Full Text of HB1955 102nd General Assembly
HB1955enr 102ND GENERAL ASSEMBLY |
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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 Sections 35B-25, 131.1, 131.8, and 131.22 and by | 6 | | adding Section 131.20d as follows: | 7 | | (215 ILCS 5/35B-25) | 8 | | Sec. 35B-25. Plan of division approval. | 9 | | (a) A division shall not become effective until it is | 10 | | approved by the Director after reasonable notice and a public | 11 | | hearing, if the notice and hearing are deemed by the Director | 12 | | to be in the public interest. The Director shall hold a public | 13 | | hearing if one is requested by the dividing company. A hearing | 14 | | conducted under this Section shall be conducted in accordance | 15 | | with Article 10 of the Illinois Administrative Procedure Act. | 16 | | (b) The Director shall approve a plan of division unless | 17 | | the Director finds that: | 18 | | (1) the interest of any class of policyholder or | 19 | | shareholder of the dividing company will not be properly | 20 | | protected; | 21 | | (2) each new company created by the proposed division, | 22 | | except a new company that is a nonsurviving party to a | 23 | | merger pursuant to subsection (b) of Section 156, would be |
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| 1 | | ineligible to receive a license to do insurance business | 2 | | in this State pursuant to Section 5; | 3 | | (2.5) each new company created by the proposed | 4 | | division, except a new company that is a nonsurviving | 5 | | party to a merger pursuant to subsection (b) of Section | 6 | | 156, that will be a member insurer of the Illinois Life and | 7 | | Health Insurance Guaranty Association and that will have | 8 | | policy liabilities allocated to it will not be licensed to | 9 | | do insurance business in each state where such policies | 10 | | were written by the dividing company; | 11 | | (3) the proposed division violates a provision of the | 12 | | Uniform Fraudulent Transfer Act; | 13 | | (4) the division is being made for purposes of | 14 | | hindering, delaying, or defrauding any policyholders or | 15 | | other creditors of the dividing company; | 16 | | (5) one or more resulting companies will not be | 17 | | solvent upon the consummation of the division; or | 18 | | (6) the remaining assets of one or more resulting | 19 | | companies will be, upon consummation of a division, | 20 | | unreasonably small in relation to the business and | 21 | | transactions in which the resulting company was engaged or | 22 | | is about to engage. | 23 | | (c) In determining whether the standards set forth in | 24 | | paragraph (3) of subsection (b) have been satisfied, the | 25 | | Director shall only apply the Uniform Fraudulent Transfer Act | 26 | | to a dividing company in its capacity as a resulting company |
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| 1 | | and shall not apply the Uniform Fraudulent Transfer Act to any | 2 | | dividing company that is not proposed to survive the division. | 3 | | (d) In determining whether the standards set forth in | 4 | | paragraphs (3), (4), (5), and (6) of subsection (b) have been | 5 | | satisfied, the Director may consider all proposed assets of | 6 | | the resulting company, including, without limitation, | 7 | | reinsurance agreements, parental guarantees, support or keep | 8 | | well agreements, or capital maintenance or contingent capital | 9 | | agreements, in each case, regardless of whether the same would | 10 | | qualify as an admitted asset as defined in Section 3.1. | 11 | | (e) In determining whether the standards set forth in | 12 | | paragraph (3) of subsection (b) have been satisfied, with | 13 | | respect to each resulting company, the Director shall, in | 14 | | applying the Uniform Fraudulent Transfer Act, treat: | 15 | | (1) the resulting company as a debtor; | 16 | | (2) liabilities allocated to the resulting company as | 17 | | obligations incurred by a debtor; | 18 | | (3) the resulting company as not having received | 19 | | reasonably equivalent value in exchange for incurring the | 20 | | obligations; and | 21 | | (4) assets allocated to the resulting company as | 22 | | remaining property. | 23 | | (f) All information, documents, materials, and copies | 24 | | thereof submitted to, obtained by, or disclosed to the | 25 | | Director in connection with a plan of division or in | 26 | | contemplation thereof, including any information, documents, |
