Public Act 098-0969
 
SB3322 EnrolledLRB098 18517 RPM 53654 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Intergovernmental Cooperation Act is 
amended  by changing Section 6 as follows:
 



    (5 ILCS 220/6)  (from Ch. 127, par. 746)



    Sec. 6. Joint self-insurance. An intergovernmental 
contract may, among
other undertakings,
authorize public 
agencies to jointly self-insure and authorize each public

agency member of the contract to utilize its funds to pay to a 
joint
insurance pool its costs and reserves to protect, wholly 
or partially,
itself or any public agency member of the 
contract against liability or
loss in the designated insurable 
area.  
    A joint insurance pool shall have an
annual audit performed 
by an independent certified public accountant and shall
file an 
annual audited financial report with the Director of Insurance 
no later
than 150 days after the end of the pool's immediately 
preceding fiscal year.
The
Director of Insurance shall issue 
rules necessary to implement this audit and
report requirement.  
The rule shall establish the due date for filing the
initial 
annual audited financial report.  Within 30 days after January 
1,
1991, and within 30 days after each January 1 thereafter, 
public agencies
that are jointly self-insured to protect 
against liability under the
Workers' Compensation Act and the 
Workers' Occupational Diseases Act shall
file with the Illinois 
Workers' Compensation Commission a report indicating an 
election to
self-insure. 
    The joint insurance pool shall also annually file with the 
Director a statement of actuarial opinion that conforms to the 
Actuarial Standards of Practice issued by the Actuarial 
Standards Board. All statements of actuarial opinion shall be 
issued by an independent actuary who is an associate or fellow 
of the Casualty Actuarial Society or of the Society of 
Actuaries. The statement of actuarial opinion shall include a 
statement in a casualty actuarial society that the pool's 
reserves are calculated in accordance with sound 
loss-reserving standards and adequate for the payment of 
claims.  This opinion shall be filed no later than 150 days 
after the end of each fiscal year.  The joint insurance pool 
shall be exempt from filing a statement of actuarial opinion by 
an independent actuary who is an associate or fellow of the 
Casualty Actuarial Society or of the Society of Actuaries in a 
casualty actuarial society that the joint insurance pool's 
reserves are in accordance with sound loss-reserving standards 
and payment of claims for the primary level of coverage  if the 
joint insurance pool files with the Director, by the reporting 
deadline, a statement of actuarial opinion from the provider of 
the joint pool's aggregate coverage, reinsurance, or other 
similar excess insurance coverage. Any statement of actuarial 
opinion must be prepared by an actuary who satisfies the 
qualification standards set forth by the American Academy of 
Actuaries to issue the opinion in the particular area of 
actuarial practice. 

    The Director may assess penalties against a joint insurance 
pool that fails to comply with the auditing, statement of 
actuarial opinion, and examination requirements of this 
Section in an amount equal to $500 per day for each violation, 
up to a maximum of $10,000 for each violation. The Director (or 
his or her staff) or a Director-selected independent auditor 
(or actuarial firm) that is not owned or affiliated with an 
insurance brokerage firm, insurance company, or other 
insurance industry affiliated entity may examine, as often as 
the Director deems advisable, the affairs, transactions, 
accounts, records, and assets and liabilities of each joint 
insurance pool that fails to comply with this Section. The 
joint insurance pool shall cooperate fully with the Director's 
representatives in all evaluations and audits of the joint 
insurance pool and resolve issues raised in those evaluations 
and audits. The failure to resolve those issues may constitute 
a violation of this Section, and may, after notice and an 
opportunity to be heard, result in the imposition of penalties 
pursuant to this Section. No sanctions under this Section may 
become effective until 30 days after the date that a notice of 
sanctions is delivered by registered or certified mail to the 
joint insurance pool. The Director shall have the authority to 
extend the time for filing any statement by any joint insurance 
pool for reasons that he or she considers good and sufficient.
    If a joint insurance pool requires a member to submit 
written notice in order for the member to withdraw from a 
qualified pool, then the period in which the member must 
provide the written notice cannot be greater than 120 days, 
except that this requirement applies only to joint insurance 
pool agreements entered into, modified, or renewed on or after 
the effective date of this amendatory Act of the 98th General 
Assembly. 
    For purposes of this Section, "public agency member" means 
any public
agency
defined or created under this Act, any local 
public entity as defined in
Section 1-206 of
the Local 
Governmental and Governmental Employees Tort Immunity Act, and 
any
public agency, authority, instrumentality, council, board, 
service region,
district,
unit, bureau,
or, commission, or any 
municipal corporation, college, or university, whether

corporate or
otherwise,
and any other local governmental body 
or similar entity that is presently
existing or
created after 
the effective date of this amendatory Act of the 92nd General

Assembly,
whether or not specified in this Section.
Only public 
agency members with tax receipts, tax revenues, taxing

authority, or other
resources sufficient to pay costs and to 
service debt related to
intergovernmental activities
described 
in this Section, or public agency members created by or as part 
of a
public
agency with these powers, may enter into contracts 
or otherwise associate among
themselves as permitted in this 
Section.

