Bill Text: IL HB6302 | 2013-2014 | 98th General Assembly | Introduced
Bill Title: Amends the Illinois Insurance Code. In the provision concerning transactions in the State involving industrial insureds' contracts of insurance, restores the language that was deleted by Public Act 98-978 and deletes the language that was added by Public Act 98-978. Deletes the references to the provision concerning transactions in the State involving industrial insureds' contracts of insurance that were added by Public Act 98-978. Deletes language in the definition of "home state" that was added by Public Act 98-978. Contains a nonacceleration provision. Effective January 1, 2015.
Spectrum: Partisan Bill (Republican 47-0)
Status: (Failed) 2014-12-03 - Session Sine Die [HB6302 Detail]
Download: Illinois-2013-HB6302-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | ||||||||||||||||||||||||||||
5 | changing Sections 121-2.08, 412, and 445 as follows:
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6 | (215 ILCS 5/121-2.08) (from Ch. 73, par. 733-2.08)
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7 | (Text of Section before amendment by P.A. 98-978 )
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8 | Sec. 121-2.08.
Transactions in this State involving | ||||||||||||||||||||||||||||
9 | contracts of
insurance issued to one or more industrial | ||||||||||||||||||||||||||||
10 | insureds. For purposes of this
Section "industrial insured" is | ||||||||||||||||||||||||||||
11 | an insured:
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12 | (a) which procures the insurance of any risk or risks other | ||||||||||||||||||||||||||||
13 | than life
and annuity contracts by use of the services of a | ||||||||||||||||||||||||||||
14 | full time employee acting
as an insurance manager or buyer or | ||||||||||||||||||||||||||||
15 | the services of a regularly and
continuously retained qualified | ||||||||||||||||||||||||||||
16 | insurance consultant;
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17 | (b) whose aggregate annual premiums for insurance on all | ||||||||||||||||||||||||||||
18 | risks, except for
life and accident and health insurance, total | ||||||||||||||||||||||||||||
19 | at
least $100,000; and
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20 | (c) which either (i) has at least 25 full time employees, | ||||||||||||||||||||||||||||
21 | (ii) has
gross assets in excess of $3,000,000, or (iii) has | ||||||||||||||||||||||||||||
22 | annual gross revenues in
excess of $5,000,000.
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23 | (Source: P.A. 90-794, eff. 8-14-98.)
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1 | (Text of Section after amendment by P.A. 98-978 )
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2 | Sec. 121-2.08.
Transactions in this State involving | ||||||
3 | contracts of
insurance issued to one or more independently | ||||||
4 | procured directly from an unauthorized insurer by industrial | ||||||
5 | insureds. For the purposes of this
Section, "industrial | ||||||
6 | insured" is an insured: | ||||||
7 | (a) which procures the insurance of any risk or risks other | ||||||
8 | than life
and annuity contracts by use of the services of a | ||||||
9 | full-time employee acting
as an insurance manager or buyer or | ||||||
10 | the services of a regularly and
continuously retained qualified | ||||||
11 | insurance consultant; | ||||||
12 | (b) whose aggregate annual premiums for insurance on all | ||||||
13 | risks, except for
life and accident and health insurance, total | ||||||
14 | at
least $100,000; and | ||||||
15 | (c) which either (i) has at least 25 full-time employees, | ||||||
16 | (ii) has
gross assets in excess of $3,000,000, or (iii) has | ||||||
17 | annual gross revenues in
excess of $5,000,000. | ||||||
18 | (a) As used in this Section: | ||||||
19 | "Exempt commercial purchaser" means exempt commercial | ||||||
20 | purchaser as the term is defined in subsection (1) of Section | ||||||
21 | 445 of this Code. | ||||||
22 | "Home state" means home state as the term is defined in | ||||||
23 | subsection (1) of Section 445 of this Code. | ||||||
24 | "Industrial insured" means an insured:
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25 | (i) that procures the insurance of any risk or risks of |
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1 | the kinds specified in Classes 2 and 3 of Section 4 of this | ||||||
2 | Code by use of the services of a full-time employee who is | ||||||
3 | a qualified risk manager or the services of a regularly and
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4 | continuously retained consultant who is a qualified risk | ||||||
5 | manager;
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6 | (ii) that procures the insurance directly from an | ||||||
7 | unauthorized insurer without the services of an | ||||||
8 | intermediary insurance producer; and
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9 | (iii) that is an exempt commercial purchaser whose home | ||||||
10 | state is Illinois.
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11 | "Insurance producer" means insurance producer as the term | ||||||
12 | is defined in Section 500-10 of this Code. | ||||||
13 | "Qualified risk manager" means qualified risk manager as | ||||||
14 | the term is defined in subsection (1) of Section 445 of this | ||||||
15 | Code. | ||||||
16 | "Unauthorized insurer" means unauthorized insurer as the | ||||||
17 | term is defined in subsection (1) of Section 445 of this Code. | ||||||
18 | (b) For contracts of insurance effective January 1, 2015 or | ||||||
19 | later, within 90 days after the effective date of each contract | ||||||
20 | of insurance issued under this Section, the insured shall file | ||||||
21 | a report with the Director by submitting the report to the | ||||||
22 | Surplus Line Association of Illinois in writing or in a | ||||||
23 | computer readable format and provide information as designated | ||||||
24 | by the Surplus Line Association of Illinois. The information in | ||||||
25 | the report shall be substantially similar to that required for | ||||||
26 | surplus line submissions as described in subsection (5) of |
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1 | Section 445 of this Code. Where applicable, the report shall | ||||||
2 | satisfy, with respect to the subject insurance, the reporting | ||||||
3 | requirement of Section 12 of the Fire Investigation Act. | ||||||
4 | (c) For contracts of insurance effective January 1, 2015 or | ||||||
5 | later, within 30 days after filing the report, the insured | ||||||
6 | shall pay to the Director for the use and benefit of the State | ||||||
7 | a sum equal to the gross premium of the contract of insurance | ||||||
8 | multiplied by the surplus line tax rate, as described in | ||||||
9 | paragraph (3) of subsection (a) of Section 445 of this Code, | ||||||
10 | and shall pay the fire marshal tax that would otherwise be due | ||||||
11 | annually in March for insurance subject to tax under Section 12 | ||||||
12 | of the Fire Investigation Act. For contracts of insurance | ||||||
13 | effective January 1, 2015 or later, within 30 days after filing | ||||||
14 | the report, the insured shall pay to the Surplus Line | ||||||
15 | Association of Illinois a countersigning fee that shall be | ||||||
16 | assessed at the same rate charged to members pursuant to | ||||||
17 | subsection (4) of Section 445.1 of this Code. | ||||||
18 | (d) For contracts of insurance effective January 1, 2015 or | ||||||
19 | later, the insured shall withhold the amount of the taxes and | ||||||
20 | countersignature fee from the amount of premium charged by and | ||||||
21 | otherwise payable to the insurer for the insurance. If the | ||||||
22 | insured fails to withhold the tax and countersignature fee from | ||||||
23 | the premium, then the insured shall be liable for the amounts | ||||||
24 | thereof and shall pay the amounts as prescribed in subsection | ||||||
25 | (c) of this Section. | ||||||
26 | (Source: P.A. 98-978, eff. 1-1-15.)
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1 | (215 ILCS 5/412) (from Ch. 73, par. 1024)
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2 | (Text of Section before amendment by P.A. 98-978 )
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3 | Sec. 412. Refunds; penalties; collection.
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4 | (1)(a) Whenever it appears to
the satisfaction of the | ||||||
5 | Director that because of some mistake of fact,
error in | ||||||
6 | calculation, or erroneous interpretation of a statute of this
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7 | or any other state, any authorized company has paid to him, | ||||||
8 | pursuant to
any provision of law, taxes, fees, or other charges
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9 | in excess of the
amount legally chargeable against it, during | ||||||
10 | the 6 year period
immediately preceding the discovery of such | ||||||
11 | overpayment, he shall have
power to refund to such company the | ||||||
12 | amount of the excess or excesses by
applying the amount or | ||||||
13 | amounts thereof toward
the payment of taxes, fees, or other | ||||||
14 | charges already due, or which may
thereafter become due from | ||||||
15 | that company until such excess or excesses have been
fully
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16 | refunded, or upon a written request from the authorized | ||||||
17 | company, the
Director shall provide a cash refund within
120 | ||||||
18 | days after receipt of the written request if all necessary | ||||||
19 | information has
been filed with the Department in order for it | ||||||
20 | to perform an audit of the
annual return for the year in which | ||||||
21 | the overpayment occurred or within 120 days
after the date the | ||||||
22 | Department receives all the necessary information to perform
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23 | such audit. The Director shall not provide a cash refund if | ||||||
24 | there are
insufficient funds in the Insurance Premium Tax | ||||||
25 | Refund Fund to provide a cash
refund, if the amount of the |
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1 | overpayment is less than $100, or if the amount of
the | ||||||
2 | overpayment can be fully offset against the taxpayer's | ||||||
3 | estimated liability
for the year following the year of the cash | ||||||
4 | refund request. Any cash refund
shall be paid from the | ||||||
5 | Insurance Premium Tax Refund Fund, a special fund hereby
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6 | created in the
State treasury.
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7 | (b) Beginning January 1, 2000 and thereafter, the | ||||||
8 | Department shall deposit
a percentage of the amounts collected | ||||||
9 | under Sections 409, 444, and 444.1 of
this
Code into the | ||||||
10 | Insurance Premium Tax Refund Fund. The percentage deposited | ||||||
11 | into
the Insurance Premium Tax Refund Fund shall be the annual | ||||||
12 | percentage. The
annual
percentage shall be calculated as a | ||||||
13 | fraction, the numerator of which shall be
the amount of cash | ||||||
14 | refunds approved by the Director for payment and paid during
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15 | the preceding calendar year as a result of overpayment of tax | ||||||
16 | liability under
Sections 409, 444, and 444.1 of this Code and | ||||||
17 | the denominator of which shall
be the amounts collected | ||||||
18 | pursuant to Sections 409, 444, and 444.1 of this Code
during | ||||||
19 | the preceding calendar year. However, if there were no cash | ||||||
20 | refunds
paid in a preceding calendar year, the Department shall | ||||||
21 | deposit 5% of the
amount collected in that preceding calendar | ||||||
22 | year pursuant to Sections 409, 444,
and 444.1 of this Code into | ||||||
23 | the Insurance Premium Tax Refund Fund instead of an
amount | ||||||
24 | calculated by using the annual percentage.
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25 | (c) Beginning July 1, 1999, moneys in the Insurance Premium | ||||||
26 | Tax Refund
Fund
shall be expended exclusively for the purpose |
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1 | of paying cash refunds resulting
from overpayment of tax | ||||||
2 | liability under Sections 409, 444, and 444.1 of this
Code
as
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3 | determined by the Director pursuant to subsection 1(a) of this | ||||||
4 | Section. Cash
refunds made in accordance with this Section may | ||||||
5 | be made from the Insurance
Premium Tax Refund Fund only to the | ||||||
6 | extent that amounts have been deposited and
retained in the | ||||||
7 | Insurance Premium Tax Refund Fund.
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8 | (d) This Section shall constitute an irrevocable and | ||||||
9 | continuing
appropriation from the Insurance Premium Tax Refund | ||||||
10 | Fund for the purpose of
paying cash refunds pursuant to the | ||||||
11 | provisions of this Section.
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12 | (2) When any insurance company or any surplus line producer | ||||||
13 | fails to
file any tax return required under Sections 408.1, | ||||||
14 | 409, 444, 444.1 and 445 of
this Code or Section 12 of the Fire | ||||||
15 | Investigation Act on the date
prescribed, including any | ||||||
16 | extensions, there shall be added as a penalty
$400 or 10% of | ||||||
17 | the amount of such tax, whichever is
greater, for each month
or | ||||||
18 | part of a month of failure to file, the entire penalty not to | ||||||
19 | exceed
$2,000 or 50% of the tax due, whichever is greater.