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| 1 | | materials, or copies provided by or on behalf of a domestic | 2 | | stock company in advance of its adoption or submission of a | 3 | | plan of division, shall be confidential and shall be subject | 4 | | to the same protection and treatment in accordance with | 5 | | Section 131.22 131.14d as documents and reports disclosed to | 6 | | or filed with the Director pursuant to Section 131.14b until | 7 | | such time, if any, as a notice of the hearing contemplated by | 8 | | subsection (a) is issued. | 9 | | (g) From and after the issuance of a notice of the hearing | 10 | | contemplated by subsection (a), all business, financial, and | 11 | | actuarial information that the domestic stock company requests | 12 | | confidential treatment, other than the plan of division, shall | 13 | | continue to be confidential and shall not be available for | 14 | | public inspection and shall be subject to the same protection | 15 | | and treatment in accordance with Section 131.22 131.14d as | 16 | | documents and reports disclosed to or filed with the Director | 17 | | pursuant to Section 131.14b. | 18 | | (h) All expenses incurred by the Director in connection | 19 | | with proceedings under this Section, including expenses for | 20 | | the services of any attorneys, actuaries, accountants, and | 21 | | other experts as may be reasonably necessary to assist the | 22 | | Director in reviewing the proposed division, shall be paid by | 23 | | the dividing company filing the plan of division. A dividing | 24 | | company may allocate expenses described in this subsection in | 25 | | a plan of division in the same manner as any other liability. | 26 | | (i) If the Director approves a plan of division, the |
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| 1 | | Director shall issue an order that shall be accompanied by | 2 | | findings of fact and conclusions of law. | 3 | | (j) The conditions in this Section for freeing one or more | 4 | | of the resulting companies from the liabilities of the | 5 | | dividing company and for allocating some or all of the | 6 | | liabilities of the dividing company shall be conclusively | 7 | | deemed to have been satisfied if the plan of division has been | 8 | | approved by the Director in a final order that is not subject | 9 | | to further appeal.
| 10 | | (Source: P.A. 100-1118, eff. 11-27-18; 101-549, eff. 1-1-20 .)
| 11 | | (215 ILCS 5/131.1) (from Ch. 73, par. 743.1)
| 12 | | Sec. 131.1. Definitions. As used in this Article, the | 13 | | following terms have the respective
meanings set forth in this | 14 | | Section unless the context requires otherwise:
| 15 | | (a) An "affiliate" of, or person "affiliated" with, a | 16 | | specific person,
is a person that directly, or indirectly | 17 | | through one or more
intermediaries, controls, or is controlled | 18 | | by, or is under common control
with, the person specified.
| 19 | | (a-5) "Acquiring party" means such person by whom or on | 20 | | whose behalf the merger or other acquisition of control | 21 | | referred to in Section 131.4 is to be affected and any person | 22 | | that controls such person or persons. | 23 | | (a-10) "Associated person" means, with respect to an | 24 | | acquiring party, (1) any beneficial owner of shares of the | 25 | | company to be acquired, owned, directly or indirectly, of |
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| 1 | | record or beneficially by the acquiring party, (2) any | 2 | | affiliate of the acquiring party or beneficial owner, and (3) | 3 | | any other person acting in concert, directly or indirectly, | 4 | | pursuant to any agreement, arrangement, or understanding, | 5 | | whether written or oral, with the acquiring party or | 6 | | beneficial owner, or any of their respective affiliates, in | 7 | | connection with the merger, consolidation, or other | 8 | | acquisition of control referred to in Section 131.4 of this | 9 | | Code. | 10 | | (a-15) "Company" has the same meaning as "company" as | 11 | | defined in Section 2 of this Code, except that it does not | 12 | | include agencies, authorities, or instrumentalities of the | 13 | | United States, its possessions and territories, the | 14 | | Commonwealth of Puerto Rico, the District of Columbia, or a | 15 | | state or political subdivision of a state. | 16 | | (b) "Control" (including the terms "controlling", | 17 | | "controlled by" and
"under common control with") means the | 18 | | possession, direct or indirect, of
the power to direct or | 19 | | cause the direction of the management and policies
of a | 20 | | person, whether through the ownership of voting securities, | 21 | | the holding
of shareholders' or policyholders' proxies by
| 22 | | contract other than a commercial contract for goods or | 23 | | non-management
services, or otherwise, unless the power is | 24 | | solely the result of an
official position with or corporate | 25 | | office held by the person. Control is presumed
to exist if any | 26 | | person, directly or indirectly, owns, controls, holds with
the |
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| 1 | | power to vote, or holds shareholders' proxies representing 10% | 2 | | or
more of the voting securities of any other person, or holds | 3 | | or controls
sufficient policyholders' proxies to elect the | 4 | | majority of the board of
directors of the domestic company. | 5 | | This presumption may be rebutted by a
showing made in the | 6 | | manner as the Director may provide by rule. The Director
may | 7 | | determine, after
furnishing all persons in interest notice and | 8 | | opportunity to be heard and
making specific findings of fact | 9 | | to support such determination, that
control exists in fact, | 10 | | notwithstanding the absence of a presumption to
that effect.
