exceed $250,000 in the aggregate in
24any single year and shall be billed by the Director to the
25member company designated by the group.
26    (8) Beginning January 1, 1992, the financial regulation

 

 

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1fees imposed under subsections (6) and (7) of this Section
2shall be paid by each company or domestic affiliated group
3annually. After January 1, 1994, the fee shall be billed by
4Department invoice based upon the company's premium income or
5admitted assets as shown in its annual statement for the
6preceding calendar year. The invoice is due upon receipt and
7must be paid no later than June 30 of each calendar year. All
8financial regulation fees collected by the Department shall be
9paid to the Insurance Financial Regulation Fund. The
10Department may not collect financial examiner per diem charges
11from companies subject to subsections (6) and (7) of this
12Section undergoing financial examination after June 30, 1992.
13    (9) In addition to the financial regulation fee required
14by this Section, a company undergoing any financial
15examination authorized by law shall pay the following costs
16and expenses incurred by the Department: electronic data
17processing costs, the expenses authorized under Section 131.21
18and subsection (d) of Section 132.4 of this Code, and lodging
19and travel expenses.
20    Electronic data processing costs incurred by the
21Department in the performance of any examination shall be
22billed directly to the company undergoing examination for
23payment to the Technology Management Revolving Fund. Except
24for direct reimbursements authorized by the Director or direct
25payments made under Section 131.21 or subsection (d) of
26Section 132.4 of this Code, all financial regulation fees and

 

 

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1all financial examination charges collected by the Department
2shall be paid to the Insurance Financial Regulation Fund.
3    All lodging and travel expenses shall be in accordance
4with applicable travel regulations published by the Department
5of Central Management Services and approved by the Governor's
6Travel Control Board, except that out-of-state lodging and
7travel expenses related to examinations authorized under
8Sections 132.1 through 132.7 shall be in accordance with
9travel rates prescribed under paragraph 301-7.2 of the Federal
10Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
11subsistence expenses incurred during official travel. All
12lodging and travel expenses may be reimbursed directly upon
13the authorization of the Director.
14    In the case of an organization or person not subject to the
15financial regulation fee, the expenses incurred in any
16financial examination authorized by law shall be paid by the
17organization or person being examined. The charge shall be
18reasonably related to the cost of the examination including,
19but not limited to, compensation of examiners and other costs
20described in this subsection.
21    (10) Any company, person, or entity failing to make any
22payment of $150 or more as required under this Section shall be
23subject to the penalty and interest provisions provided for in
24subsections (4) and (7) of Section 412.
25    (11) Unless otherwise specified, all of the fees collected
26under this Section shall be paid into the Insurance Financial

 

 

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1Regulation Fund.
2    (12) For purposes of this Section:
3        (a) "Domestic company" means a company as defined in
4    Section 2 of this Code which is incorporated or organized
5    under the laws of this State, and in addition includes a
6    not-for-profit corporation authorized under the Dental
7    Service Plan Act or the Voluntary Health Services Plans
8    Act, a health maintenance organization, and a limited
9    health service organization.
10        (b) "Foreign company" means a company as defined in
11    Section 2 of this Code which is incorporated or organized
12    under the laws of any state of the United States other than
13    this State and in addition includes a health maintenance
14    organization and a limited health service organization
15    which is incorporated or organized under the laws of any
16    state of the United States other than this State.
17        (c) "Alien company" means a company as defined in
18    Section 2 of this Code which is incorporated or organized
19    under the laws of any country other than the United
20    States.
21        (d) "Fraternal benefit society" means a corporation,
22    society, order, lodge or voluntary association as defined
23    in Section 282.1 of this Code.
24        (e) "Mutual benefit association" means a company,
25    association or corporation authorized by the Director to
26    do business in this State under the provisions of Article

 

 

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1    XVIII of this Code.
2        (f) "Burial society" means a person, firm,
3    corporation, society or association of individuals
4    authorized by the Director to do business in this State
5    under the provisions of Article XIX of this Code.
6        (g) "Farm mutual" means a district, county and
7    township mutual insurance company authorized by the
8    Director to do business in this State under the provisions
9    of the Farm Mutual Insurance Company Act of 1986.
10(Source: P.A. 102-775, eff. 5-13-22.)
 