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20 | (3)(a) When any insurance company or any surplus line | ||||||
21 | producer
fails to pay the full amount due under the provisions | ||||||
22 | of this Section,
Sections 408.1, 409, 444, 444.1 or 445 of this | ||||||
23 | Code, or Section 12 of the
Fire Investigation Act, there shall | ||||||
24 | be added to the amount due as a penalty
an amount equal to 10% | ||||||
25 | of the deficiency.
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26 | (b) If such failure to pay is determined by the Director to |
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1 | be wilful,
after a hearing under Sections 402 and 403, there | ||||||
2 | shall be added to the tax
as a penalty an amount equal to the | ||||||
3 | greater of 50% of the
deficiency or 10%
of the amount due and | ||||||
4 | unpaid for each month or part of a month that the
deficiency | ||||||
5 | remains unpaid commencing with the date that the amount becomes
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6 | due. Such amount shall be in lieu of any determined under | ||||||
7 | paragraph (a).
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8 | (4) Any insurance company or any surplus line producer | ||||||
9 | which
fails to pay the full amount due under this Section or | ||||||
10 | Sections 408.1, 409,
444, 444.1 or 445 of this Code, or Section | ||||||
11 | 12 of the Fire Investigation
Act is liable, in addition to the | ||||||
12 | tax and any penalties, for interest
on such deficiency at the | ||||||
13 | rate of 12% per annum, or at such higher adjusted
rates as are | ||||||
14 | or may be established under subsection (b) of Section 6621
of | ||||||
15 | the Internal Revenue Code, from the date that payment of any | ||||||
16 | such tax
was due, determined without regard to any extensions, | ||||||
17 | to the date of payment
of such amount.
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18 | (5) The Director, through the Attorney
General, may | ||||||
19 | institute an action in the name of the People of the State
of | ||||||
20 | Illinois, in any court of competent jurisdiction, for the | ||||||
21 | recovery of
the amount of such taxes, fees, and penalties due, | ||||||
22 | and prosecute the same to
final judgment, and take such steps | ||||||
23 | as are necessary to collect the same.
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24 | (6) In the event that the certificate of authority of a | ||||||
25 | foreign or
alien company is revoked for any cause or the | ||||||
26 | company withdraws from
this State prior to the renewal date of |
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1 | the certificate of authority as
provided in Section 114, the | ||||||
2 | company may recover the amount of any such
tax paid in advance. | ||||||
3 | Except as provided in this subsection, no
revocation or | ||||||
4 | withdrawal excuses payment of or constitutes grounds for
the | ||||||
5 | recovery of any taxes or penalties imposed by this Code.
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6 | (7) When an insurance company or domestic affiliated group | ||||||
7 | fails to pay
the full amount of any fee of $200 or more due | ||||||
8 | under
Section 408 of this Code, there shall be added to the | ||||||
9 | amount due as
a penalty the greater of $100 or an amount equal | ||||||
10 | to 10%
of the deficiency for
each month or part of
a month that | ||||||
11 | the deficiency remains unpaid.
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12 | (8) The Department shall have a lien for the taxes, fees, | ||||||
13 | charges, fines, penalties, interest, other charges, or any | ||||||
14 | portion thereof, imposed or assessed pursuant to this Code, | ||||||
15 | upon all the real and personal property of any company or | ||||||
16 | person to whom the assessment or final order has been issued or | ||||||
17 | whenever a tax return is filed without payment of the tax or | ||||||
18 | penalty shown therein to be due, including all such property of | ||||||
19 | the company or person acquired after receipt of the assessment, | ||||||
20 | issuance of the order, or filing of the return. The company or | ||||||
21 | person is liable for the filing fee incurred by the Department | ||||||
22 | for filing the lien and the filing fee incurred by the | ||||||
23 | Department to file the release of that lien. The filing fees | ||||||
24 | shall be paid to the Department in addition to payment of the | ||||||
25 | tax, fee, charge, fine, penalty, interest, other charges, or | ||||||
26 | any portion thereof, included in the amount of the lien. |
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1 | However, where the lien arises because of the issuance of a | ||||||
2 | final order of the Director or tax assessment by the | ||||||
3 | Department, the lien shall not attach and the notice referred | ||||||
4 | to in this Section shall not be filed until all administrative | ||||||
5 | proceedings or proceedings in court for review of the final | ||||||
6 | order or assessment have terminated or the time for the taking | ||||||
7 | thereof has expired without such proceedings being instituted. | ||||||
8 | Upon the granting of Department review after a lien has | ||||||
9 | attached, the lien shall remain in full force except to the | ||||||
10 | extent to which the final assessment may be reduced by a | ||||||
11 | revised final assessment following the rehearing or review. The | ||||||
12 | lien created by the issuance of a final assessment shall | ||||||
13 | terminate, unless a notice of lien is filed, within 3 years | ||||||
14 | after the date all proceedings in court for the review of the | ||||||
15 | final assessment have terminated or the time for the taking | ||||||
16 | thereof has expired without such proceedings being instituted, | ||||||
17 | or (in the case of a revised final assessment issued pursuant | ||||||
18 | to a rehearing or review by the Department) within 3 years | ||||||
19 | after the date all proceedings in court for the review of such | ||||||
20 | revised final assessment have terminated or the time for the | ||||||
21 | taking thereof has expired without such proceedings being | ||||||
22 | instituted. Where the lien results from the filing of a tax | ||||||
23 | return without payment of the tax or penalty shown therein to | ||||||
24 | be due, the lien shall terminate, unless a notice of lien is | ||||||
25 | filed, within 3 years after the date when the return is filed | ||||||
26 | with the Department. |
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1 | The time limitation period on the Department's right to | ||||||
2 | file a notice of lien shall not run during any period of time | ||||||
3 | in which the order of any court has the effect of enjoining or | ||||||
4 | restraining the Department from filing such notice of lien. If | ||||||
5 | the Department finds that a company or person is about to | ||||||
6 | depart from the State, to conceal himself or his property, or | ||||||
7 | to do any other act tending to prejudice or to render wholly or | ||||||
8 | partly ineffectual proceedings to collect the amount due and | ||||||
9 | owing to the Department unless such proceedings are brought | ||||||
10 | without delay, or if the Department finds that the collection | ||||||
11 | of the amount due from any company or person will be | ||||||
12 | jeopardized by delay, the Department shall give the company or | ||||||
13 | person notice of such findings and shall make demand for | ||||||
14 | immediate return and payment of the amount, whereupon the | ||||||
15 | amount shall become immediately due and payable. If the company | ||||||
16 | or person, within 5 days after the notice (or within such | ||||||
17 | extension of time as the Department may grant), does not comply | ||||||
18 | with the notice or show to the Department that the findings in | ||||||
19 | the notice are erroneous, the Department may file a notice of | ||||||
20 | jeopardy assessment lien in the office of the recorder of the | ||||||
21 | county in which any property of the company or person may be | ||||||
22 | located and shall notify the company or person of the filing. | ||||||
23 | The jeopardy assessment lien shall have the same scope and | ||||||
24 | effect as the statutory lien provided for in this Section. If | ||||||
25 | the company or person believes that the company or person does | ||||||
26 | not owe some or all of the tax for which the jeopardy |
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1 | assessment lien against the company or person has been filed, | ||||||
2 | or that no jeopardy to the revenue in fact exists, the company | ||||||
3 | or person may protest within 20 days after being notified by | ||||||
4 | the Department of the filing of the jeopardy assessment lien | ||||||
5 | and request a hearing, whereupon the Department shall hold a | ||||||
6 | hearing in conformity with the provisions of this Code and, | ||||||
7 | pursuant thereto, shall notify the company or person of its | ||||||
8 | findings as to whether or not the jeopardy assessment lien will | ||||||
9 | be released. If not, and if the company or person is aggrieved | ||||||
10 | by this decision, the company or person may file an action for | ||||||
11 | judicial review of the final determination of the Department in | ||||||
12 | accordance with the Administrative Review Law. If, pursuant to | ||||||
13 | such hearing (or after an independent determination of the | ||||||
14 | facts by the Department without a hearing), the Department | ||||||
15 | determines that some or all of the amount due covered by the | ||||||
16 | jeopardy assessment lien is not owed by the company or person, | ||||||
17 | or that no jeopardy to the revenue exists, or if on judicial | ||||||
18 | review the final judgment of the court is that the company or | ||||||
19 | person does not owe some or all of the amount due covered by | ||||||
20 | the jeopardy assessment lien against them, or that no jeopardy | ||||||
21 | to the revenue exists, the Department shall release its | ||||||
22 | jeopardy assessment lien to the extent of such finding of | ||||||
23 | nonliability for the amount, or to the extent of such finding | ||||||
24 | of no jeopardy to the revenue. The Department shall also | ||||||
25 | release its jeopardy assessment lien against the company or | ||||||
26 | person whenever the amount due and owing covered by the lien, |
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1 | plus any interest which may be due, are paid and the company or | ||||||
2 | person has paid the Department in cash or by guaranteed | ||||||
3 | remittance an amount representing the filing fee for the lien | ||||||
4 | and the filing fee for the release of that lien. The Department | ||||||
5 | shall file that release of lien with the recorder of the county | ||||||
6 | where that lien was filed. | ||||||
7 | Nothing in this Section shall be construed to give the | ||||||
8 | Department a preference over the rights of any bona fide | ||||||
9 | purchaser, holder of a security interest, mechanics | ||||||
10 | lienholder, mortgagee, or judgment lien creditor arising prior | ||||||
11 | to the filing of a regular notice of lien or a notice of | ||||||
12 | jeopardy assessment lien in the office of the recorder in the | ||||||
13 | county in which the property subject to the lien is located. | ||||||
14 | For purposes of this Section, "bona fide" shall not include any | ||||||
15 | mortgage of real or personal property or any other credit | ||||||
16 | transaction that results in the mortgagee or the holder of the | ||||||
17 | security acting as trustee for unsecured creditors of the | ||||||
18 | company or person mentioned in the notice of lien who executed | ||||||
19 | such chattel or real property mortgage or the document | ||||||
20 | evidencing such credit transaction. The lien shall be inferior | ||||||
21 | to the lien of general taxes, special assessments, and special | ||||||
22 | taxes levied by any political subdivision of this State. In | ||||||
23 | case title to land to be affected by the notice of lien or | ||||||
24 | notice of jeopardy assessment lien is registered under the | ||||||
25 | provisions of the Registered Titles (Torrens) Act, such notice | ||||||
26 | shall be filed in the office of the Registrar of Titles of the |
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1 | county within which the property subject to the lien is | ||||||
2 | situated and shall be entered upon the register of titles as a | ||||||
3 | memorial or charge upon each folium of the register of titles | ||||||
4 | affected by such notice, and the Department shall not have a | ||||||
5 | preference over the rights of any bona fide purchaser, | ||||||
6 | mortgagee, judgment creditor, or other lienholder arising | ||||||
7 | prior to the registration of such notice. The regular lien or | ||||||
8 | jeopardy assessment lien shall not be effective against any | ||||||
9 | purchaser with respect to any item in a retailer's stock in | ||||||
10 | trade purchased from the retailer in the usual course of the | ||||||
11 | retailer's business. | ||||||
12 | (Source: P.A. 98-158, eff. 8-2-13.)