    No joint insurance pool or other intergovernmental 
cooperative offering health insurance shall interfere with the 
statutory obligation of any public agency member to bargain 
over or to reach agreement with a labor organization over a 
mandatory subject of collective bargaining as those terms are 
used in the Illinois Public Labor Relations Act.  No 
intergovernmental contract of insurance offering health 
insurance shall limit the rights or obligations of public 
agency members to engage in collective bargaining, and it shall 
be unlawful for a joint insurance pool or other 
intergovernmental cooperative offering health insurance to 
discriminate against public agency members or otherwise 
retaliate against such members for limiting their 
participation in a joint insurance pool as a result of a 
collective bargaining agreement.

    It shall not be considered a violation of this Section for 
an intergovernmental contract of insurance relating to health 
insurance coverage, life insurance coverage, or both to permit 
the pool or cooperative, if a member withdraws employees or 
officers into a union-sponsored program, to re-price the costs 
of benefits provided to the continuing employees or officers 
based upon the same underwriting criteria used by that pool or 
cooperative in the normal course of its business, but no member 
shall be expelled from a pool or cooperative if the continuing 
employees or officers meet the general criteria required of 
other members.

(Source: P.A. 98-504, eff. 1-1-14.)

 
    Section 10. The Illinois Insurance Code is amended  by 
changing Sections 26, 53, 174, and 245.1 as follows:
 



    (215 ILCS 5/26)  (from Ch. 73, par. 638)


    (Section scheduled to be repealed on January 1, 2017)

    Sec. 26. Deposit. 
    (a) A company subject to the provisions of this
Article 
shall make and
maintain with the Director for the protection of 
all creditors,
policyholders and policy obligations of the 
company, a deposit of
securities which are authorized 
investments under Section 126.11A(1),
126.11A(2), 126.24A(1), 
or 126.24A(2) having a
fair market value equal to the minimum 
capital and surplus required to be
maintained under Section 13.

The Director may release the required deposit of securities 
upon receipt of
an order of a court having proper jurisdiction 
or upon: (i)
certification by the company that it has no 
outstanding creditors,
policyholders, or policy obligations in 
effect and no plans to engage in the
business of insurance; 
(ii) receipt of a lawful resolution of the company's
board of 
directors effecting the surrender of its articles of 
incorporation for
administrative dissolution by the Director; 
and (iii) receipt of the name and
forwarding address for each 
of the final officers and directors of the company,
together 
with a plan of dissolution approved by the Director.