11    (215 ILCS 5/534.4)  (from Ch. 73, par. 1065.84-4)
12    Sec. 534.4. "Insolvent company" means a company organized
13as a stock company, mutual company, reciprocal or Lloyds (a)
14which holds a certificate of authority to transact insurance
15in this State either at the time the policy was issued or when
16the insured event occurred, or any company which has assumed
17or has been allocated such policy obligation through merger,
18division, insurance business transfer, consolidation, or
19reinsurance, whether or not such assuming company held a
20certificate of authority to transact insurance in this State
21at the time such policy was issued or when the insured event
22occurred; and (b) against which a final Order of Liquidation
23with a finding of insolvency to which there is no further right
24of appeal has been entered by a court of competent
25jurisdiction in the company's State of domicile after the

 

 

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1effective date of this Article.
2(Source: P.A. 100-1190, eff. 4-5-19.)
 
3    (215 ILCS 5/Art. XLVII heading new)
4
ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS

 
5    (215 ILCS 5/1701 new)
6    Sec. 1701. Short title. This Article may be cited as the
7Insurance Business Transfer Law.
 
8    (215 ILCS 5/1703 new)
9    Sec. 1703. Purpose and intent. The purpose of this Article
10is to provide a mechanism for insurers to transfer or assume
11blocks of insurance business in an efficient and
12cost-effective manner that provides needed legal finality for
13such transfers in order to provide for improved operational
14and capital efficiency for insurance companies, while
15protecting the interests of the policyholders, reinsurers, and
16claimants of the subject business. This new process is
17intended to stimulate the economy by attracting segments of
18the insurance industry to this State, make this State an
19attractive home jurisdiction for insurance companies,
20encourage economic growth and increased investment in the
21financial services sector, and increase the availability of
22quality insurance industry jobs in this State. These purposes
23are accomplished by providing a basis and procedures for the

 

 

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1transfer and statutory novation of policies from a
2transferring insurer to an assuming insurer by way of an
3insurance business transfer without the affirmative consent of
4policyholders or reinsureds, but with consideration of their
5interests. This Article establishes the requirements for
6notice and disclosure and standards and procedures for the
7approval of the transfer and novation by a court pursuant to an
8insurance business transfer plan. This Article does not limit
9or restrict other means of effecting a transfer or novation.
 
10    (215 ILCS 5/1705 new)
11    Sec. 1705. Definitions. As used in this Article:
12    "Affiliate" means a person that directly or indirectly,
13through one or more intermediaries, controls, is controlled
14by, or is under common control with the person specified.
15    "Applicant" means a transferring insurer or reinsurer
16applying under this Article.
17    "Assuming insurer" means an insurer domiciled in Illinois
18and authorized to transact the type of business described in
19clause (c) of Class 1, clauses (b) through (l) of Class 2, or
20Class 3 of Section 4 that seeks to assume policies from a
21transferring insurer pursuant to this Article.
22    "Court" means the circuit court of Sangamon County or Cook
23County.
24    "Department" means the Department of Insurance.
25    "Director" means the Director of Insurance.

 

 

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1    "Implementation order" means an order issued by a court
2under this Article.
3    "Insurance business transfer" means a transfer and
4novation that, once approved pursuant to this Article,
5transfers insurance obligations or risks, or both, of existing
6or in-force contracts of insurance or reinsurance from a
7transferring insurer to an assuming insurer, and effects a
8novation of the transferred contracts of insurance or
9reinsurance with the result that the assuming insurer becomes
10directly liable to the policyholders of the transferring
11insurer and the transferring insurer's insurance obligations
12or risks, or both, under the contracts are extinguished.
13    "Insurance business transfer plan" means the plan
14submitted to the Department to accomplish the transfer and
15novation pursuant to an insurance business transfer, including
16any associated transfer of assets and rights from or on behalf
17of the transferring insurer to the assuming insurer. An
18"insurance business transfer plan" is limited to the types of
19insurance described in clause (c) of Class 1, clauses (b)
20through (l) of Class 2, or Class 3 of Section 4.
21    "Independent expert" means the impartial person procured
22to assist the Director and the court in connection with their
23review of a proposed transaction. The independent expert
24shall:
25        (i) have no current or past, direct or indirect,
26    financial interest in either the assuming insurer or

 

 

