Full Text of SB0765 103rd General Assembly
SB0765sam001 103RD GENERAL ASSEMBLY | Sen. Napoleon Harris, III Filed: 10/25/2023 | | 10300SB0765sam001 | | LRB103 03220 JDS 65002 a |
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| 1 | | AMENDMENT TO SENATE BILL 765
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 765 by replacing | 3 | | everything after the enacting clause with the following: | 4 | | "Section 5. The Farm Mutual Insurance Company Act of 1986 | 5 | | is amended by changing Section 10 as follows: | 6 | | (215 ILCS 120/10) (from Ch. 73, par. 1260) | 7 | | Sec. 10. Property insurable; limitations of risk. | 8 | | (a) Until the date that is 5 years after the effective date | 9 | | of this amendatory Act of the 103rd General Assembly this | 10 | | subsection (a) applies: | 11 | | (1) Farm mutual insurance companies are permitted to | 12 | | insure the following classes of property: | 13 | | (A) (a) Farm property, including residences and | 14 | | other farm buildings and all classes of personal | 15 | | property in connection therewith, other than motor | 16 | | vehicles required to be licensed for road use, |
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| 1 | | including such property temporarily located elsewhere; | 2 | | (B) (b) Growing crops; | 3 | | (C) (c) Buildings and personal property used in | 4 | | the processing of agricultural products in conjunction | 5 | | with a farming operation; | 6 | | (D) (d) Residences, including household and | 7 | | personal effects, and including such property | 8 | | temporarily located elsewhere; | 9 | | (E) (e) Churches, schools and community buildings | 10 | | and such property as may be properly contained | 11 | | therein. | 12 | | No farm mutual insurance company may insure any | 13 | | property within the limits of any city containing over | 14 | | 50,000 inhabitants at the time of the organization of the | 15 | | company. | 16 | | (2) No farm mutual insurance company authorized to | 17 | | write the kinds of insurance enumerated in Section 5 of | 18 | | this Act may expose itself to any loss on any one risk in | 19 | | an amount in excess of $20,000 plus 10% of its | 20 | | policyholders' surplus in excess of $20,000. | 21 | | A farm mutual insurance company insuring against | 22 | | the perils of wind or hail must have and maintain adequate | 23 | | catastrophic reinsurance which limits the company's | 24 | | exposure on any one loss occurrence to 20% of its | 25 | | policyholders' surplus . | 26 | | A farm mutual insurance company converting from |
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| 1 | | unlimited catastrophic reinsurance to adequate | 2 | | catastrophic reinsurance under this Section shall provide | 3 | | notice of the change to policyholders in a form approved | 4 | | by the Director of Insurance. | 5 | | A farm mutual insurance company must additionally have | 6 | | and maintain aggregate reinsurance coverage in an amount | 7 | | no less than that required for a 250-year event, based on | 8 | | an actuarially sound catastrophe model. | 9 | | The reinsurance permitted or required by this Section | 10 | | must be provided by (i) a farm mutual insurance company, | 11 | | (ii) an insurance company authorized to write the kinds of | 12 | | insurance described in Class 2 or Class 3 of Section 4 of | 13 | | the Illinois Insurance Code, or (iii) a reinsurer and | 14 | | reinsurance program meeting the standards set forth in | 15 | | Article XI of the Illinois Insurance Code that permit a | 16 | | domestic company to take credit for reinsurance. | 17 | | Nothing in this Section shall be construed to prohibit | 18 | | a farm mutual insurance company from purchasing | 19 | | reinsurance coverage greater than the minimum requirement | 20 | | set forth under this Section, including purchasing | 21 | | unlimited catastrophic coverage. | 22 | | No portion of any such risk which has been reinsured | 23 | | with a farm mutual insurance company or an insurance | 24 | | company authorized to write the kinds of insurance | 25 | | described in Class 2 or Class 3 of Section 4 of the | 26 | | Illinois Insurance Code shall be included in determining |
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| 1 | | the limitation of risk described herein. | 2 | | For purposes of this Section: | 3 | | A single risk shall be all real and personal property | 4 | | in one fixed location and not separated by 50 feet. | 5 | | "Adequate catastrophic reinsurance" means reinsurance | 6 | | in an amount no less than that required for a 500-year | 7 | | event, based on an actuarially sound catastrophe model | 8 | | that limits the company's exposure on any one loss | 9 | | occurrence to (i) 20% of its policyholders' surplus or | 10 | | (ii) an amount authorized by the Director of Insurance. | 11 | | As regards the peril of wind or hail, the term "loss | 12 | | occurrence" shall mean all losses occasioned by tornadoes, | 13 | | cyclones, windstorms, hurricanes, or hail stones arising | 14 | | from the same atmospheric disturbance and occurring during | 15 | | any continuous period of not less than 48 hours. | 16 | | (3) Whenever the company's financial condition is such | 17 | | that the further assumption of risks might be hazardous to | 18 | | policyholders, the Director of Insurance may order the | 19 | | company to take one or more of the following steps: | 20 | | (A) (a) To reduce the loss exposure by | 21 | | reinsurance; | 22 | | (B) (b) To reduce the volume of business being | 23 | | written or renewed; | 24 | | (C) (c) To suspend the writing of new business; | 25 | | (D) (d) To suspend the writing of both new and | 26 | | renewal business; |