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13 | (Text of Section after amendment by P.A. 98-978 )
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14 | Sec. 412. Refunds; penalties; collection.
| ||||||
15 | (1)(a) Whenever it appears to
the satisfaction of the | ||||||
16 | Director that because of some mistake of fact,
error in | ||||||
17 | calculation, or erroneous interpretation of a statute of this
| ||||||
18 | or any other state, any authorized company or , surplus line | ||||||
19 | producer , or industrial insured has paid to him, pursuant to
| ||||||
20 | any provision of law, taxes, fees, or other charges
in excess | ||||||
21 | of the
amount legally chargeable against it, during the 6 year | ||||||
22 | period
immediately preceding the discovery of such | ||||||
23 | overpayment, he shall have
power to refund to such company or , | ||||||
24 | surplus line producer , or industrial insured the amount of the | ||||||
25 | excess or excesses by
applying the amount or amounts thereof |
| |||||||
| |||||||
1 | toward
the payment of taxes, fees, or other charges already | ||||||
2 | due, or which may
thereafter become due from that company until | ||||||
3 | such excess or excesses have been
fully
refunded, or upon a | ||||||
4 | written request from the authorized company or , surplus line | ||||||
5 | producer, or industrial insured, the
Director shall provide a | ||||||
6 | cash refund within
120 days after receipt of the written | ||||||
7 | request if all necessary information has
been filed with the | ||||||
8 | Department in order for it to perform an audit of the
tax | ||||||
9 | report for the transaction or period or annual return for the | ||||||
10 | year in which the overpayment occurred or within 120 days
after | ||||||
11 | the date the Department receives all the necessary information | ||||||
12 | to perform
such audit. The Director shall not provide a cash | ||||||
13 | refund if there are
insufficient funds in the Insurance Premium | ||||||
14 | Tax Refund Fund to provide a cash
refund, if the amount of the | ||||||
15 | overpayment is less than $100, or if the amount of
the | ||||||
16 | overpayment can be fully offset against the taxpayer's | ||||||
17 | estimated liability
for the year following the year of the cash | ||||||
18 | refund request. Any cash refund
shall be paid from the | ||||||
19 | Insurance Premium Tax Refund Fund, a special fund hereby
| ||||||
20 | created in the
State treasury.
| ||||||
21 | (b) Beginning January 1, 2000 and thereafter, the | ||||||
22 | Department shall deposit
a percentage of the amounts collected | ||||||
23 | under Sections 409, 444, and 444.1 of
this
Code into the | ||||||
24 | Insurance Premium Tax Refund Fund. The percentage deposited | ||||||
25 | into
the Insurance Premium Tax Refund Fund shall be the annual | ||||||
26 | percentage. The
annual
percentage shall be calculated as a |
| |||||||
| |||||||
1 | fraction, the numerator of which shall be
the amount of cash | ||||||
2 | refunds approved by the Director for payment and paid during
| ||||||
3 | the preceding calendar year as a result of overpayment of tax | ||||||
4 | liability under
Sections 121-2.08, 409, 444, 444.1, and 445 of | ||||||
5 | this Code and the denominator of which shall
be the amounts | ||||||
6 | collected pursuant to Sections 121-2.08, 409, 444, 444.1, and | ||||||
7 | 445 of this Code
during the preceding calendar year. However, | ||||||
8 | if there were no cash refunds
paid in a preceding calendar | ||||||
9 | year, the Department shall deposit 5% of the
amount collected | ||||||
10 | in that preceding calendar year pursuant to Sections 121-2.08, | ||||||
11 | 409, 444,
444.1, and 445 of this Code into the Insurance | ||||||
12 | Premium Tax Refund Fund instead of an
amount calculated by | ||||||
13 | using the annual percentage.
| ||||||
14 | (c) Beginning July 1, 1999, moneys in the Insurance Premium | ||||||
15 | Tax Refund
Fund
shall be expended exclusively for the purpose | ||||||
16 | of paying cash refunds resulting
from overpayment of tax | ||||||
17 | liability under Sections 121-2.08, 409, 444, 444.1, and 445 of | ||||||
18 | this
Code
as
determined by the Director pursuant to subsection | ||||||
19 | 1(a) of this Section. Cash
refunds made in accordance with this | ||||||
20 | Section may be made from the Insurance
Premium Tax Refund Fund | ||||||
21 | only to the extent that amounts have been deposited and
| ||||||
22 | retained in the Insurance Premium Tax Refund Fund.
| ||||||
23 | (d) This Section shall constitute an irrevocable and | ||||||
24 | continuing
appropriation from the Insurance Premium Tax Refund | ||||||
25 | Fund for the purpose of
paying cash refunds pursuant to the | ||||||
26 | provisions of this Section.
|
| |||||||
| |||||||
1 | (2)(a) When any insurance company fails to
file any tax | ||||||
2 | return required under Sections 408.1, 409, 444, and 444.1 of
| ||||||
3 | this Code or Section 12 of the Fire Investigation Act on the | ||||||
4 | date
prescribed, including any extensions, there shall be added | ||||||
5 | as a penalty
$400 or 10% of the amount of such tax, whichever | ||||||
6 | is
greater, for each month
or part of a month of failure to | ||||||
7 | file, the entire penalty not to exceed
$2,000 or 50% of the tax | ||||||
8 | due, whichever is greater.
| ||||||
9 | (b) When any industrial insured or surplus line producer | ||||||
10 | fails to file any tax return or report required under Section | ||||||
11 | Sections 121-2.08 and 445 of this Code or Section 12 of the | ||||||
12 | Fire Investigation Act on the date prescribed, including any | ||||||
13 | extensions, there shall be added: | ||||||
14 | (i) as a late fee, if the return or report is received | ||||||
15 | at least one day but not more than 7 days after the | ||||||
16 | prescribed due date, $400 or 10% of the tax due, whichever | ||||||
17 | is greater, the entire fee not to exceed $1,000; | ||||||
18 | (ii) as a late fee, if the return or report is received | ||||||
19 | at least 8 days but not more than 14 days after the | ||||||
20 | prescribed due date, $400 or 10% of the tax due, whichever | ||||||
21 | is greater, the entire fee not to exceed $1,500; | ||||||
22 | (iii) as a late fee, if the return or report is | ||||||
23 | received at least 15 days but not more than 21 days after | ||||||
24 | the prescribed due date, $400 or 10% of the tax due, | ||||||
25 | whichever is greater, the entire fee not to exceed $2,000; | ||||||
26 | or |
| |||||||
| |||||||
1 | (iv) as a penalty, if the return or report is received | ||||||
2 | more than 21 days after the prescribed due date, $400 or | ||||||
3 | 10% of the tax due, whichever is greater, for each month or | ||||||
4 | part of a month of failure to file, the entire penalty not | ||||||
5 | to exceed $2,000 or 50% of the tax due, whichever is | ||||||
6 | greater. | ||||||
7 | A tax return or report shall be deemed received as of the | ||||||
8 | date mailed as evidenced by a postmark, proof of mailing on a | ||||||
9 | recognized United States Postal Service form or a form | ||||||
10 | acceptable to the United States Postal Service or other | ||||||
11 | commercial mail delivery service, or other evidence acceptable | ||||||
12 | to the Director.
| ||||||
13 | (3)(a) When any insurance company
fails to pay the full | ||||||
14 | amount due under the provisions of this Section,
Sections | ||||||
15 | 408.1, 409, 444, or 444.1 of this Code, or Section 12 of the
| ||||||
16 | Fire Investigation Act, there shall be added to the amount due | ||||||
17 | as a penalty
an amount equal to 10% of the deficiency.
| ||||||
18 | (a-5) When any industrial insured or surplus line producer | ||||||
19 | fails to pay the full amount due under the provisions of this | ||||||
20 | Section , Sections 121-2.08 or Section 445 of this Code, or | ||||||
21 | Section 12 of the Fire Investigation Act on the date | ||||||
22 | prescribed, there shall be added: | ||||||
23 | (i) as a late fee, if the payment is received at least | ||||||
24 | one day but not more than 7 days after the prescribed due | ||||||
25 | date, 10% of the tax due, the entire fee not to exceed | ||||||
26 | $1,000; |
| |||||||
| |||||||
1 | (ii) as a late fee, if the payment is received at least | ||||||
2 | 8 days but not more than 14 days after the prescribed due | ||||||
3 | date, 10% of the tax due, the entire fee not to exceed | ||||||
4 | $1,500; | ||||||
5 | (iii) as a late fee, if the payment is received at | ||||||
6 | least 15 days but not more than 21 days after the | ||||||
7 | prescribed due date, 10% of the tax due, the entire fee not | ||||||
8 | to exceed $2,000; or | ||||||
9 | (iv) as a penalty, if the return or report is received | ||||||
10 | more than 21 days after the prescribed due date, 10% of the | ||||||
11 | tax due. | ||||||
12 | A tax payment shall be deemed received as of the date | ||||||
13 | mailed as evidenced by a postmark, proof of mailing on a | ||||||
14 | recognized United States Postal Service form or a form | ||||||
15 | acceptable to the United States Postal Service or other | ||||||
16 | commercial mail delivery service, or other evidence acceptable | ||||||
17 | to the Director.
| ||||||
18 | (b) If such failure to pay is determined by the Director to | ||||||
19 | be wilful,
after a hearing under Sections 402 and 403, there | ||||||
20 | shall be added to the tax
as a penalty an amount equal to the | ||||||
21 | greater of 50% of the
deficiency or 10%
of the amount due and | ||||||
22 | unpaid for each month or part of a month that the
deficiency | ||||||
23 | remains unpaid commencing with the date that the amount becomes
| ||||||
24 | due. Such amount shall be in lieu of any determined under | ||||||
25 | paragraph (a) or (a-5).
| ||||||
26 | (4) Any insurance company , industrial insured, or surplus |
| |||||||
| |||||||
1 | line producer that
fails to pay the full amount due under this | ||||||
2 | Section or Sections 121-2.08, 408.1, 409,
444, 444.1, or 445 of | ||||||
3 | this Code, or Section 12 of the Fire Investigation
Act is | ||||||
4 | liable, in addition to the tax and any late fees and penalties, | ||||||
5 | for interest
on such deficiency at the rate of 12% per annum, | ||||||
6 | or at such higher adjusted
rates as are or may be established | ||||||
7 | under subsection (b) of Section 6621
of the Internal Revenue | ||||||
8 | Code, from the date that payment of any such tax
was due, | ||||||
9 | determined without regard to any extensions, to the date of | ||||||
10 | payment
of such amount.
| ||||||
11 | (5) The Director, through the Attorney
General, may | ||||||
12 | institute an action in the name of the People of the State
of | ||||||
13 | Illinois, in any court of competent jurisdiction, for the | ||||||
14 | recovery of
the amount of such taxes, fees, and penalties due, | ||||||
15 | and prosecute the same to
final judgment, and take such steps | ||||||
16 | as are necessary to collect the same.
| ||||||
17 | (6) In the event that the certificate of authority of a | ||||||
18 | foreign or
alien company is revoked for any cause or the | ||||||
19 | company withdraws from
this State prior to the renewal date of | ||||||
20 | the certificate of authority as
provided in Section 114, the | ||||||
21 | company may recover the amount of any such
tax paid in advance. | ||||||
22 | Except as provided in this subsection, no
revocation or | ||||||
23 | withdrawal excuses payment of or constitutes grounds for
the | ||||||
24 | recovery of any taxes or penalties imposed by this Code.
| ||||||
25 | (7) When an insurance company or domestic affiliated group | ||||||
26 | fails to pay
the full amount of any fee of $200 or more due |
| |||||||
| |||||||
1 | under
Section 408 of this Code, there shall be added to the | ||||||
2 | amount due as
a penalty the greater of $100 or an amount equal | ||||||
3 | to 10%
of the deficiency for
each month or part of
a month that | ||||||
4 | the deficiency remains unpaid.
