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90_HB2226ham004
LRB9001538JSgcam02
1 AMENDMENT TO HOUSE BILL 2226
2 AMENDMENT NO. . Amend House Bill 2226 on page 1,
3 line 7, by changing "and 245.25" to "245.25, and 513a9"; and
4 on page 42 by inserting immediately below line 18 the
5 following:
6 "(215 ILCS 5/513a9) (from Ch. 73, par. 1065.60a9)
7 Sec. 513a9. Premium finance agreement.
8 (a) A premium finance agreement must be dated and signed
9 by or on behalf of the named insured, and the printed portion
10 shall be in at least 8-point type. The following items must
11 be set forth on the first page of the accepted finance
12 agreement:
13 (1) the total amount of the premiums;
14 (2) the amount of the down payment;
15 (3) the principal balance (the difference between
16 items (1) and (2));
17 (4) the amount of the finance charges expressed in
18 dollars and as an annual percentage rate;
19 (5) the balance payable by the insured (sum of
20 items (3) and (4));
21 (6) the number of installments, the due dates
22 thereof, and the amount of each installment expressed in
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1 dollars; and
2 (7) the policy numbers or binder numbers.
3 (b) The premium finance company is required to furnish
4 full and complete disclosure of the terms and conditions of
5 the premium finance agreement including, but not limited to,
6 the specific insurance coverages financed to the named
7 insured no later than the date that the first premium payment
8 notice is sent to the insured.
9 (c) As to policies written primarily for personal,
10 family, or household use, the premium finance company must:
11 (1) deliver or mail the premium check or checks in
12 the amount of the principal balance directly to the
13 insurer or insurers unless the insurer or insurers have
14 given written authority to the premium finance company to
15 deliver the checks to the producer;
16 (2) issue the premium check or checks payable to
17 the insurer, insurers, or, if the insurer gives written
18 authority to the premium finance company, to the
19 producer; and
20 (3) properly identify the premium check or checks
21 by policy number or binder number when the premium is
22 paid to the insurer or insurers.
23 (d) As to all other policies the premium finance company
24 may:
25 (1) deliver or mail the premium check or checks in
26 the amount of the principal balance directly to the
27 producer; and
28 (2) issue the premium check or checks payable to
29 the producer.
30 (e) A premium finance company that pays the financed
31 premium to the producer pursuant to subsection (d)
32 establishes the producer as the agent of the premium finance
33 company for payment of the premium and for receipt of any
34 return premium.
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1 (Source: P.A. 89-265, eff. 1-1-96.)"; and
2 on page 43 by inserting immediately below line 6 the
3 following:
4 "Section 20. The Religious and Charitable Risk Pooling
5 Trust Act is amended by changing Section 25.1 as follows:
6 (215 ILCS 150/25.1) (from Ch. 148, par. 225.1)
7 Sec. 25.1. (a) Any trust fund organized under this Act
8 may reorganize itself as a mutual insurance company or a
9 reciprocal in accordance with the provisions of this Section,
10 provided that it has both (1) a net fund balance (surplus),
11 reported on a basis consistent with that prescribed in
12 Section 136 of the Illinois Insurance Code of (a) not less
13 than that required of a newly organized mutual insurance
14 company under Section 43 of the Illinois Insurance Code and
15 authorized to write like lines of business, if the trust fund
16 is reorganizing into a mutual insurance company, or (b) not
17 less than that required of a newly organized reciprocal under
18 Section 66 of the Illinois Insurance Code and Authorized to
19 write like lines of business, if the trust fund is
20 reorganizing into a reciprocal, and (2) an operating history
21 of not less than 3 5 consecutive years after organizational
22 approval of the trust fund by the Director of Insurance,
23 during which period such trust fund shall have continuously
24 provided non-assessable benefits or indemnification contracts
25 to its beneficiaries. A trust fund reorganized as a mutual
26 insurance company shall, after reorganization and
27 notwithstanding any contrary provision of the Illinois
28 Insurance Code, have the powers of a mutual insurance company
29 organized under Article III of the Illinois Insurance Code
30 together with continuing powers and authority granted trust
31 funds pursuant to Section 6 of this Act. A trust fund
32 reorganized as a reciprocal shall, after reorganization and
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1 notwithstanding any contrary provision of the Illinois