| 11 | | (b-5) "Enterprise risk" means any activity, circumstance, | 12 | | event, or series of events involving one or more affiliates of | 13 | | a company that, if not remedied promptly, is likely to have a | 14 | | material adverse effect upon the financial condition or | 15 | | liquidity of the company or its insurance holding company | 16 | | system as a whole, including, but not limited to, anything | 17 | | that would cause the company's risk-based capital to fall into | 18 | | company action level as set forth in Article IIA of this Code | 19 | | or would cause the company to be in
hazardous financial | 20 | | condition as set forth in Article XII 1/2 of this Code. | 21 | | (b-10) "Exchange Act" means the Securities Exchange Act of | 22 | | 1934, as amended, together with the rules and regulations | 23 | | promulgated thereunder. | 24 | | (b-15) "Group-wide supervisor" means the regulatory | 25 | | official authorized to engage in conducting and coordinating | 26 | | group-wide supervision activities who is determined or |
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| 1 | | acknowledged by the Director under Section 131.20d of this | 2 | | Code to have sufficient contacts with an internationally | 3 | | active insurance group. | 4 | | (c) "Insurance holding company system" means two or more | 5 | | affiliated
persons, one or more of which is an insurance | 6 | | company as defined in
paragraph (e) of Section 2 of this Code.
| 7 | | (c-5) "Internationally active insurance group" means an | 8 | | insurance holding company system that: | 9 | | (1) includes an insurer registered under Section 4 of | 10 | | this Code; and | 11 | | (2) meets the following criteria: | 12 | | (A) premiums written in at least 3 countries; | 13 | | (B) the percentage of gross premiums written | 14 | | outside the United States is at least 10% of the | 15 | | insurance holding company system's total gross written | 16 | | premiums; and | 17 | | (C) based on a 3-year rolling average, the total | 18 | | assets of the insurance holding company system are at | 19 | | least $50,000,000,000 or the total gross written | 20 | | premiums of the insurance holding company system are | 21 | | at least $10,000,000,000. | 22 | | (d) (Blank).
| 23 | | (d-1) "NAIC" means the National Association of Insurance | 24 | | Commissioners. | 25 | | (d-5) "Non-operating holding company" is a general | 26 | | business corporation functioning solely for the purpose of |
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| 1 | | forming, owning, acquiring, and managing subsidiary business | 2 | | entities and having no other business operations not related | 3 | | thereto. | 4 | | (d-10) "Own", "owned," or "owning" means shares (1) with | 5 | | respect to which a person
has title or to which a person's | 6 | | nominee, custodian, or other agent has title and which such
| 7 | | nominee, custodian, or other agent is holding on behalf of the | 8 | | person or (2) with respect to
which a person (A) has purchased | 9 | | or has entered into an unconditional contract, binding on both
| 10 | | parties, to purchase the shares, but has not yet received the | 11 | | shares, (B) owns a security
convertible into or exchangeable | 12 | | for the shares and has tendered the security for conversion or
| 13 | | exchange, (C) has an option to purchase or acquire, or rights | 14 | | or warrants to subscribe to, the shares and has exercised such | 15 | | option, rights, or warrants, or (D) holds a securities futures | 16 | | contract
to purchase the shares and has received notice that | 17 | | the position will be physically settled and is
irrevocably | 18 | | bound to receive the underlying shares. To the extent that any
| 19 | | affiliates of the stockholder or beneficial owner are acting | 20 | | in concert with the stockholder or
beneficial owner, the | 21 | | determination of shares owned may include the effect of | 22 | | aggregating the
shares owned by the affiliate or affiliates. | 23 | | Whether shares constitute shares owned shall
be decided by the | 24 | | Director in his or her reasonable determination. | 25 | | (e) "Person" means an individual, a corporation, a limited | 26 | | liability company, a partnership, an
association, a joint |
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| 1 | | stock company, a trust, an unincorporated
organization, any | 2 | | similar entity or any combination of the foregoing acting
in | 3 | | concert, but does not include any securities broker performing | 4 | | no more
than the usual and customary broker's function or | 5 | | joint venture
partnership exclusively engaged in owning, | 6 | | managing, leasing or developing
real or tangible personal | 7 | | property other than capital stock.
| 8 | | (e-5) "Policyholders' proxies" are proxies that give the | 9 | | holder the right to vote for the election of the directors and | 10 | | other corporate actions not in the day to day operations of the | 11 | | company. | 12 | | (f) (Blank).