| ||||||
5 | (8) The Department shall have a lien for the taxes, fees, | ||||||
6 | charges, fines, penalties, interest, other charges, or any | ||||||
7 | portion thereof, imposed or assessed pursuant to this Code, | ||||||
8 | upon all the real and personal property of any company or | ||||||
9 | person to whom the assessment or final order has been issued or | ||||||
10 | whenever a tax return is filed without payment of the tax or | ||||||
11 | penalty shown therein to be due, including all such property of | ||||||
12 | the company or person acquired after receipt of the assessment, | ||||||
13 | issuance of the order, or filing of the return. The company or | ||||||
14 | person is liable for the filing fee incurred by the Department | ||||||
15 | for filing the lien and the filing fee incurred by the | ||||||
16 | Department to file the release of that lien. The filing fees | ||||||
17 | shall be paid to the Department in addition to payment of the | ||||||
18 | tax, fee, charge, fine, penalty, interest, other charges, or | ||||||
19 | any portion thereof, included in the amount of the lien. | ||||||
20 | However, where the lien arises because of the issuance of a | ||||||
21 | final order of the Director or tax assessment by the | ||||||
22 | Department, the lien shall not attach and the notice referred | ||||||
23 | to in this Section shall not be filed until all administrative | ||||||
24 | proceedings or proceedings in court for review of the final | ||||||
25 | order or assessment have terminated or the time for the taking | ||||||
26 | thereof has expired without such proceedings being instituted. |
| |||||||
| |||||||
1 | Upon the granting of Department review after a lien has | ||||||
2 | attached, the lien shall remain in full force except to the | ||||||
3 | extent to which the final assessment may be reduced by a | ||||||
4 | revised final assessment following the rehearing or review. The | ||||||
5 | lien created by the issuance of a final assessment shall | ||||||
6 | terminate, unless a notice of lien is filed, within 3 years | ||||||
7 | after the date all proceedings in court for the review of the | ||||||
8 | final assessment have terminated or the time for the taking | ||||||
9 | thereof has expired without such proceedings being instituted, | ||||||
10 | or (in the case of a revised final assessment issued pursuant | ||||||
11 | to a rehearing or review by the Department) within 3 years | ||||||
12 | after the date all proceedings in court for the review of such | ||||||
13 | revised final assessment have terminated or the time for the | ||||||
14 | taking thereof has expired without such proceedings being | ||||||
15 | instituted. Where the lien results from the filing of a tax | ||||||
16 | return without payment of the tax or penalty shown therein to | ||||||
17 | be due, the lien shall terminate, unless a notice of lien is | ||||||
18 | filed, within 3 years after the date when the return is filed | ||||||
19 | with the Department. | ||||||
20 | The time limitation period on the Department's right to | ||||||
21 | file a notice of lien shall not run during any period of time | ||||||
22 | in which the order of any court has the effect of enjoining or | ||||||
23 | restraining the Department from filing such notice of lien. If | ||||||
24 | the Department finds that a company or person is about to | ||||||
25 | depart from the State, to conceal himself or his property, or | ||||||
26 | to do any other act tending to prejudice or to render wholly or |
| |||||||
| |||||||
1 | partly ineffectual proceedings to collect the amount due and | ||||||
2 | owing to the Department unless such proceedings are brought | ||||||
3 | without delay, or if the Department finds that the collection | ||||||
4 | of the amount due from any company or person will be | ||||||
5 | jeopardized by delay, the Department shall give the company or | ||||||
6 | person notice of such findings and shall make demand for | ||||||
7 | immediate return and payment of the amount, whereupon the | ||||||
8 | amount shall become immediately due and payable. If the company | ||||||
9 | or person, within 5 days after the notice (or within such | ||||||
10 | extension of time as the Department may grant), does not comply | ||||||
11 | with the notice or show to the Department that the findings in | ||||||
12 | the notice are erroneous, the Department may file a notice of | ||||||
13 | jeopardy assessment lien in the office of the recorder of the | ||||||
14 | county in which any property of the company or person may be | ||||||
15 | located and shall notify the company or person of the filing. | ||||||
16 | The jeopardy assessment lien shall have the same scope and | ||||||
17 | effect as the statutory lien provided for in this Section. If | ||||||
18 | the company or person believes that the company or person does | ||||||
19 | not owe some or all of the tax for which the jeopardy | ||||||
20 | assessment lien against the company or person has been filed, | ||||||
21 | or that no jeopardy to the revenue in fact exists, the company | ||||||
22 | or person may protest within 20 days after being notified by | ||||||
23 | the Department of the filing of the jeopardy assessment lien | ||||||
24 | and request a hearing, whereupon the Department shall hold a | ||||||
25 | hearing in conformity with the provisions of this Code and, | ||||||
26 | pursuant thereto, shall notify the company or person of its |
| |||||||
| |||||||
1 | findings as to whether or not the jeopardy assessment lien will | ||||||
2 | be released. If not, and if the company or person is aggrieved | ||||||
3 | by this decision, the company or person may file an action for | ||||||
4 | judicial review of the final determination of the Department in | ||||||
5 | accordance with the Administrative Review Law. If, pursuant to | ||||||
6 | such hearing (or after an independent determination of the | ||||||
7 | facts by the Department without a hearing), the Department | ||||||
8 | determines that some or all of the amount due covered by the | ||||||
9 | jeopardy assessment lien is not owed by the company or person, | ||||||
10 | or that no jeopardy to the revenue exists, or if on judicial | ||||||
11 | review the final judgment of the court is that the company or | ||||||
12 | person does not owe some or all of the amount due covered by | ||||||
13 | the jeopardy assessment lien against them, or that no jeopardy | ||||||
14 | to the revenue exists, the Department shall release its | ||||||
15 | jeopardy assessment lien to the extent of such finding of | ||||||
16 | nonliability for the amount, or to the extent of such finding | ||||||
17 | of no jeopardy to the revenue. The Department shall also | ||||||
18 | release its jeopardy assessment lien against the company or | ||||||
19 | person whenever the amount due and owing covered by the lien, | ||||||
20 | plus any interest which may be due, are paid and the company or | ||||||
21 | person has paid the Department in cash or by guaranteed | ||||||
22 | remittance an amount representing the filing fee for the lien | ||||||
23 | and the filing fee for the release of that lien. The Department | ||||||
24 | shall file that release of lien with the recorder of the county | ||||||
25 | where that lien was filed. | ||||||
26 | Nothing in this Section shall be construed to give the |
| |||||||
| |||||||
1 | Department a preference over the rights of any bona fide | ||||||
2 | purchaser, holder of a security interest, mechanics | ||||||
3 | lienholder, mortgagee, or judgment lien creditor arising prior | ||||||
4 | to the filing of a regular notice of lien or a notice of | ||||||
5 | jeopardy assessment lien in the office of the recorder in the | ||||||
6 | county in which the property subject to the lien is located. | ||||||
7 | For purposes of this Section, "bona fide" shall not include any | ||||||
8 | mortgage of real or personal property or any other credit | ||||||
9 | transaction that results in the mortgagee or the holder of the | ||||||
10 | security acting as trustee for unsecured creditors of the | ||||||
11 | company or person mentioned in the notice of lien who executed | ||||||
12 | such chattel or real property mortgage or the document | ||||||
13 | evidencing such credit transaction. The lien shall be inferior | ||||||
14 | to the lien of general taxes, special assessments, and special | ||||||
15 | taxes levied by any political subdivision of this State. In | ||||||
16 | case title to land to be affected by the notice of lien or | ||||||
17 | notice of jeopardy assessment lien is registered under the | ||||||
18 | provisions of the Registered Titles (Torrens) Act, such notice | ||||||
19 | shall be filed in the office of the Registrar of Titles of the | ||||||
20 | county within which the property subject to the lien is | ||||||
21 | situated and shall be entered upon the register of titles as a | ||||||
22 | memorial or charge upon each folium of the register of titles | ||||||
23 | affected by such notice, and the Department shall not have a | ||||||
24 | preference over the rights of any bona fide purchaser, | ||||||
25 | mortgagee, judgment creditor, or other lienholder arising | ||||||
26 | prior to the registration of such notice. The regular lien or |
| |||||||
| |||||||
1 | jeopardy assessment lien shall not be effective against any | ||||||
2 | purchaser with respect to any item in a retailer's stock in | ||||||
3 | trade purchased from the retailer in the usual course of the | ||||||
4 | retailer's business. | ||||||
5 | (Source: P.A. 98-158, eff. 8-2-13; 98-978, eff. 1-1-15.)
| ||||||
6 | (215 ILCS 5/445) (from Ch. 73, par. 1057)
| ||||||
7 | (Text of Section before amendment by P.A. 98-978 )
| ||||||
8 | Sec. 445. Surplus line.
