Bill Text: IL SB0762 | 2023-2024 | 103rd General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Illinois Insurance Code. Changes the definition of "insolvent company" to include any company which has assumed or has been allocated a policy obligation through an approved insurance business transfer plan. Provides that the fee for filing an insurance business transfer plan is $25,000. Creates the Insurance Business Transfers Article of the Illinois Insurance Code and provides that the Article may be cited as the Insurance Business Transfers Law. Sets forth provisions concerning notice requirements, application procedure, application to a court for approval of a plan, approval and denial of insurance business transfer plans, and fees and costs. Provides that the Department of Insurance may adopt rules that are consistent with the provisions. Provides that the portion of the application for an insurance business transfer that would otherwise be confidential, including any documents, materials, communications, or other information submitted to the Director of Insurance in contemplation of an application, shall not lose such confidentiality. Provides that insurers consent to the jurisdiction of the Director with regard to ongoing oversight of operations, management, and solvency relating to the transferred business. Provides that the Director may direct the applicant to retain parties to assist Department personnel. Defines terms. Effective immediately, except specified provisions take effect January 1, 2025.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2023-06-09 - Public Act . . . . . . . . . 103-0075 [SB0762 Detail]

Download: Illinois-2023-SB0762-Enrolled.html

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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Sections 408 and 534.4 and by adding Article XLVII as
follows:
(215 ILCS 5/408) (from Ch. 73, par. 1020)
Sec. 408. Fees and charges.
(1) The Director shall charge, collect and give proper
acquittances for the payment of the following fees and
charges:
(a) For filing all documents submitted for the
incorporation or organization or certification of a
domestic company, except for a fraternal benefit society,
$2,000.
(b) For filing all documents submitted for the
incorporation or organization of a fraternal benefit
society, $500.
(c) For filing amendments to articles of incorporation
and amendments to declaration of organization, except for
a fraternal benefit society, a mutual benefit association,
a burial society or a farm mutual, $200.
(d) For filing amendments to articles of incorporation

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of a fraternal benefit society, a mutual benefit
association or a burial society, $100.
(e) For filing amendments to articles of incorporation
of a farm mutual, $50.
(f) For filing bylaws or amendments thereto, $50.
(g) For filing agreement of merger or consolidation:
(i) for a domestic company, except for a fraternal
benefit society, a mutual benefit association, a
burial society, or a farm mutual, $2,000.
(ii) for a foreign or alien company, except for a
fraternal benefit society, $600.
(iii) for a fraternal benefit society, a mutual
benefit association, a burial society, or a farm
mutual, $200.
(h) For filing agreements of reinsurance by a domestic
company, $200.
(i) For filing all documents submitted by a foreign or
alien company to be admitted to transact business or
accredited as a reinsurer in this State, except for a
fraternal benefit society, $5,000.
(j) For filing all documents submitted by a foreign or
alien fraternal benefit society to be admitted to transact
business in this State, $500.
(k) For filing declaration of withdrawal of a foreign
or alien company, $50.
(l) For filing annual statement by a domestic company,

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except a fraternal benefit society, a mutual benefit
association, a burial society, or a farm mutual, $200.
(m) For filing annual statement by a domestic
fraternal benefit society, $100.
(n) For filing annual statement by a farm mutual, a
mutual benefit association, or a burial society, $50.
(o) For issuing a certificate of authority or renewal
thereof except to a foreign fraternal benefit society,
$400.
(p) For issuing a certificate of authority or renewal
thereof to a foreign fraternal benefit society, $200.
(q) For issuing an amended certificate of authority,
$50.
(r) For each certified copy of certificate of
authority, $20.
(s) For each certificate of deposit, or valuation, or
compliance or surety certificate, $20.
(t) For copies of papers or records per page, $1.
(u) For each certification to copies of papers or
records, $10.
(v) For multiple copies of documents or certificates
listed in subparagraphs (r), (s), and (u) of paragraph (1)
of this Section, $10 for the first copy of a certificate of
any type and $5 for each additional copy of the same
certificate requested at the same time, unless, pursuant
to paragraph (2) of this Section, the Director finds these

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additional fees excessive.
(w) For issuing a permit to sell shares or increase
paid-up capital:
(i) in connection with a public stock offering,
$300;
(ii) in any other case, $100.
(x) For issuing any other certificate required or
permissible under the law, $50.
(y) For filing a plan of exchange of the stock of a
domestic stock insurance company, a plan of
demutualization of a domestic mutual company, or a plan of
reorganization under Article XII, $2,000.
(z) For filing a statement of acquisition of a
domestic company as defined in Section 131.4 of this Code,
$2,000.
(aa) For filing an agreement to purchase the business
of an organization authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act or of a
health maintenance organization or a limited health
service organization, $2,000.
(bb) For filing a statement of acquisition of a
foreign or alien insurance company as defined in Section
131.12a of this Code, $1,000.
(cc) For filing a registration statement as required
in Sections 131.13 and 131.14, the notification as
required by Sections 131.16, 131.20a, or 141.4, or an

