Illinois General Assembly - Full Text of HB0982
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Full Text of HB0982  98th General Assembly




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1    AN ACT concerning insurance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 245.21 as follows:
6    (215 ILCS 5/245.21)  (from Ch. 73, par. 857.21)
7    Sec. 245.21. Establishment of separate accounts by
8domestic companies organized to do a life, annuity, or accident
9and health insurance business. A domestic company, including
10for the purposes of this Article all domestic fraternal benefit
11societies, may, for authorized classes of insurance, establish
12one or more separate accounts, and may allocate thereto amounts
13(including without limitation proceeds applied under optional
14modes of settlement or under dividend options) to provide for
15life, annuity, or accident and health insurance (and benefits
16incidental thereto), payable in fixed or variable amounts or
17both, subject to the following:
18    (1) The income, gains and losses, realized or unrealized,
19from assets allocated to a separate account must be credited to
20or charged against the account, without regard to other income,
21gains or losses of the company.
22    (2) Except as may be provided with respect to reserves for
23guaranteed benefits and funds referred to in paragraph (3) of



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1this Section (i) amounts allocated to any separate account and
2accumulations thereon may be invested and reinvested without
3regard to any requirements or limitations of Part 2 or Part 3
4of Article VIII of this Code and (ii) the investments in any
5separate account or accounts may not be taken into account in
6applying the investment limitations otherwise applicable to
7the investments of the company.
8    (3) Except with the approval of the Director and under the
9conditions as to investments and other matters as the Director
10may prescribe, that must recognize the guaranteed nature of the
11benefits provided, reserves for (i) benefits guaranteed as to
12dollar amount and duration and (ii) funds guaranteed as to
13principal amount or stated rate of interest may not be
14maintained in a separate account.
15    (4) Unless otherwise approved by the Director, assets
16allocated to a separate account must be valued at their market
17value on the date of valuation, or if there is no readily
18available market, then as provided in the contract or the rules
19or other written agreement applicable to the separate account.
20Unless otherwise approved by the Director, the portion, if any,
21of the assets of the separate account equal to the company's
22reserve liability with regard to the guaranteed benefits and
23funds referred to in paragraph (3) of this Section must be
24valued in accordance with the rules otherwise applicable to the
25company's assets.
26    (5) Amounts allocated to a separate account under this



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1Article are owned by the company, and the company may not be,
2nor hold itself out to be, a trustee with respect to those
3amounts. The assets of any separate account equal to the
4reserves and other contract liabilities with respect to the
5account may not be charged with liabilities arising out of any
6other business the company may conduct, unless the separate
7account is subject to guarantees, in which case the assets
8shall be charged with liabilities arising out of other business
9of the company, unless the contract specifies that the assets
10are insulated.
11    (6) No sale, exchange or other transfer of assets may be
12made by a company between any of its separate accounts or
13between any other investment account and one or more of its
14separate accounts unless, in case of a transfer into a separate
15account, the transfer is made solely to establish the account
16or to support the operation of the contracts with respect to
17the separate account to which the transfer is made, and unless
18the transfer, whether into or from a separate account, is made
19(i) by a transfer of cash, or (ii) by a transfer of securities
20having a readily determinable market value, if the transfer of
21securities is approved by the Director. The Director may
22approve other transfers among those accounts if, in his or her
23opinion, the transfers would not be inequitable.
24    (7) To the extent a company considers it necessary to
25comply with any applicable federal or state laws, the company,
26with respect to any separate account, including without



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1limitation any separate account which is a management
2investment company or a unit investment trust, may provide for
3persons having an interest therein appropriate voting and other
4rights and special procedures for the conduct of the business
5of the account, including without limitation special rights and
6procedures relating to investment policy, investment advisory
7services, selection of independent public accountants, and the
8selection of a committee, the members of which need not be
9otherwise affiliated with the company, to manage the business
10of the account.
11(Source: P.A. 90-381, eff. 8-14-97; 90-418, eff. 8-15-97;
1290-655, eff. 7-30-98.)
13    Section 99. Effective date. This Act takes effect upon
14becoming law.