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| 1 | | (E) (e) To levy a special assessment of | 2 | | policyholders; | 3 | | (F) (f) To reduce general or acquisition expenses | 4 | | by specified methods. | 5 | | (4) Whenever the Director determines that a farm | 6 | | mutual insurance company is insolvent he shall order the | 7 | | farm mutual insurance company to levy a special assessment | 8 | | within 30 days of receipt of such order. If the insolvency | 9 | | is not corrected within 90 days of the mailing of such | 10 | | assessment, the company shall be subject to liquidation | 11 | | pursuant to Article XIII of the Illinois Insurance Code. | 12 | | (b) On and after the date that is 5 years after the | 13 | | effective date of this amendatory Act of the 103rd General | 14 | | Assembly this subsection (b) applies: | 15 | | (1) Farm mutual insurance companies are permitted to | 16 | | insure the following classes of property: | 17 | | (A) Farm property, including residences and other | 18 | | farm buildings and all classes of personal property in | 19 | | connection therewith, other than motor vehicles | 20 | | required to be licensed for road use, including such | 21 | | property temporarily located elsewhere; | 22 | | (B) Growing crops; | 23 | | (C) Buildings and personal property used in the | 24 | | processing of agricultural products in conjunction | 25 | | with a farming operation; | 26 | | (D) Residences, including household and personal |
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| 1 | | effects, and including such property temporarily | 2 | | located elsewhere; | 3 | | (E) Churches, schools and community buildings and | 4 | | such property as may be properly contained therein. | 5 | | No farm mutual insurance company may insure any | 6 | | property within the limits of any city containing over | 7 | | 50,000 inhabitants at the time of the organization of the | 8 | | company. | 9 | | (2) No farm mutual insurance company authorized to | 10 | | write the kinds of insurance enumerated in Section 5 of | 11 | | this Act may expose itself to any loss on any one risk in | 12 | | an amount in excess of $20,000 plus 10% of its | 13 | | policyholders' surplus in excess of $20,000. | 14 | | A farm mutual insurance company insuring against the | 15 | | perils of wind or hail must have and maintain catastrophic | 16 | | reinsurance which limits the company's exposure on any one | 17 | | loss occurrence to 20% of its policyholders' surplus. | 18 | | No portion of any such risk which has been reinsured | 19 | | with a farm mutual insurance company or an insurance | 20 | | company authorized to write the kinds of insurance | 21 | | described in Class 2 or Class 3 of Section 4 of the | 22 | | Illinois Insurance Code shall be included in determining | 23 | | the limitation of risk described herein. | 24 | | For purposes of this Section: | 25 | | A single risk shall be all real and personal property | 26 | | in one fixed location and not separated by 50 feet. |
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| 1 | | As regards the peril of wind or hail, the term "loss | 2 | | occurrence" shall mean all losses occasioned by tornadoes, | 3 | | cyclones, windstorms, hurricanes, or hail stones arising | 4 | | from the same atmospheric disturbance and occurring during | 5 | | any continuous period of not less than 48 hours. | 6 | | (3) Whenever the company's financial condition is such | 7 | | that the further assumption of risks might be hazardous to | 8 | | policyholders, the Director of Insurance may order the | 9 | | company to take one or more of the following steps: | 10 | | (A) To reduce the loss exposure by reinsurance; | 11 | | (B) To reduce the volume of business being written | 12 | | or renewed; | 13 | | (C) To suspend the writing of new business; | 14 | | (D) To suspend the writing of both new and renewal | 15 | | business; | 16 | | (E) To levy a special assessment of policyholders; | 17 | | (F) To reduce general or acquisition expenses by | 18 | | specified methods. | 19 | | (4) Whenever the Director determines that a farm | 20 | | mutual insurance company is insolvent he shall order the | 21 | | farm mutual insurance company to levy a special assessment | 22 | | within 30 days of receipt of such order. If the insolvency | 23 | | is not corrected within 90 days of the mailing of such | 24 | | assessment, the company shall be subject to liquidation | 25 | | pursuant to Article XIII of the Illinois Insurance Code. | 26 | | (Source: P.A. 88-364.) |
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| 1 | | Section 99. Effective date. This Act takes effect upon | 2 | | becoming law.". |
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