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agreement or transaction required by Sections 124.2(2),
141, 141a, or 141.1, $200.
(dd) For filing an application for licensing of:
(i) a religious or charitable risk pooling trust
or a workers' compensation pool, $1,000;
(ii) a workers' compensation service company,
$500;
(iii) a self-insured automobile fleet, $200; or
(iv) a renewal of or amendment of any license
issued pursuant to (i), (ii), or (iii) above, $100.
(ee) For filing articles of incorporation for a
syndicate to engage in the business of insurance through
the Illinois Insurance Exchange, $2,000.
(ff) For filing amended articles of incorporation for
a syndicate engaged in the business of insurance through
the Illinois Insurance Exchange, $100.
(gg) For filing articles of incorporation for a
limited syndicate to join with other subscribers or
limited syndicates to do business through the Illinois
Insurance Exchange, $1,000.
(hh) For filing amended articles of incorporation for
a limited syndicate to do business through the Illinois
Insurance Exchange, $100.
(ii) For a permit to solicit subscriptions to a
syndicate or limited syndicate, $100.
(jj) For the filing of each form as required in

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Section 143 of this Code, $50 per form. Informational and
advertising filings shall be $25 per filing. The fee for
advisory and rating organizations shall be $200 per form.
(i) For the purposes of the form filing fee,
filings made on insert page basis will be considered
one form at the time of its original submission.
Changes made to a form subsequent to its approval
shall be considered a new filing.
(ii) Only one fee shall be charged for a form,
regardless of the number of other forms or policies
with which it will be used.
(iii) Fees charged for a policy filed as it will be
issued regardless of the number of forms comprising
that policy shall not exceed $1,500. For advisory or
rating organizations, fees charged for a policy filed
as it will be issued regardless of the number of forms
comprising that policy shall not exceed $2,500.
(iv) The Director may by rule exempt forms from
such fees.
(kk) For filing an application for licensing of a
reinsurance intermediary, $500.
(ll) For filing an application for renewal of a
license of a reinsurance intermediary, $200.
(mm) For filing a plan of division of a domestic stock
company under Article IIB, $10,000.
(nn) For filing all documents submitted by a foreign

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or alien company to be a certified reinsurer in this
State, except for a fraternal benefit society, $1,000.
(oo) For filing a renewal by a foreign or alien
company to be a certified reinsurer in this State, except
for a fraternal benefit society, $400.
(pp) For filing all documents submitted by a reinsurer
domiciled in a reciprocal jurisdiction, $1,000.
(qq) For filing a renewal by a reinsurer domiciled in
a reciprocal jurisdiction, $400.
(rr) For registering a captive management company or
renewal thereof, $50.
(ss) For filing an insurance business transfer plan
under Article XLVII, $25,000.
(2) When printed copies or numerous copies of the same
paper or records are furnished or certified, the Director may
reduce such fees for copies if he finds them excessive. He may,
when he considers it in the public interest, furnish without
charge to state insurance departments and persons other than
companies, copies or certified copies of reports of
examinations and of other papers and records.
(3) The expenses incurred in any performance examination
authorized by law shall be paid by the company or person being
examined. The charge shall be reasonably related to the cost
of the examination including but not limited to compensation
of examiners, electronic data processing costs, supervision
and preparation of an examination report and lodging and

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travel expenses. All lodging and travel expenses shall be in
accord with the applicable travel regulations as published by
the Department of Central Management Services and approved by
the Governor's Travel Control Board, except that out-of-state
lodging and travel expenses related to examinations authorized
under Section 132 shall be in accordance with travel rates
prescribed under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
authorization of the Director. With the exception of the
direct reimbursements authorized by the Director, all
performance examination charges collected by the Department
shall be paid to the Insurance Producer Administration Fund,
however, the electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company being examined for payment to
the Technology Management Revolving Fund.
(4) At the time of any service of process on the Director
as attorney for such service, the Director shall charge and
collect the sum of $40, which may be recovered as taxable costs
by the party to the suit or action causing such service to be
made if he prevails in such suit or action.
(5) (a) The costs incurred by the Department of Insurance
in conducting any hearing authorized by law shall be assessed
against the parties to the hearing in such proportion as the

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Director of Insurance may determine upon consideration of all
relevant circumstances including: (1) the nature of the
hearing; (2) whether the hearing was instigated by, or for the
benefit of a particular party or parties; (3) whether there is
a successful party on the merits of the proceeding; and (4) the
relative levels of participation by the parties.
(b) For purposes of this subsection (5) costs incurred
shall mean the hearing officer fees, court reporter fees, and
travel expenses of Department of Insurance officers and
employees; provided however, that costs incurred shall not
include hearing officer fees or court reporter fees unless the
Department has retained the services of independent
contractors or outside experts to perform such functions.
(c) The Director shall make the assessment of costs
incurred as part of the final order or decision arising out of
the proceeding; provided, however, that such order or decision
shall include findings and conclusions in support of the
assessment of costs. This subsection (5) shall not be
construed as permitting the payment of travel expenses unless
calculated in accordance with the applicable travel
regulations of the Department of Central Management Services,
as approved by the Governor's Travel Control Board. The
Director as part of such order or decision shall require all
assessments for hearing officer fees and court reporter fees,
if any, to be paid directly to the hearing officer or court
reporter by the party(s) assessed for such costs. The