| 13 | | (f-5) "Securityholder" of a specified person is one who | 14 | | owns any security of such person, including common stock, | 15 | | preferred stock, debt obligations, and any other security | 16 | | convertible into or evidencing the right to acquire any of the | 17 | | foregoing. | 18 | | (g) "Subsidiary" of a specified person is an affiliate | 19 | | controlled by
such person directly, or indirectly through one | 20 | | or more intermediaries.
| 21 | | (h) "Voting Security" is a security which gives to the | 22 | | holder thereof
the right to vote for the election of directors | 23 | | and includes any security
convertible into or evidencing a | 24 | | right to acquire a voting security.
| 25 | | (i) (Blank).
| 26 | | (j) (Blank).
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| 1 | | (k) (Blank).
| 2 | | (Source: P.A. 98-609, eff. 1-1-14.)
| 3 | | (215 ILCS 5/131.8) (from Ch. 73, par. 743.8)
| 4 | | Sec. 131.8.
(1) After the statement required by Section | 5 | | 131.5 has been
filed, the Director shall approve
any merger, | 6 | | consolidation or other acquisition of control referred to in
| 7 | | Section 131.4 unless
the Director finds that:
| 8 | | (a) after the change of control, the domestic company | 9 | | referred to in
Section 131.4 would not be able to satisfy | 10 | | the requirements for the issuance of
a license to write | 11 | | the line or lines of insurance for which it is presently
| 12 | | licensed;
| 13 | | (b) the effect of the merger, consolidation or other | 14 | | acquisition
of control would be substantially to lessen | 15 | | competition in insurance in
this State or tend to create a | 16 | | monopoly therein. In applying the
competitive
standard in | 17 | | this paragraph:
| 18 | | (i) the informational requirements of subsection | 19 | | (3)(a) and the standards
of subsection (4)(b) of | 20 | | Section 131.12a shall apply,
| 21 | | (ii) the merger or other acquisition shall not be | 22 | | found substantially to lessen competition in insurance | 23 | | in this State or tend to create a monopoly therein if | 24 | | the Director finds that any of the situations meeting | 25 | | the criteria provided
by subsection (4)(c) of Section |
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| 1 | | 131.12a exist, and
| 2 | | (iii) the Director may condition the approval of | 3 | | the merger or other acquisition
on the removal of the | 4 | | basis of disapproval within a specified period of | 5 | | time;
| 6 | | (c) the financial condition of any acquiring party is | 7 | | such as might
jeopardize the financial stability of the | 8 | | domestic company or
jeopardize the interests of its | 9 | | policyholders;
| 10 | | (d) the plans or proposals which the acquiring party | 11 | | has to liquidate
the domestic company, sell its assets or | 12 | | consolidate or merge it with any
person,
or to make any | 13 | | other material change in its business or corporate | 14 | | structure
or management, are unfair and unreasonable to
| 15 | | policyholders of such company and not in the public | 16 | | interest; or
| 17 | | (e) the competence, experience and integrity of those | 18 | | persons who
would control the operation of the domestic | 19 | | company are such that it would not
be in the best interests | 20 | | of policyholders of such company and of the
insurance | 21 | | buying public to permit the merger, consolidation or other
| 22 | | acquisition of control.
| 23 | | (2) The Director may hold a public hearing on any merger,
| 24 | | consolidation or other acquisition of control referred to in | 25 | | Section 131.4 if
the Director determines that the statement | 26 | | filed as required by
Section 131.5 does
not demonstrate |
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| 1 | | compliance with the standards referred to in subsection (1), | 2 | | of
this Section, or if he determines that such acquisition of | 3 | | control is likely to be hazardous or prejudicial to the | 4 | | insurance buying public.
| 5 | | (3) The public hearing referred to in subsection
(2) must | 6 | | be held within 60 days after the statement
required by Section | 7 | | 131.5 is filed, and at least 20 days'
notice thereof must be
| 8 | | given by the Director to the person filing the statement and to | 9 | | the domestic
company. Not less than 7 days' notice of such | 10 | | hearing must be given by the person
filing the statement to | 11 | | such other persons as may be designated by the
Director and by | 12 | | the company to its shareholders. The Director must make
a | 13 | | determination within 60 days after the conclusion of the | 14 | | hearing. At the
hearing, the person filing the statement, the | 15 | | domestic company, any person to
whom notice of the hearing was | 16 | | sent, and any other person whose interests
may be affected | 17 | | thereby has the right to present evidence, examine and
| 18 | | cross-examine witnesses, and offer oral and written arguments | 19 | | and in connection
therewith is entitled to conduct discovery | 20 | | proceedings in the same manner as is
presently allowed in the | 21 | | Circuit Courts of this State. All discovery proceedings
must | 22 | | be concluded not later than 3 days prior to the commencement of | 23 | | the public hearing.