2 Insurance Code, have the power of a reciprocal organized
3 under Article IV of the Illinois Insurance Code together with
4 continuing powers and authority granted trust funds pursuant
5 to Section 6 of this Act. In addition, surplus amounts
6 attributable to contribution certificates meeting the
7 requirements of Section 14.1 of this Act and issued by a
8 trust fund prior to reorganization as either a mutual
9 insurance company or a reciprocal or by the successor mutual
10 insurance company or reciprocal within a period of 5 years
11 following reorganization, may be reported as surplus on the
12 successor insurance company's or reciprocal's financial
13 statements in a manner consistent with and subject to the
14 terms of Section 14.1 of this Act. After expiration of such
15 5 year period, the provisions of Section 56 of the Illinois
16 Insurance Code shall be applicable to a reorganized mutual
17 insurance company or reciprocal, with regard to the
18 accumulation of a guarantee fund. Except as provided in this
19 subsection (a), this Act shall not be applicable to a
20 reorganized mutual insurance company or reciprocal, and the
21 mutual insurance company or reciprocal shall be subject to
22 all otherwise applicable provisions of the Illinois Insurance
23 Code.
24 (b) The Trustees of any trust fund seeking to reorganize
25 as a mutual insurance company shall adopt articles of
26 incorporation and by-laws as shall be necessary to make the
27 same conform to articles of incorporation and by-laws of a
28 mutual insurance company, as provided under Article III of
29 the Illinois Insurance Code. Duplicate originals of such
30 articles and by-laws shall be delivered to the Director of
31 Insurance, together with the financial statements, as
32 required under subsection (d). The Director shall approve
33 the articles and by-laws after a finding that they are
34 consistent with the requirements applicable to companies
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1 organized under Article III of the Illinois Insurance Code,
2 relating to domestic mutual companies, except as otherwise
3 provided herein. Upon approval by the Director and the
4 recordation of a certified copy of the articles of
5 incorporation in the office of the recorder in the county
6 where the principal office of the company is located, such
7 company shall be subject to and entitled to the benefits of
8 Article III of the Illinois Insurance Code.
9 (c) (i) The trustees of any trust fund seeking to
10 reorganize as a reciprocal shall, by resolution, approve a
11 plan of reorganization setting forth (1) a proposed
12 declaration of organization, as provided under Article IV of
13 the Illinois Insurance Code; (2) a form of power of attorney
14 designating a person, as defined in Section 2 of the Illinois
15 Insurance Code, to act as attorney in fact on behalf of the
16 beneficiaries of the trust fund in exchanging contracts of
17 insurance after reorganization of the trust fund as a
18 reciprocal, which form shall be consistent with the
19 provisions of Article IV; (3) the terms and conditions of the
20 proposed reorganization and the mode of carrying the same
21 into effect; and (4) the manner and basis of assuming the
22 assets and liabilities of the trust fund, including the
23 benefit schedule theretofore issued by the trust fund,
24 whether or not then in force. Duplicate originals of the plan
25 of reorganization, as adopted by the trustees, shall be
26 submitted to the Director of Insurance, together with such
27 other documents as are necessary to satisfy the requirements
28 of Article IV and the financial statements, as required under
29 subsection (d) below. The Director shall approve the plan and
30 the other documents upon finding each consistent with the
31 requirements applicable to reciprocals organized under
32 Article IV relating to domestic reciprocals, except as
33 otherwise provided herein.
34 (ii) Within 60 days after approval by the Director, the
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1 plan of reorganization and other documents, as approved by
2 the Director, shall then be submitted by the trustees for
3 approval by the beneficiaries of the trust fund at a
4 regularly scheduled or special meeting of beneficiaries.
5 Written or printed notice shall be given not less than 20
6 days before each such meeting, either personally or by mail,
7 to each beneficiary of the trust fund. If mailed, such notice
8 is deemed to be delivered when deposited in the United States
9 mail, with postage prepaid, addressed to the beneficiary at
10 his address as it appears on the records of the trust fund.
11 Such notice shall state the place, day, hour and purpose of
12 the meeting. A copy of the plan of reorganization shall be
13 enclosed with such notice. Approval by beneficiaries shall
14 require (1) the affirmative vote of 2/3 of all beneficiaries
15 of the trust fund covered under benefit schedules in force at
16 the date of the notice, voting in person or by proxy at the
17 meeting, and (2) the execution by the beneficiaries voting in
18 favor of the plan of the power of attorney proposed as a part
19 of the plan. Each beneficiary entitled to vote shall have one
20 vote regardless of the number of benefit schedules that may
21 have been issued or contributions paid therefor.