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assessments for travel expenses of Department officers and
employees shall be reimbursable to the Director of Insurance
for deposit to the fund out of which those expenses had been
paid.
(d) The provisions of this subsection (5) shall apply in
the case of any hearing conducted by the Director of Insurance
not otherwise specifically provided for by law.
(6) The Director shall charge and collect an annual
financial regulation fee from every domestic company for
examination and analysis of its financial condition and to
fund the internal costs and expenses of the Interstate
Insurance Receivership Commission as may be allocated to the
State of Illinois and companies doing an insurance business in
this State pursuant to Article X of the Interstate Insurance
Receivership Compact. The fee shall be the greater fixed
amount based upon the combination of nationwide direct premium
income and nationwide reinsurance assumed premium income or
upon admitted assets calculated under this subsection as
follows:
(a) Combination of nationwide direct premium income
and nationwide reinsurance assumed premium.
(i) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(ii) $750, if the premium is $500,000 or more, but
less than $5,000,000 and there is no reinsurance
assumed premium; or if the premium is less than

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$5,000,000 and the reinsurance assumed premium is less
than $10,000,000;
(iii) $3,750, if the premium is less than
$5,000,000 and the reinsurance assumed premium is
$10,000,000 or more;
(iv) $7,500, if the premium is $5,000,000 or more,
but less than $10,000,000;
(v) $18,000, if the premium is $10,000,000 or
more, but less than $25,000,000;
(vi) $22,500, if the premium is $25,000,000 or
more, but less than $50,000,000;
(vii) $30,000, if the premium is $50,000,000 or
more, but less than $100,000,000;
(viii) $37,500, if the premium is $100,000,000 or
more.
(b) Admitted assets.
(i) $150, if admitted assets are less than
$1,000,000;
(ii) $750, if admitted assets are $1,000,000 or
more, but less than $5,000,000;
(iii) $3,750, if admitted assets are $5,000,000 or
more, but less than $25,000,000;
(iv) $7,500, if admitted assets are $25,000,000 or
more, but less than $50,000,000;
(v) $18,000, if admitted assets are $50,000,000 or
more, but less than $100,000,000;

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(vi) $22,500, if admitted assets are $100,000,000
or more, but less than $500,000,000;
(vii) $30,000, if admitted assets are $500,000,000
or more, but less than $1,000,000,000;
(viii) $37,500, if admitted assets are
$1,000,000,000 or more.
(c) The sum of financial regulation fees charged to
the domestic companies of the same affiliated group shall
not exceed $250,000 in the aggregate in any single year
and shall be billed by the Director to the member company
designated by the group.
(7) The Director shall charge and collect an annual
financial regulation fee from every foreign or alien company,
except fraternal benefit societies, for the examination and
analysis of its financial condition and to fund the internal
costs and expenses of the Interstate Insurance Receivership
Commission as may be allocated to the State of Illinois and
companies doing an insurance business in this State pursuant
to Article X of the Interstate Insurance Receivership Compact.
The fee shall be a fixed amount based upon Illinois direct
premium income and nationwide reinsurance assumed premium
income in accordance with the following schedule:
(a) $150, if the premium is less than $500,000 and
there is no reinsurance assumed premium;
(b) $750, if the premium is $500,000 or more, but less
than $5,000,000 and there is no reinsurance assumed

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premium; or if the premium is less than $5,000,000 and the
reinsurance assumed premium is less than $10,000,000;
(c) $3,750, if the premium is less than $5,000,000 and
the reinsurance assumed premium is $10,000,000 or more;
(d) $7,500, if the premium is $5,000,000 or more, but
less than $10,000,000;
(e) $18,000, if the premium is $10,000,000 or more,
but less than $25,000,000;
(f) $22,500, if the premium is $25,000,000 or more,
but less than $50,000,000;
(g) $30,000, if the premium is $50,000,000 or more,
but less than $100,000,000;
(h) $37,500, if the premium is $100,000,000 or more.
The sum of financial regulation fees under this subsection
(7) charged to the foreign or alien companies within the same
affiliated group shall not exceed $250,000 in the aggregate in
any single year and shall be billed by the Director to the
member company designated by the group.
(8) Beginning January 1, 1992, the financial regulation
fees imposed under subsections (6) and (7) of this Section
shall be paid by each company or domestic affiliated group
annually. After January 1, 1994, the fee shall be billed by
Department invoice based upon the company's premium income or
admitted assets as shown in its annual statement for the
preceding calendar year. The invoice is due upon receipt and
must be paid no later than June 30 of each calendar year. All

