Full Text of HB0074 99th General Assembly
HB0074 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB0074 Introduced , by Rep. Lou Lang SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/53 | from Ch. 73, par. 665 |
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Amends the Illinois Insurance Code. Makes a technical change in a Section
concerning deposits of
securities.
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 53 as follows:
| 6 | | (215 ILCS 5/53) (from Ch. 73, par. 665)
| 7 | | (Section scheduled to be repealed on January 1, 2017)
| 8 | | Sec. 53. Deposit. | 9 | | (a) A company subject to the the provisions of this Article | 10 | | shall make and
maintain with the Director for the protection of | 11 | | all creditors,
policyholders and policy obligations of the | 12 | | company, a deposit of
securities having a
fair market value | 13 | | equal to the minimum surplus required to be maintained
under | 14 | | Section 43.
The Director may release the required deposit of | 15 | | securities
upon receipt of
an order of a court having proper | 16 | | jurisdiction or
upon: (i)
certification by the company that it | 17 | | has no outstanding creditors,
policyholders, or policy | 18 | | obligations in effect and no plans to engage in the
business of | 19 | | insurance; (ii) receipt of a lawful resolution of the company's
| 20 | | board of directors effecting the surrender of its articles of | 21 | | incorporation for
administrative dissolution by the Director; | 22 | | and (iii) receipt of the name and
forwarding address for each | 23 | | of the final officers and directors of the company,
together |
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| 1 | | with a plan of dissolution approved by the Director.
| 2 | | (b) All deposits by insurers subject to this Article must | 3 | | be limited to the following types: | 4 | | (1) United States government bonds, notes, and bills | 5 | | for which the full faith and credit of the government of | 6 | | the United States is pledged for the payment of principal | 7 | | and interest. | 8 | | (2) United States public bonds and notes of any state | 9 | | or of the District of Columbia, or Canadian public bonds | 10 | | and notes of any province thereof, for which the full faith | 11 | | and credit of the issuer has been pledged for the payment | 12 | | of principal and interest. | 13 | | (3) United States and Canadian county, provincial, | 14 | | municipal, and district bonds and notes for which the | 15 | | issuer has lawful authority to levy taxes or make | 16 | | assessments for the payment of principal and interest. | 17 | | (4) Bonds and notes of any federal agency that are | 18 | | guaranteed as to payment of principal and interest by the | 19 | | United States. | 20 | | (5) International development bank bonds, bonds issued | 21 | | by the State of Israel and sold through the Development | 22 | | Corporation for Israel or its successor entities, and notes | 23 | | issued, assumed, and guaranteed by the International Bank | 24 | | for Reconstruction and Development, the Inter-American | 25 | | Development Bank, the Asian Development Bank, the African | 26 | | Development Bank, or the International Finance |
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| 1 | | Corporation. | 2 | | (6) Corporate bonds and notes of any private | 3 | | corporations that are not affiliates or subsidiaries of the | 4 | | insurer, which corporations are organized under the laws of | 5 | | the United States, Canada, any state, the District of | 6 | | Columbia, any territory or possession of the United States, | 7 | | or any province of Canada. | 8 | | (7) Certificates of deposit. | 9 | | (c) To be eligible for deposit under subsection (b), any | 10 | | bond or note must have the following characteristics: | 11 | | (1) The bond or note must be interest-bearing or | 12 | | interest-accruing, and the insurer must be the exclusive | 13 | | owner of the interest accruing thereon and entitled to | 14 | | receive the interest for its account. | 15 | | (2) The issuer must be in a solvent financial condition | 16 | | and the bond or note must not be in default. | 17 | | (3) The bond, note, or debt of the issuing country must | 18 | | be rated in one of the 4 highest classifications by an | 19 | | established, nationally recognized investment rating | 20 | | service or must have been given a rating of 1 by the | 21 | | Securities Valuation Office of the National Association of | 22 | | Insurance Commissioners. | 23 | | (4) The market value of the bond or note must be | 24 | | readily ascertainable or the value of the bond or note must | 25 | | be obtainable by the insurer or its custodian from the | 26 | | issuer's fiscal agent. |
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| 1 | | (5) The bond or note must be the direct obligation of | 2 | | the issuer. | 3 | | (6) The bond or note must be stated in United States | 4 | | dollar denominations. | 5 | | (7) The bond or note must be eligible for book-entry | 6 | | form on the books of the Federal Reserve's book-entry | 7 | | system or in a depository trust clearing system or on the | 8 | | books of the issuer's transfer agent or evidenced by a | 9 | | certificate delivered to the insurer or its custodian. | 10 | | (d) To be eligible for deposit under item (7) of subsection | 11 | | (b), a certificate of deposit must have the following | 12 | | characteristics: | 13 | | (1) The certificate of deposit must be issued by a | 14 | | bank, savings bank, or savings association that is | 15 | | organized under the laws of the United States, of this | 16 | | State, or of any other state and that has a principal | 17 | | office or branch office in this State that is authorized to | 18 | | receive deposits in this State. | 19 | | (2) The certificate of deposit must be | 20 | | interest-bearing and may not be issued in discounted form. | 21 | | (3) The certificate of deposit must be issued for a | 22 | | period of not less than one year. | 23 | | (4) The issuing bank, savings bank, or savings | 24 | | association must agree to the terms and conditions of the | 25 | | Director regarding the rights to the certificate of deposit | 26 | | and must have executed a written certificate of deposit |
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| 1 | | agreement with the Director. The terms and conditions of | 2 | | the agreement shall include, but need not be limited to: | 3 | | (A) Exclusive authorized signature authority for | 4 | | the chief financial officer. | 5 | | (B) An agreement to pay, without protest, the | 6 | | proceeds of its certificate of deposit to the Director | 7 | | within 30 business days after presentation. | 8 | | (C) A prohibition against levies, setoffs, | 9 | | survivorship, or other conditions that might hinder | 10 | | the Director's ability to recover the full face value | 11 | | of a certificate of deposit. | 12 | | (D) Instructions regarding interest payments, | 13 | | renewals, taxpayer identification, and early | 14 | | withdrawal penalties. | 15 | | (E) An agreement to be subject to the jurisdiction | 16 | | of the courts of this State, or those of the United | 17 | | States that are located in this State, for the purposes | 18 | | of any litigation arising out of this Section. | 19 | | (F) Such other conditions as the Director | 20 | | requires. | 21 | | (e) The Director may refuse to accept certain securities or | 22 | | refuse to accept the reported market value of certain | 23 | | securities offered pursuant to this Section in order to ensure | 24 | | that sufficient cash and securities are on hand to meet the | 25 | | purposes of the deposit. In making a refusal under this | 26 | | subsection (e), the guidelines for use of the Director may |
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| 1 | | include, but need not be limited to, whether the market value | 2 | | of the securities cannot be readily ascertained and the lack of | 3 | | liquidity of the securities. Securities refused under this | 4 | | subsection (e) are not acceptable as deposits. | 5 | | (f) All deposits required of a domestic insurer pursuant to | 6 | | the laws of another state, province, or country must be | 7 | | comprised of securities of the kinds required under subsection | 8 | | (b), having the characteristics required under subsections (c) | 9 | | and (d), and permitted by the laws of the other state, | 10 | | province, or country, except common stocks, mortgages or loans | 11 | | of any kind, real estate investment trust funds or programs, | 12 | | commercial paper, and letters of credit. | 13 | | (Source: P.A. 98-110, eff. 1-1-14; 98-969, eff. 1-1-15 .)
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