Illinois General Assembly - Illinois Compiled Statutes

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215 ILCS 5/1705

    (215 ILCS 5/1705)
    (This Section may contain text from a Public Act with a delayed effective date)
    Sec. 1705. Definitions. As used in this Article:

"Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled
by, or is under common control with the person specified.

"Applicant" means a transferring insurer or reinsurer applying under this Article.

"Assuming insurer" means an insurer domiciled in Illinois and authorized to transact the type of business described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4 that
seeks to assume policies from a
transferring insurer pursuant to this Article.

    "Court" means the circuit court of Sangamon County or Cook County.
    "Department" means the Department of Insurance.
    "Director" means the Director of Insurance.

"Implementation order" means an order issued by a court
under this Article.

"Insurance business transfer" means a transfer and
novation that, once approved pursuant to this Article, transfers
insurance obligations or risks, or both, of existing or
in-force contracts of insurance or reinsurance from a
transferring insurer to an assuming insurer, and effects a
novation of the transferred contracts of insurance or
reinsurance with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer and the transferring insurer's insurance obligations
or risks, or both, under the contracts are extinguished.

"Insurance business transfer plan" means the plan
submitted to the Department to accomplish the transfer and
novation pursuant to an insurance business transfer, including
any associated transfer of assets and rights from or on behalf
of the transferring insurer to the assuming insurer. An "insurance business transfer plan" is limited to the types of insurance described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4.

"Independent expert" means the impartial person procured to assist the Director and the court in connection with their review of a proposed transaction. The independent expert shall:

(i) have no current or past, direct or indirect,

financial interest in either the assuming insurer or transferring insurer or any of their respective affiliates,

(ii) have not been employed by or acted as an

officer, director, consultant, or other independent contractor for either the assuming insurer or transferring insurer or any of their respective affiliates within the past 12 months,

(iii) not currently be appointed by the Director to

assist in any capacity in any proceeding initiated under Article XIII, and

(iv) receive no compensation in connection with the

transaction governed by this Article other than a fee based on a fixed or hourly basis that is not contingent on the approval or consummation of an insurance business transfer.

"Insurer" means an insurance, surety, or reinsurance
company, corporation, partnership, association, society,
order, individual, or aggregation of individuals engaging in
or proposing or attempting to engage in insurance
or surety business, including the exchanging of reciprocal or
inter-insurance contracts between individuals, partnerships,
and corporations.

"Policy" means a policy, certificate of
insurance, or a contract of reinsurance pursuant to which an
insurer agrees to assume an obligation or risk, or both, of the
policyholder or to make payments on behalf of, or to, the
policyholder or its beneficiaries, and includes property and
casualty insurance. "Policy" does not include any policy, contract, or certificate of life, accident, or health insurance, including those defined in clause (a) or (b) of Class 1 or clause (a) of Class 2 of Section 4.

"Policyholder" means an insured or a reinsured under a
policy that is part of the subject business.

"State guaranty association" means the Illinois Insurance Guaranty Fund, the Illinois Life and Health Guaranty Association, or any similar organization in another state.

"Subject business" means the policy or policies that are
the subject of the insurance business transfer plan.

"Transfer and novation" means the transfer of insurance
obligations or risks, or both, of existing or in-force
policies from a transferring insurer to an assuming insurer
that is intended to effect a novation of the transferred
policies with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer on the transferred policies and the transferring
insurer's obligations or risks, or both, under the transferred
policies are extinguished.

"Transferring insurer" means an insurer or reinsurer that
transfers and novates or seeks to transfer and novate
obligations or risks, or both, under one or more policies to an
assuming insurer pursuant to an insurance business transfer
plan.

(Source: P.A. 103-75, eff. 1-1-25.)