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financial regulation fees collected by the Department shall be
paid to the Insurance Financial Regulation Fund. The
Department may not collect financial examiner per diem charges
from companies subject to subsections (6) and (7) of this
Section undergoing financial examination after June 30, 1992.
(9) In addition to the financial regulation fee required
by this Section, a company undergoing any financial
examination authorized by law shall pay the following costs
and expenses incurred by the Department: electronic data
processing costs, the expenses authorized under Section 131.21
and subsection (d) of Section 132.4 of this Code, and lodging
and travel expenses.
Electronic data processing costs incurred by the
Department in the performance of any examination shall be
billed directly to the company undergoing examination for
payment to the Technology Management Revolving Fund. Except
for direct reimbursements authorized by the Director or direct
payments made under Section 131.21 or subsection (d) of
Section 132.4 of this Code, all financial regulation fees and
all financial examination charges collected by the Department
shall be paid to the Insurance Financial Regulation Fund.
All lodging and travel expenses shall be in accordance
with applicable travel regulations published by the Department
of Central Management Services and approved by the Governor's
Travel Control Board, except that out-of-state lodging and
travel expenses related to examinations authorized under

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Sections 132.1 through 132.7 shall be in accordance with
travel rates prescribed under paragraph 301-7.2 of the Federal
Travel Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official travel. All
lodging and travel expenses may be reimbursed directly upon
the authorization of the Director.
In the case of an organization or person not subject to the
financial regulation fee, the expenses incurred in any
financial examination authorized by law shall be paid by the
organization or person being examined. The charge shall be
reasonably related to the cost of the examination including,
but not limited to, compensation of examiners and other costs
described in this subsection.
(10) Any company, person, or entity failing to make any
payment of $150 or more as required under this Section shall be
subject to the penalty and interest provisions provided for in
subsections (4) and (7) of Section 412.
(11) Unless otherwise specified, all of the fees collected
under this Section shall be paid into the Insurance Financial
Regulation Fund.
(12) For purposes of this Section:
(a) "Domestic company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of this State, and in addition includes a
not-for-profit corporation authorized under the Dental
Service Plan Act or the Voluntary Health Services Plans

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Act, a health maintenance organization, and a limited
health service organization.
(b) "Foreign company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any state of the United States other than
this State and in addition includes a health maintenance
organization and a limited health service organization
which is incorporated or organized under the laws of any
state of the United States other than this State.
(c) "Alien company" means a company as defined in
Section 2 of this Code which is incorporated or organized
under the laws of any country other than the United
States.
(d) "Fraternal benefit society" means a corporation,
society, order, lodge or voluntary association as defined
in Section 282.1 of this Code.
(e) "Mutual benefit association" means a company,
association or corporation authorized by the Director to
do business in this State under the provisions of Article
XVIII of this Code.
(f) "Burial society" means a person, firm,
corporation, society or association of individuals
authorized by the Director to do business in this State
under the provisions of Article XIX of this Code.
(g) "Farm mutual" means a district, county and
township mutual insurance company authorized by the

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Director to do business in this State under the provisions
of the Farm Mutual Insurance Company Act of 1986.
(Source: P.A. 102-775, eff. 5-13-22.)
(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
Sec. 534.4. "Insolvent company" means a company organized
as a stock company, mutual company, reciprocal or Lloyds (a)
which holds a certificate of authority to transact insurance
in this State either at the time the policy was issued or when
the insured event occurred, or any company which has assumed
or has been allocated such policy obligation through merger,
division, insurance business transfer, consolidation, or
reinsurance, whether or not such assuming company held a
certificate of authority to transact insurance in this State
at the time such policy was issued or when the insured event
occurred; and (b) against which a final Order of Liquidation
with a finding of insolvency to which there is no further right
of appeal has been entered by a court of competent
jurisdiction in the company's State of domicile after the
effective date of this Article.
(Source: P.A. 100-1190, eff. 4-5-19.)
(215 ILCS 5/Art. XLVII heading new)
ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS
(215 ILCS 5/1701 new)

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Sec. 1701. Short title. This Article may be cited as the
Insurance Business Transfer Law.
(215 ILCS 5/1703 new)
Sec. 1703. Purpose and intent. The purpose of this Article
is to provide a mechanism for insurers to transfer or assume
blocks of insurance business in an efficient and
cost-effective manner that provides needed legal finality for
such transfers in order to provide for improved operational
and capital efficiency for insurance companies, while
protecting the interests of the policyholders, reinsurers, and
claimants of the subject business. This new process is
intended to stimulate the economy by attracting segments of
the insurance industry to this State, make this State an
attractive home jurisdiction for insurance companies,
encourage economic growth and increased investment in the
financial services sector, and increase the availability of
quality insurance industry jobs in this State. These purposes
are accomplished by providing a basis and procedures for the
transfer and statutory novation of policies from a
transferring insurer to an assuming insurer by way of an
insurance business transfer without the affirmative consent of
policyholders or reinsureds, but with consideration of their
interests. This Article establishes the requirements for
notice and disclosure and standards and procedures for the
approval of the transfer and novation by a court pursuant to an