| ||||||
9 | (1) Definitions. For the purposes of this Section:
| ||||||
10 | "Affiliate" means, with respect to an insured, any entity | ||||||
11 | that controls, is controlled by, or is under common control | ||||||
12 | with the insured. For the purpose of this definition, an entity | ||||||
13 | has control over another entity if: | ||||||
14 | (A) the entity directly or indirectly or acting through | ||||||
15 | one or more other persons owns, controls, or has the power | ||||||
16 | to vote 25% or more of any class of voting securities of | ||||||
17 | the other entity; or | ||||||
18 | (B) the entity controls in any manner the election of a | ||||||
19 | majority of the directors or trustees of the other entity. | ||||||
20 | "Affiliated group" means any group of entities that are all | ||||||
21 | affiliated. | ||||||
22 | "Authorized insurer" means an insurer that holds a | ||||||
23 | certificate of
authority
issued by the Director but, for the | ||||||
24 | purposes of this Section, does not
include a
domestic surplus | ||||||
25 | line insurer as defined in Section 445a or any
residual market
|
| |||||||
| |||||||
1 | mechanism. | ||||||
2 | "Exempt commercial purchaser" means any person purchasing | ||||||
3 | commercial insurance that, at the time of placement, meets the | ||||||
4 | following requirements: | ||||||
5 | (A) The person employs or retains a qualified risk | ||||||
6 | manager to negotiate insurance coverage. | ||||||
7 | (B) The person has paid aggregate nationwide | ||||||
8 | commercial property and casualty insurance premiums in | ||||||
9 | excess of $100,000 in the immediately preceding 12 months. | ||||||
10 | (C) The person meets at least one of the following | ||||||
11 | criteria: | ||||||
12 | (I) The person possesses a net worth in excess of | ||||||
13 | $20,000,000, as such amount is adjusted pursuant to the | ||||||
14 | provision in this definition concerning percentage | ||||||
15 | change. | ||||||
16 | (II) The person generates annual revenues in | ||||||
17 | excess of $50,000,000, as such amount is adjusted | ||||||
18 | pursuant to the provision in this definition | ||||||
19 | concerning percentage change. | ||||||
20 | (III) The person employs more than 500 full-time or | ||||||
21 | full-time equivalent employees per individual insured | ||||||
22 | or is a member of an affiliated group employing more | ||||||
23 | than 1,000 employees in the aggregate. | ||||||
24 | (IV) The person is a not-for-profit organization | ||||||
25 | or public entity generating annual budgeted | ||||||
26 | expenditures of at least $30,000,000, as such amount is |
| |||||||
| |||||||
1 | adjusted pursuant to the provision in this definition | ||||||
2 | concerning percentage change. | ||||||
3 | (V) The person is a municipality with a population | ||||||
4 | in excess of 50,000 persons. | ||||||
5 | Effective on January 1, 2015 and each fifth January 1 | ||||||
6 | occurring thereafter, the amounts in subitems (I), (II), and | ||||||
7 | (IV) of item (C) of this definition shall be adjusted to | ||||||
8 | reflect the percentage change for such 5-year period in the | ||||||
9 | Consumer Price Index for All Urban Consumers published by the | ||||||
10 | Bureau of Labor Statistics of the Department of Labor. | ||||||
11 | "Home state" means the following: | ||||||
12 | (A) With respect to an insured, except as provided in | ||||||
13 | item (B) of this definition: | ||||||
14 | (I) the state in which an insured maintains its | ||||||
15 | principal place of business or, in the case of an | ||||||
16 | individual, the individual's principal residence; or | ||||||
17 | (II) if 100% of the insured risk is located out of | ||||||
18 | the state referred to in subitem (I), the state to | ||||||
19 | which the greatest percentage of the insured's taxable | ||||||
20 | premium for that insurance contract is allocated. | ||||||
21 | (B) If more than one insured from an affiliated group | ||||||
22 | are named insureds on a single surplus line insurance | ||||||
23 | contract, then "home state" means the home state, as | ||||||
24 | determined pursuant to item (A) of this definition, of the | ||||||
25 | member of the affiliated group that has the largest | ||||||
26 | percentage of premium attributed to it under such insurance |
| |||||||
| |||||||
1 | contract. | ||||||
2 | "Multi-State risk" means a risk with insured exposures in | ||||||
3 | more than one State. | ||||||
4 | "NAIC" means the National Association of Insurance | ||||||
5 | Commissioners or any successor entity. | ||||||
6 | "Qualified risk manager" means, with respect to a | ||||||
7 | policyholder of commercial insurance, a person who meets all of | ||||||
8 | the following requirements: | ||||||
9 | (A) The person is an employee of, or third-party | ||||||
10 | consultant retained by, the commercial policyholder. | ||||||
11 | (B) The person provides skilled services in loss | ||||||
12 | prevention, loss reduction, or risk and insurance coverage | ||||||
13 | analysis, and purchase of insurance. | ||||||
14 | (C) With regard to the person: | ||||||
15 | (I) the person has: | ||||||
16 | (a) a bachelor's degree or higher from an | ||||||
17 | accredited college or university in risk | ||||||
18 | management, business administration, finance, | ||||||
19 | economics, or any other field determined by the | ||||||
20 | Director or his designee to demonstrate minimum | ||||||
21 | competence in risk management; and | ||||||
22 | (b) the following: | ||||||
23 | (i) three years of experience in risk | ||||||
24 | financing, claims administration, loss | ||||||
25 | prevention, risk and insurance analysis, or | ||||||
26 | purchasing commercial lines of insurance; or |
| |||||||
| |||||||
1 | (ii) alternatively has: | ||||||
2 | (AA) a designation as a Chartered | ||||||
3 | Property and Casualty Underwriter (in this | ||||||
4 | subparagraph (ii) referred to as "CPCU") | ||||||
5 | issued by the American Institute for | ||||||
6 | CPCU/Insurance Institute of America; | ||||||
7 | (BB) a designation as an Associate in | ||||||
8 | Risk Management (ARM) issued by the | ||||||
9 | American Institute for CPCU/Insurance | ||||||
10 | Institute of America; | ||||||
11 | (CC) a designation as Certified Risk | ||||||
12 | Manager (CRM) issued by the National | ||||||
13 | Alliance for Insurance Education & | ||||||
14 | Research; | ||||||
15 | (DD) a designation as a RIMS Fellow | ||||||
16 | (RF) issued by the Global Risk Management | ||||||
17 | Institute; or | ||||||
18 | (EE) any other designation, | ||||||
19 | certification, or license determined by | ||||||
20 | the Director or his designee to | ||||||
21 | demonstrate minimum competency in risk | ||||||
22 | management; | ||||||
23 | (II) the person has: | ||||||
24 | (a) at least 7 years of experience in risk | ||||||
25 | financing, claims administration, loss prevention, | ||||||
26 | risk and insurance coverage analysis, or |
| |||||||
| |||||||
1 | purchasing commercial lines of insurance; and | ||||||
2 | (b) has any one of the designations specified | ||||||
3 | in subparagraph (ii) of paragraph (b); | ||||||
4 | (III) the person has at least 10 years of | ||||||
5 | experience in risk financing, claims administration, | ||||||
6 | loss prevention, risk and insurance coverage analysis, | ||||||
7 | or purchasing commercial lines of insurance; or | ||||||
8 | (IV) the person has a graduate degree from an | ||||||
9 | accredited college or university in risk management, | ||||||
10 | business administration, finance, economics, or any | ||||||
11 | other field determined by the Director or his or her | ||||||
12 | designee to demonstrate minimum competence in risk | ||||||
13 | management. | ||||||
14 | "Residual market mechanism" means an association, | ||||||
15 | organization, or other
entity described in Article XXXIII of | ||||||
16 | this Code or Section 7-501 of the
Illinois Vehicle Code or any | ||||||
17 | similar association, organization, or other
entity. | ||||||
18 | "State" means any state of the United States, the District | ||||||
19 | of Columbia, the Commonwealth of Puerto Rico, Guam, the | ||||||
20 | Northern Mariana Islands, the Virgin Islands, and American | ||||||
21 | Samoa. | ||||||
22 | "Surplus line insurance" means insurance on a risk: | ||||||
23 | (A) of the kinds specified in Classes 2 and 3 of | ||||||
24 | Section 4 of this Code; and | ||||||
25 | (B) that is procured from an unauthorized insurer after | ||||||
26 | the insurance producer representing the insured or the |
| |||||||
| |||||||
1 | surplus line producer is unable, after diligent effort, to | ||||||
2 | procure the insurance from authorized insurers; and | ||||||
3 | (C) where Illinois is the home state of the insured, | ||||||
4 | for policies effective, renewed or extended on July 21, | ||||||
5 | 2011 or later and for multiyear policies upon the policy | ||||||
6 | anniversary that falls on or after July 21, 2011; and | ||||||
7 | (D) that is located in Illinois, for policies effective | ||||||
8 | prior to July 21, 2011. | ||||||
9 | "Unauthorized insurer" means an insurer that does not hold | ||||||
10 | a valid
certificate of authority issued by the Director but, | ||||||
11 | for the purposes of this
Section, shall also include a domestic | ||||||
12 | surplus line insurer as defined in
Section 445a.
| ||||||
13 | (1.5) Procuring surplus line insurance; surplus line | ||||||
14 | insurer requirements. | ||||||
15 | (a) Insurance producers may procure surplus line | ||||||
16 | insurance only if licensed
as a surplus line producer under | ||||||
17 | this Section. | ||||||
18 | (b) Licensed surplus line producers may procure | ||||||
19 | surplus line
insurance from an unauthorized insurer | ||||||
20 | domiciled in the United States only if the insurer:
| ||||||
21 | (i) is permitted in its domiciliary jurisdiction | ||||||
22 | to write the type of insurance involved; and | ||||||
23 |
(ii) has, based upon information available to the | ||||||
24 | surplus
line producer,
a policyholders surplus of not | ||||||
25 | less than $15,000,000
determined in
accordance with | ||||||
26 | the laws of its domiciliary jurisdiction;
and
|
| |||||||
| |||||||
1 |
(iii) has standards of solvency and management | ||||||
2 | that are adequate
for the protection of policyholders.
| ||||||
3 |
Where an unauthorized insurer does not meet the
| ||||||
4 | standards set forth
in (ii) and (iii) above, a surplus line | ||||||
5 | producer may, if necessary, procure
insurance from that | ||||||
6 | insurer only if prior written warning of
such fact or
| ||||||
7 | condition is given to the insured by the insurance producer | ||||||
8 | or surplus line
producer.
| ||||||
9 | (c) Licensed surplus line producers may procure | ||||||
10 | surplus line insurance from an unauthorized insurer | ||||||
11 | domiciled outside of the United States only if the insurer | ||||||
12 | is listed on the Quarterly Listing of Alien Insurers | ||||||
13 | maintained by the International Insurers Department of the | ||||||
14 | NAIC. The Director shall make the Quarterly Listing of | ||||||
15 | Alien Insurers available to surplus line producers without | ||||||
16 | charge. | ||||||
17 | (d) Insurance producers shall not procure from an
| ||||||
18 | unauthorized insurer an insurance policy: | ||||||
19 | (i) that is designed to satisfy the
proof of | ||||||
20 | financial responsibility and insurance requirements in | ||||||
21 | any
Illinois law where the law requires that the proof | ||||||
22 | of
insurance is issued by an authorized insurer or | ||||||
23 | residual market
mechanism; | ||||||
24 | (ii) that covers the risk of accidental injury to | ||||||
25 | employees arising
out of and in the course of | ||||||
26 | employment according to the provisions of the
Workers' |
| |||||||
| |||||||
1 | Compensation Act; or | ||||||
2 | (iii) that insures any Illinois personal lines | ||||||
3 | risk, as defined in
subsection (a), (b), or (c) of | ||||||
4 | Section 143.13 of this Code, that is eligible
for | ||||||
5 | residual market mechanism coverage, unless the insured | ||||||
6 | or prospective
insured requests limits of liability | ||||||
7 | greater than the limits provided by the
residual market | ||||||
8 | mechanism. In the course of making a diligent effort to
| ||||||
9 | procure insurance from authorized insurers, an | ||||||
10 | insurance producer shall not be
required to submit a | ||||||
11 | risk to a residual market mechanism when the risk is | ||||||
12 | not
eligible for coverage or exceeds the limits | ||||||
13 | available in the residual market
mechanism. | ||||||
14 | Where there is an insurance policy issued by an
| ||||||
15 | authorized insurer or residual market mechanism
insuring a | ||||||
16 | risk described in item (i), (ii), or (iii)
above, nothing | ||||||
17 | in this paragraph shall be construed
to prohibit a surplus | ||||||
18 | line producer from procuring
from an unauthorized insurer a | ||||||
19 | policy insuring the
risk on an excess or umbrella basis | ||||||
20 | where the excess
or umbrella policy is written over one or | ||||||
21 | more
underlying policies.
| ||||||
22 | (e) Licensed surplus line producers may procure | ||||||
23 | surplus line insurance from an unauthorized insurer for an | ||||||
24 | exempt commercial purchaser without making the required | ||||||
25 | diligent effort to procure the insurance from authorized | ||||||
26 | insurers if: |
| |||||||
| |||||||
1 | (i) the producer has disclosed to the exempt | ||||||
2 | commercial purchaser that such insurance may or may not | ||||||
3 | be available from authorized insurers that may provide | ||||||
4 | greater protection with more regulatory oversight; and | ||||||
5 | (ii) the exempt commercial purchaser has | ||||||
6 | subsequently in writing requested the producer to | ||||||
7 | procure such insurance from an unauthorized insurer. | ||||||
8 | (2) Surplus line producer; license. Any licensed producer | ||||||
9 | who is a
resident of this State, or any nonresident who | ||||||
10 | qualifies under Section
500-40, may be licensed as a surplus | ||||||
11 | line producer upon payment of an annual license fee of $400.
| ||||||
12 | A surplus line producer so licensed shall keep a separate
| ||||||
13 | account of
the business transacted thereunder which shall be | ||||||
14 | open at all times to the
inspection of the Director or his | ||||||
15 | representative.
| ||||||
16 | No later than July 21, 2012, the State of Illinois shall | ||||||
17 | participate in the national insurance producer database of the | ||||||
18 | NAIC, or any other equivalent uniform national database, for | ||||||
19 | the licensure of surplus line producers and the renewal of such | ||||||
20 | licenses.
| ||||||
21 | (3) Taxes and reports.
| ||||||
22 | (a) Surplus line tax and penalty for late payment. The | ||||||
23 | surplus line tax rate for a surplus line insurance policy | ||||||
24 | or contract is determined as follows: | ||||||
25 | (i) 3% for policies or contracts with an effective | ||||||
26 | date prior to July 1, 2003; |
| |||||||
| |||||||
1 | (ii) 3.5% for policies or contracts with an | ||||||
2 | effective date of July 1, 2003 or later.
| ||||||
3 | A surplus line producer shall file with the Director on | ||||||
4 | or
before
February 1 and August 1 of each year a report in | ||||||
5 | the form prescribed by the
Director on all surplus line | ||||||
6 | insurance procured from unauthorized insurers
during the | ||||||
7 | preceding
6 month period ending December 31 or June 30
| ||||||
8 | respectively, and on the filing of such report shall pay to | ||||||
9 | the Director
for the use and benefit of the State a sum | ||||||
10 | equal to the surplus line tax rate multiplied by the
gross
| ||||||
11 | premiums less returned premiums upon all surplus line | ||||||
12 | insurance submitted to the Surplus Line Association of | ||||||
13 | Illinois during the preceding 6 months.
| ||||||
14 | Any surplus line producer who fails to pay the full | ||||||
15 | amount due under this
subsection is liable, in addition to | ||||||
16 | the amount due, for such
penalty and interest charges as | ||||||
17 | are provided for under Section 412 of
this Code. The | ||||||
18 | Director, through the
Attorney General, may
institute an | ||||||
19 | action in the name of the People of the State of Illinois, | ||||||
20 | in
any court of competent jurisdiction, for the recovery of | ||||||
21 | the amount of such
taxes and penalties due, and prosecute | ||||||
22 | the same to final judgment, and take
such steps as are | ||||||
23 | necessary to collect the same.
| ||||||
24 | (b) Fire Marshal Tax.