| 24 | | (4) If the proposed acquisition of control will require | 25 | | the approval of more than one state insurance commissioner, | 26 | | the public hearing referred to in subsection (2) of this |
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| 1 | | Section may be held on a consolidated basis upon request of the | 2 | | person filing the statement referred to in Section 131.5 of | 3 | | this Code. Such person shall file the statement referred to in | 4 | | Section 131.5 of this Code with the National Association of | 5 | | Insurance Commissioners (NAIC) within 5 days after making the | 6 | | request for a public hearing. A commissioner may opt out of a | 7 | | consolidated hearing and shall provide notice to the applicant | 8 | | of the opt out within 10 days after the receipt of the | 9 | | statement referred to in Section 131.5 of this Code. A hearing | 10 | | conducted on a consolidated basis shall be public and shall be | 11 | | held within the United States before the commissioners of the | 12 | | states in which the companies are domiciled. Such | 13 | | commissioners shall hear and receive evidence. A commissioner | 14 | | may attend such hearing in person or by telecommunication. | 15 | | (5) In connection with a change of control of a domestic | 16 | | company, any determination by the Director that the person | 17 | | acquiring control of the company shall be required to maintain | 18 | | or restore the capital of the company to the level required by | 19 | | the laws and regulations of this State shall be made not later | 20 | | than 60 days after the filing of the statement required by | 21 | | Section 131.5 of this Code. | 22 | | (Source: P.A. 98-609, eff. 1-1-14.)
| 23 | | (215 ILCS 5/131.20d new) | 24 | | Sec. 131.20d. Group-wide supervision of internationally | 25 | | active insurance groups. |
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| 1 | | (a) The Director is authorized to act as the group-wide | 2 | | supervisor for any internationally active insurance group in | 3 | | accordance with the provisions of this Section. | 4 | | (b) The Director may otherwise acknowledge another | 5 | | regulatory official as the group-wide supervisor where the | 6 | | internationally active insurance group: | 7 | | (1) does not have substantial insurance operations in | 8 | | the United States; | 9 | | (2) has substantial insurance operations in the United | 10 | | States, but not in this State; or | 11 | | (3) has substantial insurance operations in the United | 12 | | States and this State, but the Director has determined | 13 | | pursuant to the factors set forth in subsections (d) and | 14 | | (h) that the other regulatory official is the appropriate | 15 | | group-wide supervisor. | 16 | | (c) An insurance holding company system that does not | 17 | | otherwise qualify as an internationally active insurance group | 18 | | may request that the Director make a determination or | 19 | | acknowledgment as to a group-wide supervisor pursuant to this | 20 | | Section. | 21 | | (d) In cooperation with other state, federal, and | 22 | | international regulatory agencies, the Director will identify | 23 | | a single group-wide supervisor for an internationally active | 24 | | insurance group. The Director may determine that the Director | 25 | | is the appropriate group-wide supervisor for an | 26 | | internationally active insurance group that conducts |
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| 1 | | substantial insurance operations concentrated in this State. | 2 | | However, the Director may acknowledge that a regulatory | 3 | | official from another jurisdiction is the appropriate | 4 | | group-wide supervisor for the internationally active insurance | 5 | | group. A regulatory official identified under this Section as | 6 | | the group-wide supervisor may determine that it is appropriate | 7 | | to acknowledge another supervisor to serve as the group-wide | 8 | | supervisor. The acknowledgment of the group-wide supervisor | 9 | | shall be made after consideration of the factors listed in | 10 | | paragraphs (1) through (5) of this subsection, and shall be | 11 | | made in cooperation with and subject to the acknowledgment of | 12 | | other regulatory officials involved with supervision of | 13 | | members of the internationally active insurance group, and in | 14 | | consultation with the internationally active insurance group. | 15 | | The Director shall consider the following factors when making | 16 | | a determination or acknowledgment under this subsection: | 17 | | (1) the place of domicile of the insurance companies | 18 | | within the internationally active insurance group that | 19 | | hold the largest share of the group's written premiums, | 20 | | assets, or liabilities; | 21 | | (2) the place of domicile of the top-tiered insurance | 22 | | company or companies in the insurance holding company | 23 | | system of the internationally active insurance group; | 24 | | (3) the location of the executive offices or largest | 25 | | operational offices of the internationally active | 26 | | insurance group; |