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insurance business transfer plan. This Article does not limit
or restrict other means of effecting a transfer or novation.
(215 ILCS 5/1705 new)
Sec. 1705. Definitions. As used in this Article:
"Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled
by, or is under common control with the person specified.
"Applicant" means a transferring insurer or reinsurer
applying under this Article.
"Assuming insurer" means an insurer domiciled in Illinois
and authorized to transact the type of business described in
clause (c) of Class 1, clauses (b) through (l) of Class 2, or
Class 3 of Section 4 that seeks to assume policies from a
transferring insurer pursuant to this Article.
"Court" means the circuit court of Sangamon County or Cook
County.
"Department" means the Department of Insurance.
"Director" means the Director of Insurance.
"Implementation order" means an order issued by a court
under this Article.
"Insurance business transfer" means a transfer and
novation that, once approved pursuant to this Article,
transfers insurance obligations or risks, or both, of existing
or in-force contracts of insurance or reinsurance from a
transferring insurer to an assuming insurer, and effects a

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novation of the transferred contracts of insurance or
reinsurance with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer and the transferring insurer's insurance obligations
or risks, or both, under the contracts are extinguished.
"Insurance business transfer plan" means the plan
submitted to the Department to accomplish the transfer and
novation pursuant to an insurance business transfer, including
any associated transfer of assets and rights from or on behalf
of the transferring insurer to the assuming insurer. An
"insurance business transfer plan" is limited to the types of
insurance described in clause (c) of Class 1, clauses (b)
through (l) of Class 2, or Class 3 of Section 4.
"Independent expert" means the impartial person procured
to assist the Director and the court in connection with their
review of a proposed transaction. The independent expert
shall:
(i) have no current or past, direct or indirect,
financial interest in either the assuming insurer or
transferring insurer or any of their respective
affiliates,
(ii) have not been employed by or acted as an officer,
director, consultant, or other independent contractor for
either the assuming insurer or transferring insurer or any
of their respective affiliates within the past 12 months,
(iii) not currently be appointed by the Director to

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assist in any capacity in any proceeding initiated under
Article XIII, and
(iv) receive no compensation in connection with the
transaction governed by this Article other than a fee
based on a fixed or hourly basis that is not contingent on
the approval or consummation of an insurance business
transfer.
"Insurer" means an insurance, surety, or reinsurance
company, corporation, partnership, association, society,
order, individual, or aggregation of individuals engaging in
or proposing or attempting to engage in insurance or surety
business, including the exchanging of reciprocal or
inter-insurance contracts between individuals, partnerships,
and corporations.
"Policy" means a policy, certificate of insurance, or a
contract of reinsurance pursuant to which an insurer agrees to
assume an obligation or risk, or both, of the policyholder or
to make payments on behalf of, or to, the policyholder or its
beneficiaries, and includes property and casualty insurance.
"Policy" does not include any policy, contract, or certificate
of life, accident, or health insurance, including those
defined in clause (a) or (b) of Class 1 or clause (a) of Class
2 of Section 4.
"Policyholder" means an insured or a reinsured under a
policy that is part of the subject business.
"State guaranty association" means the Illinois Insurance

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Guaranty Fund, the Illinois Life and Health Guaranty
Association, or any similar organization in another state.
"Subject business" means the policy or policies that are
the subject of the insurance business transfer plan.
"Transfer and novation" means the transfer of insurance
obligations or risks, or both, of existing or in-force
policies from a transferring insurer to an assuming insurer
that is intended to effect a novation of the transferred
policies with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer on the transferred policies and the transferring
insurer's obligations or risks, or both, under the transferred
policies are extinguished.
"Transferring insurer" means an insurer or reinsurer that
transfers and novates or seeks to transfer and novate
obligations or risks, or both, under one or more policies to an
assuming insurer pursuant to an insurance business transfer
plan.
(215 ILCS 5/1710 new)
Sec. 1710. Court authority. Notwithstanding any other
provision of law, a court may issue any order, process, or
judgment that is necessary or appropriate to carry out the
provisions of this Article. No provision of this Article shall
be construed to preclude a court from, on its own motion,
taking any action or making any determination necessary or

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appropriate to enforce or implement court orders or rules or
to prevent an abuse of power.
(215 ILCS 5/1715 new)
Sec. 1715. Notice requirements.
(a) Whenever notice is required to be given by an
applicant under this Article, except as otherwise permitted by
a court or the Director, the applicant shall within 15 days
after the event triggering the requirement transmit the
notice:
(1) to the chief insurance regulator in each
jurisdiction:
(A) in which the applicant holds or has ever held a
certificate of authority; and
(B) in which policies that are part of the subject
business were issued or policyholders currently
reside;
(2) to the National Conference of Insurance Guaranty
Funds, the National Organization of Life and Health
Insurance Guaranty Associations, and all state insurance
guaranty associations for the states:
(A) in which the applicant holds or has ever held a
certificate of authority; and
(B) in which policies that are part of the subject
business were issued or policyholders currently
reside;