10300SB0762sam001- 21 -LRB103 03216 BMS 60136 a

1    transferring insurer or any of their respective
2    affiliates,
3        (ii) have not been employed by or acted as an officer,
4    director, consultant, or other independent contractor for
5    either the assuming insurer or transferring insurer or any
6    of their respective affiliates within the past 12 months,
7        (iii) not currently be appointed by the Director to
8    assist in any capacity in any proceeding initiated under
9    Article XIII, and
10        (iv) receive no compensation in connection with the
11    transaction governed by this Article other than a fee
12    based on a fixed or hourly basis that is not contingent on
13    the approval or consummation of an insurance business
14    transfer.
15    "Insurer" means an insurance, surety, or reinsurance
16company, corporation, partnership, association, society,
17order, individual, or aggregation of individuals engaging in
18or proposing or attempting to engage in insurance or surety
19business, including the exchanging of reciprocal or
20inter-insurance contracts between individuals, partnerships,
21and corporations.
22    "Policy" means a policy, certificate of insurance, or a
23contract of reinsurance pursuant to which an insurer agrees to
24assume an obligation or risk, or both, of the policyholder or
25to make payments on behalf of, or to, the policyholder or its
26beneficiaries, and includes property and casualty insurance.

 

 

10300SB0762sam001- 22 -LRB103 03216 BMS 60136 a

1"Policy" does not include any policy, contract, or certificate
2of life, accident, or health insurance, including those
3defined in clause (a) or (b) of Class 1 or clause (a) of Class
42 of Section 4.
5    "Policyholder" means an insured or a reinsured under a
6policy that is part of the subject business.
7    "State guaranty association" means the Illinois Insurance
8Guaranty Fund, the Illinois Life and Health Guaranty
9Association, or any similar organization in another state.
10    "Subject business" means the policy or policies that are
11the subject of the insurance business transfer plan.
12    "Transfer and novation" means the transfer of insurance
13obligations or risks, or both, of existing or in-force
14policies from a transferring insurer to an assuming insurer
15that is intended to effect a novation of the transferred
16policies with the result that the assuming insurer becomes
17directly liable to the policyholders of the transferring
18insurer on the transferred policies and the transferring
19insurer's obligations or risks, or both, under the transferred
20policies are extinguished.
21    "Transferring insurer" means an insurer or reinsurer that
22transfers and novates or seeks to transfer and novate
23obligations or risks, or both, under one or more policies to an
24assuming insurer pursuant to an insurance business transfer
25plan.
 

 

 

10300SB0762sam001- 23 -LRB103 03216 BMS 60136 a

1    (215 ILCS 5/1710 new)
2    Sec. 1710. Court authority. Notwithstanding any other
3provision of law, a court may issue any order, process, or
4judgment that is necessary or appropriate to carry out the
5provisions of this Article. No provision of this Article shall
6be construed to preclude a court from, on its own motion,
7taking any action or making any determination necessary or
8appropriate to enforce or implement court orders or rules or
9to prevent an abuse of power.
 
10    (215 ILCS 5/1715 new)
11    Sec. 1715. Notice requirements.
12     (a) Whenever notice is required to be given by an
13applicant under this Article, except as otherwise permitted by
14a court or the Director, the applicant shall within 15 days
15after the event triggering the requirement transmit the
16notice:
17        (1) to the chief insurance regulator in each
18    jurisdiction:
19            (A) in which the applicant holds or has ever held a
20        certificate of authority; and
21            (B) in which policies that are part of the subject
22        business were issued or policyholders currently
23        reside;
24        (2) to the National Conference of Insurance Guaranty
25    Funds, the National Organization of Life and Health

 

 

10300SB0762sam001- 24 -LRB103 03216 BMS 60136 a

1    Insurance Guaranty Associations, and all state insurance
2    guaranty associations for the states:
3            (A) in which the applicant holds or has ever held a
4        certificate of authority; and
5            (B) in which policies that are part of the subject
6        business were issued or policyholders currently
7        reside;
8        (3) to reinsurers of the applicant pursuant to the
9    notice provisions of the reinsurance agreements applicable
10    to the policies that are part of the subject business or,
11    where an agreement has no provision for notice, by
12    internationally recognized delivery service;
13        (4) to all policyholders holding policies that are
14    part of the subject business at their last known address
15    as indicated by the records of the applicant or to the
16    address to which premium notices or other policy documents
17    are sent. A notice of transfer shall also be sent to the
18    transferring insurer's agents or brokers of record on the
19    subject business; and
20        (5) by publication in a newspaper of general
21    circulation in the state in which the applicant has its
22    principal place of business and in such other publications
23    that the Director requires.
24    (b) If notice is given in accordance with this Section,
25any orders under this Article shall be conclusive with respect
26to all intended recipients of the notice whether or not they