    (b) All deposits by insurers subject to this Article must 
be limited to the following types:
        (1) United States government bonds, notes, and bills 
    for which the full faith and credit of the government of 
    the United States is pledged for the payment of principal 
    and interest.
        (2) United States public bonds and notes of any state 
    or of the District of Columbia, or Canadian public bonds 
    and notes of any province thereof, for which the full faith 
    and credit of the issuer has been pledged for the payment 
    of principal and interest.
        (3) United States and Canadian county, provincial, 
    municipal, and district bonds and notes for which the 
    issuer has lawful authority to levy taxes or make 
    assessments for the payment of principal and interest.
        (4) Bonds and notes of any federal agency that are 
    guaranteed as to payment of principal and interest by the 
    United States.
        (5) International development bank bonds, bonds issued 
    by the State of Israel and sold through the Development 
    Corporation for Israel or its successor entities, and notes 
    issued, assumed, and guaranteed by the International Bank 
    for Reconstruction and Development, the Inter-American 
    Development Bank, the Asian Development Bank, the African 
    Development Bank, or the International Finance 
    Corporation.
        (6) Corporate bonds and notes of any private 
    corporations that are not affiliates or subsidiaries of the 
    insurer, which corporations are organized under the laws of 
    the United States, Canada, any state, the District of 
    Columbia, any territory or possession of the United States, 
    or any province of Canada.
        (7) Certificates of deposit.
    (c) To be eligible for deposit under subsection (b), any 
bond or note must have the following characteristics:
        (1) The bond or note must be interest-bearing or 
    interest-accruing, and the insurer must be the exclusive 
    owner of the interest accruing thereon and entitled to 
    receive the interest for its account.
        (2) The issuer must be in a solvent financial condition 
    and the bond or note must not be in default.
        (3) The bond, note, or debt of the issuing country must 
    be rated in one of the 4 highest classifications by an 
    established, nationally recognized investment rating 
    service or must have been given a rating of 1 by the 
    Securities Valuation Office of the National Association of 
    Insurance Commissioners.
        (4) The market value of the bond or note must be 
    readily ascertainable or the value of the bond or note must 
    be obtainable by the insurer or its custodian from the 
    issuer's fiscal agent.
        (5) The bond or note must be the direct obligation of 
    the issuer.
        (6) The bond or note must be stated in United States 
    dollar denominations.
        (7) The bond or note must be eligible for book-entry 
    form on the books of the Federal Reserve's book-entry 
    system or in a depository trust clearing system or on the 
    books of the issuer's transfer agent or evidenced by a 
    certificate delivered to the insurer or its custodian.
    (d) To be eligible for deposit under item (7) of subsection 
(b), a certificate of deposit must have the following 
characteristics:
        (1) The certificate of deposit must be issued by a 
    bank, savings bank, or savings association that is 
    organized under the laws of the United States, of this 
    State, or of any other state and that has a principal 
    office or branch office in this State that is authorized to 
    receive deposits in this State.
        (2) The certificate of deposit must be 
    interest-bearing and may not be issued in discounted form.
        (3) The certificate of deposit must be issued for a 
    period of not less than one year.
        (4) The issuing bank, savings bank, or savings 
    association must agree to the terms and conditions of the 
    Director regarding the rights to the certificate of deposit 
    and must have executed a written certificate of deposit 
    agreement with the Director. The terms and conditions of 
    the agreement shall include, but need not be limited to:
            (A) Exclusive authorized signature authority for 
        the chief financial officer.
            (B) An agreement to pay, without protest, the 
        proceeds of its certificate of deposit to the Director 
        within 30 business days after presentation.
            (C) A prohibition against levies, setoffs, 
        survivorship, or other conditions that might hinder 
        the Director's ability to recover the full face value 
        of a certificate of deposit.
            (D) Instructions regarding interest payments, 
        renewals, taxpayer identification, and early 
        withdrawal penalties.
            (E) An agreement to be subject to the jurisdiction 
        of the courts of this State, or those of the United 
        States that are located in this State, for the purposes 
        of any litigation arising out of this Section.
            (F) Such other conditions as the Director 
        requires.
    (e) The Director may refuse to accept certain securities or 
refuse to accept the reported market value of certain 
securities offered pursuant to this Section in order to ensure 
that sufficient cash and securities are on hand to meet the 
purposes of the deposit. In making a refusal under this 
subsection (e), the guidelines for use of the Director may 
include, but need not be limited to, whether the market value 
of the securities cannot be readily ascertained and the lack of 
liquidity of the securities. Securities refused under this 
subsection (e) are not acceptable as deposits.
    (f) All deposits required of a domestic insurer pursuant to 
the laws of another state, province, or country must be 
comprised of securities of the kinds required under subsection 
(b), having the characteristics required under subsections (c) 
and (d), and permitted by the laws of the other state, 
province, or country, except common stocks, mortgages or loans 
of any kind, real estate investment trust funds or programs, 
commercial paper, and letters of credit.
(Source: P.A. 98-110, eff. 1-1-14.)

 



    (215 ILCS 5/53)  (from Ch. 73, par. 665)


    (Section scheduled to be repealed on January 1, 2017)

    Sec. 53. Deposit. 
    (a) A company subject to the provisions of this Article 
shall make and
maintain with the Director for the protection of 
all creditors,
policyholders and policy obligations of the 
company, a deposit of
securities which are authorized 
investments under Section 126.11A(1),
126.11A(2), 126.24A(1), 
or 126.24A(2) having a
fair market value equal to the minimum 
surplus required to be maintained
under Section 43.
The 
Director may release the required deposit of securities
upon 
receipt of
an order of a court having proper jurisdiction or

upon: (i)
certification by the company that it has no 
outstanding creditors,
policyholders, or policy obligations in 
effect and no plans to engage in the
business of insurance; 
(ii) receipt of a lawful resolution of the company's
board of 
directors effecting the surrender of its articles of 
incorporation for
administrative dissolution by the Director; 
and (iii) receipt of the name and
forwarding address for each 
of the final officers and directors of the company,
together 
with a plan of dissolution approved by the Director.