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(3) to reinsurers of the applicant pursuant to the
notice provisions of the reinsurance agreements applicable
to the policies that are part of the subject business or,
where an agreement has no provision for notice, by
internationally recognized delivery service;
(4) to all policyholders holding policies that are
part of the subject business at their last known address
as indicated by the records of the applicant or to the
address to which premium notices or other policy documents
are sent. A notice of transfer shall also be sent to the
transferring insurer's agents or brokers of record on the
subject business; and
(5) by publication in a newspaper of general
circulation in the state in which the applicant has its
principal place of business and in such other publications
that the Director requires.
(b) If notice is given in accordance with this Section,
any orders under this Article shall be conclusive with respect
to all intended recipients of the notice whether or not they
receive actual notice.
(c) If this Article requires that the applicant provide
notice but the Director has been named receiver of the
applicant pursuant to Article XIII, the Director shall provide
the required notice.
(d) Notice under this Section may take the form of
first-class mail, facsimile, or electronic notice. The court

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may order that notice take a specific form.
(215 ILCS 5/1720 new)
Sec. 1720. Application procedure.
(a) Before filing an insurance business transfer plan, the
applicant shall file with the Department a notice of its
intention to file a plan and shall pay the required fee. Upon
request, the applicant and the assuming insurer shall provide
the Department with any information necessary for the
Department to procure an independent expert that meets the
requirements of this Article.
(b) An insurance business transfer plan shall be filed by
the applicant with the Director for his or her review and
approval. The plan may be supplemented by other information
deemed necessary by the Director, and shall contain the
following information or an explanation as to why the
following information is not included:
(1) the name, address, and telephone number of the
transferring insurer and the assuming insurer and their
respective direct and indirect controlling persons, if
any;
(2) a summary of the insurance business transfer plan;
(3) an identification and description of the subject
business;
(4) the most recent audited financial statements and
statutory annual and quarterly reports of the transferring

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insurer and the assuming insurer filed with their
domiciliary regulator;
(5) the most recent actuarial report and opinion that
quantify the liabilities associated with the subject
business;
(6) pro forma financial statements showing the
projected statutory balance sheet, results of operation,
and cash flows of the assuming insurer for the 3 years
following the proposed transfer and novation;
(7) officers' certificates of the transferring insurer
and the assuming insurer attesting that each has obtained
all required internal approvals and authorizations
regarding the insurance business transfer plan and
completed all necessary and appropriate actions relating
thereto;
(8) a proposal for plan implementation and
administration, including the form of notice to be
provided under the insurance business transfer plan to any
policyholder whose policy is part of the subject business;
(9) a full description as to how notice under the
insurance business transfer plan shall be provided;
(10) a description of any reinsurance arrangements
that would pass to the assuming insurer under the
insurance business transfer plan;
(11) a description of any guarantees or additional
reinsurance that will cover the subject business following

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the transfer and novation;
(12) a statement describing the assuming insurer's
proposed investment policies and any contemplated
third-party claims management and administration
arrangements;
(13) a description of how the transferring and
assuming insurers will be licensed for the purpose of
preserving state guaranty association coverage;
(14) a description of the financial implications of
the transaction including solvency, capital adequacy, cash
flow, reserves, asset quality, and risk-based capital;
(15) an analysis of the assuming insurer's corporate
governance structure to ensure that there is proper board
management oversight and expertise to manage the subject
business;
(16) an evaluation of the competency, experience, and
integrity of the persons who would control the operation
of an involved insurer;
(17) a certified statement that the transaction is not
being made for improper purposes, including fraud;
(18) evidence of approval or nonobjection of the
transfer from the chief insurance regulator of the state
of the transferring insurer's domicile; and
(19) a report from the independent expert that shall
provide the following:
(A) a statement of the independent expert's

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professional qualifications and descriptions of the
experience that qualifies him or her as an expert
suitable for the engagement;
(B) a certified statement from the independent
expert that he or she meets the standards for an
independent expert under this Article;
(C) a description of the scope of the report;
(D) a summary of the terms of the insurance
business transfer plan to the extent relevant to the
report;
(E) a listing and summaries of documents, reports,
and other material information the independent expert
has considered in preparing the report and whether any
information requested was not provided;
(F) the extent to which the independent expert has
relied on information provided by or judgment of
others;
(G) the people on whom the independent expert has
relied and why, in his or her opinion, such reliance is
reasonable;
(H) the independent expert's opinion of the likely
effects of the insurance business transfer plan on
policyholders, reinsurers, and claimants,
distinguishing between:
(i) transferring policyholders, reinsurers,
and claimants;

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(ii) policyholders, reinsurers, and claimants
of the transferring insurer whose policies will
not be transferred; and
(iii) policyholders, reinsurers, and claimants
of the assuming insurer;
(I) the facts and circumstances supporting each
opinion that the independent expert expresses in the
report; and
(J) consideration as to whether the security
position of policyholders that are affected by the
insurance business transfer are materially adversely
affected by the transfer, including, but not limited
to, state guaranty association coverage.
(c) The independent expert's report as required by
paragraph (19) of subsection (b) shall also include, but not
be limited to, a review of and report on the following:
(1) analysis of the transferring insurer's actuarial
review of resources for the subject business to determine
the reserve adequacy;
(2) analysis of the financial condition of the
transferring and assuming insurers and the effect the
transfer will have on the financial condition of each
company;
(3) review of the plans or proposals the assuming
insurer has with respect to the administration of the
policies subject to the proposed transfer;