 

 

10300SB0762sam001- 25 -LRB103 03216 BMS 60136 a

1receive actual notice.
2    (c) If this Article requires that the applicant provide
3notice but the Director has been named receiver of the
4applicant pursuant to Article XIII, the Director shall provide
5the required notice.
6    (d) Notice under this Section may take the form of
7first-class mail, facsimile, or electronic notice. The court
8may order that notice take a specific form.
 
9    (215 ILCS 5/1720 new)
10    Sec. 1720. Application procedure.
11    (a) Before filing an insurance business transfer plan, the
12applicant shall file with the Department a notice of its
13intention to file a plan and shall pay the required fee. Upon
14request, the applicant and the assuming insurer shall provide
15the Department with any information necessary for the
16Department to procure an independent expert that meets the
17requirements of this Article.
18    (b) An insurance business transfer plan shall be filed by
19the applicant with the Director for his or her review and
20approval. The plan may be supplemented by other information
21deemed necessary by the Director, and shall contain the
22following information or an explanation as to why the
23following information is not included:
24        (1) the name, address, and telephone number of the
25    transferring insurer and the assuming insurer and their

 

 

10300SB0762sam001- 26 -LRB103 03216 BMS 60136 a

1    respective direct and indirect controlling persons, if
2    any;
3        (2) a summary of the insurance business transfer plan;
4        (3) an identification and description of the subject
5    business;
6        (4) the most recent audited financial statements and
7    statutory annual and quarterly reports of the transferring
8    insurer and the assuming insurer filed with their
9    domiciliary regulator;
10        (5) the most recent actuarial report and opinion that
11    quantify the liabilities associated with the subject
12    business;
13        (6) pro forma financial statements showing the
14    projected statutory balance sheet, results of operation,
15    and cash flows of the assuming insurer for the 3 years
16    following the proposed transfer and novation;
17        (7) officers' certificates of the transferring insurer
18    and the assuming insurer attesting that each has obtained
19    all required internal approvals and authorizations
20    regarding the insurance business transfer plan and
21    completed all necessary and appropriate actions relating
22    thereto;
23        (8) a proposal for plan implementation and
24    administration, including the form of notice to be
25    provided under the insurance business transfer plan to any
26    policyholder whose policy is part of the subject business;

 

 

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1        (9) a full description as to how notice under the
2    insurance business transfer plan shall be provided;
3        (10) a description of any reinsurance arrangements
4    that would pass to the assuming insurer under the
5    insurance business transfer plan;
6        (11) a description of any guarantees or additional
7    reinsurance that will cover the subject business following
8    the transfer and novation;
9        (12) a statement describing the assuming insurer's
10    proposed investment policies and any contemplated
11    third-party claims management and administration
12    arrangements;
13        (13) a description of how the transferring and
14    assuming insurers will be licensed for the purpose of
15    preserving state guaranty association coverage;
16        (14) a description of the financial implications of
17    the transaction including solvency, capital adequacy, cash
18    flow, reserves, asset quality, and risk-based capital;
19        (15) an analysis of the assuming insurer's corporate
20    governance structure to ensure that there is proper board
21    management oversight and expertise to manage the subject
22    business;
23        (16) an evaluation of the competency, experience, and
24    integrity of the persons who would control the operation
25    of an involved insurer;
26        (17) a certified statement that the transaction is not

 

 

10300SB0762sam001- 28 -LRB103 03216 BMS 60136 a

1    being made for improper purposes, including fraud;
2        (18) evidence of approval or nonobjection of the
3    transfer from the chief insurance regulator of the state
4    of the transferring insurer's domicile; and
5        (19) a report from the independent expert that shall
6    provide the following:
7            (A) a statement of the independent expert's
8        professional qualifications and descriptions of the
9        experience that qualifies him or her as an expert
10        suitable for the engagement;
11            (B) a certified statement from the independent
12        expert that he or she meets the standards for an
13        independent expert under this Article;
14            (C) a description of the scope of the report;
15            (D) a summary of the terms of the insurance
16        business transfer plan to the extent relevant to the
17        report;
18            (E) a listing and summaries of documents, reports,
19        and other material information the independent expert
20        has considered in preparing the report and whether any
21        information requested was not provided;
22            (F) the extent to which the independent expert has
23        relied on information provided by or judgment of
24        others;
25            (G) the people on whom the independent expert has
26        relied and why, in his or her opinion, such reliance is