    (b) All deposits by insurers subject to this Article must 
be limited to the following types:
        (1) United States government bonds, notes, and bills 
    for which the full faith and credit of the government of 
    the United States is pledged for the payment of principal 
    and interest.
        (2) United States public bonds and notes of any state 
    or of the District of Columbia, or Canadian public bonds 
    and notes of any province thereof, for which the full faith 
    and credit of the issuer has been pledged for the payment 
    of principal and interest.
        (3) United States and Canadian county, provincial, 
    municipal, and district bonds and notes for which the 
    issuer has lawful authority to levy taxes or make 
    assessments for the payment of principal and interest.
        (4) Bonds and notes of any federal agency that are 
    guaranteed as to payment of principal and interest by the 
    United States.
        (5) International development bank bonds, bonds issued 
    by the State of Israel and sold through the Development 
    Corporation for Israel or its successor entities, and notes 
    issued, assumed, and guaranteed by the International Bank 
    for Reconstruction and Development, the Inter-American 
    Development Bank, the Asian Development Bank, the African 
    Development Bank, or the International Finance 
    Corporation.
        (6) Corporate bonds and notes of any private 
    corporations that are not affiliates or subsidiaries of the 
    insurer, which corporations are organized under the laws of 
    the United States, Canada, any state, the District of 
    Columbia, any territory or possession of the United States, 
    or any province of Canada.
        (7) Certificates of deposit.
    (c) To be eligible for deposit under subsection (b), any 
bond or note must have the following characteristics:
        (1) The bond or note must be interest-bearing or 
    interest-accruing, and the insurer must be the exclusive 
    owner of the interest accruing thereon and entitled to 
    receive the interest for its account.
        (2) The issuer must be in a solvent financial condition 
    and the bond or note must not be in default.
        (3) The bond, note, or debt of the issuing country must 
    be rated in one of the 4 highest classifications by an 
    established, nationally recognized investment rating 
    service or must have been given a rating of 1 by the 
    Securities Valuation Office of the National Association of 
    Insurance Commissioners.
        (4) The market value of the bond or note must be 
    readily ascertainable or the value of the bond or note must 
    be obtainable by the insurer or its custodian from the 
    issuer's fiscal agent.
        (5) The bond or note must be the direct obligation of 
    the issuer.
        (6) The bond or note must be stated in United States 
    dollar denominations.
        (7) The bond or note must be eligible for book-entry 
    form on the books of the Federal Reserve's book-entry 
    system or in a depository trust clearing system or on the 
    books of the issuer's transfer agent or evidenced by a 
    certificate delivered to the insurer or its custodian.
    (d) To be eligible for deposit under item (7) of subsection 
(b), a certificate of deposit must have the following 
characteristics:
        (1) The certificate of deposit must be issued by a 
    bank, savings bank, or savings association that is 
    organized under the laws of the United States, of this 
    State, or of any other state and that has a principal 
    office or branch office in this State that is authorized to 
    receive deposits in this State.
        (2) The certificate of deposit must be 
    interest-bearing and may not be issued in discounted form.
        (3) The certificate of deposit must be issued for a 
    period of not less than one year.
        (4) The issuing bank, savings bank, or savings 
    association must agree to the terms and conditions of the 
    Director regarding the rights to the certificate of deposit 
    and must have executed a written certificate of deposit 
    agreement with the Director. The terms and conditions of 
    the agreement shall include, but need not be limited to:
            (A) Exclusive authorized signature authority for 
        the chief financial officer.
            (B) An agreement to pay, without protest, the 
        proceeds of its certificate of deposit to the Director 
        within 30 business days after presentation.
            (C) A prohibition against levies, setoffs, 
        survivorship, or other conditions that might hinder 
        the Director's ability to recover the full face value 
        of a certificate of deposit.
            (D) Instructions regarding interest payments, 
        renewals, taxpayer identification, and early 
        withdrawal penalties.
            (E) An agreement to be subject to the jurisdiction 
        of the courts of this State, or those of the United 
        States that are located in this State, for the purposes 
        of any litigation arising out of this Section.
            (F) Such other conditions as the Director 
        requires.
    (e) The Director may refuse to accept certain securities or 
refuse to accept the reported market value of certain 
securities offered pursuant to this Section in order to ensure 
that sufficient cash and securities are on hand to meet the 
purposes of the deposit. In making a refusal under this 
subsection (e), the guidelines for use of the Director may 
include, but need not be limited to, whether the market value 
of the securities cannot be readily ascertained and the lack of 
liquidity of the securities. Securities refused under this 
subsection (e) are not acceptable as deposits.
    (f) All deposits required of a domestic insurer pursuant to 
the laws of another state, province, or country must be 
comprised of securities of the kinds required under subsection 
(b), having the characteristics required under subsections (c) 
and (d), and permitted by the laws of the other state, 
province, or country, except common stocks, mortgages or loans 
of any kind, real estate investment trust funds or programs, 
commercial paper, and letters of credit.
(Source: P.A. 98-110, eff. 1-1-14.)

