Bill Text: IL HB0982 | 2013-2014 | 98th General Assembly | Chaptered

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Bill Title: Amends the Illinois Insurance Code in the provision concerning factors to which domestic companies are subject with regard to establishing one or more separate accounts and allocating thereto amounts to provide for life, annuity, or accident and health insurance. Provides that 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 (now, any other business the company may conduct). Effective immediately.

Spectrum: Bipartisan Bill

Status: (Passed) 2013-06-28 - Public Act . . . . . . . . . 98-0039 [HB0982 Detail]

Download: Illinois-2013-HB0982-Chaptered.html

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Public Act 098-0039
HB0982 Enrolled LRB098 02752 RPM 32760 b
AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Section 245.21 as follows:
(215 ILCS 5/245.21) (from Ch. 73, par. 857.21)
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
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
incidental thereto), payable in fixed or variable amounts or
both, subject to the following:
(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.
(2) Except as may be provided with respect to reserves for
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.
(3) Except with the approval of the Director and under the
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.
(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
funds referred to in paragraph (3) of this Section must be
valued in accordance with the rules otherwise applicable to the
company's assets.
(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.
(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
(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.
(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.
(Source: P.A. 90-381, eff. 8-14-97; 90-418, eff. 8-15-97;
90-655, eff. 7-30-98.)
Section 99. Effective date. This Act takes effect upon
becoming law.