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| 1 | | (4) whether another regulatory official is acting or | 2 | | is seeking to act as the group-wide supervisor under a | 3 | | regulatory system that the Director determines to be: | 4 | | (A) substantially similar to the system of | 5 | | regulation provided under the laws of this State; or | 6 | | (B) otherwise sufficient in terms of providing for | 7 | | group-wide supervision, enterprise risk analysis, and | 8 | | cooperation with other regulatory officials; and | 9 | | (5) whether another regulatory official acting or | 10 | | seeking to act as the group-wide supervisor provides the | 11 | | Director with reasonably reciprocal recognition and | 12 | | cooperation. | 13 | | (e) Notwithstanding any other provision of law, when | 14 | | another regulatory official is acting as the group-wide | 15 | | supervisor of an internationally active insurance group, the | 16 | | Director shall acknowledge that regulatory official as the | 17 | | group-wide supervisor. However, in the event of a material | 18 | | change in the internationally active insurance group that | 19 | | results in: | 20 | | (1) the internationally active insurance group's | 21 | | insurance companies domiciled in this State holding the | 22 | | largest share of the group's premiums, assets, or | 23 | | liabilities; or | 24 | | (2) this State being the place of domicile of the | 25 | | top-tiered insurance company or companies in the insurance | 26 | | holding company system of the internationally active |
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| 1 | | insurance group, the Director shall make a determination | 2 | | or acknowledgment as to the appropriate group-wide | 3 | | supervisor for such an internationally active insurance | 4 | | group pursuant to subsection (d). | 5 | | (f) The Director is authorized to collect from any company | 6 | | registered pursuant to Section 131.13 all information | 7 | | necessary to determine whether the Director may act as the | 8 | | group-wide supervisor of an internationally active insurance | 9 | | group or if the Director may acknowledge another regulatory | 10 | | official to act as the group-wide supervisor. Before issuing a | 11 | | determination that an internationally active insurance group | 12 | | is subject to group-wide supervision by the Director, the | 13 | | Director shall notify the company registered pursuant to | 14 | | Section 131.13 and the ultimate controlling person within the | 15 | | internationally active insurance group. The internationally | 16 | | active insurance group shall have not less than 30 days to | 17 | | provide the Director with additional information pertinent to | 18 | | the pending determination. The Department shall publish on its | 19 | | Internet website the identity of internationally active | 20 | | insurance groups that the Director has determined are subject | 21 | | to group-wide supervision by the Director. | 22 | | (g) If the Director is the group-wide supervisor for an | 23 | | internationally active insurance group, the Director is | 24 | | authorized to engage in any of the following group-wide | 25 | | supervision activities: | 26 | | (1) assess the enterprise risks within the |
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| 1 | | internationally active insurance group to ensure that: | 2 | | (A) the material financial condition and liquidity | 3 | | risks to the members of the internationally active | 4 | | insurance group that are engaged in the business of | 5 | | insurance are identified by management; and | 6 | | (B) reasonable and effective mitigation measures | 7 | | are in place; | 8 | | (2) request, from any member of an internationally | 9 | | active insurance group subject to the Director's | 10 | | supervision, information necessary and appropriate to | 11 | | assess enterprise risk, including, but not limited to, | 12 | | information about the members of the internationally | 13 | | active insurance group regarding: | 14 | | (A) governance, risk assessment, and management; | 15 | | (B) capital adequacy; and | 16 | | (C) material intercompany transactions; | 17 | | (3) coordinate and, through the authority of the | 18 | | regulatory officials of the jurisdictions where members of | 19 | | the internationally active insurance group are domiciled, | 20 | | compel development and implementation of reasonable | 21 | | measures designed to ensure that the internationally | 22 | | active insurance group is able to timely recognize and | 23 | | mitigate enterprise risks to members of such | 24 | | internationally active insurance group that are engaged in | 25 | | the business of insurance; | 26 | | (4) communicate with other state, federal, and |