 



    (215 ILCS 5/174)  (from Ch. 73, par. 786)



    Sec. 174. 
Kinds of
agreements requiring approval.

    (1) The following kinds of reinsurance agreements shall not 
be entered into
by any domestic company unless such agreements 
are approved in writing by
the Director:

    (a) Agreements of reinsurance of any such company 
transacting the kind
or kinds of business enumerated in Class 1 
of Section 4, or as a Fraternal
Benefit Society under Article 
XVII, a Mutual Benefit Association under Article
XVIII, a 
Burial Society under Article XIX or an Assessment Accident and

Assessment Accident and Health Company under Article XXI, cedes 
previously
issued and outstanding risks to any company, or 
cedes any risks to a company
not authorized to transact 
business in this State, or assumes any outstanding
risks on 
which the aggregate reserves and claim
liabilities exceed 20 
percent of the aggregate reserves and claim liabilities
of the 
assuming company, as reported in the preceding annual 
statement,
for the business of either life or accident and 
health insurance.

    (b) Any agreement or agreements of reinsurance whereby any 
company
transacting the kind or kinds of business enumerated in 
either Class 2 or
Class 3 of Section 4 cedes to any company or

companies at one time, or during a period of six consecutive 
months more
than twenty per centum of the total amount of its 
previously retained
unearned premium reserve liability.

    (c) (Blank). Any agreement or agreements of reinsurance 
whereby any company
transacting the kind or kinds of business 
enumerated in either Class 2 or 3
of section 4 except Class 
2(a) cedes any outstanding risks to a stock company
with less 
than
$2,000,000 in capital and surplus or to a mutual or 
reciprocal company with
less than $2,000,000 in surplus.

    (2) An agreement which is not disapproved by the Director 
within thirty
days after its submission shall be deemed 
approved.

(Source: P.A. 82-626.)

 



    (215 ILCS 5/245.1)  (from Ch. 73, par. 857.1)



    Sec. 245.1. Assignability of Life Insurance. 

    No provision of the Illinois Insurance Code, or any other 
law prohibits
an insured under any policy of life insurance, or 
any other person who may
be the owner of any rights under such 
policy, from making an assignment of
all or any part of his 
rights and privileges under the policy including but
not 
limited to the right to designate a beneficiary thereunder and 
to have
an individual policy issued in accordance with 
paragraphs (G), (H), and (K) of Section 231.1 (d) and (g) of

Section 231 of the Illinois Insurance Code. Subject to the 
terms of the
policy or any contract relating thereto, an 
assignment by an insured or by
any other owner of rights under 
the policy, made before or after the
effective date of this 
amendatory Act of 1969 is valid for the purpose of
vesting in 
the assignee, in accordance with any provisions included 
therein
as to the time at which it is effective, all rights and 
privileges so
assigned. However, such assignment is without 
prejudice to the company on
account of any payment it makes or 
individual policy it issues in
accordance with paragraphs (d) 
and (g) of Section 231 before receipt of
notice of the 
assignment. This amendatory Act of 1969 acknowledges,
declares 
and codifies the existing right of assignment of interests 
under
life insurance policies.

(Source: P.A. 76-1443.)

 
    (215 ILCS 5/Art. V.5 rep.)
    (215 ILCS 5/Art. XVI rep.)
    (215 ILCS 5/Art. XVIII rep.)
    (215 ILCS 5/Art. XIXB rep.)
    (215 ILCS 5/178 rep.)
    (215 ILCS 5/359b rep.)
    (215 ILCS 5/359c rep.)
    Section 15. The Illinois Insurance Code is amended  by 
repealing Articles  V 1/2, XVI, XVIII, and XIXB and Sections 
178, 359b, and 359c.
  

            

									INDEX
								

									Statutes amended in order of appearance
								
    5 ILCS 220/6from Ch. 127, par. 746
    215 ILCS 5/26from Ch. 73, par. 638
    215 ILCS 5/53from Ch. 73, par. 665
    215 ILCS 5/174from Ch. 73, par. 786
    215 ILCS 5/245.1from Ch. 73, par. 857.1
    215 ILCS 5/Art. V.5 rep.
    215 ILCS 5/Art. XVI rep.
    215 ILCS 5/Art. XVIII rep.
    215 ILCS 5/Art. XIXB rep.
    215 ILCS 5/155.39 rep.
    215 ILCS 5/178 rep.
    215 ILCS 5/359b rep.
    215 ILCS 5/359c rep.