22 (iii) Within 10 days after approval by the
23 beneficiaries, the trust fund, acting by and through its
24 designated officers, shall certify to the Director such
25 approval, appending to such certification a true and correct
26 copy of the plan, as approved, the declaration of
27 organization executed by the attorney-in-fact, and the form
28 of the power of attorney, as executed, together with a list
29 of the beneficiaries so approving and executing the power of
30 attorney. The Director shall thereafter issue to the
31 attorney-in-fact a certificate of authority, as provided in
32 Section 73 of the Illinois Insurance Code, but only after the
33 termination by the trust fund of all benefit schedules issued
34 to beneficiaries who have declined to execute the power of
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1 attorney, which termination may be accomplished by the
2 expiry, nonrenewal or cancellation of benefit schedules. Upon
3 such termination, the trust fund, acting by and through its
4 designated officers, shall so certify to the Director, and
5 the date of such certification shall constitute the effective
6 date of reorganization of the trust fund, being the date on
7 which the reciprocal shall become the successor in interest
8 to the trust fund and thenceforth be responsible and liable
9 for all of the liabilities and obligations of the trust fund
10 in accordance with the approved plan of reorganization, and
11 the benefit schedules issued by the trust fund which then
12 remain outstanding shall be deemed to have been issued by the
13 reciprocal. All of the property, real, personal and mixed,
14 and all other choses in action and all and every other
15 interest of the trust fund upon the effective date of
16 reorganization shall be deemed transferred to and vested in
17 the reciprocal without further act or deed. The reciprocal
18 shall thereupon be subject to and entitled to the benefits of
19 Article IV of the Illinois Insurance Code and the trust fund
20 shall thereafter cease to exist.
21 (d) The Trustees of any such trust fund shall deliver to
22 the Director of Insurance a statement of financial condition
23 as of a date not more than 6 months prior to said date of
24 delivery, prepared in accordance with Section 136 of the
25 Illinois Insurance Code and certified by an independent
26 public accountant as correctly stating the financial
27 condition of such trust fund in accordance with the standards
28 of said Section 136. The Director shall review such
29 statement of financial condition and may, in his discretion,
30 conduct an examination of such trust fund to determine its
31 financial condition. Any such examination shall be commenced
32 within 60 days after the date of delivery to the Director of
33 such statement of financial condition.
34 (e) In the case of a trust fund reorganizing into a
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1 mutual insurance company, provided that (i) such statement of
2 financial condition shall reflect, and the Director is
3 satisfied from the examination, if conducted, that a net fund
4 balance (surplus) in an amount at least equal at the time of
5 reorganization to that required of a newly organized company
6 subject to Section 43 of the Illinois Insurance Code and
7 writing like lines of business and (ii) the articles of
8 incorporation and by-laws, as required by subsection (b),
9 shall comply with the requirements of Article III of the
10 Illinois Insurance Code, the Director of Insurance shall
11 approve the reorganization and articles and by-laws within 60
12 days after receipt thereof, or within 60 days after the
13 completion of any examination conducted by the Director,
14 whichever date shall last occur, and shall issue a
15 certificate of authority, as provided under Section 51 of the
16 Illinois Insurance Code within 10 days after the receipt of
17 evidence of recordation of the articles and by-laws.
18 (f) In the case of a trust fund reorganizing into a
19 reciprocal, provided that (i) the statement of financial
20 condition shall reflect, and the Director is satisfied from
21 the examination, if conducted, that a net fund balance
22 (surplus) in an amount at least equal at the time of
23 reorganization to that required of a newly organized
24 reciprocal subject to Section 66 of the Illinois Insurance
25 Code and writing like lines of business and (ii) the
26 declaration of organization and other documents, as required
27 by subsection (c), shall comply with the requirements of
28 Article IV of the Illinois Insurance Code, the Director of
29 Insurance shall approve the reorganization and declaration
30 within 60 days after receipt thereof, or within 60 days after
31 the completion of any examination conducted by the Director,
32 whichever date shall last occur, and shall issue a
33 certificate of authority, as provided under Section 73 of the
34 Illinois Insurance Code within 10 days after the deposit with
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1 the Director by the reorganizing reciprocal of cash or
2 securities as required by Section 74 of the Illinois
3 Insurance Code.
4 (Source: P.A. 86-847.)".