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| Public Act 098-0039 | ||||
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AN ACT concerning insurance.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by | ||||
changing Section 245.21 as follows:
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(215 ILCS 5/245.21) (from Ch. 73, par. 857.21)
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Sec. 245.21.
Establishment of separate accounts by | ||||
domestic companies
organized to do a life, annuity, or accident | ||||
and health insurance business. A
domestic company, including | ||||
for the purposes of this
Article all domestic fraternal benefit
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societies, may, for authorized
classes of insurance, establish | ||||
one or more
separate accounts, and may allocate thereto amounts | ||||
(including without
limitation proceeds applied under optional | ||||
modes of settlement or under
dividend options) to provide for | ||||
life, annuity, or accident and health
insurance (and benefits
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incidental thereto), payable in fixed or variable amounts or | ||||
both, subject
to the following:
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(1) The income, gains and losses, realized or unrealized, | ||||
from
assets allocated to a separate account must be credited to | ||||
or charged
against the account, without regard to other income, | ||||
gains or losses of
the company.
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(2) Except as may be provided with respect to reserves for
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guaranteed benefits and funds referred to in paragraph (3) of | ||||
this
Section (i) amounts allocated to any separate account and | ||
accumulations
thereon may be invested and reinvested without | ||
regard to any requirements
or limitations of Part 2 or Part 3 | ||
of Article VIII of this Code and (ii) the
investments in any | ||
separate account or accounts may not be taken into
account in | ||
applying the investment limitations otherwise applicable to | ||
the
investments of the company.
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(3) Except with the approval of the Director and under the
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conditions as to investments and other matters as the Director | ||
may
prescribe,
that must recognize the guaranteed nature of the | ||
benefits provided,
reserves for (i) benefits guaranteed as to | ||
dollar amount and duration
and (ii) funds guaranteed as to | ||
principal amount or stated rate of
interest may not be | ||
maintained in a separate account.
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(4) Unless otherwise approved by the Director, assets | ||
allocated to a
separate account must be valued at their market | ||
value on the date of
valuation, or if there is no readily | ||
available market, then as provided
in the contract or the rules | ||
or other written agreement applicable to
the separate account. | ||
Unless otherwise approved by the Director, the
portion, if any, | ||
of the assets of the separate account equal to the
company's | ||
reserve liability with regard to the guaranteed benefits and
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funds referred to in paragraph (3) of this Section must be | ||
valued in
accordance with the rules otherwise applicable to the | ||
company's assets.
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(5) Amounts allocated to a separate account under this | ||
Article are
owned by the company, and the company may not be, | ||
nor hold itself out to
be, a trustee with respect to those | ||
amounts. The assets of any
separate account equal to the | ||
reserves and other contract liabilities
with respect to the | ||
account may not be charged with liabilities arising
out of any | ||
other business the company may conduct, unless the separate | ||
account is subject to guarantees, in which case the assets | ||
shall be charged with liabilities arising out of other business | ||
of the company, unless the contract specifies that the assets | ||
are insulated.
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(6) No sale, exchange or other transfer of assets may be | ||
made by a
company between any of its separate accounts or | ||
between any other
investment account and one or more of its | ||
separate accounts unless, in
case of a transfer into a separate | ||
account, the transfer is made solely
to establish the account | ||
or to support the operation of the contracts
with respect to | ||
the separate account to which the transfer is made, and
unless | ||
the transfer, whether into or from a separate account, is made
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(i) by a transfer of cash, or (ii) by a transfer of securities | ||
having a
readily determinable market value, if the transfer of | ||
securities is
approved by the Director. The Director may | ||
approve other transfers among
those accounts if, in his or her | ||
opinion, the transfers would not be
inequitable.
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(7) To the extent a company considers it necessary to | ||
comply with
any applicable federal or state laws, the company, | ||
with respect to any
separate account, including without | ||
limitation any separate account
which is a management | ||
investment company or a unit investment trust, may
provide for | ||
persons having an interest therein appropriate voting and
other | ||
rights and special procedures for the conduct of the business | ||
of
the account, including without limitation special rights and | ||
procedures
relating to investment policy, investment advisory | ||
services, selection
of independent public accountants, and the | ||
selection of a committee, the
members of which need not be | ||
otherwise affiliated with the company, to
manage the business | ||
of the account.
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(Source: P.A. 90-381, eff. 8-14-97; 90-418, eff. 8-15-97;
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90-655, eff. 7-30-98.)
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Section 99. Effective date. This Act takes effect upon | ||
becoming law.
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