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(4) whether the proposed transfer has a material,
adverse impact on the policyholders, reinsurers, and
claimants of the transferring and the assuming insurers;
(5) analysis of the assuming insurer's corporate
governance structure to ensure that there is proper board
and management oversight and expertise to manage the
subject business;
(6) analysis of whether any policyholder or group of
policyholders will lose or gain state guaranty association
coverage as a result of the transaction; and
(7) any other information that the Director requests
in order to review the insurance business transfer.
(d) After the receipt of a complete insurance business
transfer plan, the Director shall review the plan to determine
if the applicant is authorized to submit it to a court.
(e) The Director shall authorize the submission of the
insurance business transfer plan to a court unless he or she
finds that the insurance business transfer would have a
material adverse impact on the interests of policyholders,
reinsurers, or claimants that are part of the subject
business.
(f) If the Director determines that the insurance business
transfer would have a material adverse impact on the interests
of policyholders, reinsurers, or claimants that are part of
the subject business, he or she shall notify the applicant and
specify any modifications, supplements, or amendments and any

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additional information or documentation with respect to the
plan that must be provided to the Director before he or she
shall allow the applicant to proceed with the court filing.
(g) The applicant shall have 30 days following the date
the Director notifies him or her of a determination under
subsection (f) to file an amended insurance business transfer
plan providing the modifications, supplements, or amendments
and additional information or documentation as requested by
the Director. If necessary, the applicant may request in
writing an extension of time of 30 days. If the applicant does
not make an amended filing within the time period provided in
this subsection, including any extension of time granted by
the Director, the insurance business transfer plan filing
shall terminate and a subsequent filing by the applicant shall
be considered a new filing which shall require compliance with
all provisions of this Article as if the prior filing had never
been made.
(h) When the modification, supplement, amendment, or
additional information requested in subsection (f) is
received, the Director shall review the amended plan in
accordance with subsection (c).
(i) If the Director determines that the plan may proceed
with the court filing, the Director shall confirm that fact in
writing to the applicant.
(215 ILCS 5/1725 new)

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Sec. 1725. Application to the court for approval of a
plan.
(a) Within 30 days after notice from the Director that the
applicant may proceed with the court filing, the applicant
shall apply to the court for approval of the insurance
business transfer plan. Upon written request by the applicant,
the Director may extend the period for filing an application
with the court for an additional 30 days.
(b) The applicant shall inform the court of the reasons
why he or she petitions the court to find no material adverse
impact to policyholders, reinsurers, or claimants affected by
the proposed transfer.
(c) The application shall be in the form of a verified
petition for implementation of the insurance business transfer
plan in the court. The petition shall include the insurance
business transfer plan and shall identify any documents and
witnesses which the applicant intends to present at a hearing
regarding the petition.
(d) The Director shall be a party to the proceedings
before the court concerning the petition and shall be served
with copies of all filings. The Director's position in the
proceeding shall not be limited by his or her initial review of
the plan. The Director shall have all the rights of a litigant
under the Illinois Supreme Court Rules and the Code of Civil
Procedure, including, but not limited to, the right to appeal.
(e) Following the filing of the petition, the applicant

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shall file a motion for a scheduling order setting a hearing on
the petition.
(f) Within 15 days after receipt of the scheduling order,
the applicant shall cause notice of the hearing to be provided
in accordance with the notice provisions of Section 1715.
Following the date of distribution of the notice, there shall
be a 60-day comment period. The notice and all comments
received shall be part of the court record.
(g) The notice shall be filed with and approved by the
court before distribution, and the Director shall be given the
opportunity to review and comment on the sufficiency of the
notice before court approval. The notice shall state or
provide:
(1) the date and time of the approval hearing;
(2) the name, address, and telephone number of the
assuming insurer and transferring insurer;
(3) that the recipient may comment on or object to the
transfer and novation;
(4) the procedures and deadline for submitting
comments or objections on the plan;
(5) a summary of any effect that the transfer and
novation will have on the policyholder's rights;
(6) a statement that the assuming insurer is
authorized to assume the subject business and that court
approval of the plan shall extinguish all rights of
policyholders under policies that are part of the subject

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business against the transferring insurer;
(7) a statement regarding whether any policyholder or
group of policyholders may or will lose or gain state
guaranty association coverage as a result of the transfer
and the implication of losing or gaining state guaranty
association coverage;
(8) that recipients shall not have the opportunity to
opt out of or otherwise reject the transfer and novation;
(9) contact information for the Department where the
policyholder may obtain further information;
(10) information on how an electronic copy of the
insurance business transfer plan may be accessed. If
policyholders are unable to readily access electronic
copies, the applicant shall provide hard copies by
first-class mail; and
(11) any other information that the court may require.
(h) Any person, including by their legal representative,
who considers himself, herself, or itself to be adversely
affected can present evidence or comments to the court at the
approval hearing. Any person participating in the approval
hearing must follow the process established by the court and
shall bear his or her own costs and attorney's fees.
(215 ILCS 5/1730 new)
Sec. 1730. Approval; denial; insurance business transfer
plans.