Each surplus line producer shall | ||||||
25 | file with the Director on or before
March 31 of each year a | ||||||
26 | report in the form prescribed by the Director on all
fire |
| |||||||
| |||||||
1 | insurance procured from unauthorized insurers and | ||||||
2 | submitted to the Surplus Line Association of Illinois | ||||||
3 | subject to tax under
Section 12 of the Fire Investigation
| ||||||
4 | Act
and shall pay to the Director the fire marshal tax | ||||||
5 | required thereunder.
| ||||||
6 | (c) Taxes and fees charged to insured. The taxes | ||||||
7 | imposed under this
subsection and the countersigning fees | ||||||
8 | charged by the Surplus Line
Association of Illinois may be | ||||||
9 | charged to and collected from surplus line
insureds.
| ||||||
10 | (4) (Blank).
| ||||||
11 | (5) Submission of documents to Surplus Line Association of | ||||||
12 | Illinois.
A surplus line producer shall submit every insurance | ||||||
13 | contract
issued
under his or her license to the Surplus Line | ||||||
14 | Association of Illinois for
recording and countersignature. | ||||||
15 | The submission and countersignature may be
effected through | ||||||
16 | electronic means. The submission shall set
forth:
| ||||||
17 | (a) the name of the insured;
| ||||||
18 | (b) the description and location of the insured | ||||||
19 | property or
risk;
| ||||||
20 | (c) the amount insured;
| ||||||
21 | (d) the gross premiums charged or returned;
| ||||||
22 | (e) the name of the unauthorized insurer from whom | ||||||
23 | coverage has been procured;
| ||||||
24 | (f) the kind or kinds of insurance procured; and
| ||||||
25 | (g) amount of premium subject to tax required by | ||||||
26 | Section 12 of the Fire
Investigation Act.
|
| |||||||
| |||||||
1 | Proposals, endorsements, and other documents which are
| ||||||
2 | incidental to the insurance but which do not affect the premium
| ||||||
3 | charged
are exempted from filing and countersignature.
| ||||||
4 | The submission of insuring contracts
to the Surplus Line | ||||||
5 | Association of
Illinois constitutes a certification by the | ||||||
6 | surplus line producer or by the
insurance producer who | ||||||
7 | presented the risk to the surplus line producer for
placement | ||||||
8 | as a surplus line risk that
after diligent effort the required | ||||||
9 | insurance could not be procured from
authorized insurers and | ||||||
10 | that
such procurement was otherwise in accordance with the | ||||||
11 | surplus line law.
| ||||||
12 | (6) Countersignature required. It shall be unlawful for an | ||||||
13 | insurance
producer to deliver any unauthorized insurer
| ||||||
14 | contract unless such
insurance contract is countersigned by the | ||||||
15 | Surplus Line Association of
Illinois.
| ||||||
16 | (7) Inspection of records. A surplus line producer shall
| ||||||
17 | maintain
separate records of the business transacted under his | ||||||
18 | or her license,
including complete copies of surplus line | ||||||
19 | insurance contracts maintained on
paper or by electronic means, | ||||||
20 | which
records shall be open at all times for inspection by the | ||||||
21 | Director and by
the Surplus Line Association of Illinois.
| ||||||
22 | (8) Violations and penalties. The Director may suspend or | ||||||
23 | revoke or
refuse to renew a surplus line producer license for | ||||||
24 | any violation of this Code.
In addition to or in lieu of | ||||||
25 | suspension or revocation, the Director may
subject a surplus | ||||||
26 | line producer
to a civil penalty of up to $2,000 for each cause |
| |||||||
| |||||||
1 | for suspension
or
revocation. Such penalty is enforceable under | ||||||
2 | subsection (5) of Section
403A of this Code.
| ||||||
3 | (9) Director may declare insurer ineligible. If the
| ||||||
4 | Director determines
that the further assumption of risks might | ||||||
5 | be hazardous to the
policyholders of an unauthorized insurer, | ||||||
6 | the Director may
order the
Surplus Line Association of
Illinois | ||||||
7 | not to countersign insurance contracts evidencing insurance in
| ||||||
8 | such insurer and order surplus line producers to cease
| ||||||
9 | procuring insurance
from such insurer.
| ||||||
10 | (10) Service of process upon Director. Insurance contracts
| ||||||
11 | delivered under this Section from unauthorized insurers, other | ||||||
12 | than domestic
surplus line insurers as defined in Section 445a,
| ||||||
13 | shall contain a
provision designating the
Director and his | ||||||
14 | successors in office the true and lawful attorney of the
| ||||||
15 | insurer upon whom may be served all lawful process in any
| ||||||
16 | action, suit or
proceeding arising out of such insurance.
| ||||||
17 | Service of process made upon the Director to be valid hereunder | ||||||
18 | must state
the name of the insured, the name of the | ||||||
19 | unauthorized insurer
and identify
the contract of insurance. | ||||||
20 | The Director at his option is authorized to
forward a copy of | ||||||
21 | the process to the Surplus Line Association of Illinois
for | ||||||
22 | delivery to the unauthorized insurer or the Director may | ||||||
23 | deliver the process to the
unauthorized insurer by other means | ||||||
24 | which he considers to be
reasonably
prompt and certain.
| ||||||
25 | (10.5) Insurance contracts delivered under this Section | ||||||
26 | from unauthorized insurers, other than domestic surplus line |
| |||||||
| |||||||
1 | insurers as defined in Section 445a, shall have stamped or | ||||||
2 | imprinted on the first page thereof in not less than 12-pt. | ||||||
3 | bold face type the following legend: "Notice to Policyholder: | ||||||
4 | This contract is issued, pursuant to Section 445 of the | ||||||
5 | Illinois Insurance Code, by a company not authorized and | ||||||
6 | licensed to transact business in Illinois and as such is not | ||||||
7 | covered by the Illinois Insurance Guaranty Fund." Insurance | ||||||
8 | contracts delivered under this Section from domestic surplus | ||||||
9 | line insurers as defined in Section 445a shall have stamped or | ||||||
10 | imprinted on the first page thereof in not less than 12-pt. | ||||||
11 | bold face type the following legend: "Notice to Policyholder: | ||||||
12 | This contract is issued by a domestic surplus line insurer, as | ||||||
13 | defined in Section 445a of the Illinois Insurance Code, | ||||||
14 | pursuant to Section 445, and as such is not covered by the | ||||||
15 | Illinois Insurance Guaranty Fund."
| ||||||
16 | (11) The Illinois Surplus Line law does not apply to | ||||||
17 | insurance of
property and operations of railroads or aircraft | ||||||
18 | engaged in interstate or
foreign commerce, insurance of | ||||||
19 | vessels, crafts or hulls, cargoes, marine
builder's risks, | ||||||
20 | marine protection and indemnity, or other risks including
| ||||||
21 | strikes and war risks insured under ocean or wet marine forms | ||||||
22 | of policies.
| ||||||
23 | (12) Surplus line insurance procured under this Section, | ||||||
24 | including
insurance procured from a domestic surplus line | ||||||
25 | insurer, is not subject
to the provisions of the Illinois | ||||||
26 | Insurance Code other than Sections 123,
123.1, 401, 401.1, 402, |
| |||||||
| |||||||
1 | 403, 403A, 408, 412, 445, 445.1, 445.2, 445.3,
445.4, and all | ||||||
2 | of the provisions of Article XXXI to the extent that the
| ||||||
3 | provisions of Article XXXI are not inconsistent with the terms | ||||||
4 | of this Act.
| ||||||
5 | (Source: P.A. 97-955, eff. 8-14-12.)
| ||||||
6 | (Text of Section after amendment by P.A. 98-978 )
| ||||||
7 | Sec. 445. Surplus line.