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| 1 | | international regulatory agencies for members within the | 2 | | internationally active insurance group and share relevant | 3 | | information subject to the confidentiality provisions of | 4 | | Section 131.22, through supervisory colleges as set forth | 5 | | in Section 131.20c or otherwise; | 6 | | (5) enter into agreements with or obtain documentation | 7 | | from any company registered under Section 131.13, any | 8 | | member of the internationally active insurance group, and | 9 | | any other state, federal, and international regulatory | 10 | | agencies for members of the internationally active | 11 | | insurance group, providing the basis for or otherwise | 12 | | clarifying the Director's role as group-wide supervisor, | 13 | | including provisions for resolving disputes with other | 14 | | regulatory officials. Such agreements or documentation | 15 | | shall not serve as evidence in any proceeding that any | 16 | | company or person within an insurance holding company | 17 | | system not domiciled or incorporated in this State is | 18 | | doing business in this State or is otherwise subject to | 19 | | jurisdiction in this State; and | 20 | | (6) other group-wide supervision activities, | 21 | | consistent with the authorities and purposes enumerated | 22 | | above, as considered necessary by the Director. | 23 | | (h) If the Director acknowledges that another regulatory | 24 | | official from a jurisdiction that is not accredited by the | 25 | | NAIC is the group-wide supervisor, the Director is authorized | 26 | | to reasonably cooperate, through supervisory colleges or |
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| 1 | | otherwise, with group-wide supervision undertaken by the | 2 | | group-wide supervisor, provided that: | 3 | | (1) the Director's cooperation is in compliance with | 4 | | the laws of this State; and | 5 | | (2) the regulatory official acknowledged as the | 6 | | group-wide supervisor also recognizes and cooperates with | 7 | | the Director's activities as a group-wide supervisor for | 8 | | other internationally active insurance groups where | 9 | | applicable. Where such recognition and cooperation is not | 10 | | reasonably reciprocal, the Director is authorized to | 11 | | refuse recognition and cooperation. | 12 | | (i) The Director is authorized to enter into agreements | 13 | | with or obtain documentation from any company registered under | 14 | | Section 131.13, any affiliate of the company, and other state, | 15 | | federal, and international regulatory agencies for members of | 16 | | the internationally active insurance group that provide the | 17 | | basis for or otherwise clarify a regulatory official's role as | 18 | | group-wide supervisor. | 19 | | (j) The Department may adopt regulations necessary for the | 20 | | administration of this Section. | 21 | | (k) A registered company subject to this Section shall be | 22 | | liable for and shall pay the reasonable expenses of the | 23 | | Director's participation in the administration of this | 24 | | Section, including the engagement of attorneys, actuaries, and | 25 | | any other professionals and all reasonable travel expenses.
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| 1 | | (215 ILCS 5/131.22) (from Ch. 73, par. 743.22)
| 2 | | Sec. 131.22. Confidential treatment. | 3 | | (a) Documents, materials, or other information in the | 4 | | possession or control of the Department that are obtained by | 5 | | or disclosed to the Director or any other person in the course | 6 | | of an examination or investigation made pursuant to this | 7 | | Article and all information reported or provided to the | 8 | | Department pursuant to paragraphs (12) and (13) of Section | 9 | | 131.5 and Sections 131.13 through 131.21 this Article shall be | 10 | | confidential by law and privileged, shall not be subject to | 11 | | the Illinois Freedom of Information Act, shall not be subject | 12 | | to subpoena, and shall not be subject to discovery or | 13 | | admissible in evidence in any private civil action. However, | 14 | | the Director is authorized to use the documents, materials, or | 15 | | other information in the furtherance of any regulatory or | 16 | | legal action brought as a part of the Director's official | 17 | | duties. The Director shall not otherwise make the documents, | 18 | | materials, or other information public without the prior | 19 | | written consent of the company to which it pertains unless the | 20 | | Director, after giving the company and its affiliates who | 21 | | would be affected thereby prior written notice and an | 22 | | opportunity to be heard, determines that the interest of | 23 | | policyholders, shareholders, or the public shall be served by | 24 | | the publication thereof, in which event the Director may | 25 | | publish all or any part in such manner as may be deemed | 26 | | appropriate. |
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| 1 | | (b) Neither the Director nor any person who received | 2 | | documents, materials, or other information while acting under | 3 | | the authority of the Director or with whom such documents, | 4 | | materials, or other information are shared pursuant to this | 5 | | Article shall be permitted or required to testify in any | 6 | | private civil action concerning any confidential documents, | 7 | | materials, or information subject to subsection (a) of this | 8 | | Section. | 9 | | (c) In order to assist in the performance of the | 10 | | Director's duties, the Director: | 11 | | (1) may share documents, materials, or other | 12 | | information, including the confidential and privileged | 13 | | documents, materials, or information subject to subsection | 14 | | (a) of this Section, with other state, federal, and | 15 | | international regulatory agencies, with the NAIC and its | 16 | | affiliates and subsidiaries , and with third-party