 

 

10300SB0762sam001- 29 -LRB103 03216 BMS 60136 a

1        reasonable;
2            (H) the independent expert's opinion of the likely
3        effects of the insurance business transfer plan on
4        policyholders, reinsurers, and claimants,
5        distinguishing between:
6                (i) transferring policyholders, reinsurers,
7            and claimants;
8                (ii) policyholders, reinsurers, and claimants
9            of the transferring insurer whose policies will
10            not be transferred; and
11                (iii) policyholders, reinsurers, and claimants
12            of the assuming insurer;
13            (I) the facts and circumstances supporting each
14        opinion that the independent expert expresses in the
15        report; and
16            (J) consideration as to whether the security
17        position of policyholders that are affected by the
18        insurance business transfer are materially adversely
19        affected by the transfer, including, but not limited
20        to, state guaranty association coverage.
21    (c) The independent expert's report as required by
22paragraph (19) of subsection (b) shall also include, but not
23be limited to, a review of and report on the following:
24        (1) analysis of the transferring insurer's actuarial
25    review of resources for the subject business to determine
26    the reserve adequacy;

 

 

10300SB0762sam001- 30 -LRB103 03216 BMS 60136 a

1        (2) analysis of the financial condition of the
2    transferring and assuming insurers and the effect the
3    transfer will have on the financial condition of each
4    company;
5        (3) review of the plans or proposals the assuming
6    insurer has with respect to the administration of the
7    policies subject to the proposed transfer;
8        (4) whether the proposed transfer has a material,
9    adverse impact on the policyholders, reinsurers, and
10    claimants of the transferring and the assuming insurers;
11        (5) analysis of the assuming insurer's corporate
12    governance structure to ensure that there is proper board
13    and management oversight and expertise to manage the
14    subject business;
15        (6) analysis of whether any policyholder or group of
16    policyholders will lose or gain state guaranty association
17    coverage as a result of the transaction; and
18        (7) any other information that the Director requests
19    in order to review the insurance business transfer.
20    (d) After the receipt of a complete insurance business
21transfer plan, the Director shall review the plan to determine
22if the applicant is authorized to submit it to a court.
23    (e) The Director shall authorize the submission of the
24insurance business transfer plan to a court unless he or she
25finds that the insurance business transfer would have a
26material adverse impact on the interests of policyholders,

 

 

10300SB0762sam001- 31 -LRB103 03216 BMS 60136 a

1reinsurers, or claimants that are part of the subject
2business.
3    (f) If the Director determines that the insurance business
4transfer would have a material adverse impact on the interests
5of policyholders, reinsurers, or claimants that are part of
6the subject business, he or she shall notify the applicant and
7specify any modifications, supplements, or amendments and any
8additional information or documentation with respect to the
9plan that must be provided to the Director before he or she
10shall allow the applicant to proceed with the court filing.
11    (g) The applicant shall have 30 days following the date
12the Director notifies him or her of a determination under
13subsection (f) to file an amended insurance business transfer
14plan providing the modifications, supplements, or amendments
15and additional information or documentation as requested by
16the Director. If necessary, the applicant may request in
17writing an extension of time of 30 days. If the applicant does
18not make an amended filing within the time period provided in
19this subsection, including any extension of time granted by
20the Director, the insurance business transfer plan filing
21shall terminate and a subsequent filing by the applicant shall
22be considered a new filing which shall require compliance with
23all provisions of this Article as if the prior filing had never
24been made.
25    (h) When the modification, supplement, amendment, or
26additional information requested in subsection (f) is

 

 

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1received, the Director shall review the amended plan in
2accordance with subsection (c).
3    (i) If the Director determines that the plan may proceed
4with the court filing, the Director shall confirm that fact in
5writing to the applicant.
 