| ||||||
8 | (1) Definitions. For the purposes of this Section:
| ||||||
9 | "Affiliate" means, with respect to an insured, any entity | ||||||
10 | that controls, is controlled by, or is under common control | ||||||
11 | with the insured. For the purpose of this definition, an entity | ||||||
12 | has control over another entity if: | ||||||
13 | (A) the entity directly or indirectly or acting through | ||||||
14 | one or more other persons owns, controls, or has the power | ||||||
15 | to vote 25% or more of any class of voting securities of | ||||||
16 | the other entity; or | ||||||
17 | (B) the entity controls in any manner the election of a | ||||||
18 | majority of the directors or trustees of the other entity. | ||||||
19 | "Affiliated group" means any group of entities that are all | ||||||
20 | affiliated. | ||||||
21 | "Authorized insurer" means an insurer that holds a | ||||||
22 | certificate of
authority
issued by the Director but, for the | ||||||
23 | purposes of this Section, does not
include a
domestic surplus | ||||||
24 | line insurer as defined in Section 445a or any
residual market
| ||||||
25 | mechanism. |
| |||||||
| |||||||
1 | "Exempt commercial purchaser" means any person purchasing | ||||||
2 | commercial insurance that, at the time of placement, meets the | ||||||
3 | following requirements: | ||||||
4 | (A) The person employs or retains a qualified risk | ||||||
5 | manager to negotiate insurance coverage. | ||||||
6 | (B) The person has paid aggregate nationwide | ||||||
7 | commercial property and casualty insurance premiums in | ||||||
8 | excess of $100,000 in the immediately preceding 12 months. | ||||||
9 | (C) The person meets at least one of the following | ||||||
10 | criteria: | ||||||
11 | (I) The person possesses a net worth in excess of | ||||||
12 | $20,000,000, as such amount is adjusted pursuant to the | ||||||
13 | provision in this definition concerning percentage | ||||||
14 | change. | ||||||
15 | (II) The person generates annual revenues in | ||||||
16 | excess of $50,000,000, as such amount is adjusted | ||||||
17 | pursuant to the provision in this definition | ||||||
18 | concerning percentage change. | ||||||
19 | (III) The person employs more than 500 full-time or | ||||||
20 | full-time equivalent employees per individual insured | ||||||
21 | or is a member of an affiliated group employing more | ||||||
22 | than 1,000 employees in the aggregate. | ||||||
23 | (IV) The person is a not-for-profit organization | ||||||
24 | or public entity generating annual budgeted | ||||||
25 | expenditures of at least $30,000,000, as such amount is | ||||||
26 | adjusted pursuant to the provision in this definition |
| |||||||
| |||||||
1 | concerning percentage change. | ||||||
2 | (V) The person is a municipality with a population | ||||||
3 | in excess of 50,000 persons. | ||||||
4 | Effective on January 1, 2015 and each fifth January 1 | ||||||
5 | occurring thereafter, the amounts in subitems (I), (II), and | ||||||
6 | (IV) of item (C) of this definition shall be adjusted to | ||||||
7 | reflect the percentage change for such 5-year period in the | ||||||
8 | Consumer Price Index for All Urban Consumers published by the | ||||||
9 | Bureau of Labor Statistics of the Department of Labor. | ||||||
10 | "Home state" means the following: | ||||||
11 | (A) With respect to an insured, except as provided in | ||||||
12 | item (B) of this definition: | ||||||
13 | (I) the state in which an insured maintains its | ||||||
14 | principal place of business or, in the case of an | ||||||
15 | individual, the individual's principal residence; or | ||||||
16 | (II) if 100% of the insured risk is located out of | ||||||
17 | the state referred to in subitem (I), the state to | ||||||
18 | which the greatest percentage of the insured's taxable | ||||||
19 | premium for that insurance contract is allocated. | ||||||
20 | (B) If more than one insured from an affiliated group | ||||||
21 | are named insureds on a single surplus line insurance | ||||||
22 | contract, then "home state" means the home state, as | ||||||
23 | determined pursuant to item (A) of this definition, of the | ||||||
24 | member of the affiliated group that has the largest | ||||||
25 | percentage of premium attributed to it under such insurance | ||||||
26 | contract. |
| |||||||
| |||||||
1 | If more than one insured from a group that is not | ||||||
2 | affiliated are named insureds on a single surplus line | ||||||
3 | insurance contract, then: | ||||||
4 | (I) if individual group members pay 100% of the | ||||||
5 | premium for the insurance from their own funds, "home | ||||||
6 | state" means the home state, as determined pursuant to | ||||||
7 | item (A) of this definition, of each individual group | ||||||
8 | member; each individual group member's coverage under | ||||||
9 | the surplus line insurance contract shall be treated as | ||||||
10 | a separate surplus line contract for the purposes of | ||||||
11 | this Section; | ||||||
12 | (II) otherwise, "home state" means the home state, | ||||||
13 | as determined pursuant to item (A) of this definition, | ||||||
14 | of the group. | ||||||
15 | Nothing in this definition shall be construed to alter the | ||||||
16 | terms of the surplus line insurance contract. | ||||||
17 | "Multi-State risk" means a risk with insured exposures in | ||||||
18 | more than one State. | ||||||
19 | "NAIC" means the National Association of Insurance | ||||||
20 | Commissioners or any successor entity. | ||||||
21 | "Qualified risk manager" means, with respect to a | ||||||
22 | policyholder of commercial insurance, a person who meets all of | ||||||
23 | the following requirements: | ||||||
24 | (A) The person is an employee of, or third-party | ||||||
25 | consultant retained by, the commercial policyholder. | ||||||
26 | (B) The person provides skilled services in loss |
| |||||||
| |||||||
1 | prevention, loss reduction, or risk and insurance coverage | ||||||
2 | analysis, and purchase of insurance. | ||||||
3 | (C) With regard to the person: | ||||||
4 | (I) the person has: | ||||||
5 | (a) a bachelor's degree or higher from an | ||||||
6 | accredited college or university in risk | ||||||
7 | management, business administration, finance, | ||||||
8 | economics, or any other field determined by the | ||||||
9 | Director or his designee to demonstrate minimum | ||||||
10 | competence in risk management; and | ||||||
11 | (b) the following: | ||||||
12 | (i) three years of experience in risk | ||||||
13 | financing, claims administration, loss | ||||||
14 | prevention, risk and insurance analysis, or | ||||||
15 | purchasing commercial lines of insurance; or | ||||||
16 | (ii) alternatively has: | ||||||
17 | (AA) a designation as a Chartered | ||||||
18 | Property and Casualty Underwriter (in this | ||||||
19 | subparagraph (ii) referred to as "CPCU") | ||||||
20 | issued by the American Institute for | ||||||
21 | CPCU/Insurance Institute of America; | ||||||
22 | (BB) a designation as an Associate in | ||||||
23 | Risk Management (ARM) issued by the | ||||||
24 | American Institute for CPCU/Insurance | ||||||
25 | Institute of America; | ||||||
26 | (CC) a designation as Certified Risk |
| |||||||
| |||||||
1 | Manager (CRM) issued by the National | ||||||
2 | Alliance for Insurance Education & | ||||||
3 | Research; | ||||||
4 | (DD) a designation as a RIMS Fellow | ||||||
5 | (RF) issued by the Global Risk Management | ||||||
6 | Institute; or | ||||||
7 | (EE) any other designation, | ||||||
8 | certification, or license determined by | ||||||
9 | the Director or his designee to | ||||||
10 | demonstrate minimum competency in risk | ||||||
11 | management; | ||||||
12 | (II) the person has: | ||||||
13 | (a) at least 7 years of experience in risk | ||||||
14 | financing, claims administration, loss prevention, | ||||||
15 | risk and insurance coverage analysis, or | ||||||
16 | purchasing commercial lines of insurance; and | ||||||
17 | (b) has any one of the designations specified | ||||||
18 | in subparagraph (ii) of paragraph (b); | ||||||
19 | (III) the person has at least 10 years of | ||||||
20 | experience in risk financing, claims administration, | ||||||
21 | loss prevention, risk and insurance coverage analysis, | ||||||
22 | or purchasing commercial lines of insurance; or | ||||||
23 | (IV) the person has a graduate degree from an | ||||||
24 | accredited college or university in risk management, | ||||||
25 | business administration, finance, economics, or any | ||||||
26 | other field determined by the Director or his or her |
| |||||||
| |||||||
1 | designee to demonstrate minimum competence in risk | ||||||
2 | management. | ||||||
3 | "Residual market mechanism" means an association, | ||||||
4 | organization, or other
entity described in Article XXXIII of | ||||||
5 | this Code or Section 7-501 of the
Illinois Vehicle Code or any | ||||||
6 | similar association, organization, or other
entity. | ||||||
7 | "State" means any state of the United States, the District | ||||||
8 | of Columbia, the Commonwealth of Puerto Rico, Guam, the | ||||||
9 | Northern Mariana Islands, the Virgin Islands, and American | ||||||
10 | Samoa. | ||||||
11 | "Surplus line insurance" means insurance on a risk: | ||||||
12 | (A) of the kinds specified in Classes 2 and 3 of | ||||||
13 | Section 4 of this Code; and | ||||||
14 | (B) that is procured from an unauthorized insurer after | ||||||
15 | the insurance producer representing the insured or the | ||||||
16 | surplus line producer is unable, after diligent effort, to | ||||||
17 | procure the insurance from authorized insurers; and | ||||||
18 | (C) where Illinois is the home state of the insured, | ||||||
19 | for policies effective, renewed or extended on July 21, | ||||||
20 | 2011 or later and for multiyear policies upon the policy | ||||||
21 | anniversary that falls on or after July 21, 2011; and | ||||||
22 | (D) that is located in Illinois, for policies effective | ||||||
23 | prior to July 21, 2011. | ||||||
24 | "Unauthorized insurer" means an insurer that does not hold | ||||||
25 | a valid
certificate of authority issued by the Director but, | ||||||
26 | for the purposes of this
Section, shall also include a domestic |
| |||||||
| |||||||
1 | surplus line insurer as defined in
Section 445a.
| ||||||
2 | (1.5) Procuring surplus line insurance; surplus line | ||||||
3 | insurer requirements. | ||||||
4 | (a) Insurance producers may procure surplus line | ||||||
5 | insurance only if licensed
as a surplus line producer under | ||||||
6 | this Section. | ||||||
7 | (b) Licensed surplus line producers may procure | ||||||
8 | surplus line
insurance from an unauthorized insurer | ||||||
9 | domiciled in the United States only if the insurer:
| ||||||
10 | (i) is permitted in its domiciliary jurisdiction | ||||||
11 | to write the type of insurance involved; and | ||||||
12 |
(ii) has, based upon information available to the | ||||||
13 | surplus
line producer,
a policyholders surplus of not | ||||||
14 | less than $15,000,000
determined in
accordance with | ||||||
15 | the laws of its domiciliary jurisdiction;
and
| ||||||
16 |
(iii) has standards of solvency and management | ||||||
17 | that are adequate
for the protection of policyholders.
| ||||||
18 |
Where an unauthorized insurer does not meet the
| ||||||
19 | standards set forth
in (ii) and (iii) above, a surplus line | ||||||
20 | producer may, if necessary, procure
insurance from that | ||||||
21 | insurer only if prior written warning of
such fact or
| ||||||
22 | condition is given to the insured by the insurance producer | ||||||
23 | or surplus line
producer.
| ||||||
24 | (c) Licensed surplus line producers may procure | ||||||
25 | surplus line insurance from an unauthorized insurer | ||||||
26 | domiciled outside of the United States only if the insurer |
| |||||||
| |||||||
1 | meets the standards for unauthorized insurers domiciled in | ||||||
2 | the United States in paragraph (b) of this subsection (1.5) | ||||||
3 | or is listed on the Quarterly Listing of Alien Insurers | ||||||
4 | maintained by the International Insurers Department of the | ||||||
5 | NAIC. The Director shall make the Quarterly Listing of | ||||||
6 | Alien Insurers available to surplus line producers without | ||||||
7 | charge. | ||||||
8 | (d) Insurance producers shall not procure from an
| ||||||
9 | unauthorized insurer an insurance policy: | ||||||
10 | (i) that is designed to satisfy the
proof of | ||||||
11 | financial responsibility and insurance requirements in | ||||||
12 | any
Illinois law where the law requires that the proof | ||||||
13 | of
insurance is issued by an authorized insurer or | ||||||
14 | residual market
mechanism; | ||||||
15 | (ii) that covers the risk of accidental injury to | ||||||
16 | employees arising
out of and in the course of | ||||||
17 | employment according to the provisions of the
Workers' | ||||||
18 | Compensation Act; or | ||||||
19 | (iii) that insures any Illinois personal lines | ||||||
20 | risk, as defined in
subsection (a), (b), or (c) of | ||||||
21 | Section 143.13 of this Code, that is eligible
for | ||||||
22 | residual market mechanism coverage, unless the insured | ||||||
23 | or prospective
insured requests limits of liability | ||||||
24 | greater than the limits provided by the
residual market | ||||||
25 | mechanism. In the course of making a diligent effort to
| ||||||
26 | procure insurance from authorized insurers, an |
| |||||||
| |||||||
1 | insurance producer shall not be
required to submit a | ||||||
2 | risk to a residual market mechanism when the risk is | ||||||
3 | not
eligible for coverage or exceeds the limits | ||||||
4 | available in the residual market
mechanism. | ||||||
5 | Where there is an insurance policy issued by an
| ||||||
6 | authorized insurer or residual market mechanism
insuring a | ||||||
7 | risk described in item (i), (ii), or (iii)
above, nothing | ||||||
8 | in this paragraph shall be construed
to prohibit a surplus | ||||||
9 | line producer from procuring
from an unauthorized insurer a | ||||||
10 | policy insuring the
risk on an excess or umbrella basis | ||||||
11 | where the excess
or umbrella policy is written over one or | ||||||
12 | more
underlying policies.