| 17 | | consultants , and with state, federal, and international | 18 | | law enforcement authorities and regulatory agencies , | 19 | | including members of any supervisory college allowed by | 20 | | this Article, provided that the recipient agrees in | 21 | | writing to maintain the confidentiality and privileged | 22 | | status of the document, material, or other information, | 23 | | and has verified in writing the legal authority to | 24 | | maintain confidentiality; | 25 | | (1.5) notwithstanding paragraph (1) of this subsection | 26 | | (c), may only share confidential and privileged documents, |
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| 1 | | material, or information reported pursuant to Section | 2 | | 131.14b with commissioners of states having statutes or | 3 | | regulations substantially similar to subsection (a) of | 4 | | this Section and who have agreed in writing not to | 5 | | disclose such information; and | 6 | | (2) may receive documents, materials, or information, | 7 | | including otherwise confidential and privileged documents, | 8 | | materials, or information from the NAIC and its affiliates | 9 | | and subsidiaries and from regulatory and law enforcement | 10 | | officials of other foreign or domestic jurisdictions, and | 11 | | shall maintain as confidential or privileged any document, | 12 | | material, or information received with notice or the | 13 | | understanding that it is confidential or privileged under | 14 | | the laws of the jurisdiction that is the source of the | 15 | | document, material, or information; any such documents,
| 16 | | materials, or information, while in the Director's | 17 | | possession, shall not be subject to the
Illinois Freedom | 18 | | of Information Act and shall not be subject to subpoena . ; | 19 | | and | 20 | | (c-5) Written (3) shall enter into written agreements with | 21 | | the NAIC or third-party consultants governing sharing and use | 22 | | of information provided pursuant to this Article consistent | 23 | | with this subsection (c) that shall :
| 24 | | (1) (i)
specify procedures and protocols regarding the | 25 | | confidentiality and security of information shared with | 26 | | the NAIC and its affiliates and subsidiaries or |
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| 1 | | third-party consultants pursuant to this Article, | 2 | | including procedures and protocols for sharing by the NAIC | 3 | | with other state, federal, or international regulators;
| 4 | | (2) (ii)
specify that ownership of information shared | 5 | | with the NAIC and its affiliates and subsidiaries or | 6 | | third-party consultants pursuant to this Article remains | 7 | | with the Director and the NAIC's or third-party | 8 | | consultant's use of the information is subject to the | 9 | | direction of the Director;
| 10 | | (3) (iii)
require prompt notice to be given to a | 11 | | company whose confidential information in the possession | 12 | | of the NAIC or third-party consultant pursuant to this | 13 | | Article is subject to a request or subpoena to the NAIC for | 14 | | disclosure or production; and
| 15 | | (4) (iv)
require the NAIC and its affiliates and | 16 | | subsidiaries or third-party consultants to consent to | 17 | | intervention by a company in any judicial or | 18 | | administrative action in which the NAIC and its affiliates | 19 | | and subsidiaries or third-party consultants may be | 20 | | required to disclose confidential information about the | 21 | | company shared with the NAIC and its affiliates and | 22 | | subsidiaries or third-party consultants pursuant to this | 23 | | Article. | 24 | | (d) The sharing of documents, materials, or information by | 25 | | the Director pursuant to this Article shall not constitute a | 26 | | delegation of regulatory authority or rulemaking, and the |
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| 1 | | Director is solely responsible for the administration, | 2 | | execution, and enforcement of the provisions of this Article. | 3 | | (e) No waiver of any applicable privilege or claim of | 4 | | confidentiality in the documents, materials, or information | 5 | | shall occur as a result of disclosure to the Director under | 6 | | this Section or as a result of sharing as authorized in | 7 | | subsection (c) of this Section. | 8 | | (f) Documents, materials, or other information in the | 9 | | possession or control of the NAIC or a third-party consultant | 10 | | pursuant to this Article shall be confidential by law and | 11 | | privileged, shall not be subject to the Illinois Freedom of | 12 | | Information Act, shall not be subject to subpoena, and shall | 13 | | not be subject to discovery or admissible in evidence in any | 14 | | private civil action.
| 15 | | (Source: P.A. 98-609, eff. 1-1-14.)
| 16 | | (215 ILCS 5/131.9a rep.) | 17 | | (215 ILCS 5/131.14d rep.) | 18 | | Section 10. The Illinois Insurance Code is amended by | 19 | | repealing Sections 131.9a and 131.14d.
| 20 | | Section 99. Effective date. This Act takes effect upon | 21 | | becoming law.
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