6    (215 ILCS 5/1725 new)
7    Sec. 1725. Application to the court for approval of a
8plan.
9    (a) Within 30 days after notice from the Director that the
10applicant may proceed with the court filing, the applicant
11shall apply to the court for approval of the insurance
12business transfer plan. Upon written request by the applicant,
13the Director may extend the period for filing an application
14with the court for an additional 30 days.
15    (b) The applicant shall inform the court of the reasons
16why he or she petitions the court to find no material adverse
17impact to policyholders, reinsurers, or claimants affected by
18the proposed transfer.
19    (c) The application shall be in the form of a verified
20petition for implementation of the insurance business transfer
21plan in the court. The petition shall include the insurance
22business transfer plan and shall identify any documents and
23witnesses which the applicant intends to present at a hearing
24regarding the petition.
25    (d) The Director shall be a party to the proceedings

 

 

10300SB0762sam001- 33 -LRB103 03216 BMS 60136 a

1before the court concerning the petition and shall be served
2with copies of all filings. The Director's position in the
3proceeding shall not be limited by his or her initial review of
4the plan. The Director shall have all the rights of a litigant
5under the Illinois Supreme Court Rules and the Code of Civil
6Procedure, including, but not limited to, the right to appeal.
7    (e) Following the filing of the petition, the applicant
8shall file a motion for a scheduling order setting a hearing on
9the petition.
10    (f) Within 15 days after receipt of the scheduling order,
11the applicant shall cause notice of the hearing to be provided
12in accordance with the notice provisions of Section 1715.
13Following the date of distribution of the notice, there shall
14be a 60-day comment period. The notice and all comments
15received shall be part of the court record.
16    (g) The notice shall be filed with and approved by the
17court before distribution, and the Director shall be given the
18opportunity to review and comment on the sufficiency of the
19notice before court approval. The notice shall state or
20provide:
21        (1) the date and time of the approval hearing;
22        (2) the name, address, and telephone number of the
23    assuming insurer and transferring insurer;
24        (3) that the recipient may comment on or object to the
25    transfer and novation;
26        (4) the procedures and deadline for submitting

 

 

10300SB0762sam001- 34 -LRB103 03216 BMS 60136 a

1    comments or objections on the plan;
2        (5) a summary of any effect that the transfer and
3    novation will have on the policyholder's rights;
4        (6) a statement that the assuming insurer is
5    authorized to assume the subject business and that court
6    approval of the plan shall extinguish all rights of
7    policyholders under policies that are part of the subject
8    business against the transferring insurer;
9        (7) a statement regarding whether any policyholder or
10    group of policyholders may or will lose or gain state
11    guaranty association coverage as a result of the transfer
12    and the implication of losing or gaining state guaranty
13    association coverage;
14        (8) that recipients shall not have the opportunity to
15    opt out of or otherwise reject the transfer and novation;
16        (9) contact information for the Department where the
17    policyholder may obtain further information;
18        (10) information on how an electronic copy of the
19    insurance business transfer plan may be accessed. If
20    policyholders are unable to readily access electronic
21    copies, the applicant shall provide hard copies by
22    first-class mail; and
23        (11) any other information that the court may require.
24    (h) Any person, including by their legal representative,
25who considers himself, herself, or itself to be adversely
26affected can present evidence or comments to the court at the

 

 

10300SB0762sam001- 35 -LRB103 03216 BMS 60136 a

1approval hearing. Any person participating in the approval
2hearing must follow the process established by the court and
3shall bear his or her own costs and attorney's fees.
 
4    (215 ILCS 5/1730 new)
5    Sec. 1730. Approval; denial; insurance business transfer
6plans.
7    (a) After the comment period pursuant to subsection (f) of
8Section 1725 has ended the insurance business transfer plan
9shall be presented by the applicant for approval by the court.
10    (b) At any time before the court issues an order approving
11the insurance business transfer plan, the applicant may
12withdraw the petition without prejudice.
13    (c) If the court finds that the implementation of the
14insurance business transfer plan would not materially
15adversely affect the interests of policyholders, reinsurers,
16or claimants that are part of the subject business, the court
17shall enter a judgment and implementation order. The judgment
18and implementation order shall:
19        (1) order implementation of the insurance business
20    transfer plan;
21        (2) order a statutory novation with respect to all
22    policyholders or reinsureds and their respective policies
23    and reinsurance agreements under the subject business,
24    including the extinguishment of all rights of
25    policyholders under policies that are part of the subject

 

 