| ||||||
13 | (e) Licensed surplus line producers may procure | ||||||
14 | surplus line insurance from an unauthorized insurer for an | ||||||
15 | exempt commercial purchaser without making the required | ||||||
16 | diligent effort to procure the insurance from authorized | ||||||
17 | insurers if: | ||||||
18 | (i) the producer has disclosed to the exempt | ||||||
19 | commercial purchaser that such insurance may or may not | ||||||
20 | be available from authorized insurers that may provide | ||||||
21 | greater protection with more regulatory oversight; and | ||||||
22 | (ii) the exempt commercial purchaser has | ||||||
23 | subsequently in writing requested the producer to | ||||||
24 | procure such insurance from an unauthorized insurer. | ||||||
25 | (2) Surplus line producer; license. Any licensed producer | ||||||
26 | who is a
resident of this State, or any nonresident who |
| |||||||
| |||||||
1 | qualifies under Section
500-40, may be licensed as a surplus | ||||||
2 | line producer upon payment of an annual license fee of $400.
| ||||||
3 | A surplus line producer so licensed shall keep a separate
| ||||||
4 | account of
the business transacted thereunder for 7 years from | ||||||
5 | the policy effective date which shall be open at all times to | ||||||
6 | the
inspection of the Director or his representative.
| ||||||
7 | No later than July 21, 2012, the State of Illinois shall | ||||||
8 | participate in the national insurance producer database of the | ||||||
9 | NAIC, or any other equivalent uniform national database, for | ||||||
10 | the licensure of surplus line producers and the renewal of such | ||||||
11 | licenses.
| ||||||
12 | (3) Taxes and reports.
| ||||||
13 | (a) Surplus line tax and penalty for late payment. The | ||||||
14 | surplus line tax rate for a surplus line insurance policy | ||||||
15 | or contract is determined as follows: | ||||||
16 | (i) 3% for policies or contracts with an effective | ||||||
17 | date prior to July 1, 2003; | ||||||
18 | (ii) 3.5% for policies or contracts with an | ||||||
19 | effective date of July 1, 2003 or later.
| ||||||
20 | A surplus line producer shall file with the Director on | ||||||
21 | or
before
February 1 and August 1 of each year a report in | ||||||
22 | the form prescribed by the
Director on all surplus line | ||||||
23 | insurance procured from unauthorized insurers and | ||||||
24 | submitted to the Surplus Line Association of Illinois
| ||||||
25 | during the preceding
6 month period ending December 31 or | ||||||
26 | June 30
respectively, and on the filing of such report |
| |||||||
| |||||||
1 | shall pay to the Director
for the use and benefit of the | ||||||
2 | State a sum equal to the surplus line tax rate multiplied | ||||||
3 | by the
gross
premiums less returned premiums upon all | ||||||
4 | surplus line insurance submitted to the Surplus Line | ||||||
5 | Association of Illinois during the preceding 6 months.
| ||||||
6 | Any surplus line producer who fails to pay the full | ||||||
7 | amount due under this
subsection is liable, in addition to | ||||||
8 | the amount due, for such late fee,
penalty, and interest | ||||||
9 | charges as are provided for under Section 412 of
this Code. | ||||||
10 | The Director, through the
Attorney General, may
institute | ||||||
11 | an action in the name of the People of the State of | ||||||
12 | Illinois, in
any court of competent jurisdiction, for the | ||||||
13 | recovery of the amount of such
taxes, late fees, interest, | ||||||
14 | and penalties due, and prosecute the same to final | ||||||
15 | judgment, and take
such steps as are necessary to collect | ||||||
16 | the same.
| ||||||
17 | (b) Fire Marshal Tax.
Each surplus line producer shall | ||||||
18 | file with the Director on or before
March 31 of each year a | ||||||
19 | report in the form prescribed by the Director on all
fire | ||||||
20 | insurance procured from unauthorized insurers and | ||||||
21 | submitted to the Surplus Line Association of Illinois | ||||||
22 | subject to tax under
Section 12 of the Fire Investigation
| ||||||
23 | Act
and shall pay to the Director the fire marshal tax | ||||||
24 | required thereunder.
| ||||||
25 | (c) Taxes and fees charged to insured. The taxes | ||||||
26 | imposed under this
subsection and the countersigning fees |
| |||||||
| |||||||
1 | charged by the Surplus Line
Association of Illinois may be | ||||||
2 | charged to and collected from surplus line
insureds.
| ||||||
3 | (4) (Blank).
| ||||||
4 | (5) Submission of documents to Surplus Line Association of | ||||||
5 | Illinois.
A surplus line producer shall submit every insurance | ||||||
6 | contract
issued
under his or her license to the Surplus Line | ||||||
7 | Association of Illinois for
recording and countersignature. | ||||||
8 | The submission and countersignature may be
effected through | ||||||
9 | electronic means. The submission shall set
forth:
| ||||||
10 | (a) the name of the insured;
| ||||||
11 | (b) the description and location of the insured | ||||||
12 | property or
risk;
| ||||||
13 | (c) the amount insured;
| ||||||
14 | (d) the gross premiums charged or returned;
| ||||||
15 | (e) the name of the unauthorized insurer from whom | ||||||
16 | coverage has been procured;
| ||||||
17 | (f) the kind or kinds of insurance procured; and
| ||||||
18 | (g) amount of premium subject to tax required by | ||||||
19 | Section 12 of the Fire
Investigation Act.
| ||||||
20 | Proposals, endorsements, and other documents which are
| ||||||
21 | incidental to the insurance but which do not affect the premium
| ||||||
22 | charged
are exempted from filing and countersignature.
| ||||||
23 | The submission of insuring contracts
to the Surplus Line | ||||||
24 | Association of
Illinois constitutes a certification by the | ||||||
25 | surplus line producer or by the
insurance producer who | ||||||
26 | presented the risk to the surplus line producer for
placement |
| |||||||
| |||||||
1 | as a surplus line risk that
after diligent effort the required | ||||||
2 | insurance could not be procured from
authorized insurers and | ||||||
3 | that
such procurement was otherwise in accordance with the | ||||||
4 | surplus line law.
| ||||||
5 | (6) Countersignature required. It shall be unlawful for an | ||||||
6 | insurance
producer to deliver any unauthorized insurer
| ||||||
7 | contract unless such
insurance contract is countersigned by the | ||||||
8 | Surplus Line Association of
Illinois.
| ||||||
9 | (7) Inspection of records. A surplus line producer shall
| ||||||
10 | maintain
separate records of the business transacted under his | ||||||
11 | or her license for 7 years from the policy effective date,
| ||||||
12 | including complete copies of surplus line insurance contracts | ||||||
13 | maintained on
paper or by electronic means, which
records shall | ||||||
14 | be open at all times for inspection by the Director and by
the | ||||||
15 | Surplus Line Association of Illinois.
| ||||||
16 | (8) Violations and penalties. The Director may suspend or | ||||||
17 | revoke or
refuse to renew a surplus line producer license for | ||||||
18 | any violation of this Code.
In addition to or in lieu of | ||||||
19 | suspension or revocation, the Director may
subject a surplus | ||||||
20 | line producer
to a civil penalty of up to $2,000 for each cause | ||||||
21 | for suspension
or
revocation. Such penalty is enforceable under | ||||||
22 | subsection (5) of Section
403A of this Code.
| ||||||
23 | (9) Director may declare insurer ineligible. If the
| ||||||
24 | Director determines
that the further assumption of risks might | ||||||
25 | be hazardous to the
policyholders of an unauthorized insurer, | ||||||
26 | the Director may
order the
Surplus Line Association of
Illinois |
| |||||||
| |||||||
1 | not to countersign insurance contracts evidencing insurance in
| ||||||
2 | such insurer and order surplus line producers to cease
| ||||||
3 | procuring insurance
from such insurer.
| ||||||
4 | (10) Service of process upon Director. Insurance contracts
| ||||||
5 | delivered under this Section from unauthorized insurers, other | ||||||
6 | than domestic
surplus line insurers as defined in Section 445a,
| ||||||
7 | shall contain a
provision designating the
Director and his | ||||||
8 | successors in office the true and lawful attorney of the
| ||||||
9 | insurer upon whom may be served all lawful process in any
| ||||||
10 | action, suit or
proceeding arising out of such insurance.
| ||||||
11 | Service of process made upon the Director to be valid hereunder | ||||||
12 | must state
the name of the insured, the name of the | ||||||
13 | unauthorized insurer
and identify
the contract of insurance. | ||||||
14 | The Director at his option is authorized to
forward a copy of | ||||||
15 | the process to the Surplus Line Association of Illinois
for | ||||||
16 | delivery to the unauthorized insurer or the Director may | ||||||
17 | deliver the process to the
unauthorized insurer by other means | ||||||
18 | which he considers to be
reasonably
prompt and certain.
| ||||||
19 | (10.5) Insurance contracts delivered under this Section | ||||||
20 | from unauthorized insurers, other than domestic surplus line | ||||||
21 | insurers as defined in Section 445a, shall have stamped or | ||||||
22 | imprinted on the first page thereof in not less than 12-pt. | ||||||
23 | bold face type the following legend: "Notice to Policyholder: | ||||||
24 | This contract is issued, pursuant to Section 445 of the | ||||||
25 | Illinois Insurance Code, by a company not authorized and | ||||||
26 | licensed to transact business in Illinois and as such is not |
| |||||||
| |||||||
1 | covered by the Illinois Insurance Guaranty Fund." Insurance | ||||||
2 | contracts delivered under this Section from domestic surplus | ||||||
3 | line insurers as defined in Section 445a shall have stamped or | ||||||
4 | imprinted on the first page thereof in not less than 12-pt. | ||||||
5 | bold face type the following legend: "Notice to Policyholder: | ||||||
6 | This contract is issued by a domestic surplus line insurer, as | ||||||
7 | defined in Section 445a of the Illinois Insurance Code, | ||||||
8 | pursuant to Section 445, and as such is not covered by the | ||||||
9 | Illinois Insurance Guaranty Fund."
| ||||||
10 | (11) The Illinois Surplus Line law does not apply to | ||||||
11 | insurance of
property and operations of railroads or aircraft | ||||||
12 | engaged in interstate or
foreign commerce, insurance of | ||||||
13 | vessels, crafts or hulls, cargoes, marine
builder's risks, | ||||||
14 | marine protection and indemnity, or other risks including
| ||||||
15 | strikes and war risks insured under ocean or wet marine forms | ||||||
16 | of policies.
| ||||||
17 | (12) Surplus line insurance procured under this Section, | ||||||
18 | including
insurance procured from a domestic surplus line | ||||||
19 | insurer, is not subject
to the provisions of the Illinois | ||||||
20 | Insurance Code other than Sections 123,
123.1, 401, 401.1, 402, | ||||||
21 | 403, 403A, 408, 412, 445, 445.1, 445.2, 445.3,
445.4, and all | ||||||
22 | of the provisions of Article XXXI to the extent that the
| ||||||
23 | provisions of Article XXXI are not inconsistent with the terms | ||||||
24 | of this Act.
| ||||||
25 | (Source: P.A. 97-955, eff. 8-14-12; 98-978, eff. 1-1-15.)
|
| |||||||
| |||||||
1 | Section 95. No acceleration or delay. Where this Act makes | ||||||
2 | changes in a statute that is represented in this Act by text | ||||||
3 | that is not yet or no longer in effect (for example, a Section | ||||||
4 | represented by multiple versions), the use of that text does | ||||||
5 | not accelerate or delay the taking effect of (i) the changes | ||||||
6 | made by this Act or (ii) provisions derived from any other | ||||||
7 | Public Act.
| ||||||
8 | Section 99. Effective date. This Act takes effect January | ||||||
9 | 1, 2015.
|