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(a) After the comment period pursuant to subsection (f) of
Section 1725 has ended the insurance business transfer plan
shall be presented by the applicant for approval by the court.
(b) At any time before the court issues an order approving
the insurance business transfer plan, the applicant may
withdraw the petition without prejudice.
(c) If the court finds that the implementation of the
insurance business transfer plan would not materially
adversely affect the interests of policyholders, reinsurers,
or claimants that are part of the subject business, the court
shall enter a judgment and implementation order. The judgment
and implementation order shall:
(1) order implementation of the insurance business
transfer plan;
(2) order a statutory novation with respect to all
policyholders or reinsureds and their respective policies
and reinsurance agreements under the subject business,
including the extinguishment of all rights of
policyholders under policies that are part of the subject
business against the transferring insurer, and providing
that the transferring insurer shall have no further
rights, obligations, or liabilities with respect to such
policies, and that the assuming insurer shall have all
such rights, obligations, and liabilities as if it were
the original insurer of such policies;
(3) release the transferring insurer from all

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obligations or liabilities under policies that are part of
the subject business;
(4) authorize and order the transfer of property or
liabilities, including, but not limited to, the ceded
reinsurance of transferred policies and contracts on the
subject business, notwithstanding any non-assignment
provisions in any such reinsurance contracts. The subject
business shall vest in and become liabilities of the
assuming insurer;
(5) order that the applicant provide notice of the
transfer and novation in accordance with the notice
provisions in Section 1715; and
(6) make such other provisions with respect to
incidental, consequential, and supplementary matters as
are necessary to assure the insurance business transfer
plan is fully and effectively carried out.
(d) If the court finds that the insurance business
transfer plan should not be approved, the court by its order
shall deny the petition.
(e) The applicant shall have 30 days following the
withdrawal or denial of the petition to file an amended
business transfer plan with the Director in accordance with
Section 1720.
(f) Nothing in this Section in any way affects the right of
appeal of any party.

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(215 ILCS 5/1735 new)
Sec. 1735. Rules. The Department may adopt rules that are
consistent with the provisions of this Article.
(215 ILCS 5/1740 new)
Sec. 1740. Confidentiality. The portion of the application
for an insurance business transfer that would otherwise be
confidential, including any documents, materials,
communications, or other information submitted to the Director
in contemplation of such application, shall not lose such
confidentiality, except (i) the Director may disclose
confidential information as needed to procure the independent
expert and ensure that the expert meets the requirements under
this Article and (ii) if the Director determines that
disclosure of confidential information is necessary to fully
and fairly advise policyholders and others entitled to notice
of the material implications of the insurance business
transfer plan.
(215 ILCS 5/1745 new)
Sec. 1745. Department oversight. Insurers engaging in an
insurance business transfer under this Article consent to the
jurisdiction of the Director with regard to any aspect of the
transferred business or business transfer plan, including the
authority of the Director to conduct financial analysis and
examinations, regardless of whether the insurer has a

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certificate of authority or another basis for the Director's
jurisdiction exists.
(215 ILCS 5/1750 new)
Sec. 1750. Fees and costs.
(a) All expenses incurred by the Director for the
compensation, costs, and expenses of the independent expert
and any consultants retained by the independent expert
incurred in fulfilling the obligations of the independent
expert under this Article shall be paid by the applicant.
(b) The Director may retain the services of any attorneys,
actuaries, accountants, and other professionals and
specialists as may be reasonably necessary to assist the
Director in reviewing the insurance business transfer plan.
All expenses incurred by the Director in connection with
proceedings under this Article, including, but not limited to,
expenses for the services of any attorneys, actuaries,
accountants, and other professionals and specialists, shall be
paid by the applicant.
(c) The transferring insurer and the assuming insurer
shall jointly be obligated to pay all debts incurred pursuant
to this Section. Nothing in this Article shall be construed to
create any duty for the independent expert to any party other
than the Department or a court.
(d) Failure to pay any of the requisite fees or costs
within 30 days after demand shall be grounds for the Director

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to request that a court dismiss the petition for approval of
the insurance business transfer plan before the filing of an
implementation order by the court or, if after the filing of an
implementation order, the Director may suspend or revoke the
assuming insurer's certificate of authority to transact
insurance business in this State. The Director may also take
any other action authorized by law against an insurer who
fails to pay the requisite fees or costs.
Section 99. Effective date. This Act takes effect upon
becoming law, except that the changes to Section 408 and
Article XLVII of the Illinois Insurance Code take effect
January 1, 2025.