10300SB0762sam001- 36 -LRB103 03216 BMS 60136 a

1    business against the transferring insurer, and providing
2    that the transferring insurer shall have no further
3    rights, obligations, or liabilities with respect to such
4    policies, and that the assuming insurer shall have all
5    such rights, obligations, and liabilities as if it were
6    the original insurer of such policies;
7        (3) release the transferring insurer from all
8    obligations or liabilities under policies that are part of
9    the subject business;
10        (4) authorize and order the transfer of property or
11    liabilities, including, but not limited to, the ceded
12    reinsurance of transferred policies and contracts on the
13    subject business, notwithstanding any non-assignment
14    provisions in any such reinsurance contracts. The subject
15    business shall vest in and become liabilities of the
16    assuming insurer;
17        (5) order that the applicant provide notice of the
18    transfer and novation in accordance with the notice
19    provisions in Section 1715; and
20        (6) make such other provisions with respect to
21    incidental, consequential, and supplementary matters as
22    are necessary to assure the insurance business transfer
23    plan is fully and effectively carried out.
24    (d) If the court finds that the insurance business
25transfer plan should not be approved, the court by its order
26shall deny the petition.

 

 

10300SB0762sam001- 37 -LRB103 03216 BMS 60136 a

1    (e) The applicant shall have 30 days following the
2withdrawal or denial of the petition to file an amended
3business transfer plan with the Director in accordance with
4Section 1720.
5    (f) Nothing in this Section in any way affects the right of
6appeal of any party.
 
7    (215 ILCS 5/1735 new)
8    Sec. 1735. Rules. The Department may adopt rules that are
9consistent with the provisions of this Article.
 
10    (215 ILCS 5/1740 new)
11    Sec. 1740. Confidentiality. The portion of the application
12for an insurance business transfer that would otherwise be
13confidential, including any documents, materials,
14communications, or other information submitted to the Director
15in contemplation of such application, shall not lose such
16confidentiality, except (i) the Director may disclose
17confidential information as needed to procure the independent
18expert and ensure that the expert meets the requirements under
19this Article and (ii) if the Director determines that
20disclosure of confidential information is necessary to fully
21and fairly advise policyholders and others entitled to notice
22of the material implications of the insurance business
23transfer plan.
 

 

 

10300SB0762sam001- 38 -LRB103 03216 BMS 60136 a

1    (215 ILCS 5/1745 new)
2    Sec. 1745. Department oversight. Insurers engaging in an
3insurance business transfer under this Article consent to the
4jurisdiction of the Director with regard to any aspect of the
5transferred business or business transfer plan, including the
6authority of the Director to conduct financial analysis and
7examinations, regardless of whether the insurer has a
8certificate of authority or another basis for the Director's
9jurisdiction exists.
 
10    (215 ILCS 5/1750 new)
11    Sec. 1750. Fees and costs.
12    (a) All expenses incurred by the Director for the
13compensation, costs, and expenses of the independent expert
14and any consultants retained by the independent expert
15incurred in fulfilling the obligations of the independent
16expert under this Article shall be paid by the applicant.
17    (b) The Director may retain the services of any attorneys,
18actuaries, accountants, and other professionals and
19specialists as may be reasonably necessary to assist the
20Director in reviewing the insurance business transfer plan.
21All expenses incurred by the Director in connection with
22proceedings under this Article, including, but not limited to,
23expenses for the services of any attorneys, actuaries,
24accountants, and other professionals and specialists, shall be
25paid by the applicant.

 

 

10300SB0762sam001- 39 -LRB103 03216 BMS 60136 a

1    (c) The transferring insurer and the assuming insurer
2shall jointly be obligated to pay all debts incurred pursuant
3to this Section. Nothing in this Article shall be construed to
4create any duty for the independent expert to any party other
5than the Department or a court.
6    (d) Failure to pay any of the requisite fees or costs
7within 30 days after demand shall be grounds for the Director
8to request that a court dismiss the petition for approval of
9the insurance business transfer plan before the filing of an
10implementation order by the court or, if after the filing of an
11implementation order, the Director may suspend or revoke the
12assuming insurer's certificate of authority to transact
13insurance business in this State. The Director may also take
14any other action authorized by law against an insurer who
15fails to pay the requisite fees or costs.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law, except that the changes to Section 408 and
18Article XLVII of the Illinois Insurance Code take effect
19January 1, 2025.".